Smt. Rohini Hitesh Patel, Ahmedabad V. The Income Tax Officer, Ward-2(2)(4), Ahmedabad

ITA 498/AHD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0134 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 01-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: PF JAIN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.498/AHD/2016 / ASSTT. YEAR: 2011-2012 SMT.ROHINI HITESH PATEL 18, GIRISHKUNJ SOCIETY NAVRANG HIGH SCHOOL ROAD NAVRANGPURA AHMEDABAD 380 009. PAN : ADRPP 1822 H VS ITO, WARD - 2(2)(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI P.F. JAIN, AR REVENUE BY : MS.SONIA KUMAR, CIT - DR / DATE OF HEARING : 26/10/2016 / DATE OF PRONOUNCEMENT: 08/11/2016 $%/ O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-10, AHMEDABAD DATED 12.1.2016. 2. THOUGH THE ASSESSEE HAS TAKEN SIX ROUNDS OF APPE AL, BUT HER GRIEVANCE REVOLVES AROUND A SINGLE ISSUE I.E. THE LD.CIT(A) H AS ERRED IN CONFIRMING THE ADDITION OF RS.4,36,528/- IN THE COMPUTATION OF SHO RT TERM CAPITAL GAIN. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HER RETURN OF INCOME ON 29.7.2011 DECLARING TOTAL INCOME AT RS.5, 98,266/-. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESS EE HAS SOLD AN OFFICE-SPACE FOR A CONSIDERATION OF RS.9.50 LAKHS. AFTER DEBITI NG COST OF ACQUISITION AND OTHER EXPENSES, THE ASSESSEE HAS WORKED OUT SHORT T ERM CAPITAL GAIN AT ITA NO.498/AHD/2016 2 RS.6,28,577/-. THE LD.AO FOUND THAT FOR THE PURPOS E OF PAYMENT OF STAMP DUTY, THE PROPERTY WAS VALUED AT RS.13,86,528/- BY THE STAMP DUTY VALUATION AUTHORITY. HE INVITED EXPLANATION OF THE ASSESSEE A S TO WHY THIS VALUE SHOULD NOT BE ADOPTED AS FULL SALE CONSIDERATION AS PROVID ED IN SECTION 50C OF THE INCOME TAX ACT. IN RESPONSE TO THE QUERY OF THE AO , IT WAS CONTENDED BY THE ASSESSEE THAT THIS PREMISES HAD SUPER BUILT-UP AREA OF 78.78 SQ.METERS I.E. APPROX. 848 SQ.FEETS. CARPET AREA WAS ROUGHLY ABOU T 635 SQ.FEETS. THE STAMP DUTY VALUATION AUTHORITY HAS CHARGED STAMP DUTY ON SUPER BUILT-UP AREA, WHEREAS, THE ASSESSEE HAS RECEIVED PRICE OF CARPET AREA. THEREFORE, FAIR MARKET VALUE OF THE PROPERTY COULD NOT BE DETERMINED ON TH E BASIS OF SUPER BUILT-UP AREA. THE LD.AO DID NOT MAKE REFERENCE TO THE VALU ATION OFFICER AS CONTEMPLATED IN SUB-SECTION (2) OF SECTION 50C AND HE ADOPTED THE FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN AT RS.13,86,538/- AS AGAINST RS.9.50 LACS TAKEN BY THE ASSESSEE. ACCORDINGLY, AN ADDITION OF RS.4,36,528/- WAS MADE. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. WITH THE ASSISTANCE OF LD.REPRESENTATIVES, I HAV E GONE THROUGH THE RECORD. SECTION 48 OF THE INCOME TAX ACT, 1961 PRO VIDES MODE OF COMPUTATION OF CAPITAL GAIN. THIS SECTION CONTEMPLATES THAT INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAIN SHALL BE COM PUTED BY DEDUCTING FROM THE VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER, THE AMOUNTS, VIZ. (I) EXPENDITURE INCURRED WHOLLY AND E XCLUSIVELY IN CONNECTION WITH SUCH TRANSFER, AND (II) THE COST OF ACQUISITIO N OF ASSET AND THE COST OF ANY IMPROVEMENT THERETO. SECTION 50C OF THE ACT PROVIDE S THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUED, AS A RESULT OF T RANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED BY AN AUTHORITY OF A STATE GOVERNMENT FOR T HE PURPOSE OF PAYMENT OF STAMP DUTY, IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED ITA NO.498/AHD/2016 3 OR ASSESSED, SHALL, FOR THE PURPOSE OF SECTION 48, TO BE DEEMED TO THE FULL VALUE OF CONSIDERATIONS RECEIVED OR ACCRUING AS A R ESULT OF SUCH TRANSFER. IN OTHER WORDS, IF FOR THE PURPOSE OF STAMP DUTY PA YMENT, PROPERTY HAS BEEN ASSESSED AT A HIGHER RATE, THEN, THIS SECTION PROVIDES THAT SUCH HIGHER VALUE WOULD BE DEEMED AS FULL VALUATION OF S ALE CONSIDERATION. SUB-SECTION (2) OF THIS SECTION FURTHER CONTEMPLATE S THAT WHERE THE ASSESSEE DID NOT DISPUTE ABOUT VALUATION OF SUCH PROPERTY BE FORE THE STAMP VALUATION AUTHORITY, BUT BEFORE THE AO CLAIMS THAT VALUE ADOP TED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) OF SECTION 50C EXCEEDS FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRAN SFER, THEN, THE AO MAY REFER THE VALUATION OF THE CAPITAL ASSETS TO A VALUATION OFFICER. IN THIS CASE, THE ASSESSEE HAS DISPUTED THE VALUATION MADE BY THE STA MP DUTY VALUATION AUTHORITY, BECAUSE THAT VALUATION TOOK DIFFERENT AR EA INTO CONSIDERATION FOR THE PURPOSE OF CHARGING STAMP DUTY. THE AO SHOULD HAVE MADE A REFERENCE TO THE DVO FOR DETERMINING THE FAIR MARKET VALUE OF THE PR OPERTY ON THE DATE OF TRANSFER. CONSIDERING THIS LAPSE AT THE END OF THE AO, I ALLOW THIS APPEAL AND SET THE ORDERS OF THE REVENUE AUTHORITIES BELOW. I REMIT THIS ISSUE TO THE FILE OF THE AO. THE LD.AO SHALL MAKE A REFERENCE TO THE DV O FOR DETERMINING THE FAIR MARKET VALUE OF THE PREMISES OWNED BY THE ASSE SSEE ON THE DATE OF TRANSFER, AND THEREFORE, COMPUTE THE CAPITAL GAIN. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 8 TH NOVEMBER, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 08/11/2016