Amarshiv Construction Pvt.Ltd., Baroda V. Dy.Commissioner of Income Tax,Circle-1(1), Baroda

ITA 3061/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7891 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL PATEL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 3061/AHD/2015 (ASSESSMENT YEAR: 2011-12) AMARSHIV CONSTRUCTION PVT. LTD. 14, ATUL PARK SOCIETY, KARELIBAUG BARODA 390 018 APPELLANT VS. D.C.I.T., CIRCLE 1(1), AAYKAR BHAVAN, RACE COURSE, BARODA RESPONDENT PAN: AACCA3235E /BY ASSESSEE : SHRI PARIN SHAH & MEHUL PATEL , A.R. /BY REVENUE : SHRI PRASOON KABRA, SR. D.R /DATE OF HEARING : 28.12.2017 /DATE OF PRONOUNCEMENT : 29.12.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES AGAINST THE CIT(A)-1, VADODARAS ORDER DATED 21.08.2015 IN CASE NO. CAB-1/176/2014-15, UPHOLDING ASSESSING OFFICERS ACTION MAKING LONG TE RM CAPITAL GAINS ADDITION OF ITA NO. 3061/AHD/15 [AMARSHIV CONSTRUCTION PVT. LTD . VS. DCIT] A.Y. 2011-12 - 2 - RS.62,21,877/- AFTER INVOKING SECTION 50C, IN PROCE EDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE COME TO THE RELEVANT FACTS NOW. THE ASSESSEE COMPANY HAD SOLD ITS CAPITAL ASSETS IN QUESTION I.E. A PLOT MEASURING 37 838SQ.FT. COMPRISED IN LAND SURVEY NO.974/27 FOR CONSIDERATION OF RS.75,67,600/- AT TI MBA, R.S. NO.974/14 ADMEASURING 40,772SQ.FT. FOR RS.81,54,400/- AND R.S . NO. 974/26 ADMEASURING 39625 SQ.FT. FOR RS.79,25,000/-; RESPECTIVELY. THE SAID TRANSACTIONS ALSO ATTRACTED ADDITIONAL STAMP DUTIES. NET EFFECT THEREOF WAS TH AT THE TOTAL CONSIDERATION AMOUNT STOOD NOTIONALLY INCREASED TO RS.95,69,273/-, RS.1, 03,08,584/- AND RS.99,91,020/-; RESPECTIVELY. THE ASSESSING OFFICER ADOPTED THE A BOVE ENHANCED CONSIDERATION(S) TO INVOKE SECTION 50C OF THE ACT RESULTING IN LONG TERM CAPITAL GAINS IN ADDITION IN QUESTION OF RS.62,21,877/- IN ASSESSMENT ORDER DATE D 26.03.2014. 3. THE CIT(A) AFFIRMS THE IMPUGNED ADDITION AS UNDE R: 5.2.3. FROM THE DETAILS FURNISHED BY THE APPELLANT DURING THE COURSE OF THE APPELLATE PROCEEDINGS AND THE SUBMISSIONS MADE ALON G WITH THESE, IT IS SEEN THAT THE MARKET VALUE OF THE LAND FIXED BY THE STAMP DUT Y OFFICER HAD BEEN DISPUTED BY THE PURCHASER AND ACCORDINGLY, THEY HAD APPROACHED IN APPEAL TO THE COLLECTOR, STAMP DUTY VALUATION DIVISION, PANCHMAHALS FOR CORR ECT VALUATION AS PER THE MARKET PRICE. THE TRANSLATION OF THE LETTER ISSUED BY THE SUB REGISTRAR, GODHRA TO THE PURCHASER ASKING FOR THE PAYMENTS OF ADDITIONAL STAMP DUTY IN REGARD OF ONE OF THESE PLOTS IS REPRODUCED BELOW: 'WE HAVE TO INFORM YOU THAT A DOCUMENT FOR CHANGE O F OWNERSHIP/SALE WAS RECEIVED ON 07.09.2010 VIDE ACKNOWLEDGEMENT NO.600/ 2010 FOR RS.75,67,600/- FOR REGISTRATION. THE PRICE AS PER T HE JANTRI RECORD AS ON DATE IS RS. 1,87,29,900/-. ON THE SAID PRICE THE ST AMP DUTY PAYABLE IS RS. 9,17,766/-. IN THE DOCUMENTS SUBMITTED BY YOU THE S TAMP DUTY PAID IS RS. 3,71,000/-. IN VIEW OF THIS THE SHORT FALL IN STAMP DUTY WORKS OUT TO RS. 5,46,766/- WHICH IS DESIRED BY YOU TO BE PAID THE SAME SHOULD BE PAID WITHIN THE PERIOD OF 30 DAYS FROM THE RECEIPT OF THIS NOTICE. AFTER THE RECEIPT OF THE PAYMENT THE NECESSARY ENTRIES WOULD BE MADE IN THE SALE DEED AND THE SAME WOULD BE RETURNED. ITA NO. 3061/AHD/15 [AMARSHIV CONSTRUCTION PVT. LTD . VS. DCIT] A.Y. 2011-12 - 3 - IF THE SAID STAMP DUTY IS NOT PAID WITHIN A PERIOD OF 30 DAYS THE SAID DOCUMENT WOULD BE REFERRED TO THE COLLECTOR STAMP D UTY VALUATION DIVISION - 1/2, PANCHMAHALS FOR CORRECT VALUATION O F MARKET PRICE AS PER THE PROVISIONS OF SECTION 32(KA)(1).' 5.2.4. THUS, THE STAMP DUTY AS PER THE JANTRI RATE HAS NOT BEEN ACCEPTED IN THIS CASE AND THE SAME HAD BEEN APPEALED AGAINST AND, AC CORDINGLY, A FRESH MARKET VALUE WAS DETERMINED BY THE COLLECTOR, STAMP DUTY V ALUATION WHICH WAS SUBSTANTIALLY LOWER THAN THE VALUATION OF THE LAND AS PER THE JANTRI RATE. FOR E.G. IN CASE OF R.S. NO. 974/27, THE SALE CONSIDERATION VHO WN BY THE APPELLANT IS RS.75,67,600/- AS AGAINST WHICH THE JANTRI RATE WAS RS.1,87,29,900/-. AFTER FILING APPEAL AGAINST THIS JANTRI RATE, THE MARKET VALUE W AS DETERMINED AT RS. 95,73,102/- ON WHICH THE STAMP DUTY WAS PAID FOR THE REGISTRATI ON OF THE SALE DEED. THUS, THE APPELLANT HAD ALREADY BEEN GIVEN SUBSTANTIAL RELIEF BY THE COLLECTOR STAMP DUTY VALUATION DIVISION AND HENCE, AS PER THE PROVISIONS OF CLAUSE (B) OF SUB SECTION (2) OF SECTION 50C OF THE IT ACT, 1961, THE AO WAS NOT OBLIGED TO REFER THE MATTER FOR FRESH VALUATION TO THE DISTRICT VALUATION OFFICER. 5.2.5 HENCE, IT IS HELD THAT SINCE THE MARKET VALUE OF THE LAND HAS ALREADY BEEN DETERMINED BY THE HIGHER AUTHORITY AS PER THE APPEA L FILED BY THE PURCHASER OF THE LAND AND MARKET VALUE OF THE LANDS HAVE ALREADY BEE N SUBSTANTIALLY REDUCED AS COMPARED TO THE MARKET VALUE AS PER JANTRI RATE, HE NCE, THE AO WAS CORRECT IN ADOPTING SUCH MARKET VALUE OF THE LANDS AS DETERMIN ED BY THE COLLECTOR AS THE SALE CONSIDERATION RECEIVED BY THE APPELLANT AS AS PER T HE PROVISIONS OF SECTION 50C OF THE IT ACT, 1961. ACCORDINGLY, THERE IS NO REQUIREM ENT OF REMANDING THE MATTER BACK TO THE AO FOR REFERRING THE VALUATION OF THE L AND TO THE DISTRICT VALUATION OFFICER. THE ADDITION MADE BY THE AO IS AS PER LAW AND HENCE, THE APPELLANT IS NOT ENTITLED TO RECEIVE ANY FURTHER RELIEF. ACCORDINGL Y, THIS GROUND OF APPEAL IS DISMISSED. 4. HEARD BOTH THE PARTIES. CASE FILE PERUSED. THE RE IS NO DISPUTE FROM THE ABOVE NARRATED FACTS AND CIRCUMSTANCES THAT BOTH TH E LOWER AUTHORITIES HAVE GONE BY THE REDUCED JANTRI PRICE FOR THE PURPOSE OF INVOKIN G SECTION 50C OF THE ACT SO AS TO MAKE THE IMPUGNED LONG TERM CAPITAL GAINS ADDITION. THE CIT(A) PARTICULARLY IS OF THE OPINION THAT THE ABOVE REDUCED JANTRI PRICE IN STAMP ACT APPELLATE PROCEEDINGS COMING TO RS.95,73,102/- IS JUST AND PROPER. WE HO WEVER SEE NO REASON TO CONCUR WITH THE ABOVE EXTRACTED FINDINGS AS THE IMPUGNED A DDITION U/S.50C(2) OF THE ACT MANDATES REFERENCE TO THE DVO IN CASE AN ASSESSEE C ONTESTS THE JANTRI PRICE IN QUESTION TO BE HIGHER THAN FAIR MARKET VALUE OF THE RELEVANT CAPITAL ASSET. HONBLE CALCUTTA HIGH COURTS JUDGMENT IN (2015) 372 ITR 83 (CAL.) SUNIL KUMAR AGARWAL VS. CIT HOLDS THAT SUCH A REFERENCE IS MANDATORY EV EN IF AN ASSESSEE DOES NOT MAKE ANY SUCH PRAYER. WE THEREFORE ACCEPT ASSESSEES SO LE SUBSTANTIVE GRIEVANCE FOR ITA NO. 3061/AHD/15 [AMARSHIV CONSTRUCTION PVT. LTD . VS. DCIT] A.Y. 2011-12 - 4 - STATISTICAL PURPOSES AND REMIT THE ISSUE BACK TO TH E ASSESSING OFFICER TO PROCEED AFRESH AS PER LAW U/S.50C(2) OF THE ACT BY MAKING R EFERENCE TO THE DVO. 5. THIS ASSESSEES APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF DECEMBER, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 29/12/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0