Smt. Ashaba Rajendrasinh Zala, Jamnagar V. The Commissioner of Income Tax (Appeals), Jamnagar

ITA 409/RJT/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4829 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-09-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 05-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RATHI
• Keywords: Cost of acquisition; Fair market value; Valuation report; Benefit of exemption
• Section: 139(1); 54; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (THROUGH VIRTUAL COURT) BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.409/RJT/2018 (ASSESSMENT YEAR: 2008-09) SMT. ASHABA RAJENDRASINH ZALA, C. A. BHAVIN SHAH, BRS & ASSOCIATES C.A. HOUSE, 4 TH FLOOR, WALKESHWARI, OFF INDIRA GANDHI MARG, JAMNAGAR- 361008 VS. CIT(A) JAMNAGAR, 301, MANEK CENTRE, 3 RD FLOOR, P. N. MARG, JAMNAGAR [PAN NO. AAIPZ5068K] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI BHAVIN SHAH, AR. RESPONDENT BY : SHRI S. S. RATHI, SR. D.R. DATE OF HEARING 28/09/2021 DATE OF PRONOUNCEMENT 30/09/2021 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER DATED 27.08.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), JAMNAGAR ARISING OUT OF THE ORDER DATED 18.02.2016 PASSED BY THE ITO, WA RD 1(1), JAMNAGAR UNDER SECTION 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED AS TO THE ACT) FOR THE ASSESSMENT YEAR (A.Y.) 2008-09. 2. DENIAL OF BENEFIT OF EXEMPTION/DEDUCTION TO THE TUNE OF RS. 1,45,000/- UNDER SECTION 54(1)(II) IS THE SUBJECT MATTER BEFORE US. THE ASSESSEE PURCHASED A PLOT OF LAND AT RAJNAGAR, JAMNAGAR ON 09.02.1998 WHEREUPON A RESIDE NTIAL HOUSE WAS CONSTRUCTED WITH AN AREA OF 273.75 SQ. MTRS. AT A COST OF RS. 10,25, 750/-. SUBSEQUENTLY, THE ASSESSEE SOLD - 2 - ITA NO.409/RJT/2018 SMT. ASHABA RAJENDRASINH ZALA VS. CIT(A) ASST.YEAR 2008-09 THE SAID RESIDENTIAL HOUSE ON 27.07.2007 AT A CONSI DERATION OF RS. 16,00,000/-. THE VALUE OF THE PROPERTY AS PER THE REGISTRATION AUTHORITY W AS OF RS. 21,81,400/-. THE ASSESSEE PURCHASED A NEW RESIDENTIAL HOUSE ADMEASURING 815.7 1 SQ. FT. AT ROYAL PUSHPA PARK, JAMNAGAR AT RS. 6,38,600/- ON 17.08.2007. THE ASSE SSMENT WAS COMPLETED UNDER SECTION 147 OF THE ACT UPON MAKING ADDITION OF RS. 21,81,40 0/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN. THE FIRST APPELLATE AUTHORITY IN APPEAL CONS IDERED THE COST OF ACQUISITION OF THE PROPERTY AT RS. 11,65,000/- FOR THE PURPOSE OF COMP UTING THE CAPITAL GAIN ON THE BASIS OF THE REPORT OF THE DISTRICT VALUATION OFFICER (DVO). 3. THE LD. CIT(A) PASSED THE FOLLOWING ORDERS IN AP PEAL. THE RELEVANT PORTION WHEREOF IS AS FOLLOWS:- 13.2 AGAIN THE APPELLANT'S AR DURING THE COURSE OF APPELLATE PROCEEDING VIDE HIS LETTER DATED 23/08/2017 HAS REQUESTED TO MAKE REFERENCE TO THE D EPARTMENT VALUATION OFFICER FOR VALUATION OF THE PROPERTY AND ACCORDINGLY AS PER DIRECTION OF TH E UNDERSIGNED REFERENCE WAS MADE BY THE AO TO THE DEPARTMENTAL VALUATION OFFICER, VALUATION CE LL, RAJKOT FOR VALUATION OF THE SAID PROPERTY. SUBSEQUENTLY THE AO HAS SENT HIS REMAND REPORT DATE D 05/06/2018 ALONG WITH COPY OF VALUATION REPORT DATED 24/04/2018 OF THE ASST. VALUATION OFFI CER, VALUATION CELL, RAJKOT. ON PERUSAL OF VALUATION REPORT OF DEPARTMENTAL VALUATION OFFICER, IT IS SEEN THAT THE FAIR MARKET VALUE OF THE PROPERTY HAS BEEN ESTIMATED BY HIM AT RS. 11,65,000 /- AS ON 1999-2000 AFTER CONSIDERING THE EVIDENCES PRODUCED BY THE APPELLANT TO HIM AND ALSO HAVING TAKEN IN TO ACCOUNTS ALL THE RELEVANT MATERIALS GATHERED BY HIM. IT MAY BE MENTIONED THAT THE COPY OF REMAND REPORT DATED 05/06/2018 ALONG WITH COPY OF VALUATION REPORT OF THE DEPARTME NTAL VALUATION OFFICER WERE PROVIDED TO THE APPELLANT AND SHE WAS REQUESTED TO FILE HER REPLY. IN RESPONSE THE AR OF THE APPELLANT I.E. SHRI BHAVIN SHAH, CA ATTENDED THE APPELLATE PROCEEDINGS AND STATED THAT HE IS IN AGREEMENT WITH THE REMAND REPORT WITH THE AO, THE AR HAS NOT RAISED AN Y OBJECTION IN RESPECT OF VALUATION OF RS. LL,65,000/- OF THE PROPERTY AS VALUED BY THE DEPART MENTAL VALUATION OFFICER. IN VIEW OF THIS, THE VALUE (I.E. COST OF ACQUISITION) OF THE PROPERTY IS CONSIDERED AT RS. 11,65,000/- FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN ON THE BASIS OF REPORT O F DEPARTMENTAL VALUATION OFFICER. THUS THE GROUND OF APPEAL NO. 2 OF THE APPELLANT IS ALLOWED. HOWEVER, THE AO IS DIRECTED TO CONSIDER THE JANTRI VALUE OF RS. 21,81,400/- AS SALE VALUE OF TH E PROPERTY IN VIEW OF STAMP DUTY VALUATION. AGAIN SINCE HE APPELLANT HIMSELF HAS CONSIDERED VAL UE OF THE PROPERTY OF RS. 11,05,750/- WHICH IS LESS THAN THE VALUE OF THE PROPERTY OF RS. 11,65,00 0/- AS MADE BY THE DVO AS PER HIS VALUATION REPORT AND THEREFORE THE AO IS DIRECTED TO CONSIDER THE COST OF ACQUISITION OF PROPERTY AT 11,05,750/- AND ACCORDINGLY COMPUTE THE CAPITAL GAI N. 4. HOWEVER, THE BENEFIT OF BASIC EXEMPTION OF RS. 1 ,45,000/- HAS NOT BEEN EXTENDED TO THE ASSESSEE. THE LD. CIT(A) WHILE REJECTING TH E CLAIM OF THE ASSESSEE OBSERVED THAT THE ASSESSEE WAS MANDATORILY REQUIRED TO FILE THE R ETURN OF INCOME FOR THE YEAR UNDER - 3 - ITA NO.409/RJT/2018 SMT. ASHABA RAJENDRASINH ZALA VS. CIT(A) ASST.YEAR 2008-09 CONSIDERATION WHICH HE HAS FAILED TO DO. IN THAT V IEW OF THE MATTER THE CLAIM OF DEDUCTION HAS BEEN REJECTED. 5. ON THE OTHER HAND, THE ASSESSEES CONTENTION IS THIS THAT THE AMENDMENT OF THIS PROVISO OF SECTION 139(1) IS APPLICABLE W.E.F. ASSE SSMENT 2020-21 WHICH IS NOT APPLIED IN THE CASE OF THE APPLICANT. IN THIS REGARD, HE HAS DRAWN OUR ATTENTION TO PAGE 132 OF THE PAPER BOOK UPON CONSIDERING THE SAME WE FIND MERIT AND SUBSTANCE IN THE CASE MADE OUT BY THE ASSESSEE. IT APPEARS THAT THE 6 TH PROVISO OF SECTION 139(1) AFTER AMENDMENT IS APPLICABLE FOR A.Y. 2020-21. THE ASSESSEES CASE I S NOT COMING UNDE THE PURVIEW OF SUCH PROVISO. HENCE, WE HOLD THAT THE ASSESSEE IS ENTIT LED TO SUCH CLAIM UNDER SECTION 54 OF THE ACT. WE, THEREFORE, ALLOW THE APPEAL BY DIRECT ING THE LD. AO TO PASS ORDERS IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL PREFERRED BY THE ASSES SEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 30/09/2021 SD/- SD/- (WASEEM AHMED) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/09/2021 TANMAY, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A). 5. , ! ' , #$%% / DR, ITAT, RAJKOT 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, RAJKOT