Vijay Naginbhai Patel, Surat V. Income tax Officer, Ward-3(2)(4), Surat

ITA 3/SRT/2019

AI Insights

The case involves Vijay Naginbhai Patel, the appellant, who contested the additions made by the Assessing Officer under Section 50C of the Income Tax Act, 1961, concerning the sale of agricultural land. The Assessing Officer had added a long-term capital gain of Rs. 9,56,862 and disallowed a cost of improvement of Rs. 29,72,709 due to lack of evidence. The Commissioner of Income Tax (Appeals) upheld these additions. The appellant's appeal to the Income Tax Appellate Tribunal was dismissed due to procedural delays in filing the appeal, without reaching a decision on the substantive issues raised.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301504 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 26-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 01-01-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Condonation of delay; Set aside
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 03/Srt/2019 (Assessment Year 2014-15) (Virtual hearing) Vijay Naginbhai Patel, 52, Hari Har Society, Katargam Main Road, Surat-395004. PAN No. ABRPP 3832 B Vs. I.T.O., Ward 3(2)(4), Surat. Appellant/ assessee Respondent/ revenue Assessee represented by None Department represented by Shri Vinod Kumar, Sr. DR Date of hearing 27/03/2023 Date of pronouncement 27/03/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-3, Surat, (in short, the ld. CIT(A)) dated 28/09/2018 for the Assessment year (AY) 2014-15 wherein the assessee has raised following grounds of appeal: “1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of Assessing Officer in making addition of Rs. 9,56,862/- u/s 50C of the I.T. Act, 1961 on account of long term capital gain without considering the fact that assessee has sold only 75% of the land and no financial transaction had taken place for 25% portion of land. 2. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of Assessing Officer in making disallowance of Rs. 29,72,569/- on account of cost of improvement. ITA No. 03/Srt/2019 Vijay Naginbhai Patel Vs ITO 2 3. It is therefore prayed that addition made by assessing officer and confirmed by Commissioner of Income Tax (Appeals) may please be deleted or matter may be please set aside to the assessing officer for deciding afresh. 4. The appellant crave leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. Brief facts of the case are that the assessee is in the business of construction labour work, filed his return of income for A.Y. 2014-15 on 29/03/2016 declaring income of Rs. 2,27,140/-. The case was selected for scrutiny. During the assessment, the Assessing Officer noted that the assessee owned agricultural land out of Block No. 62 and 63 in Revenue Survey No. 131, Moje-Palod, Sub-dist-Mangrol, District- Surat having area of 19,466 square meters. This land was purchased in 1995 for a consideration of Rs. 90,000/-. During the financial period under consideration, the land was divided into seven plots and sols to various persons by way of and separate sale deeds by assessee. On verification of sale deeds, it was noted that only document of two sale deeds were executed as per jantri value and remaining five sale deeds were executed below the jantri value, as determined by the stamp valuation authority. The total sale consideration shown for all the seven plots were Rs. 42.60 lacs, however, the value as per Jantri rate was of Rs. 55,46,936/-, thus, there was a difference of Rs. 11,87,439/- as per value shown and jantri value. 3. The Assessing Officer was of the view that the said difference is to be added under Section 50C of the Income Tax Act, 1961 (in short, the ITA No. 03/Srt/2019 Vijay Naginbhai Patel Vs ITO 3 Act). The Assessing Officer further noted that the assessee kept 25% of share of land for himself. The Assessing Officer prepaid the summary of total sale consideration and difference under Section 50C of the Act and worked out difference of Rs. 12,75,816/-. On the basis of such working, the Assessing Officer issued show cause notice to the assessee about such difference and applicability of Section 50C of the Act. It was also noted that the assessee kept 25% share from the said land as a purchaser. The Assessing officer calculated the assessee’s 25% share as of Rs. 9,56,862/-. The assessee filed his reply and stated that the assessee has sold 75% of the land and 25% is kept for himself and no financial transaction has taken place as no one made payment to himself. The reply of assessee was not accepted by the Assessing Officer by taking a view that the capital gain needs to be worked out by replacing sale consideration as per the registered document on the basis of prevailing Jantri rate and the difference of 75% being share of total difference of Rs. 9,56,862/- being 75% share of assessee of total difference of Rs. 12,75,816/- was added. 4. The Assessing Officer further noted that the assessee has shown cost of improvement of Rs. 29,72,709/-. The land was purchased only for Rs. 90,000/-. No bills of vouchers about the cost of improvement were ITA No. 03/Srt/2019 Vijay Naginbhai Patel Vs ITO 4 produced by the assessee. In absence of proper evidence, the entire cost of improvement of Rs. 29,72,709/- was disallowed. 5. On appeal before the ld. CIT(A), both the additions were upheld. The ld. CIT(A) confirmed both the additions on similar lines vide his order dated 28/09/2018. Further aggrieved, the assessee has filed the present appeal before this Tribunal. 6. Perusal of record shows that the impugned order was passed by the ld. CIT(A) ion 28/09/2018, however, the present appeal is filed on 02/01/2019. The registry of this office has worked out the delay of 14 days in filing the present appeal. A defect memo was issued to the assessee vide defect memo dated 03/01/2019. No application or affidavit for condonation of delay was filed either at the time of filing of appeal or subsequently on receipt of defect memo. Notice of hearing of appeal was served and assessee was represented through Rasesh Shah and Company, Chartered Accountant. More than 10 adjournments were sought by Rasesh Shah & his associates. However, ultimately, they withdraw their authority letter by filing application dated 22/02/2022 stating therein that they have received information from briefing counsel M/s Kansariwala & Chevli that they are unable to contact the assessee. On receipt of such application, fresh notice through registered AD was sent to assessee for fixing the hearing on 27/03/2023. The notice was ITA No. 03/Srt/2019 Vijay Naginbhai Patel Vs ITO 5 sent at the address given on Form-36. Said notice is returned back unserved, which is kept on record. Therefore, I left no option but except to decide the appeal on the basis of material available on record and after hearing the submissions of learned Senior Departmental Representative (ld. Sr.DR) for the revenue. 7. The ld. Sr. DR for the revenue submits that the present appeal was filed belatedly. No application or affidavit for explaining the cause of delay is filed on record. The assessee has not substantiated the cause of delay in filing appeal. Thus, delay may not be condoned. On merit, the ld Sr DR for the revenue submits that the assessee not filed any submissions or evidence to substantiate both the grounds of appeal, therefore, the assessee does not deserve any relief either on condonation of delay or on merit. 8. I have considered the submission of ld. Sr. DR for the revenue and perused the material on record. It is a matter of fact that the impugned order was passed by the ld. CIT(A) on 28/09/2018 and appeal fee was paid on 28/12/2018 and the appeal was filed on 02/01/2019. Thus, there is a delay of 32 days in filing the present appeal. No application for condonation of delay is filed on record nor the assessee has come forward to explain such cause of delay despite service of notice. The present appeal is filed in 2019 and more than 4 years have passed, the ITA No. 03/Srt/2019 Vijay Naginbhai Patel Vs ITO 6 assessee has not bothered to pursue the appeal diligently. In absence of any application for condonation of delay, I am not inclined to condone the delay in filing the present appeal. Resultantly, the appeal of assessee is dismissed as unadmitted. 9. In the result, this appeal of assessee is dismissed. Order pronounced in the open court on 27 th March, 2023. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 27/03/2023 *Ranjan Copy to: 1. Assessee – 2. Revenue -- 3. CIT(A) 4. CIT 5. DR 6. Guard File By order // TRUE COPY // Sr. Private Secretary, ITAT, Surat