The ITO, Ward-3(3), Surat V. Shri Goverdhan S. Reshamwala, Surat

ITA 340/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2070 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Sale consideration of property below Jantri Value
• Section: 147; 148; 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCHES, SURAT BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS.MADHUMITA ROY, JUDICIAL MEMBER ITA NO.340/AHD/2016 ASSTT.YEAR 2006-07 ITO, WARD-1(3)(2) SURAT. VS. SHRI GOVERDHAN S. RESHAMWALA DEVARSHI AVENUE I/14, HOLIDAY INN ROAD SURAT. PAN : AABHG 2728 N / (APPELLANT) / (RESPONDENT) REVENUE : MS.ANUPAMA SINGLA, SR.DR ASSESSEE BY : NONE / DATE OF HEARING : 20/11/2018 / DATE OF PRONOUNCEMENT: 22/11/2018 / O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER: THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF LD.CIT(A)-II, SURAT DATED 8.12.20125 PASSED FOR THE ASSTT.YEAR 2006-07. 2. THOUGH THE REVENUE HAS RAISED THREE GROUNDS, BUT SOLE GROUND INVOLVED IN THIS APPEAL IS THAT THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.1,47,93,412/- MADE BY THE AO WITH HELP OF SECTION 48 R.W.S. 50C OF THE INCOME TAX ACT, 1961. ITA NO.340/AHD/2016 - 2- 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 31.3.2007 DECLARING TOTAL INCOME AT RS.2,29,610/- INCLUDING LONG TERM CAPITAL GAIN OF RS.1,78,039/-. ON THE BASIS OF INFORMATION RECEIVED BY THE AO, THE LD.AO NOTICED THAT THE ASSESSEE HAS SOLD AGRICULTURAL LAND SITUATED AT NONDH NO.162, MAUJE BHESTAN, CHORYASI, SURAT. THE TOTAL AREA OF LAND WAS 88,700 SQ.METERS. THERE WERE TOTAL 14 CO-OWNERS IN THE LAND. THE LAND WAS SOLD AT A TOTAL SALE PRICE OF RS.3,00,11,111/- AND AFTER INDEXATION, LONG TERM CAPITAL GAIN OF RS.35,60,771/- WAS SHOWN BY THE 14 CO-OWNERS. THEREFORE, ACCORDING TO THE AO, THE ASSESSEE WOULD HAVE RECEIVED AN AMOUNT OF RS.1,78,039/- BEING 5% OF HIS SHARE. IT WAS FURTHER NOTICED THAT IN THE CASE OF ONE OF THE OWNERS, SHRI KAUSHIK S. RESHAMWALA, WHO WAS HAVING 4.16% SHARE IN THE SAID LAND, HAS FILED HIS RETURN FOR THE ASSTT.YEAR 2006-07 AND ASSESSMENT UNDER SECTION 143(3) IN HIS CASE WAS COMPLETED BY DETERMINING TOTAL INCOME AT RS.19,76,343/-. HOWEVER, THE LD.CIT(A) HAS ENHANCED THE SALE PRICE OF THE PROPERTY UNDER SECTION 50C OF THE ACT TO RS.31,04,50,000/- AND AFTER INDEXATION, THE TOTAL LONG TERM CAPITAL GAIN IN THE CASE OF 14 CO-OWNERS WAS CALCULATED AT RS.29,94,29,025/-. THEREFORE, THE ASSESSEES SHARE IN THE ENHANCED VALUE OF CAPITAL GAIN WAS CALCULATED AT RS.1,49,71,451/-. IN THIS VIEW OF THE MATTER, THE AO WAS OF THE VIEW THAT SINCE THE ASSESSEEE HAS SHOWN LONG TERM CAPITAL GAIN ONLY TO THE EXTENT OF RS.1,78,039/- IN HIS RETURN INSTEAD OF ENHANCED LONG TERM CAPITAL GAIN OF RS.1,47,92,241/- INCOME TO THAT EXTENT HAS ESCAPED ASSESSMENT. THEREFORE, THE CASE WAS REOPENED ON THE ABOVE REASONS UNDER SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER SECTION 148 ON 22.3.2013. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS BROUGHT TO THE NOTICE OF THE AO ITA NO.340/AHD/2016 - 3- BY THE ASSESSEE THAT BASIS OF ADDITION TO THE EXTENT OF ENHANCED CAPITAL GAIN, CALCULATED BY THE LD.CIT(A) IS NOT CORRECT, BECAUSE, THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CO-OWNER, I.E. SHRI KAUSHIK S. RESHAMWALA HAS DELETED SUCH ADDITION. HOWEVER, THE LD.AO DID NOT ACCEPT THIS CONTENTIONS OF THE ASSESSEE AND STATED THAT THE REVENUE HAS NOT ACCEPTED THE ORDER OF THE ITAT, BECAUSE THE REVENUE HAS PREFERRED APPEAL BEFORE HONBLE GUJARAT HIGH COURT. IT WAS POINTED OUT THAT THE HONBLE HIGH COURT HAS DISMISSED THE APPEAL OF THE REVENUE BY HOLDING THAT IN THE CASE OF THE ASSESSEE, FOR EARLIER YEARS, THE VERY SAME STAND HAS BEEN TAKEN BY THE TRIBUNAL IN ITA NO.3374/AHD/2009 AND ALLIED MATTERS. AGAINST THIS DECISION OF HONBLE GUJARAT HIGH COURT, REVENUE HAS PREFERRED SLP BEFORE THE HONBLE SUPREME COURT, WHICH IS NOW PENDING, AND THEREFORE, THERE IS NO VIOLATION OF LAW IN REOPENING THE ASSESSMENT OF THE ASSESSEE. 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT THE LD.CIT(A) HAS DELETED THE ADDITION MADE BY THE AO BY REFERRING TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF OTHER CO-OWNERS. THE RELEVANT PART OF THE LD.CIT(A)S ORDER READS AS UNDER: DECISION: 6.1.1 I HAVE CONSIDERED THE ASSESSMENT ORDER AS WELL AS THE SUBMISSIONS OF THE APPELLANT. THE GROUNDS OF APPEAL- GROUND NO. 1 PERTAINS TO THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 1,47,93,412/- WHICH MAY PLEASE BE DELETED. IN THIS CASE THE CIT(A)-IV SURAT, HAD ENHANCED THE SALE PRICE OF THE PROPERTY U/S 50C OF THE ACT TO RS. 31,04,50,000/- AND AFTER INDEXATION THE TOTAL CAPITAL GAIN IN THE HANDS OF ALL 14 CO-OWNERS HAS BEEN CALCULATED AT ITA NO.340/AHD/2016 - 4- RS. 29,94,29,025/-. THIS ISSUE IS COVERED BY THE DECISION OF THE HON'BLE ITAT AHMEDABAD IN THE CASE OF THE OTHER CO-OWNERS AS PER THE CHART GIVEN BELOW WHEREIN THE HONBLE ITAT HAD DELETED THE ENHANCEMENT MADE BY THE CIT(A) OF THE SALE RATE. SR. NO. NAME OF THE ASSESSEE I.E. THE OTHER CO-OWNERS ITA NO. DATE OF ORDER 1 KAUSHIK S. RESHAMWALA 3374/AHD-2009 23.04.2010 2 ASHWIN MANCHHARAM RESHAMWALA (HUF) 3375/AHD - 2009 23.04.2010 3 HASMUKH DAYABHAI RESHAMBHAI (HUF) 3376/AHD-2009 23.04.2010 4 JASWANTLAL DAYABHAI RESHAMWALA (HUF) 3377/AHD - 2009 23.04.2010 5 MOHANLAL J. RESHAMWALA (HUF) 3378/AHD-2009 23.04.2010 6 ARVIND CHUNILAL RESHAMWALA (HUF) 3379/AHD - 2009 23.04.2010 7 RAMESHCHANDRA J. RESHAMWALA (HUF) 3380/AHD-2009 23.04.2010 8 MADHUSUDAN C. RESHAMWALA (HUF) 3394/AHD/2010 06.08.2014 9 RASIKLAL DAHYABHAI RESAMWALA (HUF) 3395/AHD/2010 06.08.2014 6.1.2 THE NAME OF THE ABOVE CO-OWNERS HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER AT PAGE 5 AND 6. SINCE THE ISSUE OF THE ENHANCEMENT OF SALE RATE IS CLEARLY COVERED BY THE DECISION OF THE HONBLE ITAT, AHMEDABAD IN THE CASE OF THE ABOVE CO-OWNERS IN FAVOUR OF THE APPELLANT, THE ADDITION MADE BY THE AO IS DELETED AND THE GROUNDS OF APPEAL IS ALLOWED. 5. IT IS UNDISPUTED FACTS THAT CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CO-OWNERS, MENTIONED IN THE ORDER OF THE LD.CIT(A) REPRODUCED ABOVE, HAS DELETED SIMILAR ADDITION ON IDENTICAL ISSUE AND ON FACTS. ITA NO.340/AHD/2016 - 5- 6. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD.CIT(A) ON THIS ISSUE, AND DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE, WHICH IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 22 ND NOVEMBER, 2018 AT SURAT. SD/- SD/- (MS.MADHUMITA ROY) JUDICIAL MEMBER (AMARJIT SINGH) ACCOUNTANT MEMBER SURAT; DATED 22/11/2018