Smt. Indumatiben G. Parmar, Rajkot V. Income Tax Officer, Ward-1(1)(1), Rajkot

ITA 39/RJT/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9191 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 08-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DEEPAK M RINDANI
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 143(3); 50C; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 39/RJT/2018 ( ASSESSMENT YEAR: 2007-08) SMT. INDUMATIBEN G PARMAR BHAVESH, 11, VIJAY PLOT, RAJKOT / VS. THE INCOME TAX OFFICER WARD 1(1)(1), RAJKOT ./ ./ PAN/GIR NO. : ARQPP0463P ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : MR. DEEPAK M. RINDANI, A.R. / RESPONDENT BY : MR. PRAVEEN VERMA, SR. D.R. DATE OF HEARING 01/07/2019 !'# / DATE OF PRONOUNCEMENT 08/07/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX(APPEALS)-1, RAJKOT (CIT(A) IN SHORT), DATED 2 2.12.2017 ARISING IN THE ASSESSMENT ORDER DATED 27.03.2015 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) R.W.S. 148 OF THE INCO ME TAX ACT, 1961 (THE ACT) CONCERNING AY 2007-08. 2. THE GROUNDS OF APPEAL RAISED BY ASSESSEE READS A S UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 1, RAJKOT HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN RESPECT OF ITA NO. 39/RJT/2018 [SMT. INDUMATIBEN G PARMAR VS. ITO] A.Y. 2007 -08 - 2 - RE-OPENING THE ASSESSMENT U/S.147 OF THE I T ACT IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 1, RAJKOT HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN RESPECT OF WRONGLY PASS THE ORDER U/S. 143(3) R.W.S. 148 OF TH E I T ACT IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 1, RAJKOT HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN RESPECT OF WRONGLY APPLY THE SECTION 50C OF THE ACT AND ADOPTE D THE VALUE OF THE PROPERTY AS PER THE STAMP DUTY AUTHORITY AND AD DED TO THE TOTAL INCOME OF RS.3,69,0607- IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 1, RAJKOT HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN RESPECT OF WRONGLY MENTIONED THE FACTS IN HIS BODY OF ORDER, I T IS TOTALLY AGAINST THE FACTS OF THE CASE AND PASS THE ORDER WI TH PREJUDICE MIND AND MAKING THE ADDITION ON SURMISES AND CONJECTURE BASIS IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1, RAJKOT HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN RESPECT OF WRONGLY CALCULATE THE INDEXATION COST OF ACQUISITIO N IS ALSO UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1, RAJKOT HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN RESPECT OF WRONGLY MENTIONED THE FACTS IN HIS BODY OF ORDER AN D PASS THE EX- PARTY ORDER IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) - 1, RAJKOT HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN RESPECT OF CHARGING THE INTEREST U/S.234A, 234B & 234C IS UNWA RRANTED, UNJUSTIFIED AND BAD IN LAW. 8. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 1, RAJKOT HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN RESPECT OF INITIATED THE PENALTY PROCEEDINGS U/S. 274 R.W.S. 2 71(1)(C) OF THE I T ACT IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 3. AS PER GROUND NO.1, THE ASSESSEE SEEKS TO CHALLE NGE THE JURISDICTION ASSUMED UNDER S.147 OF THE ACT, THE AF ORESAID GROUND IS DISMISSED AND NOT PRESSED. 4. GROUND NOS. 2 TO 6 CONCERNS ADDITION OF RS.3,69, 000/- BY APPLYING SECTION 50C OF THE ACT. ITA NO. 39/RJT/2018 [SMT. INDUMATIBEN G PARMAR VS. ITO] A.Y. 2007 -08 - 3 - 5. THE GRIEVANCE OF THE ASSESSEE IS AGAINST THE APP LICATION OF SECTION 50C OF THE ACT AND TAKING THE SALE CONSIDER ATION AS PER DISTRICT VALUATION OFFICERS REPORT AS AGAINST THE SALE CONSIDERATION DECLARED BY THE ASSESSEE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS ON THE ISSUE AND PERUSED THE ORDER OF THE CIT(A). THE CIT(A) HA S REJECTED THE CASE OF THE ASSESSEE FOR ADOPTION OF SALE CONSIDERA TION HAVING REGARD TO SECTION 50C OF THE ACT. THE CIT(A) HAS ALSO EXA MINED THE DISPUTE OF INDEXED COST OF IMPROVEMENT. THE CIT(A) HAS DEA LT WITH THE ISSUES RAISED AS UNDER: 6.3 GROUND OF APPEAL NO 3 IN THIS GROUND THE GRIEVANCE OF THE ASSESSEE IS AGA INST APPLICATION OF SECTION 50C AND TAKING THE SALE CONSIDERATION AS PE R DVO'S REPORT AS AGAINST THAT DECLARED BY THE ASSESSEE. I FIND THAT THE AO HAS CONCLUDED THAT: 'CONSIDERING THE VALUATION REPORT, THE LONG TERM CA PITAL GAIN IS RE- COMPUTED AS UNDER: TOTAL SALE CONSIDERATION RS.4,34,700/- (FMV AS PER VALUATION REPORT RS.3,49,400+RS.5,20,00 0 =RS.8.69,400/-, 50% SHARE OFRS.8,69,400/-=RS.4,34,7 00/-) LESS: INDEXED COST : COST OF ACQUISITION (33590+685+2690+3760=40725 X 50 %) =20362X519/161=65640 RS. 65,640/- LONG TERM CAPITAL GAIN RS.3,69,060/- HAVING CONSIDERED RELEVANT FACTS AND RIVAL CONTENTI ONS I FIND THAT IN VIEW OF OBJECTION BY THE ASSESSEE AGAINST ADOPTING THE S ALE CONSIDERATION AT THE VALUE ASSESSED BY THE STAMP DUTY VALUATION AUTHORIT Y, THE AO OF OTHER CO- SELLER HAD REFERRED THE IMPUGNED PROPERTIES FOR VAL UATION TO DISTRICT VALUATION OFFICER. THE DVO LOWERED HIS FIRST ESTIMA TE AFTER CONSIDERING THE OBJECTIONS OF THE CO-SELLER. THEREFORE, IN VIEW OF THE PROVISIONS OF THE SECTION 50C, THE AO'S ACTION IN ADOPTING THE VALUE ESTIMATED BY DVO (WHICH FORTUNATELY FOR ASSESSEE IS LOWER THAN THE S TAMP DUTY VALUATION) IS FAIRLY VALID AND REASONABLE AND THEREFORE, CALLS FO R NO INTERFERENCE. THE GROUND OF APPEAL IS REJECTED. 6.4, GROUND OF APPEAL NO. 5 THE APPELLANT IN SUPPORT OF THIS GROUND HAS ARGUED AT LENGTH THAT HE OUGHT TO HAVE BEEN ALLOWED INDEXED COST OF IMPROVEMENT. I FIND THAT THE ASSESSEE FAILED TO PROVE BEFORE AO THAT HE INCURRED ANY COST OF IMPROVEMENTS. THE A.O. HAS OBSERVED THAT- 'NEITHER ANY DETAILS NOR ANY DOCUMENTARY EVIDENCES IN RESPECT OF COST OF IMPROVEMENT VIZ COPY OF LAY OUT PLAN, COPY OF COMPLETION ITA NO. 39/RJT/2018 [SMT. INDUMATIBEN G PARMAR VS. ITO] A.Y. 2007 -08 - 4 - CERTIFICATE, COPY OF THE BILLS E/C. ARE SUBMITTED. IN VIEW OF THE SAME, THE CONTENTION OF COST OF IMPROVEMENT W NOT ACCEPTE D. THEREFORE, THE SAME IS TAKEN AS NIL. ' I ALSO FIND THAT IN CASE OF OTHER CO-SELLER SHRI DH ARMENDRASINH D PARMAR THE AO HAS VERY ELABORATELY AND COGENTLY DISCREDITE D THE AFFIDAVIT OF SAID CONTRACTOR CLAIMING TO HAVE CARRIED OUT THE ALLEGED CONSTRUCTION. BESIDES, THE AO'S OBSERVATION IN THAT CASE THAT COST OF CONS TRUCTION CLAIMED ON BOUNDARY ETC. WAS 10 TIMES THE COST OF PURCHASE OF PLOT ITSELF IS ALSO NOTEWORTHY. I ALSO FIND FROM THE SALE DEED THAT WHA T HAS BEEN SOLD ARE PLOTS OF LAND, THE SALE DEED DOES NOT MENTION THAT THE PLOTS WERE SOLD WITH ANY CONSTRUCTION ON THEM. THEREFORE, IN MY CONSIDER ED OPINION, THE ASSESSEE'S CLAIM OF COST OF CONSTRUCTION HAS BEEN R IGHTLY REJECTED BY THE AO. THE ACTION OF THE AO IS UPHELD AND GROUND OF AP PEAL IS REJECTED. THE ASSESSEE COULD NOT DISPUTE THE FINDING OF THE CIT(A) IN THE COURSE OF HEARING SUCCESSFULLY. WE FIND THE REASON ING LAID BY THE CIT(A) TO BE ON SOUND FOOTING. WITHOUT REPEATING T HE OBSERVATIONS OF THE CIT(A), WE ENDORSE THE SAME. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED ON MERITS. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 08/07/2019 TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 08/07/2019