REGHUVEER SINGH TANWAR, Jaipur V. DCIT, Jaipur

ITA 357/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9701 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: MAHENDRA GARGIA
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Gift; Fair market value; Valuation report; Competent authority; Reason to believe; Reassessment proceedings
• Section: 80C; 143(3); 50C; 244A; 54F; 147; 148; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 357/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09. SHRI RAGHUVEER SINGH TANWAR, A-46, GANESH NAGAR-I, NEW SANGANER ROAD, SODALA, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD-4(3), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAVPT6189J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10.02.2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 10/03/2017 VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT (A)- 2, JAIPUR, DATED 27.03.2015 PERTAINING TO A.Y. 2008 -09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1.1 THE VERY ACTION TAKEN U/S 147 R/W 148 IS BAD IN LA W WITHOUT JURISDICTION AND BEING VOID AB-INITIO, THE SAME KINDLY BE QUASHE D. CONSEQUENTLY THE IMPUGNED ASSESSMENT FRAMED U/S 143(3)/148 DATED 10. 03.2014 ALSO KINDLY BE QUASHED. 1.2 THE IMPUGNED ORDER U/S 143(3)/148 DATED 10.03.2014 IS BAD IN LAW AND ON FACTS ON THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME KINDLY BE QUASHED. 2 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. 2. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FA CTS OF THE CASE IN REJECTING THE CONTENTION THAT THERE WAS NO SALE EFF ECTED AS SUCH BY THE APPELLANT AND IT WAS ONLY A MERE GIFT ALREADY MADE AND POSSESSION HANDED OVER IN AY 2005-06, WHICH COULDNT HAVE LEG ALLY GIVEN RISE TO ANY CAPITAL GAIN TAX LIABILITY IN ABSENCE OF TRANS FER AS CONTEMPLATED BY SEC. 50C OF THE ACT, IN ANY YEAR AND IN ANY CASE, I N THIS YEAR. HENCE, ADDITION MADE ON ACCOUNT OF CAPITAL GAIN KINDLY BE DELETED. 3. RS. 1,73,43,456/-: THE LD. CIT(A) ERRED IN LAW S WELL AS ON THE FACTS ON THE CASE IN CONSIDERING THE SALE CONSIDERATION A T RS. 1,73,43,456/- AS VALUED BY THE DEPARTMENTAL VALUATION OFFICER (DV O) IN HIS REPORT ON OBJECTIONS FILED U/S 50C OF THE ACT AS AGAINST THE ( ASSUMED DECLARED) SALE CONSIDERATION THE OBJECTIONS RAISED AND THE EX PECTED SALE PRICE/FAIR MARKET VALUE (FMV) OF THE PROPERTY WAS NOT TO BE EX TENT A STATED BY THE LD. DVO. THE INCREASED FULL VALUE OF SALE CONS IDERATION SO DEEMED, BASED ON THE VALUATION REPORT BY THE LD. CIT(A) BEI NG CONTRARY TO THE PROVISIONS OF LAW AND FACTS, THE SALE CONSIDERATION AS DECLARED BE DIRECTED TO BE CONSIDERED FOR THE PURPOSES OF LONG TERM CAPITAL GAIN AND THE IMPUGNED ADDITION BE DELETED. 4. THE LD. DVO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN NOT JUDICIOUSLY APPRECIATED THE OBJECTION RAISED AND IN PARTICULAR OF THE ADMITTED FACT THAT IN RECORD OF THE JAIPUR DEVELOPM ENT AUTHORITY (JDA), THE CHARACTER OF THE LAND STILL CONTINUES TO BE A R ESIDENTIAL PROPERTY AND THE LD. DVO COULD NOT HAVE AGAIN RELIED UPON THE VA LUATION MADE BY THE STAMP DUTY AUTHORITIES CONSIDERING IT A COMMERCIAL LAND. HE BEING AN INDEPENDENT EXPERT/AUTHORITY, MUST HAVE DETERMINED THE (FULL VALUE OF) SALE CONSIDERATION REPRESENTING THE FAIR MARKET VAL UE (FMV) CONSIDERING THE OBJECTION SO RAISED HENCE, THE REPORT OF THE DV O SUFFERS FROM LEGAL AND FACTUAL INFIRMITIES, BEING PERVERSE, DESERVES T O BE QUASHED AND IGNORED. 5. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234A,234B, 234C, & 234D OF TH E ACT AND AS ALSO IN WITHDRAWING OF INTEREST U/S 244A OF THE ACT. TH E APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING AND WITHDRAWAL OF ANY SUCH INTEREST. THE INTEREST SO CHARGED/WITHDRAWN, BEING CONTRARY, TO T HE PROVISION OF LAW AND ACTS, KINDLY BE DELETED IN FULL. 6. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO A DD, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE TH E DATE OF HEARING. 3 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS RE-OPENED FOR ASSESSMENT AND THE ASSESSMENT UNDER SECTION 148 READ THAT SECTION 143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFE RRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 10 TH MARCH, 2014. WHILE FRAMING THE ASSESSMENT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DE CLARED LONG-TERM CAPITAL GAIN AT NIL AFTER CLAIMING DEDUCTION UNDER SECTION 54F OF RS. 12,78,400/-. THE ASSESSING OFFICER, HOWEVER, OBSERVED THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AT RS. 1,95,15,472/-. THE ASSE SSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE THAT THERE WAS NO T RANSFER BY THIS SALE DEED, THE PROPERTY WAS ALREADY GIFTED TO THE SOCIETY. TH E ASSESSING OFFICER, THEREFORE, COMPUTED LONG TERM CAPITAL GAIN AT RS. 1 ,73,43,456/- AND ALSO MADE ADDITION OF RS. 4,78,000/- FOR MAKING INVESTM ENT IN CASH AND DISALLOWED A SUM OF RS. 17,875/- CLAIMED THAT DEDUC TION UNDER SECTION 80C OF THE ACT. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING SUBMISSIONS PARTLY AL LOWED THE APPEAL THEREBY, THE LD. CIT(A) CONFIRMED THE ADDITION MADE ON ACCOU NT OF COMPUTATION OF LONG-TERM CAPITAL GAIN OF RS. 1,73,43,456/-. AGGRIE VED BY THIS, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 3. GROUND NO. 1.1 TO 1.2 IS AGAINST REOPENING OF TH E ASSESSMENT. 4 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. 4. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE IN THE WRITTEN SUBMISSIONS. THE L D. COUNSEL SUBMITTED THAT THE ACTION INITIATED UNDER SECTION 147 IS INVALID. THE SUBMISSIONS MADE IN THE WRITTEN BRIEF ARE REPRODUCED AS UNDER: FACTS: THE ASSESSEE ORIGINALLY FILED RETURN OF INCOME U/ S 139 AT TOTAL INCOME OF RS. 2,92,714/-ON DATED 03.10.2008 SHOWING NO LTCG. THEREAFTER, A NOTICE U/S 148(PB10) WAS ISSUED ON 26 .03.2013 BASED ON THE REASONS RECORDED (PB 9). IN RESPONSE THERETO, THE ASSESSEE FILED ANOTHER RETURN OF INCOME ON DATED 23.09.2013 AT TOT AL INCOME OF RS. 2,92,714/-. THE APPELLANT DIRECTLY BUT THE LDJ. CI T (A) REJECTED SUMMARILY. HENCE THIS GROUND. SUBMISSION: THE SETTLED JUDICIAL GUIDELINE ON THIS ASPECT IS FIRST SUBMITTED. 1. REASON TO BELIEVE AND NOT REASON TO SUSPECT: 1.1. IT IS SUBMITTED THAT EVEN UNDER THE AMENDED LAW THE BEDROCK CONDITION OR WORDS, WHICH CONTINUE RIGHT SINCE INCEPTION TILL DATE, ARE REASON TO BELIEVE AND NOT REASON TO SUSPECT. THE WORD BEL IEVE HAS TO BE UNDERSTOOD IN CONTRADISTINCTION OF SUSPICION OR OPI NION. BELIEF INDICATES SOMETHING CONCRETE OR RELIABLE. KINDLY REFER GANGASHARAN & SONS PVT. LTD. V/S ITO & ORS. (1981) 130 ITR 1/22 CTR 11 2(SC) AND ITO V/S LAKHMANI MEWAL DAS (1976) 103 ITR 437 (SC). 1.2. FURTHER, THE BELIEF MUST BE OF AN HONEST AND REASON ABLE PERSON BAED UPON REASONABLE GROUNDS. THE OFFICER MAY ACT ON DI RECT OR CIRCUMSTANTIAL EVIDENCE, BUT HIS/HER BELIEF MUST NO T BE BASED ON MERE SUSPICION, GOSSIP OR RUMOUR. THE LD. AO WOULD BE A CTING WITHOUT JURISDICTION IF THE REASON FOR HIS/HERE BELIEF THAT THE CONDITIONS ARE SATISFIED DOES NOT EXIST OR IS NOT MATERIAL OR RELE VANT TO THE BELIEF REQUIRED BY THE PROVISIONS OF LAW. THE COURT CAN A LWAYS EXAMINE THIS ASPECT THOUGH THE DECLARATION OF SUFFICIENCY OF THE REASONS FOR THE BELIEF CANNOT BE INVESTIGATED BY THE COURT. HELD IN SHEO NATH SINGH V/S AAC (1971) 82 ITR 147 (SC). 2. IN THE INSTANT CASE HOWEVER, THE AO PROCEEDED ON MERE SUSPICION . THE ONLY INFORMATION WHICH THE AO DISCLOSED IN THE IMPUGNED REASONS (PB 5 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. 9) IS THAT THOUGH THE ASSESSEE DECLARED SALES CONSIDE RATION AT RS. 21 LAKH HOWEVER AS PER SECTION 50C IT SHOULD HAS BEEN RS. 1 ,95,15,472/- AND AS AGAINST THE NIL LTCG DECLARED, THE LTCG OF RS. 1,73 ,43,456/- SHOULD HAVE BEEN DECLARED. APPLYING THE SETTLED JUDICIAL GUIDELINE, IT IS SUBM ITTED THAT 2.1 AT THE OUTSET, WE MAY SUBMIT THAT THERE WAS NO OC CASION OR THE ASESSEE TO DECLARED ANY CAPITAL GAIN(BASED ON THE A LLEGED SALE CONSIDERATION OF RS. 21 LAKHS) IN AS MUCH AS THERE WAS NO TRANSFER OF ANY PROPERTY EFFECTED THIS YEAR BECAUSE THE SAID PROPERTY HAD ALREADY BEEN GIFTED TO THE SAID SOCIETY VIDE A GIFT DEED DATED 19.12.2005 (PB 11-14) AND THE ASSESSEE HAD ALREADY PARTED WITH THE POSSESSION AND ALSO OWNERSHIP OF THE SAID PROPERTY IN A.Y.2006-07 ITSELF HENCE, THERE WAS NO LTCG IN THIS YEAR. IN FACT, THE ASSESSEE NEITHER IN THE ORIGINAL RETUR N (PB 51-60) NOR IN THE RETURN FILED U/S 148 (PB 61-68) DECLARED ANY SALE CONSIDERATION AND RATHER NIL LTCG WAS DECLARED. THE AO HOWEVER, APPE ARS TO HAVE TAKEN THIS FACT FROM A COMPUTATION PREPARED AND FLED BY T HE ASSESEE VIDE HIS LETTER DATED 26.11.2010 (PB 130-132) IN THE ALTERNATE ONLY WHEN REQUIRED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THUS, THE VERY REASON THAT THE ASSESSEE HAS DECLARED LESS SALE CONSIDERATION WAS A MISCONCEPTION OF FACT AND THUS, WAS A NON- EXISTENT REASON. 2.2 THERE APART, MERELY BECAUSE THE ORIGINAL ASSESSMEN T WAS NOT FRAMED UNDER SCRUTINY, IS NOT A GOOD GROUND BEING RELEVANT ONLY TO THE PROVISO TO SEC. 147. OTHERWISE, THE BASIC CONDITIONS LAID U/S 147 (1) MUST HAVE BEEN COMPLIED WITH BY THE AO. 2.3 FROM THE IMPUGNED REASONS IT IS NOT KNOWN HOW AND WHERE FROM THE AO COULD HAVE NOTICED THE HIGHER FMV AT RS. 1,95,15,47 2/- BEING THE DLC RATED IN AS MUCH AS THERE IS NOTHING TO SHOW THE SO URCE OF SUCH INFORMATION AND THEREFORE, EVEN PRIMA FACIE, THE AU THENTICITY AND THE CORRECTNESS OF SUCH FIGURE IS DOUBTFUL. THE AO MIG HT HAVE HEARD SUCH DLC RATED FOR SUBJECTED AREA BUT AS AGAINST HIS PERSONA L KNOWLEDGE, AT LEAST SOME MATERIAL GIVING RISE TO SOME CAUSE OR JUSTIFIC ATION [I.E. REASON TO BELIEVE], MUST BE AVAILABLE. THUS, ACTION U/S 147 WAS BASED ON MERE SUSPICION AN D ON NON-EXISTENT REASON. 6 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. 3. REASSESSMENT SANCTION FOR ISSUE OF NOTICE-NON MEN TIONING IN THE REASONS THAT APPROVAL HAS BEEN OBTAINED FROM THE CI T VITIATES THE REOPENING. [SEC/ 147,148]. IN GTL LIMITED V/S ACIT (2015) 37 ITR 376 (MUM TRIB .) (DPB 1- 11), IT WAS HELD. ANOTHER MAJOR DISCREPANCY NOTICED DURING THE COURS E OF ARGUMENTS IS THAT THERE IS NO MENTION OF AUTHORIZATION OF A HIGHER AU THORITY TO INITIATE THE CURRENT REASSESSMENT PROCEEDINGS. HONBLE BOMBAY HI GH COURT IN THE CASE OF DSJ COMMUNICATIONS VS DCIT, REPORTED IN 22 TAMAN 129 (BOM), HELD THAT APPROVAL OF CIT IS MANDATORY. SINCE THERE IS NO MENTION OF THE APPROVAL SOUGHT FROM THE CIT ON THE REASONS, AS REC ORDED BY THE AO TO IMITATE REASSESSMENT PROCEEDINGS, THE ENTIRE INITIA TION HAS BEEN VITIATED AND BECOME BAD IN LAW (PARA 24) 4.1. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVE OPPOSED THE SUBMISSIONS. 4.2. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. THE REASON FOR REOPENING OF THE ASSESSMENT WAS THAT THE ASSESSEE HAD FILED INCOME TAX RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 31/10/2008 DECLARING INCOME OF RS. 2,92,074/-. SUB SEQUENTLY, A NOTICE U/S 148 WAS ISSUED FOR REOPENING OF ASSESSMENT. IT WAS OBSERVED THAT DURING THE PERIOD UNDER CONSIDERATION THE ASSESSEE HAD SOLD A PLOT OF LAND SITUATED 76B, VISHVESHRIA NAGAR EXTENTION, TRIVENI NAGAR, GOPAL P URA BY PASS, JAIPUR TO TILAK EDUCATION SOCIETY, JAIPUR ON 11/5/2007 FOR A SALE CONSIDERATION ON RS. 21 LAKHS. HOWEVER, THE REGISTRATION AUTHORITY HAD TAKEN THE SALE CONSIDERATION AT RS. 1,95,15,472/- AS PER THE DLC RATE. THEREFOR E, THE CAPITAL GAIN OF RS. 1,73,43,456/-, ESCAPED THE ASSESSMENT ON THIS BASIS , THE ASSESSMENT WAS 7 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. REOPENED. THE FACT THAT THE STAMPED VALUATION AUTH ORITY HAS ADOPTED A DIFFERENT SALE CONSIDERATION. THEREFORE, IN TERMS O F SECTION 50C THE ASSESSING OFFICER WAS JUSTIFIED FOR REOPENING THE ASSESSMENT FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN. ACCORDINGLY, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT (A). THE CA SE LAWS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE IN SUPPORT OF HIS CONTENTI ONS ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. THE GROUND NO. 1.1 TO 1.2 ARE DISMISSED. 5. NOW, WE TAKE UP THE GROUND NO. 2. TO 4. GROUND N O. 2 IS AGAINST TAKING THE VALUE BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. HE SUBMITTED THAT THE AUTHORITIES BELOW FAI LED TO APPRECIATE THE FACT THAT THE TRANSFER HAD NOT TAKEN PLACE BY THE SALE D EED DATED 5/11/2007 SINCE THE PROPERTY WAS ALREADY GIFTED TO THE SOCIETY. TH E LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. IT IS CONTENDED THAT THERE WAS NO TRANSFER OF ANY PROPERT Y EFFECTED DURING THE YEAR UNDER APPEAL AS SAID PROPERTY HAD ALREADY BEEN GIFT ED TO THE SOCIETY VIDE IRREVOCABLE GIFT DATED 19/12/2005 AND THE ASSESSEE HAS ALREADY PARTED WITH THE POSSESSION AND ALSO OWNERSHIP OF THE SAID PROPE RTY IN THE ASSESSMENT YEAR 2006-07 ITSELF ONLY, HENCE THE ASSESSEE REMAIN ED NO MORE A LEGAL OWNER OF THE PROPERTY ON DATED 5/11/2007. IT IS ALSO CON TENDED THAT SALE WAS ALSO IMMEDIATELY GOT CANCELLED THROUGH CANCELLATION DEED EXECUTED ON 7/11/2007, 8 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. HE DREW OUR ATTENTION TO PAPER BOOK PAGES 28 TO 30. HE FURTHER SUBMITTED THAT THE SOCIETY HAD NEVER PAID SALE CONSIDERATION OF RS. 21 LAKHS. HE SUBMITTED THAT THE SALE IS NOT REAL BUT A MERE FORM ALITY. HE FURTHER SUBMITTED THAT IT WAS ONLY MEET TO PROCEDURAL REQUIREMENTS MA DE BY DIFFERENT EDUCATION DEPARTMENT OF THE GOVERNMENT OF RAJASTHAN, WHO WERE CONTINUOUSLY INSISTING THAT SOCIETY MUST SHOW ITSELF TO BE THE OWNER OF TH E SAID PROPERTY AND THE SAME SHOULD APPEAR IN ITS AUDITED BALANCE SHEET. T HE FACTUM OF THE DONATION BY THE APPELLANT TO THE SAID SOCIETY WAS RECOGNIZED EVEN BY THE EDUCATION DEPARTMENT. THE ASSESSEE IS SECRETARY AND THE FOUN DER OF THE SOCIETY. HE IS DEVOTING HIS TIME AND SKILL FOR THE DEVELOPMENT OF THE SAID SOCIETY SINCE ITS EXISTENCE AND WAS FULLY DEVOTED. HE SUBMITTED THAT LONG-TERM GAIN IS NOT DEPENDENT UPON REGISTRATION WHICH IS ILLEGAL TRANSF ER OF PROPERTY. HE SUBMITTED THAT THE ONLY INFIRMITY WAS THAT SUCH GIF T DEED WAS NOT GOT REGISTERED BUT THAT CLEARLY CONVEYED THE INTENTION OF THE PARTY. THE LAW IS WELL SETTLED THAT THE COMPUTATION AND CHARGE OF TAX WITH RESPECT TO CAPITAL GAIN IS NOT DEPENDENT ON A TRANSFER. IN STRICT LEGAL SENSE HE SUBMITTED THAT THE LAW IS WELL SETTLED THAT WHERE THE SELLER HAD ALREADY PART ED WITH THE POSSESSION OF THE PROPERTY AND HAS ALSO MADE PART PERFORMANCE PUR SUANT TO THE WRITTEN CONTRACT BETWEEN THE SELLER AND THE BUYER, THE TRAN SFER SHALL BE DEEM TO HAVE TAKEN PLACE. MERELY, ON THE HAPPENING OF THIS EVEN TS AND THE REVENUE NEED NOT WAIT TILL THE TACKING PLACE OF THE FORMAL REGIS TRATION OF THE PROPERTY AND THE 9 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. DEPRIVING IT OF THE LEGITIMATE TAX. IN SUM AND SUB STANCE THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT MERELY THE DOC UMENT REGISTRATION IN THE FORM OF SALE DEED CAN NOT BE THE BASIS FOR MAKING T HE ASSESSEE LIABLE FOR LONG- TERM CAPITAL GAIN TAX. HE SUBMITTED THAT THE INTEN TION OF THE PARTY SHOULD BE INFERRED FROM THE CONTRACT OF THE PARTIES. HE FURTH ER CHALLENGED THE VALUATION ADOPTED BY THE DVO. ON THE GROUND THAT THE PROPERT Y IN QUESTION WAS A RESIDENTIAL PROPERTY AND THE DVO HAS WRONGLY VALUED THE SAME AS A COMMERCIAL PROPERTY LEADING TO A VAST DIFFERENT. T HIS CONTENTION HOWEVER, WAS NOT APPRECIATED EITHER BY THE DVO OR BY THE LD. CIT(A). HE FURTHER SUBMITTED THAT NEITHER THE APPELLANT NOR THE SOCIET Y EVER APPLIED FOR CONVERSION /CHANGE OF USER FROM RESIDENTIAL TO COMM ERCIAL AT ANY POINT OF TIME. HE FURTHER SUBMITTED NO COMMERCIAL ACTIVITY WAS CARRIED OUT ONLY A SCHOOL WAS BEING RUN THEREIN AND THIS FACT IS OVER STRESSED BY THE LD. DVO. HE SUBMITTED THAT NO COMMERCIAL ACTIVITIES ARE ADMI TTEDLY REPORTED IN THE SURROUNDINGS OR IN THE ADJACENT PLOTS/PROPERTY. SI MPLY BECAUSE SCHOOL IS BEING RUN DOES NOT IPSO FACTO INCREASES ITS FAIR MA RKET VALUE IN MANIFOLD THAT IS FROM RESIDENTIAL AT RS. 4,400/- PER SQ. YD. TO COMM ERCIAL AT RS. 19,800/- PER SQ. YD. HE SUBMITTED THAT IT IS ALSO A FACT THAT T HE PROPERTY SITUATED 2 KM AWAY FROM THE MAIN ROAD. HE SUBMITTED THAT THE DVO IS MERELY BASED ITS VALUATION ON THE BASIS OF THE DLC RATE HE SUBMITTED THAT DVO HAS NOT APPLIED HIS MIND HE FURTHER SUBMITTED THAT THE ASSESSEE WAS ALSO DENIED DEDUCTION 10 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. UNDER SECTION 54F OF THE ACT. HE FURTHER SUBMITTED THAT THE ASSESSEE MADE INVESTMENT OF RS. 12,78,400/- CLAIMING EXEMPTION UN DER SECTION 54F OF THE ACT AND EVEN THE AO AS ALLOWED THE SAME. HOWEVER, THE ASSESSING OFFICER AGREED WITH THE ALLOWABILITY OF THE CLAIM SO MADE, HOWEVER, HE RESTRICTED THE CLAIM UP TO RS. 12,78,400/-. 5.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVES OPPOSED THE SUBMISSIONS AND SUBMITTED THAT THE ENTIRE ARGUMENT IS BASED UPON A COOKED- UP STORY. THE ASSESSEE OUGHT TO HAVE PLACED A VALU ATION REPORT IF HE WAS SO AGGRIEVED BY THE VALUATION CONDUCTED BY THE DVO. H E SUBMITTED THAT THERE IS A CATEGORICALLY FINDING THAT SCHOOL WAS BEING RUN O N THE PREMISES WHICH WAS ESSENTIALLY FOR COMMERCIAL PURPOSE. HE FURTHER SUB MITTED THAT ADMITTEDLY THE GIFT DEED WAS EXISTED PRIOR TO REGISTRATION OF SALE DEED AND WAS NOT UNREGISTERED DOCUMENT AS PER THE REGISTRATION ACT W OULD NOT CONFIRM ANY RIGHT ON THE SOCIETY. THEREFORE, SAME HAS NO VALIDATED I N THE EYES OF LAW. 5.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE DO NOT SEE ANY MERIT INTO THE CONTENTIO N OF THE LD. COUNSEL FOR THE ASSESSEE THAT BY VIRTUE OF GIFT DEED THE ASSESS EE HAD TRANSFERRED THE RIGHTS AND TITLES OF THE PROPERTY IN QUESTION BY TH E UN-REGISTERED GIFT DEED. AS THE LAW IS WELL SETTLED UN-REGISTERED DOCUMENT DOES NOT TRANSFER TITLE OF IMMOVABLE PROPERTY. ANOTHER CONTENTION OF THE LD. C OUNSEL FOR THE ASSESSEE IS THAT AS PER THE JDA RECORDS, THIS PROPERTY IS A RES IDENTIAL PROPERTY. HE 11 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. SUBMITTED THAT UNDER THE IDENTICAL FACTS, THE COORD INATE BENCH IN THE CASE OF ANITA SODHI VS. ITO IN ITA NO. 169/JP/2014 WHEREIN THE TRIBUNAL WAS PLEASED TO RESTORED THE ISSUE OF VALUATION OF PROPERTY TO T HE FILE OF ASSESSING OFFICER FOR FRESH DECISION. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE PROPERTY AS PER THE JDA RECORDS REMAINS RESIDENTIAL. THE RE VENUE HAS NOT PLACED ANY MATERIAL AS TO WHAT WAS THE BASIS OF THE STAMP VALU ATION AUTHORITY FOR TREATING THE PROPERTY AS THE COMMERCIAL PROPERTY FO R THE PURPOSE OF STAMP VALUATION . IT IS ALSO UN-REBUTTED FACT THAT THE A SSESSEE HAS BEEN RUNNING A SCHOOL ON THE LAND IN QUESTION. IT IS STATED BY TH E COUNSEL FOR THE ASSESSEE THAT EVEN IF IT IS PRESUMED THAT ON THE DATE OF TRA NSFER A SCHOOL WAS BEING RUN IN THAT EVENT ALSO THE PROPERTY IN QUESTION CAN NOT BE TREATED AS A COMMERCIAL PROPERTY AS RUNNING OF SCHOOL IS NOT A COMMERCIAL A CTIVITY. AT THE MOST THE VALUATION CAN BE MADE ON THE BASIS OF THE INSTITUTI ONAL RATES. WE FIND MERIT INTO THIS CONTENTION OF THE LD. COUNSEL FOR THE ASS ESSEE IT IS ALSO NOT CLEAR UNDER THESE FACTS WHEN THE SCHOOL WAS BEING RUN AND THE PROPERTY REMAIN AS RESIDENTIAL PROPERTY IN THE RECORDS OF JAIPUR DEVEL OPMENT AUTHORITY, WHICH IS A COMPETENT AUTHORITY FOR THIS PURPOSE. IT IS NOT CLE AR FROM THE RECORDS, AS TO WHY THE STAMP VALUATION AUTHORITY HAVE ADOPTED THE VALUE ON THE BASIS OF THE COMMERCIAL RATES. THE DVO HAS MERELY ADOPTED ON TH E BASIS OF LAND AND BUILDING AREA METHOD. IN THE LIGHT OF THE ABOVE DI SCUSSION IT WOULD BE APPROPRIATE TO SET ASIDE THE ISSUE OF VALUATION WIT H REGARD TO ASCERTAINING THE 12 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR. FAIR MARKET VALUE ON THE DATE OF TRANSFER. THESE G ROUNDS OF THE ASSESSEES APPEAL ( GROUND NOS 2 TO 4) ARE ALLOWED FOR STATIS TICAL PURPOSES. 6. GROUND NO. 5 RELATES TO CHARGING OF INTEREST WHI CH IS CONSEQUENTIAL. THE GROUND RAISED IS DISMISSED. 7. GROUND NO. 6 IS GENERAL IN NATURE NEEDS NO SEPAR ATE ADJUDICATION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10/3/2 017 SD/- SD/- HKKXPAN DQY HKKJR (BHAGCHAND) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10 /03/2017. VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI RAGHUVEER SINGH TANWAR, JAIPUR . 2. IZR;FKHZ @ THE RESPONDENT-THE INCOME TAX OFFICER, WARD-4(3), J AIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 357/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR 13 ITA NO. 357/JP/2015 SHRI RAGHUVEER SINGH TANWAR.