The ITO, Ward-6(3), Surat V. Shri Madhusudan C. Reshamwala,HUF, Surat

ITA 3394/AHD/2010

• Counselvise Citation: 339420514 RSA 2010
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 23-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH , , , , , , , , . .. . . . . . ! ! ! !, , , , '# ' $ '# ' $ '# ' $ '# ' $ BEFORE S/SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AN D N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.3394/AHD/2010 [ASSTT.YEAR : 2006-2007] ITO, WARD-6(3) SURAT. /VS. SHRI MADHUSUDAN C. RESAMWALA (HUF) 7/2320, DUDHARA SHERI, RAMPURA, SURAT. PAN : AACHM 3079 D ITA NO.3395/AHD/2010 [ASSTT.YEAR : 2006-2007] ITO, WARD-7(3) SURAT. /VS. SHRI RASIKLAL DAHYABHAI RESAMWALA (HUF) 7/3721-22, MAIN ROAD, RAMPURA, SURAT. PAN : AAHHR 2083 R ( (( (&' &' &' &' / APPELLANT) ( (( (()&' ()&' ()&' ()&' / RESPONDENT) * + , '/ REVENUE BY : SHRI ROOP CHAND, SR.DR . + , '/ ASSESSEE BY : SHRI ANKUR R. RESHAMWALA (GRANDSON OF ASSESSEE) SHRI SAPNESH SHETH / + 0#/ DATE OF HEARING : 6 TH AUGUST, 2014 123 + 0#/ DATE OF PRONOUNCEMENT : 14/08/2014 '4 / O R D E R ITA NO.3394 & 3395/AHD/2010 -2- PER MUKUL KR. SHRAWAT: THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A)-V, SU RAT DATED 20.9.2010. SINCE COMMON ISSUE IS RAISED IN THESE APPEALS, HENC E FOR THE SAKE OF CONVENIENCE, BOTH THE APPEALS ARE DISPOSED OF THROU GH THIS CONSOLIDATED ORDER. 2. THE GROUNDS RAISED IN THE RESPECTIVE APPEALS OF THE REVENUE ARE AS UNDER: I) ITA NO.3394/AHD/2010 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A), SURAT HAS ERRED IN DELETING THE ADDITION OF RS.59,38,535/- MADE ON ACCOUNT OF ESTIM ATION OF LTCG OF THE ACT. II) ITA NO.3395/AHD/2010 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADD ITION MADE BY THE AO ON ACCOUNT OF LONG TERM CAPITAL GAIN AT RS.23,75,414/- BY HOLDING THAT THE CAPITAL GAIN IS TAXABLE U/S.50C OF THE ACT AND NOT AS PER PROVISION OF SECT ION 45 OF THE INCOME TAX ACT DESPITE THE FACT THAT THERE IS N O REGISTERED SALE DOCUMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADD ITION OF RS.23,75,414/- AFTER ACCEPTING THE COST OF ACQUISIT ION OF LAND AT RS.70/- PER SQ.MTR. ON THE STRENGTH OF THE REGISTERED VALUERS REPORT WHEN THE AO ADOPTED THE RATE AT RS. 25/- PER SQ.MTR. ON THE BASIS OF SALE DEEDS REGISTERED A T THE TIME IN THAT LOCALITY. ITA NO.3394 & 3395/AHD/2010 -3- 3. THE LEARNED COUNSEL FOR THE ASSESSES, AT THE OUT SET, SUBMITTED THAT THE ONLY ISSUE INVOLVED IN BOTH THE APPEALS IS WITH REGARD TO DELETION OF ADDITION MADE ON ACCOUNT OF ESTIMATION OF LONG TERM CAPITAL GAIN BY THE CIT(A). IT IS SUBMITTED THAT SIMILAR ISSUE WAS RAI SED IN THE APPEALS OF THE GROUP CASES OF THE ASSESSEE BEFORE THE ITAT, AH MEDABAD AND THE ITAT AFTER DISCUSSING THE ISSUE IN DETAIL HAS ALLOW ED THE CLAIM OF THE ASSESSEE IN ITA NOS.3374-3380/AHD/2009 FOR A.Y.2006 -07 VIDE ORDER DATED 23-4-2010, AND THE LEARNED CIT(A) IN IMPUGNED ORDER FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL, HAS ALLOWED THE CL AIM OF THE ASSESSES IN THE PRESENT APPEALS. ACCORDINGLY, THE APPEALS OF T HE REVENUE, BEING DIRECTLY COVERED IN FAVOUR OF THE ASSESEE BE DISMIS SED. 3.1 THE LEARNED DR COULD NOT CONTROVERT THE ABOVE S UBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSES, HOWEVER, PLAC ED RELIANCE ON THE ORDER OF THE AO. 4. WE HAVE HEARD SUBMISSIONS OF BOTH THE PARTIES AN D PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AND ALSO THE ORDE R OF THE ITAT, AHMEDABAD PASSED IN THE GROUP CASES OF THE ASSESSEE CITED SUPRA. WE FIND THAT THE CIT(A) HAS PASSED AN ORDER IN BOTH TH E CASES IDENTICALLY DATED 20.9.2010. THE LEARNED CIT(A) HAS FOLLOWED T HE ORDER OF THE TRIBUNAL DATED 23.4.2010 BEARING ITA NOS.3374-3380/ AHD/2009 FOR A.Y.2006-07 IN THE GROUP CASES OF THE ASSESSES. TH E OBSERVATION OF THE LEARNED CIT(A) IN THIS CONNECTION IS AS UNDER: ITA NO.3394 & 3395/AHD/2010 -4- 5.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E AR OF THE APPELLANT FILED WRITTEN SUBMISSIONS CONTENDING THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS DIRECTLY COVERED IN FAVOUR OF THE APPELLANT AND SUBMITTED A COPY OF THE ORDER OF THE ITAT DATED 23.4.2010, IN THE CASE OF THE OTHER 7 CO-OWNERS WHE REIN, THE ADDITION AS MADE BY THE ASSESSING OFFICER BY ADOPTI NG THE SALE RATE AT RS.700/- PER SQ.MTRS. AND ENHANCED BY THE C IT(A) AT RS.5,000/- PER SQ. MTR. HAS BEEN TOTALLY DELETED BY THE HONBLE ITAT, THE DETAILS OF WHICH IS AS FOLLOWS: SR.NO. NAME OF THE ASSESSEE I.E. THE OTHER CO-OWNERS ITA NO. 1. KAUSHIK S. RESHAMWALA 3374/AHD-2009 2. ASHWIN MANCHHARAM RESHAMWALA (HUF) 3375/AHD-2009 3. HASMUKH DAYABHAI RESHAMWALA (HUF) 3376/AHD-2009 4. JASWANTLAL DAYABHAI RESHAMWALA (HUF) 3377/AHD-20 09 5. MOHANLAL J. RESHAMWALA (HUF) 3378/AHD-2009 6. ARVIND CHUNILAL RESHAMWALA (HUF) 3379/AHD-2009 7. RAMESHCHANDRA J. RESHAMWALA (HUF) 3380/AHD-2009 5. NOW, BEFORE US, THE SAID ORDER OF THE TRIBUNAL I S PLACED AND THE RELEVANT OBSERVATIONS ARE REPRODUCED AS UNDER: 8. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, W E FIND THAT THE CIRCLE RATES FIXED BY STAMP DUTY AUTHORITIES OF LAN D AT BHESTAN FOR FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMENT Y EAR UNDER CONSIDERATION WAS FIXED AT RS.400/- PER SQ.MT AND T HE SALE CONSIDERATION RECEIVED BY THE ASSESSEE IS @ RS.483/ - PER SQ.MT. WE FIND THAT THESE CO-OWNERS HAVE SOLD THE LAND AND RECEIVED PAYMENT OF RS.2,92,11,111/- UP TO 14-12-2005 AND D UE TO DEATH OF CO-OWNERS IN THE INTERVENING PERIOD, THE SALE DE ED COULD NOT BE REGISTERED BUT THE CLAIM OF THE ASSESSEE IS THAT TH E BALANCE RS.8 LAKH WAS RECEIVED AS ON 31ST MARCH, 2006. FINALLY, THE SALE DEED WAS REGISTERED IN JAN. & FEB07 THROUGH TWO SALE DE EDS REGISTERED AND THE CONSIDERATION OF THE SALE DEEDS WAS AMOUNTING TO RS.3,00,11,111/-. WE FIND THAT THE REVENUE COULD NOT BRING ANY ITA NO.3394 & 3395/AHD/2010 -5- EVIDENCE THAT THE ENTIRE CONSIDERATION WAS NOT PAID ON OR BEFORE 31-03-2006 AND POSSESSION OF LAND WAS NOT HANDED OV ER BY THESE CO-OWNERS TO THE SELLER. EVEN OTHERWISE, WE ACCEPT THE CLAIM OF THE REVENUE THAT THE POSSESSION OF THIS LAND AND TH E BALANCE PAYMENT OF RS.8 LAKH WAS DELIVERED AT THE TIME OF R EGISTRATION OF SALE DEED IN JAN. & FEB07, WHEN THE SALE DEEDS WER E REGISTERED, THE REVENUE CANNOT ASSESS THE CAPITAL GAIN IN THE A SSESSMENT YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2006-07. H OWEVER, THE VITAL ISSUE BEFORE US IS WHETHER IN THE CASE OF SAL E THROUGH REGISTERED SALE AGREEMENT, THE CAPITAL GAIN IS TO B E COMPUTED IN TERMS OF SEC.50C OF THE ACT OR NOT. .. .. WE ARE IN FULL AGREEMENT WITH THE ARGUMENT S OF THE ASSESSEE THAT SECTION 50C IS APPLICABLE IN THE PRESENT CASE AND THIS PROVISION BEING A DEEMING PROVISION WILL A PPLY FOR DETERMINING THE FULL VALUE OF CONSIDERATION AS A RE SULT OF TRANSFER OF CAPITAL ASSETS FOR THE PURPOSES OF COMPUTATION O F CAPITAL GAINS U/S.48 OF THE ACT. WE FURTHER FIND THAT THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE CONSIDERATION OVER AND ABOV E, WHAT HAS BEEN RECORDED IN THE SALE DEED/AGREEMENT, HAS BEEN MADE BY THE ASSESSEE AND IN THE ABSENCE OF THE SAME, NO ADDITIO N CAN BE MADE BY ESTIMATING AND SUBSTITUTING THE MARKET VALUE. AC CORDINGLY, WE DELETE THE ADDITION MADE BY THE LOWER AUTHORITIES I N THESE APPEALS. 13. AS REGARDS TO THE ISSUE OF COST OF ACQUISITION TO BE ESTIMATED BY ADOPTING FAIR MARKET VALUE AS ON 01-04-1981 FOR THE PURPOSES OF COMPUTING THE INDEXATION VALUE, THE ASSESSING OF FICER HAS ESTIMATED THE COST OF ACQUISITION AT RS.25/- PER SQ .MT. ON THE BASIS OF REPORT OF ASSESSEES REGISTERED VALUER APPROVED BY THE DEPARTMENT, TAKING COMPARABLE SALE INSTANCES GIVEN BY THE VALUER, WHICH RANGED FROM RS.15/- TO RS.32/- PER SQ .MT. THE ASSESSEE HAS ADOPTED THE VALUE AT RS.60/- PER SQ.MT . ON THE BASIS OF REPORT GIVEN BY REGISTERED VALUER APPROVED BY DE PARTMENT, WHO HAS VALUED ON THE BASIS OF MANY FACTORS AS LOCA LITY, TRAFFIC ITA NO.3394 & 3395/AHD/2010 -6- JAM, FERTILITY OF LAND ETC. WE FIND THAT THE REVENU E COULD NOT SUBSTANTIATE THE VALUE ADOPTED BY THE LOWER AUTHORI TIES AT RS.25/- PER SQ.MT WHICH HAS NO BASIS. THE VALUE ADOPTED BY THE ASSESSEE OF LAND AT RS.60/- PER SQ.MT. IS BASED ON A TECHNIC AL REPORT OF REGISTERED VALUER APPROVED BY THE DEPARTMENT. ACCOR DINGLY, WE ACCEPT THE VALUE ADOPTED BY THE ASSESSEE FOR COMPUT ATION OF CAPITAL GAINS AT RS.60/- PER SQ.MT. AND DIRECTING T HE ASSESSING OFFICER TO ADOPT THIS VALUE FOR THE COMPUTATION OF CAPITAL GAINS IN THESE APPEALS. 6. FOR BOTH THE CASES, WE FIND NO FALLACY IN THE ORDER OF THE LEARNED CIT(A) WHO HAS FOLLOWED THE AFORESAID ORDER OF THE TRIBUNAL. THE VIEW TAKEN BY THE LEARNED CIT(A), IS THEREFORE, CON FIRMED AND THE GROUNDS OF THE APPEALS OF THE REVENUE ARE REJECTED. 7. IN THE RESULT, BOTH APPEALS OF THE REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- . .. . . . . . ! ! ! ! /N.S. SAINI '# '# '# '# /ACCOUNTANT MEMBER ( (( ( /MUKUL KR. SHRAWAT) /JUDICIAL MEMBER C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD