Smt. Avani Shaileshbhai Mehta, Ahmedabad V. Teh Pr. CIT-4, Ahmedabad

ITA 396/AHD/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6522 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 06-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Business income; Revision of order; Depreciation; Maximum Marginal Rate; Cost of acquisition; Fair market value; Reason to believe
• Section: 148; 263; 143(3); 54B; 50C; 54F; 13; 153

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO. 396/AHD/2020 / ASSTT. YEAR: 2015-2016 SMT. AVANI SHAILESHBHAI MEHTA, A-10, ARYAMAN BUNGLOWS, OPP. SHANTINIKETAN SCHOOL, THALTEJ SHILAJ ROAD, THALTEJ, AHMEDABAD-380054. PAN: AFJPM1000N VS. THE PRINCIPAL COMMISSIONER OF INCOME- TAX-4, AHMEDABAD. (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI ASEEM THAKKAR, A.R REVENUE BY : SHRI MOHD. USMAN, CIT.D.R /DATE OF HEARING : 03/08/2021 /DATE OF PRONOUNCEMENT: 03/09/2021 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX-4, AHMEDABAD, DATED 06/05/2020 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 263 OF THE INCOME TAX ACT, 1961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') RELEVANT TO THE ASSESSMENT YEAR 2015-2016. ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 2 2. THE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. PR. CIT ERRED IN HOLDING THE ASSESSMENT FRAMED U/S 143(3) R.W.S. 147 OF THE ACT, AS ERRONEOUS IN SO FAR PREJUDICIAL TO THE INTEREST OF REVENUE. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSE IN THE PRESENT CASE IS AN INDIVIDUAL AND ENGAGED IN THE ACTIVITY OF LEGAL CONSULTANCY. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS SOLD THREE DIFFERENT PROPERTIES WHICH WERE HELD JOINTLY ALONG WITH HER FATHER NAMELY SHRI KRISHNAKANT G. VAKHARIA, AND OTHERS. THE ASSESSEE ON THE SALE OF SUCH PROPERTIES DECLARED THE CAPITAL GAIN OF RS. 2,32,16,098/- IN THE MANNER AS DISCUSSED BELOW: S. NO. DESCRIPTION OF THE PROPERTY SALE DEED REGN NO/DATE OF SALE TOTAL SALES CONSIDERATION; SAHRE IN THE SALES CONSIDERATION DATE OF PURCHASE COST OF PURCHASE INDEXED COST OF PURCHASE LONG TERM CAPITAL GAIN 1 SURVEY NO. 91 PAIKI KHORAJ AGRI LAND 17220/2014 6,30,00,000/ - 15.05.2009 5,32,645/ - 8,63,020/ - 27,36,980/ - 23.12.2014 36,00,000/ - 2 SURVEY NO. 91 PAIKI KHORAJ AGRI LAND 17217/2014 1,20,00,000/ - 23.03.2001 18,200/ - 2,74,979/ - 23,54,097/ - 23.12.2014 24,00,000/- 3 SURVEY NO. 81 PAIKI KHORAJ AGRI LAND 17221/2014 9,20,00,000/- 25.07.1983 31,750/- 2,74,919/- 1,81,25,021/- 23.12.2014 1,84,00,000/- 3.1 HOWEVER, THE LD. PR. CIT FOUND THAT THE PROPERTY BEARING SURVEY NO. 91/KHATA NO. 1489 ADMEASURING 12393 SQ. MTRS. WAS JOINTLY SOLD BY THE ASSESSEE ALONG WITH HER FATHER. THE IMPUGNED PROPERTY WAS PURCHASED IN TWO INSTALMENTS. FIRSTLY, IT WAS PURCHASED BY THE FATHER OF THE ASSESSEE SHRI KRISHNAKANT G. VAKHARIA, ADMEASURING 7713 SQ. MTRS. FOR RS. 54.25 LACS VIDE DEED NO. 448 DATED 28/01/2009. SECONDLY, THE REMAINING PROPERTY ADMEASURING 4680 SQ. MTRS. WAS PURCHASED BY THE ASSESSEE ALONG WITH HER FATHER FOR RS. 35.20 LACS VIDE REGISTRATION DEED NO. 3912 DATED 06/03/2010. ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 3 3.2 AS PER THE LD. PR. CIT, THE ASSESSEE WAS THE OWNER OF 2340 SQ. MTRS. BEING 50% OF 4680 SQ. MTRS OF THE PROPERTY PURCHASED ON 06/03/2010. THUS, THE TOTAL AREA OF THE PROPERTY BEARING SURVEY NO. 91 HELD BY THE ASSESSEE CONSTITUTES 18.88% OF THE PROPERTY. 3.3 HOWEVER, THE ASSESSEE IN THE RETURN OF INCOME DECLARED HER SHARE AT 5.71% IN THE IMPUGNED PROPERTY AND ACCORDINGLY DECLARED HER SALE CONSIDERATION AT RS. 36 LACS OUT OF THE TOTAL CONSIDERATION OF RS. 6.30 CRORES. THUS, THE ASSESSEE OFFERED THE CAPITAL GAIN OF RS. 27,36,980/- IN THE RETURN OF INCOME WHICH WAS ENHANCED BY THE AO IN THE ASSESSMENT FRAMED U/S.143(3) R.W.S 147 OF THE ACT, TO RS.27,81,328/- AGAINST HER SHARE OF RS.1,20,49,962/- BEING 18.88% IN THE TOTAL VALUE OF THE CONSIDERATION. ACCORDINGLY, THE CAPITAL GAIN SHOULD HAVE DECLARED BY THE ASSESSEE FOR RS. 91,98,317/- IN THE MANNER AS DETAILED BELOW: SR. NO DESCRIPTI ON OF THE PROPERTY TOTAL SALE CONSIDERATION SHARE OF ASSESSEE SALE CONSIDERATION DATE OF PURCHASE COST OF PURCHASE INDEXED COST OF ACQUISITION LTCG TO BE RECOMPUTED LTCG DECLARED BY THE ASSESSEE 1 SURVEY NO.91 PAIKI KHORAK AGRI. LAND 6,38,23,950/- 18.88% 1,20,49,962 15.05.2009 17,60,000 28,51,645 91,98,317 27,36,980 3.4 AS PER THE LD. PR. CIT, THE AO IN HIS ASSESSMENT ORDER ERRED IN ACCEPTING SHARE IN THE PROPERTY BEARING SURVEY NO. 91 AT 5.71% INSTEAD OF 18.88% WITHOUT ASSIGNING ANY REASON. ACCORDINGLY, THE LD. PR. CIT WAS OF THE VIEW THAT THERE IS AN ERROR WHICH IS PREJUDICIAL TO THE INTEREST OF REVENUE. 3.5 THE LD. PR. CIT FURTHER OBSERVED THAT THE ASSESSEE HAS CLAIMED EXEMPTION OF THE DEDUCTION U/S 54B OF THE ACT FOR RS. 21,04,500/- WITHOUT FILING ANY SUPPORTING DOCUMENTS WHICH WAS ALSO ALLOWED BY THE AO WITHOUT CARRYING OUT ANY ENQUIRY/ INVESTIGATION DURING THE ASSESSMENT PROCEEDINGS. THUS, THE LD. PR. CIT PROPOSED THE ORDER PASSED BY THE AO U/S 143(3) R.W.S 147 OF THE ACT, BY ISSUING SHOW CAUSE ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 4 NOTICE DATED 10/02/2020, AS ERRONEOUS IN SO FAR PREJUDICIAL TO THE INTEREST OF REVENUE. 3.6 THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTICE VIDE LETTER DATED 24/02/2020 SUBMITTED THAT SHE HAD MADE PAYMENT FOR THE PURCHASE OF PROPERTY BEARING SURVEY NO. 91/KHATA NO. 1489 FOR RS. 5,32,645/- AGAINST THE TOTAL COST OF PURCHASE AT RS. 35.20 LACS. THUS, THE INVESTMENT MADE BY HER IN THE PROPERTY UNDER CONSIDERATION COMES ONLY AT 5.71% ONLY. ACCORDINGLY, THE ASSESSEE HAS TAKEN SHARE IN THE SALE CONSIDERATION OF THE IMPUGNED PROPERTY AT 5.71% OUT OF THE TOTAL CONSIDERATION. 3.7 FURTHERMORE, REMAINING AMOUNT OF SALE CONSIDERATION WAS DECLARED BY HER FATHER IN HIS RETURN OF INCOME AFTER CLAIMING THE PROPORTIONATE COST OF ACQUISITION. 3.8 ALL THE FACTS FOR THE PURCHASE AND SALE OF IMPUGNED PROPERTY WERE DULY VERIFIED BY THE AO DURING THE ASSESSMENT PROCEEDINGS AND THEREAFTER THE CLAIM OF THE ASSESSEE WAS ACCEPTED. 3.9 IT WAS ALSO SUBMITTED THAT THE ASSESSEE AND HER FATHER, BOTH ARE PAYING TAXES AT THE MAXIMUM MARGINAL RATE AND THEREFORE IT CAN BE SEEN THAT THERE WAS NO LOSS INCURRED BY THE REVENUE. 3.10 THE ASSESSEE WITH REGARD TO THE CLAIM MADE U/S 54B OF THE ACT, SUBMITTED THAT THE NECESSARY FACTS DURING THE ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, WERE DULY VERIFIED AND THEREFORE THE SAME WAS ALLOWED BY THE AO IN THE ASSESSMENT ORDER DATED 18/08/2017. FURTHERMORE, THE RE-OPENING U/S 147 OF THE ACT, WAS INITIATED ON ACCOUNT OF DIFFERENCE IN SALE CONSIDERATION DECLARED BY THE ASSESSEE VIS--VIS THE VALUE DETERMINED UNDER THE PROVISION OF SECTION 50C OF THE ACT. ACCORDINGLY, THE AO DID NOT MAKE ANY VERIFICATION WITH RESPECT TO THE DEDUCTION CLAIMED U/S 54B OF THE ACT, DURING THE ASSESSMENT PROCEEDINGS CARRIED OUT U/S 147 ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 5 OF THE ACT. THUS, IT WAS CONTENDED BY THE ASSESSEE THAT NO ADVERSE INFERENCE CAN BE DRAWN AGAINST HER BASED ON ASSESSMENT FRAMED U/S 147 R.W.S. 143 OF THE ACT VIDE ORDER DATED 26/09/2019 DURING THE PROCEEDINGS UNDER SECTION 263 OF THE ACT. 3.11 HOWEVER, THE LD. PR. CIT DISREGARDED THE CONTENTION OF THE ASSESSEE AND HELD THE ORDER OF THE AO AS ERRONEOUS IN SO FAR PREJUDICIAL TO THE INTEREST OF REVENUE BY OBSERVING AS UNDER: 3.3 SO FAR AS THE ISSUE OF ASSESEES SHARE AS TO WHETHER IT SHOULD BE BASED ON INVESTMENT MADE IN THE LAND JOINTLY PURCHASES BY HER FATHER SHRI K. G. VAKHARIA OR ON THE BASIS OF AREA OF LAND PURCHASED JOINTLY WITH HER FATHER IS CONCERNED, THE ASSESSEE'S CONTENTION IS THAT THE COST OF ACQUISITION WAS TO BE THE BASIS FOR DETERMINING THE SHARE IN THE LAND JOINTLY PURCHASED AND NOT ON THE BASIS OF AREA PURCHASED BY THE ASSESSEE AS MENTIONED IN THE SHOW CAUSE NOTICE. I HAVE CONSIDERED THIS ISSUE CAREFULLY AND IT IS HELD THAT THE COST OR VALUE OF THE LAND IS ALWAYS MEASURED IN TERMS OF AREA AND NOT IN TERMS OF THE PROPORTIONATE COST BORNE WHEN THERE IS NO SPECIFIC MENTION OF THE SHARE IN THE ORIGINAL DEED OF PURCHASE OF LAND. IN THE ORIGINAL SALE DEED OF THE LAND SO PURCHASED IN RESPECT OF 4680 SQ.MTRS., THERE WERE ONLY TWO CO-PURCHASERS I.E. THE ASSESSEE AND HER FATHER SHRI KRISHNAKANT G. VAKHARIA AND IN ABSENCE OF SHARING RATIO BETWEEN THEM, THE SHARING RATIO OF 50% IN THE AREA IS TO BE CONSIDERED IN THE CASE OF THE ASSESSEE AND IT IS WORKED OUT TO 2340 SQ. MTRS. , THE COST OF WHICH HAS NOT BEEN BORNE BY THE ASSESSEE. HOWEVER, IN THE SALE DEED FOR RS.6,30,00,000/-, THE ASSESSEE'S NAME APPEARED FOR THE AMOUNT OF RS.36,00,000/- FOR HER SHARE OF LAND OF 2340 SQ.MTRS. OUT OF TOTAL LAND OF 12393 SQ.MTRS. THE RATE OF SALE PER SQ.MTJ-. HAS BEEN WORKED OUT TO RS.5083.51 AND THE ASSESSEE WOULD BE ENTITLED TO RECEIVE AN AMOUNT OF RS.1,18,95,425/- AS AGAINST SHE RECEIVED RS.36,00,000/- AND HER FATHER RECEIVED RS.5,94,00,000/- FOR THE REMAINING LAND OF 10053 SQ.MTRS. FURTHER, SINCE THE A.O. HAS ADOPTED TOTAL SALE CONSIDERATION AT RS. 6,38,23,950/- FOR 12393 SQ.MTRS. FOR WHICH THE AVERAGE RATE OF SALE CONSIDERATION HAS BEEN WORKED OUT TO RS.5150/- PER SQ.MTR. AND ACCORDINGLY, THE ASSESSEE'S SHARE IN THE SALE CONSIDERATION FOR 2340 SQ.MTRS. OF LAND IS WORKED OUT AT RS.1,20,51,000/- WHICH IS FURTHER REQUIRED TO BE REPLACED BY RS. 1,20,49,962/- AS PROPOSED IN THE SHOW CAUSE NOTICE SO AS TO ARRIVE AT THE LOGICAL FIGURE OF SALE CONSIDERATION BASED ON THE FACTS NOW APPRAISED AFRESH. 3.4 CONSIDERING THE ABOVE FACTS AS APPRAISED ON A FRESH PERUSAL OF THE RECORDS NOW MADE AVAILABLE, THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE IS DIRECTED TO BE COMPUTED AS UNDER:- ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 6 SR. NO. DESCRIPTIO N OF IHE PROPERLY TOTAL SALE CONSIDERATIO N SHARE OF ASSESSEE SALE CONSIDERATIO N DATE OF PURCHASE COST OF PURCHASE INDEXED COST OF ACQUISITIO N LTCG TO BE RE- COMPUTED . LTCG BY ASSESSEE 1 SURVEY NO.91 PAIKI KHORAJ AQRI. LAND 63823950 16.88% 12051000 15.05.2009 1760000 2351645 9199355 2736980 2 SURVEY NO.91 PAIKI KHORAJ AQRI, LAND 12246700 20% 2449340 23.03.2001 18200 45903 2403437 2354097 3(A) SURVEY NO.81 PAIKI KHORAI AQRI. LAND ' 23000000 20% ' 4600000 09.01,1984 1946 17179 4582822 3(B) SURVEY NO.81 PAIKI KHORAJ AQRI. LAND 69000000 20% 13800000 11.05.1987 5836 39840 13760160 3 TOTAL OF 3(A) AND 3FB] 92000000 GRAND TOTAL 168070650 18400000 7782 57018 18342982 18125021 27928 120099 29945774 23216098 3.5 THE A.O. IS DIRECTED TO INCORPORATE TOTAL LONG TERM CAPITAL GAIN AT RS.2,99,45,774/- AS AGAINST THAT DECLARED BY THE ASSESSEE AT RS.2,32,16,098/- AND OF RS. 2,35,27,746/- AS DECIDED BY THE A.O. IN THE RE-ASSESSMENT ORDER PASSED ON 26.09.2019. THE A.O. WILL TAX THE AMOUNT OF LONG TERM CAPITAL GAIN OF RS. 91,98,317/- ON PROTECTIVE BASIS WITH A DIRECTION TO TAX THE SAME ON SUBSTANTIVE BASIS IN THE CASE OF SHRI KRISHNAKANT G. VAKHARIA, FATHER OF THE ASSESSEE AS HE HAS PAID THE ENTIRE COST OF ACQUISITION OF LAND AS MENTIONED ABOVE. IN RESPECT OF OTHER PROPERTIES, THE A.O. SHALL CALL FOR THE COPIES OF PURCHASE DEEDS AS MENTIONED IN THE ABOVE TABLES AND ASCERTAIN THE PERSONS WHO HAD BORNE THE COST OF LAND ORIGINALLY PURCHASED/ACQUIRED WITH QUANTIFICATION OF THE AMOUNTS PAID BY THE RESPECTIVE PERSONS AND ALLOW THE SHARE OF THE ASSESSEE IN ACQUIRING THE LANDS SO PURCHASED WITH OTHER FAMILY MEMBERS AND ALLOW THE COST OF ACQUISITION ACCORDINGLY WITH THE BENEFIT OF INDEXATION. 4. SO FAR AS THE CLAIM OF DEDUCTION U/S 54B OF THE ACT IS CONCERNED, IT HAS BEEN RE- ASCERTAINED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.21,04,500/- IN RESPECT OF THE PROPERTY PURCHASED. IN THE BALANCE-SHEET AND THROUGH SCHEDULE OF FIXED ASSETS, IT IS SEEN THAT THE ASSESSEE HAS PURCHASED PROPERTY AT SANAND FOR RS.21,75,000/-. ON GOING THROUGH THE CASE-RECORDS, IT HAS BEEN NOTICED THAT THE ASSESSEE HAD PURCHASED SHOP NO.L IN THE ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 7 BUILDING KNOWN AS 'S.B. PATEL COMPLEX' IN SANAND FOR RS.41,00,000/- THROUGH SALE DEED REGISTERED AT SR.NO.1035 OF 2015 ON 12.02.2015. THE ASSESSEE HAS CLAIMED THE PAYMENT OF RS.20,50,000/-AND CASH OF RS.1,25,000/- PAID ON 09.02.2015. THE PAYMENT OF RS.20,50,000/- HAS BEEN MADE THROUGH CHEQUE NO.171631 DRAWN ON 03.02.2015 ON THE STATE BANK OF INDIA, S.G. HIGHWAY BRANCH, AHMEDABAD TO ONE SHRI PRANAV SUKHDEV PATEL, THE SELLER OF THE PROPERTY AS REFLECTED ON PAGE 19 OF THE SAID SALE DEED. THE BANK STATEMENT FILED BY THE ASSESSEE ALSO REFLECTED THE SAID AMOUNT CLEARED ON 09.02.2015. 4.1 DURING THE COURSE OF PRESENT REVISIONARY PROCEEDINGS, THE ASSESSEE HAS CONTENDED THAT SHE HAD PURCHASED THE AGRICULTURAL LAND AND CLAIMED THE AMOUNT OF RS.21,04,500/- FOR WHICH THE COPY OF PURCHASE DEED HAS BEEN FILED. ON GOING THROUGH THE SAME, IT IS NOTICED THAT THE ASSESSEE HAS NOT FILED THE REQUIRED COPY OF THE PURCHASE DEED BUT FILED THE COPY OF PURCHASE DEED REGISTERED AT SR.NO.5315 OF 2009 THROUGH WHICH SHRI KRISHNAKANT G. VAKHARIA AND THE ASSESSEE MADE PURCHASE FROM CHANDRESH R. PATEL AND OTHERS. THUS, THE ASSESSEE HAS NOT SUBSTANTIATED HER CLAIM FOR THE DEDUCTION U/S 54B OF THE ACT. HERE ONLY A PURCHASE DEED IS AVAILABLE IN RESPECT OF PROPERTY IN THE FORM OF SHOP AT SANAND WHICH HAS BEEN FOUND TO BE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SINCE THE ASSESSEE HAS SOLD NON-AGRICULTURAL LAND, THE AVAILABLE DEDUCTION ON PURCHASE OF SHOP WOULD BE GOVERNED BY THE PROVISIONS OF SECTION 54B OR SECTION 54F OF THE ACT. SECTION 54B OF THE ACT ALLOWS DEDUCTION IN RESPECT OF PURCHASE OF NEW AGRICULTURAL LAND WHICH IS NOT THE CASE OF THE ASSESSEE. FURTHER, SECTION 54F OF THE ACT ALLOWS DEDUCTION IN RESPECT OF PURCHASE OF NEW RESIDENTIAL HOUSE OR CONSTRUCTION OF NEW RESIDENTIAL HOUSE WITHIN THE SPECIFIED TIME LIMIT. THEREFORE, THE PURCHASE OF SHOP AS MENTIONED ABOVE IN WHICH THE ASSESSEE HAD MADE INVESTMENT OF RS.21,04,500/- AS PER THE COPY OF ACCOUNT FOR PURCHASE OF THE PROPERTY AT SANAND CANNOT BE TREATED AS A NEW ASSET FALLING WITHIN THE PURVIEW OF EITHER SECTION 54B OR 54F OF THE ACT. HENCE, IT IS HELD THAT THE A.O. HAD ERRONEOUSLY ALLOWED THE DEDUCTION OF RS.21,04,500/- WHICH IS DIRECTED TO BE WITHDRAWN WHILE GIVING EFFECT TO THIS ORDER U/S 263 OF THE ACT. 5. SINCE THE ASSESSEE HAS QUOTED JUDICIAL PRONOUNCEMENTS IN SUPPORT OF THE CONTENTION THAT THE REVISIONARY PROCEEDINGS OUGHT NOT TO HAVE BEEN INITIATED U/S 263 OF THE ACT AS THE A.O. HAD EXAMINED ALL THE ISSUES AND DECIDED THE SAME AND THERE CANNOT BE SECOND OPINION ON THE ISSUES SO VERIFIED. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. PR. CIT, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. AR BEFORE US FILED A PAPER RUNNING FROM PAGES 1 TO 109 AND SUBMITTED THAT BOTH THE ASSESSEE AND HER FATHER HAVE FILED THEIR INCOME TAX RETURN DECLARING INCOME CHARGEABLE TO TAX AT THE MAXIMUM MARGINAL RATE. THEREFORE, IF ANY INCOME IS ENHANCED IN THE HANDS OF THE ASSESSEE THEN THE EFFECT OF THE SAME SHOULD ALSO BE GIVEN IN THE HANDS OF THE FATHER OF THE ASSESSEE BY REDUCING THE CORRESPONDING INCOME. ACCORDINGLY, IT WAS CONTENDED THAT THE ENTIRE EXERCISE OF MAKING THE REVISIONS UNDER SECTION 263 OF THE ACT WOULD BE TAX NEUTRAL. LIKEWISE, EVEN IF ANY ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 8 ERROR IS POINTED OUT IN THE ASSESSMENT ORDER BUT THE SAME WILL NOT CAUSE ANY PREJUDICE TO THE REVENUE IN SUCH FACTS AND CIRCUMSTANCES. ACCORDINGLY, THE PROCEEDINGS UNDER SECTION 263 OF THE ACT CANNOT BE INITIATED UNTIL AND UNLESS THE CONDITIONS I.E. THE ASSESSMENT IS ERRONEOUS INSOFAR PREJUDICIAL TO THE INTEREST OF REVENUE, ARE ESTABLISHED. 5.1 THE LEARNED AR FURTHER SUBMITTED THAT THE LEARNED PRINCIPAL CIT HAS DIRECTED IN HIS ORDER TO MAKE THE ADDITION ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE. ACCORDING TO THE LEARNED AR THERE CANNOT BE ANY REVISION UNDER SECTION 263 OF THE ACT BY DIRECTING TO MAKE THE ADDITION ON PROTECTIVE BASIS. 6. ON THE OTHER HAND, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED PRINCIPAL CIT PASSED UNDER SECTION 263 OF THE ACT. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ORDER PASSED BY THE AO IN ANY PROCEEDINGS CAN BE REVISED UNDER THE PROVISIONS OF SECTION 263 OF THE ACT IF IT IS FOUND ERRONEOUS INSOFAR PREJUDICIAL TO THE INTEREST OF REVENUE. THE TWIN CONDITIONS I.E. ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE HAS TO BE SATISFIED FOR INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. THERE CAN BE A SITUATION THAT THE ORDER PASSED BY THE AO IS ERRONEOUS BUT NOT PREJUDICIAL TO THE INTEREST OF REVENUE AND VICE VERSA. IN THAT SITUATION, SUCH ORDER CANNOT BE SUBJECT TO THE REVISION UNDER SECTION 263 OF THE ACT. IN THE CASE ON HAND, LET US SEE WHETHER THE ERROR HIGHLIGHTED BY THE LEARNED PR. CIT UNDER SECTION 263 OF THE ACT CAUSES ANY PREJUDICE TO THE INTEREST OF REVENUE. IN THE CASE ON HAND THE ASSESSEE HAS DECLARED HER AMOUNT OF SHARE IN THE SALE CONSIDERATION IN THE JOINT PROPERTY UNDER DISPUTE AMOUNTING TO RS. 36 LAKH- WHEREAS THE LEARNED PR. CIT HAS HELD THAT THE AMOUNT ATTRIBUTABLE TO THE ASSESSEE IN THE SALE CONSIDERATION STANDS AT RS. 1,20,49,962/- ONLY. ADMITTEDLY, THERE IS NO DISPUTE IN THE TOTAL VALUE OF THE SALE CONSIDERATION AS WELL AS THE COST OF ACQUISITION. THUS, IF WE INCREASED THE SALE CONSIDERATION IN THE HANDS OF THE ASSESSEE THEN SIMULTANEOUSLY EFFECT SHOULD ALSO BE GIVEN IN THE HANDS OF THE CO-OWNER BEING THE ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 9 FATHER OF THE ASSESSEE BY DECREASING THE CORRESPONDING SALE CONSIDERATION IN HIS HANDS. THUS EFFECTIVELY, THERE WILL NOT BE ANY BENEFIT TO THE REVENUE. ACCORDINGLY, THERE IS NO PREJUDICE TO THE REVENUE EVEN IF THERE IS ERROR IN THE ASSESSMENT ORDER AND CONSEQUENTLY NO REVISION IS REQUIRED UNDER SECTION 263 OF THE ACT. 7.1 LET US UNDERSTAND THE EFFECT ON THE REVENUE, ASSUMING THE ORDER PASSED BY THE LEARNED PRINCIPLE CIT IS CORRECT UNDER THE PROVISIONS OF LAW. THE NECESSARY WORKING ON THE TAX LIABILITY STANDS AS UNDER: AS PER ASSESSEE KRISHNAKANT AVANI TOTAL SALES CONSIDERATION 8,41,99,949 24400000 10,85,99,949 COST OF ACQUISITION 1,48,41,099 1183902 1,60,25,001 DEDUCTION 54B 1,25,00,000 2104500 1,46,04,500 LTCG 5,68,58,850 2,11,11,598 7,79,70,448 TAX @ 20% 1,13,71,770 42,22,320 1,55,94,090 AFTER GIVING EFFECT OF LEARNED PR CIT FINDING KRISHNAKANT AVANI TOTAL SALES CONSIDERATION 7,59,05,549 3,26,94,400 10,85,99,949 COST OF ACQUISITION 1,48,41,099 11,83,902 1,60,25,001 DEDUCTION 1,25,00,000 21,04,500 1,46,04,500 LTCG 4,85,64,450 2,94,05,998 7,79,70,448 TAX @ 20% 97,12,890 58,81,200 1,55,94,090 ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 10 TOTAL CONSIDERATION FROM PROPERTY - 1 6,30,00,000 ASSESSEE SHARE @ 18.88% 1,18,94,400 ALREADY DECLARED 36,00,000 INCREASE IN CONSIDERATION OF ASSESSEE AND DECREASE IN KRISHNAKANT 82,94,400 7.2 FROM THE ABOVE, WE NOTE THAT THERE IS NO PREJUDICE TO THE REVENUE EVEN IF THE ORDER PASSED UNDER SECTION 263 OF THE ACT BY THE LEARNED PR. CIT IS HELD TO BE CORRECT. ACCORDINGLY WE HOLD THAT, TWIN CONDITIONS AS SPECIFIED UNDER SECTION 263 OF THE ACT HAS NOT BEEN SATISFIED IN THE GIVEN FACTS AND CIRCUMSTANCES. IN HOLDING SO WE DRAW SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES CO. LTD. REPORTED IN 243 ITR 83, THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER: A BARE READING OF SECTION 263(1) MAKES IT CLEAR THAT THE PRE-REQUISITE TO EXERCISE OF JURISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THAT THE ORDER OF THE ITO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, ( I ) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND ( II ) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT - IF THE ORDER OF THE ITO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SECTION 263(1). 7.3 IN VIEW OF THE ABOVE, WE HOLD THAT EVEN THERE IS ANY ERROR IN THE ORDER OF THE AO BUT IT DOES NOT CAUSE ANY PREJUDICE TO THE REVENUE AND THEREFORE THE SAME CANNOT BE REVISED UNDER SECTION 263 OF THE ACT. 7.4 MOVING TO THE 2 ND ALLEGATION RAISED BY THE LEARNED PR. CIT UNDER SECTION 263 OF THE WITH RESPECT TO THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 54B OF THE ACT. IN THIS REGARD WE FIND THAT THE ORDER WHICH IS UNDER REVISION UNDER SECTION 263 OF THE ACT WAS PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT. THE PROCEEDINGS UNDER SECTION 147 OF THE ACT WAS INITIATED ON ACCOUNT OF DIFFERENCE IN THE AMOUNT OF SALE CONSIDERATION SHOWN BY THE ASSESSEE VIZ A VIZ THE VALUE ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 11 DETERMINED FOR THE PURPOSE OF THE STAMP DUTY UNDER THE PROVISIONS OF SECTION 50C OF THE ACT. IN THIS CONNECTION, WE REFER THE REASONS RECORDED UNDER SECTION 147 OF THE ACT WHICH ARE REPRODUCED AS UNDER: IN THIS CASE THE RETURN OF INCOME FILED BY THE ASSESSEE ON 29.09.2015 DECLARING TOTAL INCOME AT RS.2,33,83,360/-. THEREAFTER, THE CASE WAS SELECTED TO SCRUTINY AND ORDER U/S.143(3) WAS PASSED ON 18.08.2017 IN WHICH THE TOTAL INCOME OF RS.2,33,83,360/- WAS DETERMINED. 2. SUBSEQUENTLY, ON VERIFICATION ON RECORDS, IT IS FOUND THAT (A) THE ASSESSEE IN CO-OWNERSHIP OF HER FATHER SH. KRISHNAKANT GULABCHAND VEKHARIA HAS SOLD THIS AGRICULTURAL LAND PARCEL WITH REVENUE SURVEY NO. 91,KHATA NO. 1489 ADMEASURING 12393 SQ, MTRS. FOR TOTAL CONSIDERATION OF RS.6,30,00,000/- VIDE REGISTERED DOCUMENT NO. GDR/17220 OF 2014 DATED: 23/12/2014 WHEREAS AS PER JANTRY RATE THE SAFE CONSIDERATION IS WORKED OUT AT RS.6,38,23,950/-. THEREFORE, THE SALE CONSIDERATION U/S.50C IN RESPECT OF 5.71% SHARE OF THE ASSESSEE COMES TO RS.36,44,347/- AS AGAINST THE ASSESSEE HAS SHOWN A SALE CONSIDERATION AT RS.36,00,000/-. THEREFORE, THERE IS AN ESCAPEMENT OF INCOME TO THE EXTENT OF RS.44,347/- (RS.36.44.347-RS.36,00,000). (B) THE ASSESSEE /N CO-OWNERSHIP OF HER FATHER SH. KRISHNAKANT GULABCHAND VEKHARIA AND THREE OTHERS HAS SOLD THIS AGRICULTURAL LAND PARCEL WITH REVENUE SURVEY NO. 91, KHATA NO. 1017 ADMEASURING 2378 SQ. MTRS. FOR TOTAL CONSIDERATION OF RS. 1,20,000/- VIDE REGISTERED DOCUMENT NO. GDR/17217 OF 2014 DATED: 23/12/2014 WHEREAS AS PER JANTRY RATE THE SALE CONSIDERATION IS WORKED OUT AT RS.1,22,46,700/-. THEREFORE, THE SALE CONSIDERATION U/S.50C IN RESPECT OF 20% SHARE OF THE ASSESSEE COMES TO RS.24,49,340/- AS AGAINST THE ASSESSEE HAS SHOWN A SALE CONSIDERATION AT RS.24,00,000/~. THEREFORE, THERE IS AN ESCAPEMENT OF INCOME TO THE EXTENT OF RS.49,340/- (RS.24,49,340 - R.S.24,00,000). (C) THE LONG TERM CAPITA! GAIN IN RESPECT OF AGRICULTURAL LAND AT R.S. NO.81, KHORAJ IS REQUIRED TO THE COMPUTED AS UNDER; SR. NO. PARTICULARS PURCHASE DATE SATE DATE SALE VALUE ACQUISITION COST LTCG COST/FMV INDEXED COST 1(A ). RS NO. 81, KHORAJ, AGRI. LAND (20% SHARE) - 25% FOR PURPOSE OF DATE OF ACQUISITION 09/01/1984 23/12/2014 4500000 1946 17178 1582822 1(B ). 75% FOR PURPOSE OF DATE OF ACQUISITION 11/05/1987 23/12/2014 13800000 5836 39840 13760160 TOTAL 18400000 - - 18342382 ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 12 IN VIEW OF THE ABOVE, THE LTCG IN RESPECT OF THE ABOVE LAND IS TO BE COMPUTED AT RS.1,83,42,982/- AS AGAINST RS.1,81,24,Q21/-, HENCE, THERE IS UNDER ASSESSMENT OF RS.2,18,961/- (RS.1,83,42,982 - RS.1,81,24,021). 3. IN VIEW OF THE ABOVE FACTS, I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT OF RS.3,12,648/- (RS.44,347 + RS.49,340 + RS.2,18,961) WITHIN THE MEANING OF SECTION 147 OF THE IT ACT AND THE ASSESSEE HAS ALSO NOT DISCLOSED FULLY AND TRULY ALL RELEVANT FACTS AND MATERIALS NECESSARY FOR THE ASSESSMENT THEREFORE, I AM SATISFIED THAT IT IS A FIT CASE FOR RE-OPENING THE ASSESSMENT U/S.147 OF THE IT ACT FOR THE A.Y.2015-16. 7.5 THE REOPENING WAS MADE ON THE ALLEGATION THAT THE ASSESSEE HAS UNDERSTATED THE AMOUNT OF SALE CONSIDERATION OF THE PROPERTY AND THEREFORE THE AO FRAMED THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT CONSIDERING THE SALE CONSIDERATION DECLARED BY THE ASSESSEE VIZ A VIZ THE VALUE ADOPTED FOR THE STAMP DUTY PURPOSES UNDER SECTION 50C OF THE ACT. AS SUCH, THERE WAS NO ISSUE IN THE RE- ASSESSMENT PROCEEDINGS WITH RESPECT TO THE PROVISIONS OF SECTION 54B OF THE ACT. NOW THE CONTROVERSY ARISES WHETHER THE LEARNED PRINCIPAL CIT CAN WIDEN THE SCOPE OF THE ASSESSMENT WHICH WAS FRAMED UNDER SECTION 147 OF THE ACT BY INCLUDING ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPE ASSESSMENT. IN THIS REGARD, WE REFER THE PROVISIONS OF SECTION 147 OF THE ACT WHICH READS AS UNDER: 147. IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 , ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : 7.6 AT THE THRESHOLD, WE FIND THAT IT IS THE SATISFACTION OF THE AO FOR INITIATING THE PROCEEDINGS UNDER SECTION 147 OF THE ACT AFTER RECORDING THE REASONS TO BELIEVE THAT THE INCOME HAS ESCAPE ASSESSMENT. INDEED, THE AO CAN ALSO EXPAND THE SCOPE OF THE PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT IF HE FINDS IN THE COURSE OF PROCEEDINGS THAT THE OTHER INCOME CHARGEABLE TO TAX HAS ESCAPE ASSESSMENT. THE LAW HAS CONFERRED THE POWER TO THE AO WHO HAS BEEN DEFINED UNDER SECTION 2(7A) OF THE ACT WHICH READS AS UNDER: (7A) 'ASSESSING OFFICER' MEANS THE ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER OR ASSISTANT DIRECTOR OR DEPUTY DIRECTOR OR THE INCOME-TAX OFFICER WHO IS VESTED WITH THE RELEVANT JURISDICTION BY VIRTUE OF DIRECTIONS OR ORDERS ISSUED UNDER SUB-SECTION (1) OR SUB- ITA NO.396/AHD/2020 ASSTT. YEAR 2015-16 13 SECTION (2) OF SECTION 120 OR ANY OTHER PROVISION OF THIS ACT, AND THE ADDITIONAL COMMISSIONER OR ADDITIONAL DIRECTOR OR JOINT COMMISSIONER OR JOINT DIRECTOR WHO IS DIRECTED UNDER CLAUSE (B) OF SUB-SECTION (4) OF THAT SECTION TO EXERCISE OR PERFORM ALL OR ANY OF THE POWERS AND FUNCTIONS CONFERRED ON, OR ASSIGNED TO, AN ASSESSING OFFICER UNDER THIS ACT ; 7.7 ON PERUSAL OF THE ABOVE SECTION, WE NOTE THAT SUCH POWER FOR EXPANDING THE SCOPE OF THE PROCEEDINGS UNDER SECTION 147 OF THE ACT DOES NOT LIE WITH THE PRINCIPAL COMMISSIONER OF INCOME TAX. THEREFORE, IN OUR CONSIDERED VIEW THE LEARNED PRINCIPAL CIT CANNOT EXPAND THE SCOPE OF THE PROCEEDINGS UNDER SECTION 47 OF THE ACT BY RAISING THE ISSUE OF DEDUCTION UNDER SECTION 54B OF THE ACT. THUS, IN THE CASE ON HAND, WE FIND THAT THERE WAS NO ISSUE WITH RESPECT TO THE EXEMPTION/DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 54B OF THE ACT IN THE PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT. ACCORDINGLY, WE FIND THAT THE LEARNED PRINCIPAL CIT HAS EXCEEDED HIS JURISDICTION BY HOLDING THE ORDER OF THE AO AS ERRONEOUS INSOFAR PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS COUNT I.E. DEDUCTION/EXEMPTION UNDER SECTION 54B OF THE ACT. IN VIEW OF THE ABOVE, WE HOLD THAT THE ORDER PASSED BY THE LD. PRINCIPAL CIT UNDER THREAT 263 OF THE ACT IS NOT SUSTAINABLE AND THEREFORE WE QUASH THE SAME. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 03/09/2021 AT AHMEDABAD. SD/- SD/- (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) AHMEDABAD; DATED 03/09/2021 MANISH