OM PRAKASH GUPTA, Jaipur V. ACIT, Jaipur

ITA 358/JPR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4718 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 08-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA J DHK
• Assessee Lawyers: S R SHARMA
• Keywords: Sale consideration of property below Jantri Value
• Section: 43CA; 143(3); 50C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JESK LH-'KEKZ] YS[KK LNL; DS LE{K BEFORE : SHRI RAMESH C.SHARMA, ACCOUNTA NT MEMBER VK;DJ VIHY LA-@ ITA NO.358/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 SHRI OM PRAKASH GUPTA S-3, MAHESH NAGAR BAPU NAGAR, JAIPUR CUKE VS. THE ACIT CENTRAL CIRCLE-2 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACPPG 6487 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY :SHRI S.R. SHARMA, CA JKTLO DH VKSJ LS@ REVENUE BY: SMT. ANURADHA, JCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/08/2019 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 07/08/2019 VKNS'K@ ORDER PER RAMESH C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-4, JAIPUR DATED 22-03-2017 FOR THE ASSES SMENT YEAR 2013-140, IN THE MATTER OF SECTION 143(3) R.W.S. 153B(1)(B) O F THE I.T. ACT, 1961. 2.1 IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR A DDITION OF RS. 6,46,573/- MADE BY THE AO AFTER INVOKING THE P ROVISIONS OF SECTION 50C OF THE ACT. ITA NO.358/JP/2017 SHRI OM PRAKASH GUPTA VS ACIT, CENTRAL CIRC LE 2, JAIPUR 2 2.2 BRIEF FACTS OF THE CASE ARE THAT DURING THE ASS ESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE HAD SOLD A PLOT OF LAND ON 12-04-2012 TO M/S. PRIYAKSHI BUILD TECH PVT. LTD ON WHICH CAPITAL GAIN S OF RS.14,860/-WAS DECLARED BY THE ASSESSEE. THE AO FOUND THAT THE ASS ESSEE TOOK FULL VALUE OF CONSIDERATION OF RS. 33,84,590/- AS PER COMPUTAT ION OF INCOME FOR THE PURPOSE OF SECTION 50C OF THE ACT. THE AO FOUND TH AT STAMP DUTY VALUE ADOPTED BY THE REGISTRAR WAS AMOUNTING TO RS.40,31, 163/-. THE AO INVOKED THE PROVISION OF SECTION 50C OF THE ACT AND THUS MADE THE ADDITION OF RS. 6,46,573/- IN THE DECLARED CAPITAL GAINS. 2.3 BY IMPUGNED ORDER, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE T HIS BENCH. 2.4 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE ARGUED THAT THE OPEN PLOTS OF LAND BEARING NO. 214 MEASUING 185 .78 SQ. METER AND 204.51 SQ. MTR (466.84 SQ. YARDS) WERE ALLOTTED BY THE COOPERATIVE SOCIETY BUT NO PHYSICAL POSSESSION WAS HANDED OVER TO THE ASSESSEE. THE PHYSICAL POSSESSION WAS WITH THE ORIGINAL OWNERS (K ASHTKARS) AND AS SUCH SAID LAND WAS A DISPUTED ONE. LOOKING TO THE ABOVE FACTS, THE ASSESSEE AGREED TO SELL THE SAID PLOTS ON 17-12-2011 TO M/S. PRIYAKSHI BUILD TECH. PVT. LTD FOR A SUM OF RS. 33,84,590/- UNDER AN AGRE EMENT TO SELL OF EVEN DATED EXECUTED IN BETWEEN ABOVE SAID PARTIES DULY A TTESTED BY A NOTRARY. ITA NO.358/JP/2017 SHRI OM PRAKASH GUPTA VS ACIT, CENTRAL CIRC LE 2, JAIPUR 3 OUT OF THE SAID TOTAL SALE CONSIDERATION A SUM OF R S. 2.00 LACS WERE RECEIVED BY ACCOUNT PAYEE CHEQUE NO 028438 DATED 17 -12-2011 DRAWN ON ALLAHABAD BANK, VIDHYADHAR NAGAR BRANCH, JAIPUR. OUT OF THE BALANCE SALE CONSIDERATION, A SUM OF RS. 11,67,100/- WAS P AYABLE TO THE KASHTKARS WHO WERE HOLDING PHYSICAL POSSESSION AND RS. 20,17,490/- TO THE ASSESSEE. THE FACTS AND SUBMISSIONS WERE VERIFI ABLE FROM THE AGREEMENT TO SELL FILED BEFORE THE AO. THUS THE ASS ESSEE AGREED TO SELL THE SAID DISPUTED LAND ON 17-12-2011. IT WAS ALSO VERIF IABLE FROM THE AGREEMENT TO SELL THAT REGISTRATION OF THE SALE DEE D WAS SUBJECT TO ISSUANCE OF PATTA/ LEASE DEED FROM THE JAIPUR DEVELOPMENT AU THORITY. THE SAID PATTA WAS ISSUED ON 14-02-2012 AND THE REGISTRATION OF SALE DEED WAS MADE ON 12-04-2012. AS PER THESE FACTS, IT IS APPAR ENT THAT THE ASSESSEE AGREED TO SELL THE ABOVE SAID PLOTS OF LAND AT THE PREVAILING MARKET RATE ON 17-12-2011 AND AS SUCH THE STAMP DUTY VALUE OF THE SAID PROPERTY SHOULD BE CONSIDERED AS ON THE SAID DATE I.E. 17-12-2011. THE STAMP DUTY RATE ON THE SAID DATE I.E. 17-12-2011 WAS AT RS. 6880/- PER SQ. YARD. A COPY OF THE DLC RATE CHART ISSUED BY THE RAJASTHAN STATE GOVT. SSUB-REGISTRAR, AMER IN SUPPORT OF ABOVE FACTS WAS FILED BEFORE THE AO. AS PER SAID RATE THE TOTAL SALE VALUE WORKS OUT TO RS. 32,11,859/- AS AG AINST THE ACTUAL SALE CONSIDERATION OF RS. 33,84,590/- I.E THE SALE CONSI DERATION RECEIVED BY THE ITA NO.358/JP/2017 SHRI OM PRAKASH GUPTA VS ACIT, CENTRAL CIRC LE 2, JAIPUR 4 ASSESSEE IS MORE THAN THE DLC RATE AND THE ASSESSEE CORRECTLY / LEGALLY ADOPTED THE SAID VALUE FOR COMPUTATION OF CAPITAL GAINS. THE AO HAS NOT CONTROVERED THESE FACTS SUBMITTED BY THE ASSESSEE, HENCE THESE ARE TAKEN AS CORRECT FACTS. 2.4.1 THE LD.AR SHRI S.R. SHARMA, CA FURTHER ARGUE D THAT DLC RATE ON THE DATE OF AGREEMENT SHOULD BE ADOPTED IF THE AMOU NT OF CONSIDERATION OR A PART THEREOF IS PAID BY AN ACCOUNT PAYEE CHEQUE. AS PER SECTION 50C FIRST AND SECOND PROVISO BY FINANCE ACT, 2016, THOU GH THE SAME IS STATED TO BE W.E.F. 1-04-2017 BUT BEING CLARIFICATORY PROV ISION APPLIES RETROSPECTIVELY. HE FURTHER SUBMITTED THAT A SIMIL AR PROVISIONS AS THAT OF SAID PROVISO TO SECTION 50C EXITS IN SECTION 43CA I NTRODUCED BY FINANCE ACT, 2013 W.E.F. 1-4-2014 AND IN PROVISO TO SECTION 56(2)(VII) INSERTED BY FINANCE (NO. 2) ACT, 2009 W.E.F. 1-10-2009 WHICH PR OVISIONS ARE ALSO TO ACHIEVE THE SAME OBJECTS AS THAT OF SECTION 50C. AC CORDINGLY IT WAS VEHEMENTLY ARGUED THAT THE INTENTION OF LEGISLATURE IS TO ADOPT DLC RATE PREVAILING AS ON DATE OF AGREEMENT SUBJECT TO COMPL IANCE OF CONDITION THAT AMOUNT OF CONSIDERATION OR A PART THEREOF IS PAID B Y ACCOUNT PAYEE CHEQUE. 2.5 ON THE OTHER HAND, THE LD. DR CONTENDED THAT TH E AO HAS CORRECTLY ADOPTED THE SALE CONSIDERATION ON THE BASIS OF VALU E ADOPTED FOR THE ITA NO.358/JP/2017 SHRI OM PRAKASH GUPTA VS ACIT, CENTRAL CIRC LE 2, JAIPUR 5 PURPOSE OF STAMP DUTY ON THE DATE OF REGISTRATION O F SALE DEED BY INVOKING THE PROVISION OF SECTION 50C OF THE ACT IN PLACE OF AMOUNT ACTUALLY RECEIVED BY THE ASSESSEE. THERE IS NO INFIRMITY IN THE ORDER OF THE AO, IN SO FAR, IT WAS A CASE OF SEARCH WHEREIN INCRIMINATI NG DOCUMENT WAS FOUND TO THIS EFFECT. 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT IN THE INSTANT CASE THE AO HAS ADOPTED SALE CONSIDERATION OF PLOT SOLD AT R S. 40,31,163/- ON THE BASIS OF VALUE THEREOF ADOPTED FOR THE PURPOSE OF STAMP DUTY ON THE DATE OF SALE BY INVOKING PROVISION OF SECTION 50C OF THE I.T. ACT, 1961 INSTEAD OF RS. 33,84,590/- ACTUALLY RECEIVED BY THE ASSESSE E AND THEREBY MADE AN ADDITION OF RS. 6,46,573/- TO THE INCOME OF THE ASS ESSEE AS INCOME FROM LONG TERM CAPITAL GAIN. I ALSO FOUND THAT THE PLOTS WERE ALLOTTED BY THE COOPERATIVE SOCIETY BUT NO PHYSICAL POSSESSION WAS HANDED OVER TO THE ASSESSEE . I FOUND THAT PHYSICAL POSSESSION WAS WIT H THE OWNER AND AS SUCH THE LAND WAS DISPUTED ONE . BECAUSE OF THE DIS PUTED LAND, THE ASSESSEE AGREED TO SELL THE SAID PLOTS ON 17-12-201 1 FOR A SUM OF RS. 33,84,590/- UNDER AGREEMENT TO SELL. AS PER AGREEME NT TO SELL, OUT OF TOTAL SALE CONSIDERATION, A SUM OF RS. 2.00 LACS WAS RECE IVED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUE DATED17-12-2011. OUT OF THE BA LANCE CONSIDERATION, ITA NO.358/JP/2017 SHRI OM PRAKASH GUPTA VS ACIT, CENTRAL CIRC LE 2, JAIPUR 6 A SUM OF RS. 11,67,100/- WAS PAYABLE TO KASTHKARS W HO WERE HOLDING PHYSICAL POSSESSION AND REMAINING RS. 20,17,490/- T O THE ASSESSEE. ALL THESE FACTS ARE VERIFIABLE FROM THE AGREEMENT TO SE LL FILED BY THE ASSESSEE BEFORE THE AO. THUS THE ASSESSEE AGREED TO SELL THE DISPUTED LAND ON 17- 12-2011. I ALSO FOUND THAT REGISTRATION OF THIS LAN D WAS SUBJECT TO ISSUANCE OF PATTA/LEASE DEED FROM JAIPUR DEVELOPMENT AUTHORI TY. THE SAID PATTA WAS ISSUED ON 14-02-2012 AND THAT THE ASSESSEE AGRE ED TO SALE THE ABOVE SAID PLOTS OF LAND AT THE PREVAILING MARKET RATE O N 17-12-2011 AND AS SUCH THE STAMP DUTY VALUE OF THE SAID PROPERTY SHOULD BE CONSIDERED AS ON THE SAID DATE I.E. 17-12-2011. THE STAMP DUTY RATE ON T HE SAID DATE I.E. 17-12- 2011 WAS RS. 6880/- PER SQ. YARD. A COPY OF THE DLC RATE CHART ISSUED BY THE RAJASTHAN STATE GOVT. SUB-REGISTRAR- AMER IN SU PPORT OF ABOVE FACTS WAS FILED BEFORE AO. AS PER SAID RATE THE TOTAL SAL E VALUE WORKS OUT TO RS. 32,11,859/- AS AGAINST THE ACTUAL SALE CONSIDERATIO N OF RS. 33,84,590/- I.E. THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE IS MORE THAN THE DLC RATE AND THE ASSESSEE CORRECTLY ADOPTED THE SAID VALUE F OR COMPUTATION OF CAPITAL GAIN. THE AO HAS NOT CONTROVERTED THESE FAC TS. THE INTENTION OF THE LEGISLATURE AS BROUGHT BY PROVISO TO SECTION 50C BY FINANCE ACT, 2016 WAS CLARIFICATORY PROVISIONS, ACCORDING TO WHICH LE GISLATURE INTENDED THAT DLC RATE ON THE DATE OF AGREEMENT SHOULD BE ADOPTED IF THE AMOUNT OF ITA NO.358/JP/2017 SHRI OM PRAKASH GUPTA VS ACIT, CENTRAL CIRC LE 2, JAIPUR 7 CONSIDERATION OR A PART THEREOF IS PAID BY ACCOUNT PAYEE CHEQUE. SECTION 50C FIRST AND SECOND PROVISO WERE INSERTED BY FINAN CE ACT, 2016, THOUGH THE AMENDMENT IS STATED TO BE W.E.F. 01-04-2017 BUT BEING CLARIFICATORY PROVISION APPLIES RETROSPECTIVELY. I FOUND THAT SIM ILAR PROVISIONS AS THAT OF SAID PROVISO TO SECTION 50C EXITS IN SECTION 43C A INTRODUCED BY FINANCE ACT, 2013 W.E.F. 1-4-2014 AND IN PROVISO TO SECTION 56(2)(VII) INSERTED BY FINANCE (NO. 2) ACT, 2009 W.E.F. 1-10-2 009 WHICH PROVISIONS ARE ALSO TO ACHIEVE THE SAME OBJECTS AS THAT OF SEC TION 50C. THUS IT IS MANIFEST THAT THE INTENTION OF LEGISLATURE IS TO AD OPT DLC RATE PREVAILING AS ON DATE OF AGREEMENT SUBJECT TO COMPLIANCE OF CO NDITION THAT AMOUNT OF CONSIDERATION OR A PART THEREOF IS PAID BY ACCOUNT PAYEE CHEQUE. IF THE DLC RATE EXISTED ON THE DATE OF AGREEMENT IS ADOPTE D, THE DECLARED CONSIDERATION OF SALE IS IN ACCORDANCE WITH SECTION 50C. 2.6.1 IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I T IS NOT IN DISPUTE THAT AT THE TIME OF ENTERING INTO AGREEMENT TO SELL ON 17-1 2-2011, THE ASSESSEE RECEIVED RS. 2.00 LACS BY ACCOUNT PAYEE CHEQUE DATE D 17-12-2011 DRAWN ON ALLAHABD BANK, VIDHYADHAR NAGAR BRANCH, JAIPUR. THUS I DO NOT FIND ANY MERIT FOR THE VALUE TAKEN BY THE AO AS ON REGIS TRATION OF THE AGREEMENT DATED 12-04-2012. ACCORDINGLY, THE AO IS DIRECTED TO DELETE ITA NO.358/JP/2017 SHRI OM PRAKASH GUPTA VS ACIT, CENTRAL CIRC LE 2, JAIPUR 8 THE ADDITION SO MADE BY THE AO. THUS THE SOLITARY G ROUND OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 /08/ 2019. SD/- JESK LH 'KEKZ (RAMESH C. SHARMA) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07 /08/ 2019 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI OM PRAKASH GUPTA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CENTRAL CIRCLE-2, JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 358/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR