Shri Rajeshkumar Shantilal Patel, Surat V. The Income Tax Officer, Ward-2(1), Surat

ITA 3665/AHD/2015

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1539 (ITAT-SURAT)
• Duration Of Justice: 5 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 30-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUPAMA SINGLA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Fair market value; Valuation report; Condonation of delay; Set aside
• Section: 271(1)(c); 50C; 143(1); 48; 13; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR.SHRI ARJUN LAL SAINI, HON'BLE ACCOUNTANT MEMBER (VIRTUAL HEARING) . . ./ I.T.A NO.3665/AHD/2015 [ [ / ASSESSMENT YEAR: 2008-09 SHRI RAJESHKUMAR SHANTILAL PATEL, 19, HARIHAR PATEL NIWAS, PATEL STREET, UDHNAGAM, SURAT. [PAN: ABCPP 9555 A] VS THE INCOME TAX OFFICER, WARD-2(1), SURAT. / APPELLANT /RESPONDENT [ /ASSESSEE BY SHRI MITISH MODI CA /REVENUE BY MRS. ANUPAMA SINGLA - SR.DR / DATE OF HEARING: 12 . 0 2 .20 2 1 /PRONOUNCEMENT ON: 12 . 0 2 .202 1 /O R D E R PER PAWAN SINGH, JUDICIAL MEMEBER: 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, SURAT, HEREINAFTER REFERRED AS LD. CIT (A), DATED 16.09.2015 FOR ASSESSMENT YEAR (AY) 2008-09. 2. PERUSAL OF RECORDS SHOWS THAT IMPUGNED ORDER WAS PASSED BY THE LD. CIT(A) ON 16.09.2015. HOWEVER, THE APPEAL WAS FILED ON 30.12.2012. FURTHER PERUSAL OF RECORD REVEALS THAT REGISTRY HAS NOTIFIED TO THE ASSESSEE ABOUT THE DEFECT OF DELAY OF 10 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILED AN SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 2 APPLICATION FOR CONDONATION OF DELAY. IN THE APPLICATION, THE ASSESSEE STATED THAT ORDER OF LD. CIT(A) WAS RECEIVED ON 21.10.2015. THERE WAS RENOVATION WORK IN THE OFFICE OF ASSESSEE AND ALL MATERIAL OF OFFICE RECORDS INCLUDING THE IMPUGNED ORDER WAS SHIFTED TO OTHER PLACE AND APPEAL COULD NOT BE FILED WITHIN THE TIME. THE REQUISITE APPEAL FEES WAS PAID ON 24.12.2015, HOWEVER, THE APPEAL MEMO WAS ALSO SIGNED ON THE SAME DAY. HOWEVER, THE APPEAL COULD BE FILED ONLY ON 30.12.2012. 3. THE LEARNED AR OF THE ASSESSEE SUBMITS THAT IN FACT THERE IS DELAY OF SEVEN DAYS IN FILING THE PRESENT APPEAL. THE NON-FILING OF APPEAL IN TIME WAS NOT INTENTIONAL, BUT DUE TO THE REASON THAT OFFICE OF ASSESSEE WAS UNDER RENOVATION AND IMPUGNED ORDER WAS MIXED UP IN THE OFFICE RECORD, THE ASSESSEE REALIZED FOR FILING THE APPEAL, ONLY WHEN THE IMPUGNED ORDER WAS TRACED ON 23.12.2014, WHILE CHECKING THE RECORD, THE ASSESSEE IMMEDIATELY ON REALIZING THE URGENCY OF FILING THE APPEAL IMMEDIATELY TOOK NECESSARY STEP AND MADE THE PAYMENT OF NECESSARY APPEAL FEES ON 24.12.2015. THE INTENTION OF ASSESSEE IS TO PURSUE THE APPEAL ON MERIT. THE ASSESSEE WOULD NOT GET ANY BENEFIT FOR CAUSING DELAY IN FILING OF APPEAL. THE LEARNED AR FOR THE ASSESSEE PRAYED THAT WHEN TECHNICAL ISSUE MAY BE AVOID AGAINST THE SUBSTANTIAL JUSTICE, THE ASSESSEE HAS A GOOD CASE ON MERIT AND SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 3 LIKELY TO SUCCEED AND THAT A LIBERAL VIEW MAY BE TAKEN TO CONDONE THE DELAY IN FILING THE APPEAL. 4. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE NOT SERIOUSLY OBJECTED THE CONDONATION OF DELAY SERIOUSLY. HOWEVER, THE LEARNED DR FOR THE REVENUE SUBMITS THAT THE BENCH MAY TAKE THE DECISION IN ACCORDANCE WITH LAW. 5. WE HAVE CONSIDERED THE CONTENTION OF BOTH THE PARTIES AND THE CONTENTS OF APPLICATION FOR CONDONATION OF DELAY, FILED BY THE ASSESSEE. CONSIDERING THE FACT THAT THERE IS SMALL DELAY IN FILING THE APPEAL AND THE SUBMISSIONS OF THE LEARNED AR FOR THE ASSESSEE THAT THERE WAS NO DELIBERATE DELAY ON THE PART OF THE ASSESSEE AND THAT WHEN TECHNICAL ISSUE ARE FITTED AGAINST THE SUBSTANTIAL JUSTICE, THE TECHNICALITIES MAY BE AVOIDED, WE FIND THAT THE ASSESSEE HAS SHOWN SUFFICIENT CAUSE TO CONDONE THE DELAY. THUS, THE DELAY OF 7 DAYS IN FILING OF APPEAL IS CONDONED. NOW ADVERTING TO THE MERITS OF THE CASE. THE ASSESSEE RAISED FOLLOWING GROUNDS OF APPEAL : (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS)-II, SURAT ERRED IN CONFIRMING THE ACTION OF THE ITO, WARD 2(1), SURAT (FOR THE SAKE OF BREVITY 'THE AO') IN MAKING THE ADDITION OF RS. 15,77,900/- INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT ARBITRARILY AND PURELY ON PRESUMPTION, ASSUMPTION AND SURMISES FOR THE ALLEGED CAPITAL GAIN ON TRANSFER OF THE LAND AND HENCE, LIABLE TO BE SET ASIDE. SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 4 (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, BOTH THE LOWER AUTHORITIES HAVE GRIEVOUSLY FAILED TO SEE THAT THE VALUATION REPORT GIVEN BY THE DVO ON MAKING REFERENCE BY THE AO, WITHOUT AFFORDING AN OPPORTUNITY TO THE APPELLANT BEING HEARD AND HENCE, THE ORDER PASSED BY BOTH THE LOWER AUTHORITIES SOLELY RELYING UPON THE DVO'S REPORT GIVEN IN PURE VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE, IS WITHOUT JURISDICTION, ILLEGAL, BAD IN LAW AND LIABLE TO BE STRUCK DOWN. (3) BOTH THE LOWER AUTHORITIES HAVE GRIEVOUSLY ERRED IN NOT PROPERLY APPRECIATING THE ENTIRE CORRESPONDENCES MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS AND/OR APPEAL/REMAND PROCEEDINGS ALREADY BEING SUPPLIED WITH THE APPEAL MEMO FORMING PART OF THE STATEMENT OF FACTS INCLUDING COGENT EXPLANATIONS AND SUBMISSIONS MADE IN WRITING BY THE APPELLANT ON VARIOUS DATES ALONG WITH THE VARIOUS ENCLOSURES ATTACHED WITH THE SAID SUBMISSION AND HENCE, NOT JUSTIFIED. (4) YOUR APPELLANT FURTHER RESERVES HIS RIGHTS TO ADD, ALTER, AMEND OR MODIFY ANY OF THE AFORESAID GROUNDS BEFORE OR AT THE TIME OF HEARING OF AN APPEAL. 6. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR (AY) 2008-09 ON 25.03.2009 DECLARING INCOME OF RS.1,08,810/-. INITIALLY, THE RETURN WAS ACCEPTED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS REOPENED UNDER SECTION 147 OF THE ACT. NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED 16.09.2010. THE ASSESSING OFFICER (AO) RECORDED THAT THE COPY OF REASONS RECORDED WERE PROVIDED TO THE ASSESSEE ALONG WITH THE NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE FILED HIS REPLY DATED SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 5 30.09.2010 AND STATED THAT RETURN FILED ON 25.03.2009 BE TREATED AS RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. 7. THE ASSESSMENT WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED BY THE AO FROM THE OFFICER OF SUB-REGISTRAR SURAT THAT ASSESSEE SOLD IMMOVABLE PROPERTY BEING AGRICULTURAL LAND SITUATED AT RS NO.43, BLOCK NO.39, VILLAGE SONARI, SACHIN FOR A SALE CONSIDERATION OF RS.8,50,000/-. INITIALLY, THE SALE OF THE LAND WAS EXECUTED ON 18.04.2007 SHOWING THE SALE CONSIDERATION OF RS. 8.50 LAKHS. THE SUB-REGISTRAR CONCERNED WHILE REGISTERING THE DOCUMENTS TREATED THE SALE CONSIDERATION OF LAND FOR THE PURPOSE OF STAMP VALUATION AT RS. 40,06,800/- ON THE BASIS OF JANTRI RATE OF THE AREA AND FINALLY SALE DEED WAS REGISTERED ON 19.02.2008. THE AO ON THE BASIS OF AFORESAID INFORMATION OF THE SUB-REGISTRAR MADE REOPENING UNDER SECTION 147. DURING RE- ASSESSMENT THE AO NOTED THAT ASSESSEE HAS SHOWN SHORT TERM CAPITAL GAIN (STCG) ON SALE OF SAID ASSET. THE A.O. BY INVOKING THE PROVISION OF SECTION 50C OF THE ACT TREATED THE VALUE DETERMINED BY STAMP VALUATION AUTHORITY AS A FULL VALUE OF CONSIDERATION AT RS. 40,06,800/-. THE ASSESSEE IS HAVING 50% SHARE IN THE LAND, THEREBY THE AO AFTER SETTING OFF THE INCOME DISCLOSED BY ASSESSEE IN HIS RETURN OF INCOME MADE ADDITION OF RS.15,77,900/-. SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 6 8. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE STATED THAT DURING THE RELEVANT PERIOD, THE ASSESSEE TRANSFERRED A PLOT OF AGRICULTURAL LAND SITUATED IN VILLAGE SONARI, SACHIN DISTRICT, SURAT. THE ASSESSEE OFFERED TAXABLE INCOME OF RS.1,08,814/- INCLUDING SHORT TERM CAPITAL GAIN ON TRANSFERRED THE SAID LAND OF RS.1,78,500/-. THE ASSESSEE SOLD HIS LAND AT THE FAIR MARKET VALUE (FMV) PREVAILING AT THE TIME OF TRANSFER OF LAND WHILE EXECUTING THE SALE DEED ON 19.02.2008. DURING THE RE- ASSESSMENT, THE ASSESSEE COMPLIED ALL NOTICES. THE ASSESSEE FILED OBJECTIONS AGAINST THE INITIATION THE RE-ASSESSMENT PROCEEDINGS FOR ALLEGED ESCAPEMENT INCOME FROM TAXATION AND FOR INVOKING PROVISION OF SECTION 50C OF THE ACT. THE AO REOPENED THE CASE OF ASSESSEE ON THE BASIS OF INFORMATION FROM SUB- REGISTRAR-1, SURAT ABOUT THE SALE DEED EXECUTED ON 19.02.2008 WHEREIN THE STAMP VALUATION AUTHORITY DETERMINED THE VALUE OF LAND AT RS.40,06,800/- FOR THE PURPOSE OF STAMP AND RECOVERED THE ADDITIONAL STAMP DUTY FROM THE PURCHASER. THE ASSESSEE RECEIVED SALE CONSIDERATION OF RS.4,25,500/- ONLY BEING 50% SHARE IN THE SAID LAND. THE AO DISREGARDED THE SUBMISSION OF ASSESSEE AND SUBSTITUTED THE VALUE BY ADOPTING THE DEEMING VALUE ADOPTED BY STAMP VALUATION AUTHORITY AND APPLIED THE PROVISION OF SECTION 50C OF THE ACT AND MADE ADDITION ACCORDINGLY. THE AO MADE ADDITION PURELY ON ASSUMPTION AND SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 7 PRESUMPTION. THE AO SOLELY RELIED UPON THE VALUATION OF STAMP DUTY AUTHORITIES AND A STRAIGHT AWAY APPLIED SECTION 50C OF THE ACT WITHOUT BRINGING MATERIAL ON EVIDENCE THAT ANY ADDITIONAL OR ACTUAL CONSIDERATION RECEIVED OVER AND ABOVE OF THE FAIR MARKET VALUE AS PER THE REGISTER SALE DEED. THE AO NOT REFERRED THE MATTER TO THE DISTRICT VALUATION OFFICER (DVO). ON THE CONTENTION RAISED BY THE ASSESSEE, THE LD. CIT(A) DIRECTED THE AO TO REFER THE MATTER TO THE DVO FOR DETERMINING OF FMV ON THE DATE OF TRANSFER OF AGRICULTURAL LAND IN QUESTION. THE DVO FILED THE REPORT ON 10.02.2015 AND ESTIMATED FMV OF ASSET/LAND AT RS.65,89,500/-. THE ASSESSEE OBJECTED TO THE METHOD OF VALUATION ADOPTED BY THE DVO. THE ASSESSEE RAISED OBJECTION THAT THE DVO HAS TAKEN THE SALE INSTANCES FOR THE YEAR 2011-12 AND THAT NO REASON OR LOGIC TO CONSIDER THE SALE INSTANCES OF 2011-12 IS GIVEN. THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSION OF ASSESSEE, REPORT OF DVO AND THE OBJECTION FILED BY THE ASSESSEE HELD THAT THE VALUATION OFFICER IN HIS REPORT STATED THAT DESPITE GIVING OPPORTUNITY TO THE ASSESSEE, THE ASSESSEE HAS NOT FILED ANY OBJECTION BEFORE HIM. THE LD.CIT(A) FURTHER HELD THAT PROVISION OF SECTION 50C OF THE ACT IS A DEEMING PROVISION TO TAX THE DIFFERENCE OF CAPITAL GAIN. THE SECTION 50C OF THE ACT WAS INCORPORATED TO PREVENT LARGE SCALE UNDER VALUATION OF REAL VALUE OF THE PROPERTY IN THE SALE DEED SO AS TO DEFRAUD THE GOVERNMENT SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 8 OF ITS LEGITIMATE REVENUE. THE LD. CIT(A) BY REFERRING DECISION OF HON'BLE MADRAS HIGH COURT IN K.R. PALANISAMY VS. UOI [2008] 306 ITR 61 (MAD) AND HON'BLE PUNJAB AND HARYANA HIGH COURT IN CIT VS CHANDI BUCHAR [2010] 323 ITR 510 (P&H) UPHELD THE ACTION OF THE ASSESSING OFFICER. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED THIS PRESENT APPEAL BEFORE THE TRIBUNAL. 9. WE HAVE HEARD THE SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND THE LEARNED DEPARTMENTAL REPRESENTATIVE (DR) FOR REVENUE AND HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. THE LD AR FOR THE ASSESSEE SUBMITS THAT ASSESSEE FILED OBJECTION IN WRITING AGAINST THE VALIDITY OF REOPENING. THE OBJECTION OF ASSESSEE WAS NOT DISPOSED OFF BY THE AO. THE AO REOPENED THE CASE BY SERVING NOTICE UNDER SECTION 148 OF THE ACT ON 16.09.2010. IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE FILED HIS REPLY DATED 30.09.2010 AND REQUESTED THE AO TO TREAT THE INCOME FILED ON 25.03.2009 AS RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE DURING THE ASSESSMENT, VIDE APPLICATION DATED 22.12.2011 RAISED OBJECTION THAT ASSESSEE AND HIS CO-OWNER SHRI DIPAKBHAI DALPATBHAI RANA SOLD THE AGRICULTURAL LAND FOR A SALE CONSIDERATION OF RS.8,51,000/- AND THAT THE SHARE OF ASSESSEE BEING 50% IS RS.4,25,500/-. THE ASSESSEE ALSO SPECIFICALLY STATED THAT ASSESSEE OFFERED SHORT TERM SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 9 CAPITAL GAIN (STCG) ON SALE OF SUCH ASSET. SIMILARLY, THE CO- OWNER OF ASSESSEE ALSO OFFERED SIMILAR STCG. THE REVENUE ACCEPTED THE STCG OFFERED BY HIS CO-OWNER. HOWEVER, THE ADDITION WAS MADE AGAINST THE ASSESSEE BY INVOKING THE DEEMING PROVISION. THE LEARNED AR OF THE ASSESSEE SUBMITS THAT REVENUE CANNOT TREAT THE ASSESSEE INDIFFERENTLY THAN HIS CO-OWNER. IN HIS CO-OWNER CASE THE REVENUE HAS ACCEPTED STCG. HOWEVER, IN ASSESSEES CASE, THE ADDITION IS MADE BY INVOKING OF DEEMING PROVISION OF SECTION 50C OF THE ACT. 10. THE LEARNED AR FOR THE ASSESSEE SUBMITS THAT THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. KUMARARANI SMT. MEENAKSHI ACHI REPORTED IN 292 ITR 624 HELD THAT THE ASSESSEE IS ALSO ENTITLED FOR THE BENEFIT ENJOYED BY OTHER CO-OWNER WHOSE VALUATION OF THE SAME PROPERTY AT THE SAME TIME AS THAT OF ASSESSEE WAS ACCEPTED BY THE REVENUE. THE LD.AR FOR THE ASSESSEE SUBMITS THAT THE BENEFIT EXTENDED TO HIS CO-OWNER WHOSE VALUATION OF THE SAME PROPERTY, AT THE SAME TIME AS THAT OF ASSESSEE WAS ACCEPTED, BUT WAS NOT ACCEPTED BY THE REVENUE IN ASSESSEES CASE AND THAT THE ASSESSEE CANNOT BE TREATED INDIFFERENTLY. THE AR FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE TRIBUNAL IN SHRI CHETANBHAI PRAHLAD GAMI VS. ITO, IN ITA NO.2082/AHD/2013 DATED 19.07.2019 AND RAMANBHAI UKABHAI PATEL (HUF) VS ITO [2019] 102 SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 10 TAXMANN.COM 109 (SURAT TRIBUNAL) AND IN M. AMBALAL DESAI VS. ITO IN ITA NO.1870/AHD/2015 DATED 07.01.2021. 11. ON THE OTHER HAND, THE LEARNED DR FOR THE REVENUE SUPPORTED THE ORDER OF LOWER AUTHORITIES. THE LEARNED DR FOR THE REVENUE FURTHER SUBMITS THAT BEFORE THE LD.CIT(A) THE ASSESSEE ASKED TO REFER THE QUESTION OF DETERMINATION OF FMV AT RELEVANT POINT OF TIME BY DVO. THE LD. CIT(A) DIRECTED THE AO TO MAKE THE REFERENCE FOR DETERMINATION OF FMV BY DVO. THE DVO FURNISHED HIS REPORT AND DETERMINED THE MARKET VALUE OF LAND MORE THAN THE VALUE ADOPTED BY STAMP VALUATION AUTHORITY. THE LD. CIT(A) ACCEPTED THE VALUATION OF STAMP VALUATION AUTHORITY AND UPHELD THE ADDITION OF AO. THE LEARNED DR FOR THE REVENUE FURTHER SUBMITS THAT IN CASE OF CO-OWNER NAMELY SHRI DIPAKBHAI DALPATBHAI RANA, NO SCRUTINY ASSESSMENT WAS TAKEN. THE RETURN OF SHRI DIPAKBHAI DALPATBHAI RANA WAS ACCEPTED UNDER SECTION 143(1) OF THE ACT; HENCE THE ASSESSEE CANNOT TAKE THE PLEA FOR TREATING HIM INDIFFERENTLY. IN THE CASE OF ASSESSEE, THE ASSESSEE WAS GIVEN FULL OPPORTUNITY BEFORE MAKING ADDITION. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PARTIES AND HAVE GONE THROUGH THE ORDER OF AUTHORITIES BELOW. WE HAVE ALSO DELIBERATED ON VARIOUS CASE LAWS RELIED BY LEARNED AR FOR THE ASSESSEE AND THE LOWER AUTHORITIES. THE AO REOPENED THE CASE ON THE BASIS OF INFORMATION RECEIVED FROM SUB-REGISTRAR OFFICE, SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 11 SURAT ABOUT DETERMINING THE VALUE OF CONSIDERATION FOR THE PURPOSE OF PAYMENT OF ADDITIONAL STAMP DUTY, ON THE INSTRUMENT OF REGISTRATION BY STAMP VALUATION AUTHORITY, IN ADDITION TO SALE CONSIDERATION SHOWN IN SALE DEED DATED 19.02.2008. THE AO MADE ADDITION SOLELY ON THE BASIS OF INFORMATION RECEIVED FROM SUB-REGISTRAR OFFICE FOR CHARGING THE ADDITIONAL STAMP VALUE FOR TRANSFER OF LAND AS PER JANTRI RATE OF STAMP VALUATION AUTHORITY. WE HAVE FURTHER NOTED THAT DURING RE-ASSESSMENT THE ASSESSEE VIDE HIS APPLICATION DATED 22.12.2011 STATED THAT THE ASSESSEE WAS JOINT-OWNER WITH SHRI DIPAKBHAI DALPATBHAI RANA BEING 50% SHAREHOLDER AND 50% OF SALE CONSIDERATION WAS RECEIVED BY HIM /RANA. THE ASSESSEE HAS PLACED ON RECORD COPY OF APPLICATION DATED 22.12.2011 ALONG WITH THE COPY OF RETURN OF INCOME WITH COMPUTATION OF TOTAL INCOME FOR AY 2008-09 OF HIS CO-SHARER. NO FINDING FOR ACCEPTING THE SIMILAR CAPITAL GAIN IN CO- OWNERS CASE, AND TREATING THE ASSESSEE INDIFFERENTLY, IS GIVEN EITHER BY THE AO OR BY THE LD.CIT(A). THOUGH, DURING THE FIRST APPELLATE STAGE, THE LD CIT(A0 REFERRED THE MATTER TO THE DVO, HOWEVER THE ADDITION BASED ON DEEMING PROVISION UNDER SECTION 50C OF THE ACT WAS UPHELD. 13. BEFORE US, THE AR OF THE ASSESSEE VEHEMENTLY SUBMITTED THAT ONCE THE SIMILAR CAPITAL GAIN AS OFFERED BY THE ASSESSEE ON TRANSFER OF SAME ASSET HAS BEEN ACCEPTED BY THE REVENUE IN SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 12 ASSESSEES CO-OWNERS CASE, THE ASSESSEE CANNOT BE TREATED INDIFFERENTLY AND RELIED ON VARIOUS CASE LAWS AS NOTED (SUPRA). THE LEARNED AR OF THE ASSESSEE ALSO RELIED ON THE DECISION OF COORDINATE BENCH IN M.AMBALAL DESAI VS. ITO (SUPRA), RAMANBHAI UKABHAI PATEL (HUF) VS ITO (SUPRA). WE HAVE NOTED THIS COMBINATION OF ALMOST SIMILAR SET OF FACTS IN CASE OF LATE MOHANLAL AMBALAL DESAI VS. ITO (SUPRA) PASSED THE FOLLOWING ORDER: 7. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF LOWER AUTHORITIES CAREFULLY. WE HAVE ALSO DELIBERATED ON VARIOUS CASE LAWS RELIED BY THE AR OF THE ASSESSEE. BEFORE US, THE AR OF THE ASSESSEE VEHEMENTLY SUBMITTED THAT IN ASSESSEES CO-OWNER CASE, THE REVENUE HAS ACCEPTED SIMILAR LONG TERM CAPITAL GAIN IN THE SCRUTINY ASSESSMENT. COPY OF THE ASSESSMENT ORDER IN RESPECT OF TWO CO-OWNERS IS PLACED ON RECORD. WE HAVE NOTED THAT NO COUNTER TO THE SUBMISSION OF THE ASSESSEE, WAS MADE BY DR THAT SIMILAR LONG TERM CAPITAL GAIN WAS ACCEPTED IN CASE OF CO-OWNER. 8. THE HON'BLE MADRAS HIGH COURT IN ICT VS. KUMARARANI MEENAKSHI ACHI (SUPRA) HELD THAT DURING THE SAME ASSESSMENT YEAR SAME QUANTITY OF WEALTH IN POSSESSION OF CO-SHARER IS SUBJECTED TO A LOWER RATE OF TAXATION, IT WOULD BE HIGHLY IMPROPER TO BURDEN A SIMILARLY SITUATED CO- SHARER WITH A HIGHER RATE OF TAX. IF SUCH AN ACTION ON THE PART OF THE ASSESSING AUTHORITIES IS SANCTIONED IT WOULD MILITATE AGAINST THE PRINCIPLE OF EQUALITY OF LAWS ENSHRINED IN ARTICLE 14 OF THE CONSTITUTION. BY FOLLOWING THE SAME PRINCIPLE, THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN CHETANBHAI PRAHLADBHAI GAMI VS. ITO IN ITA NO.2082/AHD/2013 DATED 19.07.2019, THE TRIBUNAL GRANTED RELIEF TO THE ASSESSEE HOLDING THAT WHILE MAKING THE ASSESSMENT OF THE SAME PROPERTY THE SIMILAR TREATMENT SHOULD BE GRANTED. 9. WE HAVE NOTED THAT IN ASSESSEES CO-OWNERS CASE WITH RESPECT TO THE PROPERTY AGAINST THE SALE OF WHICH THE ASSESSEE CLAIMED LONG TERM SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 13 CAPITAL GAIN, THE AO IN ASSESSEES CO-OWNER CASE IN PRABHODHCHANDRA AMBELAL DESAI ALLOWED THE SIMILAR LONG TERM CAPITAL GAIN BY PASSING THE FOLLOWING ORDER : 3. ON PERUSAL OF RECORDS AND DETAILS SUBMITTED BY THE ASSESSEE IT WAS FOUND THAT THE ASSESSEE WAS CO-OWNER HAVING SHARE OF 6.25% IN THE PROPERTY SOLD FOR RS.2,00,00,001/- ON 19.01.2009 SITUATED AT SURVEY NO.86, LUNSIKUI, NAVSARI. VALUE OF PROPERTY AS PER STAMP DUTY VALUATION WAS DETERMINED AT RS.4,09,01,000/-. THE ASSESSEE HAS NOT DECLARED CAPITAL GAIN AS HE HAS NOT FILED RETURN OF INCOME FOR AY 2009-10 . THE SAID PROPERTY WAS INHERITED BY THE ASSESSEE. THE ASSESSEE HAS SUBMITTED VALUATION REPORT OF THE PROPERTY FROM GOVT. APPROVED VALUER WHO HAS ARRIVED VALUE OF PROPERTY AT RS.66,61,020 AS ON 01.04.1981. THE VALUE OF THE ASSESSEES SHARE COMES TO RS. 4,16,314. INDEXED COST AS PER SECTION 48 OF THE ACT IS WORKED OUT AT RS.24,22,947/-. AS PER STAMP DUTY AUTHORITY THE ASSESSEES SHARE BEING 6.25% OF SALE VALUE IN THE PROPERTY COMES TO RS.25,56,310/-. THUS CAPITAL GAIN COMES TO RS. 1,33,363/-, WHICH WAS TAXABLE IN THE HANDS OF THE ASSESSEE. THE CAPITAL GAIN OF RS.1,33,363 HAS NOW BEEN SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. HOWEVER, THE ASSESSEE HAS NOT DECLARED SUO MOTO LONG TERM CAPITAL GAIN AS HE HAS NOT FILED RETURN OF INCOME. THE ASSESSEE HAS CONSCIOUSLY NOT FILED RETURN OF INCOME TO AVOID PAYMENT OF TAX. THEREFORE, PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE INITIATED ON THIS ISSUE FOR CONCEALMENT OF INCOME. 10. WE HAVE NOTED THAT IDENTICAL WORDED ASSESSMENT ORDER WAS PASSED IN OTHER CO-OWNER CASE I.E. SMT. PRABHABEN HARSHADRAI DESAI, RELEVANT PART OF THE ASSESSMENT ORDER IS EXTRACTED BELOW;: 3. ON PERUSAL OF RECORDS AND DETAILS SUBMITTED BY THE ASSESSEE IT WAS FOUND THAT THE ASSESSEE WAS CO-OWNER HAVING SHARE OF 6.25% IN THE PROPERTY SOLD FOR RS.2,00,00,001/- ON 19.01.2009 SITUATED AT SURVEY NO.86, LUNSIKUI, NAVSARI. VALUE OF PROPERTY AS PER STAMP DUTY SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 14 VALUATION WAS DETERMINED AT RS.4,09,01,000/-. THE ASSESSEE HAS NOT DECLARED CAPITAL GAIN AS HE HAS NOT FILED RETURN OF INCOME FOR AY 2009- 10. THE SAID PROPERTY WAS INHERITED BY THE ASSESSEE. THE ASSESSEE HAS SUBMITTED VALUATION REPORT OF THE PROPERTY FROM GOVT. APPROVED VALUER WHO HAS ARRIVED VALUE OF PROPERTY AT RS.66,61,020 AS ON 01.04.1981. THE VALUE OF THE ASSESSEES SHARE COMES TO RS. 4,16,314. INDEXED COST AS PER SECTION 48 OF THE ACT IS WORKED OUT AT RS.24,22,947/-. AS PER STAMP DUTY AUTHORITY THE ASSESSEES SHARE BEING 6.25% OF SALE VALUE IN THE PROPERTY COMES TO RS.25,56,310/-. THUS CAPITAL GAIN COMES TO RS. 1,33,363/-, WHICH WAS TAXABLE IN THE HANDS OF THE ASSESSEE. THE CAPITAL GAIN OF RS.1,33,363 HAS NOW BEEN SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. HOWEVER, THE ASSESSEE HAS NOT DECLARED SUO MOTO LONG TERM CAPITAL GAIN AS HE HAS NOT FILED RETURN OF INCOME. THE ASSESSEE HAS CONSCIOUSLY NOT FILED RETURN OF INCOME TO AVOID PAYMENT OF TAX. THEREFORE, PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE INITIATED ON THIS ISSUE FOR CONCEALMENT OF INCOME. 11. IN VIEW OF THE ABOVE AFORESAID FACTUAL AND LEGAL DISCUSSION AND RESPECTFULLY FOLLOWING THE DECISION OF MADRAS HIGH COURT IN KUMARARANI MEENAKSHI ACHI (SUPRA) AND DECISION OF CO-ORDINATE BENCH IN PRABHODHCHANDRA AMBELAL DESAI (SUPRA), THE REVENUE CANNOT TREAT THE ASSESSEE IN DIFFERENT WAY, THEREFORE, THE ADDITION TO THE LONG TERM CAPITAL GAIN ADDED BY THE AO, CONFIRMED BY LD.CIT(A) IS DELETED. IN THE RESULT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 14. CONSIDERING THE AFORESAID FACTUAL AND LEGAL DISCUSSION, WE ACCEPT THE CONTENTION OF LD. AR FOR THE ASSESSEE THAT ONCE, THE SIMILAR STCG OFFERED BY THE CO-OWNER HAS BEEN ACCEPTED BY THE REVENUE, AND THE ASSESSEE IS ALSO ENTITLED FOR SIMILAR RELIEF. WE FIND CONVINCING FORCE IN THE SUBMISSIONS LEARNED AR FOR THE ASSESSEE. HENCE, THE APPEAL OF THE ASSESSEE IS ALLOWED. SO FAR AS THE OBJECTION OF LEARNED DR FOR THE REVENUE IS THAT THE CASE OF CO- OWNER OF SHRI DIPAKBHAI DALPATBHAI RANA, NO SCRUTINY SHRI RAJESHKUMAR SHANTILAL PATEL VS. ITO, WARD-2(1), SURAT./ ITA NO.3665/AHD/2015 FOR A.Y. 2008-09 15 ASSESSMENT WAS INITIATED, IS CONCERN, WE FIND THAT THIS FACT WAS BROUGHT BY ASSESSEE AT THE EARLIEST POSSIBLE ACTION. THE REVENUE HAS NOT TAKEN ANY ACTION FOR REOPENING THE CASE OF CO-OWNER AND THEREBY ACCEPTED THE SIMILAR STCG ON SAME TRANSACTION, THEREFORE, IN OUR VIEW, THE ASSESSEE CANNOT BE TREATED INDIFFERENTLY FOR SIMILAR TRANSACTION. THUS, THE OBJECTION RAISED BY THE LEARNED DR FOR THE REVENUE IS NOT ACCEPTABLE TO US. 15. CONSIDERING THE FACT, WE HAVE ALLOWED THE APPEAL OF ASSESSEE ON PRELIMINARY SUBMISSION OF THE LEARNED AR OF THE ASSESSEE, THEREFORE, ADJUDICATION OTHER GROUND OF APPEAL RAISED BY ASSESSEE HAVE BECOME ACADEMIC. ORDER PRONOUNCED ON 12 TH FEBRUARY 2021 BY PLACING THE RESULT IN THE NOTICE BOARD. SD/- SD/- (DR. ARJUN LAL SAINI) (PAWAN SINGH) ( /ACCOUNTANT MEMBER) ( /JUDICIAL MEMBER) / SURAT, DATED : 12 TH FEB 2021 #SGR COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT