Kallubhai Budhdhilal Shahu, Surat V. Income Tax Officer, Ward-1(3)(2), Surat

ITA 500/SRT/2023

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 3217 (ITAT-SURAT)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-02-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 20-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Capital Gains; Principle of natural justice
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 500/Srt/2023 (AY: 2015-16) (Hybrid hearing) Kallubhai Budhdhilal Shahu, F/52, Silver Point, Bhatar Road, Surat, Gujarat-395001. PAN No. AFSPS 3485 C Vs. I.T.O., Ward-1(3)(2), Surat. Appellant/ assessee Respondent/ revenue Assessee represented by Shri Tushar Hemani, Senior Advocate with Shri Parimalsinh B. Parmar, Advocate Department represented by Shri Vinod Kumar, Sr. DR Date of institution of appeal 21/07/2023 Date of hearing 29/02/2024 Date of pronouncement 29/02/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 23/05/2023 for the Assessment Year (AY) 2015-16. The assessee has raised following grounds of appeal: “1. The Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. AO in making an addition of Rs.97,59,000/- as income from sale of undisclosed property. 2. The Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. AO in invoking the provisions of S.115BBE while taxing capital gains on a presumptive basis by invoking provisions of S.50C of the Act. Both these sections can not be pressed into service simultaneously. ITA No.500/Srt/2023 Kallubhai Budhdhilal Shahu Vs ITO 2 3. Both the lower authorities have erred in invoking the provisions of S.50C of the Act which are not at all applicable in the facts of the case. Moreover, both the authorities have further erred in not referring the matter to the DVO u/s. 50C of the Act. 4. The Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. AO in disallowing cost of improvement of Rs.5,90,000/- from the sales consideration. 5. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 6. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in initiating penalty u/s. 271(l)(c) of the Act. 7. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 2. Rival submission of both the parties have been heard and record perused. The learned Senior Counsel for the assessee submits that there is a very short controversy involved in the present appeal. The Assessing Officer made addition of long term capital gain of Rs. 88,72,067/- by invoking provisions of Section 50C of the Income Tax Act, 1961 (in short, the Act). The learned Senior Counsel for the assessee submits that the assessee has sold immovable property at his native place in District Unnav (Uttar Pradesh). The Assessing Officer made addition on account of difference between valuation shown on the sale deed and the valuation made by Stamp Valuation Authority. The assessee sold his house/property at Deepak Vihar Colony, Munsafi Katra, Tal.- Purva, District Unnav. Such area is very backward and there is no public amenities like drainage, ITA No.500/Srt/2023 Kallubhai Budhdhilal Shahu Vs ITO 3 water supply or proper cleanliness. The property was located in an interior place and assessee was in a position to fetch good price. The learned Senior Counsel for the assessee submits that it is admitted position under the law that when there is difference between sale value and the value determined by Stamp Valuation Authority, the Assessing Officer should refer the matter to Departmental Valuation Officer (DVO for ascertaining fair market value of the property. The assessee made specific request before the ld. CIT(A) as has been recorded on page No. 8 of order of ld. CIT(A). Despite recording such submission, the ld. CIT(A) failed to appreciate the contention of assessee and upheld the order of Assessing officer. The learned Senior Counsel for the assessee submits that he is making a very limited prayer before the Bench that the matter may be restored back to the file of Assessing Officer with direction to refer the matter for valuation before DVO and to pass order afresh. To support his submission, the learned Senior Counsel for the assessee relied upon the following decisions:  Sunil Kumar Agarwal Vs CIT (2015) 372 ITR 83 (Cal)  Narendra Dahyabhai Patel Vs ITO ITA No. 2087/Ahd/2013  Mahesh A. Vora Vs ITO ITA No. 2217/Ahd/2016  Shri Ashwin C. Shah Vs ITO WTA No. 25 to 30/Ahd/2017 3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the orders of lower authorities. The ld. ITA No.500/Srt/2023 Kallubhai Budhdhilal Shahu Vs ITO 4 Sr. DR for the revenue submits that all the submissions of assessee was considered by the ld. CIT(A) while deciding the appeal of assessee 4. We have considered the submissions of both the parties and perused material available on record. We have also deliberated various case laws relied by the learned Senior Counsel for the assessee. We find that there is a very limited controversy for our consideration. There is no dispute that the Assessing Officer while making addition, adopted the valuation of stamp valuation authority and computed capital gain. We find that before the ld. CIT(A), the assessee made specific request for making reference to ld. CIT(A). However, neither the request of assessee was accepted nor it was rejected. We find that the Hon'ble Calcutta High Court in the case of Sunil Kumar Agarwal Vs CIT (Supra) held that even in absence of specific request of assessee, the Assessing Officer has to give option to assessee to follow the course provided under Section 50C(2) of the Act. Therefore, accepting the prayer of learned Senior Counsel for the assessee, the matter is restored back to the file of Assessing officer to refer the matter to the DVO and to pass order afresh. We have restored the matter to the Assessing officer instead of ld. CIT(A) to avoid the long drawn process of seeking remand report. The assessee is also directed to provide all necessary details to the Assessing officer/DVO. Needless to direct that before passing the order, the Assessing Officer shall grant ITA No.500/Srt/2023 Kallubhai Budhdhilal Shahu Vs ITO 5 opportunity of hearing to the assessee. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 5. In the result, this appeal of assessee is allowed for statistical purposes only. Order pronounced in the open court on 29 th February, 2024. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 29/02/2024 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat