ACIT, Kota V. SATYENDRA KUMAR AGARWAL, BARAN

ITA 572/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4955 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 04-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: MANISH AGARWAL CA DHK
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Capital asset; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 50C; 147; 148; 54; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH HKKXPUN] YS[KK LNL; ,O JH DQY HKKJR] U;KF;D L NL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 572/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 THE ACIT CIRCLE- 2 KOTA CUKE VS. SHRI SATYENDRA KUMAR AGARWAL DR.USHA AGARWAL MATERNITY & NURSING HOME, OPP. GOVT. HOSPITAL, BARAN LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABMPA 7356 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY:SHRI R.A. VERMA, ADDL. CIT-. DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI MANISH AGARWAL , CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/09/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21 /10/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), KOTA DATED 25-03-2015 FOR THE ASSESSMENT YEAR 2010-11 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) DELETING THE ADDITION OF RS. 60,80,782/-MADE BY THE AO AS PER PROVISIONS OF SECTION 50C OF THE ACT. ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 2 (II) NOT APPRECIATED THE FACT THAT THE ASSESSEE WAS UNDER LEGAL OBLIGATION TO REVISE HIS RETURN OF INCO ME AND DECLARE CAPITAL GAIN AS PER THE PROVISIONS OF SECTI ON 50C OF THE ACT CONSEQUENT UPON DIG (STAMP), KOTAS ORDER D ATED 13-09-2011 REVISING DLC VALUE OF PLOT OF LAND SOLD BY THE ASSESSEE. (III) HOLDING THAT AO HAVE TAKEN REMEDIAL ACTION U/ S 155(15) INSTEAD OF SECTION 147 OF THE ACT SINCE SEC TION 155(15) CAN BE INVOKED ONLY WHEN AO HAS ALREADY ASS ESSED CAPITAL GAIN AS PER THE PROVISIONS OF SECTION 50C I N THIS CASE. (IV) HOLDING THAT VALUATION OF CHANGING NATURE OF P LOT FROM RESIDENTIAL TO COMMERCIAL IS NOT CORRECT. AS P ER SECTION 50C, THE AO IS BOUND TO ADOPT THE VALUE DETERMINED BY STAMP DUTY AUTHORITIES. (V) NOT CORRECTLY INTERPRETED THE PROVISIONS OF SECTION 50C OF THE ACT BY HOLDING THAT THE VALUE AS SESSED U/S 50C THE VALUE ASSESSED AT THE TIME OF REGISTRATION. AS PER SECTION 50C, THE DEEMED SALE CONSIDERATION IS THE V ALUE ADOPTED OR ASSESSED OR ASSESSABLE FOR THE PURPOSE O F PAYMENT OF STAMP DUTY. 2.1 APROPOS GROUND NO. (I) TO (V) OF THE REVENUE, B RIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME AT RS. 17,12,120/- ON 25-09-2010 IN THE STAT US OF INDIVIDUAL. IT IS THE ASSESSEE HAS SOLD A PIECE OF LAND FOR A CONSIDE RATION OF RS. 46,50,000/- ON 05.10.2009 WHICH WAS VALUED BY SUB REGISTRAR-II, KOTA AT SAME PRICE AND ACCORDINGLY CAPITAL GAIN WAS COMPUTED AND DECLA RED BY THE ASSESSEE IN HIS RETURN OF INCOME FILED ON 25.09.2010. THEREA FTER THE DIG, STAMPS, KOTA VIDE ORDERS DATED 13.09.2011 HAD MODIFIED THE VALUE AT RS. ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 3 1,07,30,782/- ON THE BASIS OF WHICH THE REASSESSMEN T PROCEEDINGS U/S 148 WERE INITIATED AND ADDITION TO THE EFFECT OF RS. 60 ,80,782/- WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE BEING THE DIFFEREN CE BETWEEN THE DECLARED SALE CONSIDERATION AND THE VALUE DETERMINED BY THE DIG, STAMPS, KOTA. 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE BY OB SERVING AS UNDER: I HAVE GONE THROUGH ASSESSEE'S SUBMISSION AND AO S FINDINGS. THE FACTS WHICH EMERGES ARE AS UNDER:- (I) THE ASSESSEE SOLD PLOT NO. 69, RAJIV GANDHI NA GAR ON 15-10-2009 FOR RS. 46,50,000/- (II) THE DY. REGISTRAR, KOTA-II ASSESSED THE VALUE OF THIS PROPERTY AT RS. 46,50,000/- AND AFFIXED A STAMP U/S 54. IN THIS STAMP, IT WAS CERTIFIED THAT THE VALUE OF PROP ERTY U/S 54 WAS ASSESSED AT RS. 46,50,000/- (SEE ANNEXURE A) (III) THE PROPERTY WAS VALUED BY TREATING THE SAME AS RESIDENTIAL PLOT. (IV) THE ASSESSEE FILED RETURN OF INCOME AT RS. 17, 12,120/- ON 25-09-2010. (V) IN THIS RETURN, THE SALE CONSIDERATION WAS SHOW N AT RS. 46,50,000/- AND CAPITAL GAIN WAS ASSESSED AT RS. 12 ,36,215/- (VI) SUBSEQUENTLY, DIG (STAMP) KOTA REVISED THE PRO PERTY OF VALUE TO RS. 1,07,30,782/- AS AGAINST RS. 46,50, 000/- VIDE ORDER DATED 13-09-2011 (VII) DIG (STAMP) VALUED THE PROPERTY BY TREATING T HE PROPERTY AS COMMERCIAL PROPERTY. ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 4 (VIII) THE ASSESSEE FILED APPEAL BEFORE RAJASTHAN T AX BOARD, AJMER AND THE DECISION IS PENDING. FROM THE ABOVE, THE FOLLOWING CONCLUSION CAN BE D RAWN. (I) THE ASSESSEE FILED RETURN OF INCOME ON 25-09-2 010 AND AT THAT TIME ONLY THE VALUE ASSESSED BY DY. REGISTR AR, KOTA II WAS AVAILABLE WITH ASSESSEE. THE ASSESSEE DECLAR ED THE SAME IN ITS RETURN OF INCOME. THEREFORE, AT THE TIM E OF FILING RETURN, THE ASSESSEE'S RETURN WAS CORRECT ON THE BA SIS OF FACTS AVAILABLE AT THAT TIME. THE VALUE OF PROPERTY WAS E NHANCED TO RS. 1,07,30,782/- BY DIG (STAMP) ON 30-09-2011. THE REFORE, THE ASSESSEE CANNOT BE EXPECTED TO ANTICIPATE WHAT WOULD HAPPEN IN FUTURE AND DECLARE THE INCOME. (II) WHEN THERE WAS NO MISTAKE IN THE RETURN FILED, IT CANNOT BE PRESUMED THAT INCOME HAS ESCAPED ASSESSME NT. THEREFORE, THE ASSESSMENT CANNOT BE REOPENED ON THE BASIS OF A FUTURE EVENT. THE MISTAKE (IF ANY) COULD HAVE BEE N RECTIFIED U/S 155(15) ONLY. INVOKING THE PROVISIONS OF SECTIO N 147/148, IN MY OPINION, WAS BAD IN LAW. (III) FOR SUCH EVENTUALITIES, SECTION 155(15) IS AV AILABLE IN THE INCOME TAX ACT. FOR READY REFERENCE, THE SAME I S REPRODUCED BELOW. (15) WHERE IN THE ASSESSMENT FOR ANY YEAR, A CAP ITAL GAIN ARISING FROM THE TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS COMPUTED BY TAKING THE FULL VALUE OF THE C ONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER TO BE THE V ALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN ACCORDANCE WITH SUB-SECTIO N (1) OF SECTION 50C , AND SUBSEQUENTLY SUCH VALUE IS REVISED IN ANY APP EAL OR REVISION OR REFERENCE REFERRED TO IN CLAUSE ( B ) OF SUB-SECTION (2) OF THAT SECTION, THE ASSESSING OFFICER SHALL AMEND THE ORDER OF ASSE SSMENT SO AS TO COMPUTE THE CAPITAL GAIN BY TAKING THE FULL VALUE O F THE CONSIDERATION TO BE THE VALUE AS SO REVISED IN SUCH APPEAL OR REVISI ON OR REFERENCE; AND THE PROVISIONS OF SECTION 154 SHALL, SO FAR AS MAY BE, APPLY THERETO, AND THE PERIOD OF FOUR YEARS SHALL BE RECKONED FROM THE END OF THE PREVIOUS YEAR IN WHICH THE ORDER REVISING THE VALUE WAS PASS ED IN THAT APPEAL OR REVISION OR REFERENCE.] ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 5 AS THE MATTER WAS PENDING BEFORE THE RAJASTHANTAX B OARD, AJMER, THE AO SHOULD HAVE WAITED TILL THE DECISION OF RAJASTHAN TAX BOARD, AJMER AND REVISED THE ASSESSED INCOME AFTER DETERMINATION OF VALUE IN SUCH APPEAL / REFERENCE. (IV) THE PROPERTY IN QUESTION WAS A PLOT WITHOUT AN Y CONSTRUCTION AND THE SAME WAS NOT CONVERTED INTO A COMMERCIAL PLOT. AS THERE WAS NO CONSTRUCTION ON TH E PLOT, THE NATURE OF PROPERTY COULD NOT BE DECIDED ON THE BASIS OF ITS ACTUAL USER ALSO. VALUATION BY CHANGING THE NATURE OF PLOT (I.E. FROM RESIDENTIAL TO COMMERCIAL) WAS APPARENTL Y NOT CORRECT. (V) IN MY OPINION, THE VALUE ASSESSED U/S 50C IS TH E VALUE ASSESSED AT THE TIME OF REGISTRATION AND IS THE VAL UE CERTIFIED U/S 54 BY THE STAMP VALUATION AUTHORITY. THE VALUE ASSESSED BY DIG(STAMP), TAX BOARD ETC. FALLS IN THE CATEGORY OF VALUE AS SO REVISED IN SUCH APPEAL OR REVISION OR REFERENCE [THIS PHRASE IS TAKEN FROM SECTION 155 (15)]. CONSIDERING THE ABOVE, IT IS HELD THAT FOR THE PURP OSE OF SECTION 50C, THE VALUE OF PROPERTY AS ASSESSED BY S TAMP VALUATION AUTHORITY (IN THIS CASE DY. REGISTRAR, KOTA-II) IS THE CORRECT VALUE. THE SUBSEQUENT VALUATION ON APPEAL OR REVISION OR R EFERENCE IS TO BE DEAL U/S 155 (15). THEREFORE, THE VALUE ASSESSED BY DY. REGISTRAR, KOTA-II AT RS. 46,50,000/- SHOULD HAVE BEEN TAKEN A S VALUE ASSESSED U/S 50C. IT IS ALSO HELD THAT THE VALUE OF PROPERTY SHOULD H AVE BEEN DETERMINED ON THE BASIS OF ITS CATEGORY (RESIDENTIA L OR COMMERCIAL) AT THE TIME OF SALE AND NOT ON THE BASIS OF ITS FUT URE POTENTIAL/USE. THEREFORE, THE VALUE OF PROPERTY AT RS. 46,50,000/- BY TREATING THE PROPERTY AS RESIDENTIAL PROPERTY WAS THE CORRECT VA LUE OF PROPERTY FOR THE PURPOSE OF INCOME TAX ACT. CONSIDERING THE ABOVE, THE AO IS DIRECTED TO DELETE ADDITION OF RS. 60,80,782/-. THE AO MAY REVISE HIS ORDER U/S 155(15) AFTER THE D ECISION OF RAJASTHAN BOARD, AJMER. ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 6 THIS GROUND OF APPEAL IS TREATED AS ALLOWED. 2.3 NOW THE DEPARTMENT IS IN APPEAL BEFORE US CHALL ENGING THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS. 60,80,78 2/- MADE BY THE AO TOWARDS THE LONG TERM CAPITAL GAIN U/S 50C OF THE A CT BASED ON THE VALUE OF THE PROPERTY SOLD BY THE ASSESSEE DURING THE YEA R AS DETERMINED BY THE DIG, STAMPS, KOTA. THE LD. DR SUPPORTED THE ORDER O F THE AO AND FURTHER CONTENDED THAT THE ADDITION IS BASED ON THE REVISIO N BY THE DIG, STAMPS, KOTA AND THE AO HAS ACTED AS PER THE PROVISIONS OF THE SECTION 50C OF THE ACT. THEREFORE, THE LD. DR PRAYED FOR THE RESTORAT ION OF THE ASSESSMENT ORDER. 2.4 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE FILED A DETAILED SUBMISSION AND CONTENDED THAT THE ASSESSEE HAS CHALLENGED THE REVISION MADE BY DIG, STAMPS BEFORE THE COMPETENT A UTHORITY AND AT PRESENT THE MATTER IS PENDING BEFORE THE RAJASTHAN TAX BOARD VIDE REVISION PETITION NO. 1256/12/KOTA. HE THEREFORE AR GUED THAT THE SECTION 155(15) IS AVAILABLE WITH THE AO WHO CAN REVISE THE ORDER AFTER THE DECISION IN THE REVISION PETITION FILED BY THE ASSE SSEE BEFORE THE RAJASTHAN TAX BOARD AND THEREFORE THERE IS NO NEED TO INITIAT E THE REASSESSMENT PROCEEDINGS AND MADE THE ADDITION FOR THE DIFFERENT IAL VALUE DETERMINED ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 7 BY STAMP VALUE AUTHORITIES . THE DETAILED WRITTEN SUBMISSION FILED BY THE ASSESSEE AGAINST THE GROUNDS OF REVENUE IS AS UNDE R:- DEPARTMENTS GROUND OF APPEAL NO.(I) : UNDER THIS GROUND OF APPEAL, THE DEPARTMENT HAS CHA LLENGED THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.60,80,782/- MADE BY LD. AO. BRIEF FACTS PERTAINING TO THE ISSUE INVOLVED IN THE PRESENT CASE ARE THAT THE ASSESSEE HAD PURCHASED A RESIDENTIAL PLOT SITUATED AT RAJEEV GAN DHI NAGAR RESIDENTIAL SCHEME, KOTA ON 21.09.2005 FOR A CONSIDERATION OF RS.14,00,000/-, C OPY OF PURCHASE DEED IS PLACED AT PAPER BOOK PAGES 11-18 . DURING THE YEAR UNDER APPEAL, THE AFORESAID PROPE RTY WAS SOLD BY ASSESSEE FOR A TOTAL CONSIDERATION OF RS.46,50,000/- TO TWO PERSONS, NAMELY SMT. USHA GOYAL AND SMT. DEEPALI AGARWAL ON 15.10.2009. COPY OF SALE DEED IS PLACED AT PAPER BOOK PAGES 1-10 . AS A RESULT OF THE AFORESAID TRANSACTION, THE CAPITAL GA IN OF RS.12,36,215/- HAD OCCURRED TO THE ASSESSEE WHICH WAS DULY DECLARED BY HIM IN THE RETU RN OF INCOME FILED. THE CAPITAL GAIN SO DECLARED BY ASSESSEE WAS COMPUTED BY TAKING THE VAL UE DETERMINED FOR PAYMENT OF STAMP DUTY BY STAMP VALUATION AUTHORITY I.E. SUB-REGISTRAR-II, KOTA (IN TERMS OF SECTION 50C). IT IS CLEARLY EVIDENT FROM THE COPY OF SALE DEED UPON WHICH, THE REGISTERING AUTHORITY I.E. THE SUB- REGISTRAR-II, KOTA HAS PLACED ITS STAMP, THEREBY CE RTIFYING IN TERMS OF SECTION 54 THAT THE VALUE OF THE SUBJECT PROPERTY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IS RS. 46,50,000/- (BACK SIDE OF APB-10) . HOWEVER, INSPITE OF THE ABOVE FACTS WHEREIN CAPIT AL GAIN WAS VALIDLY DECLARED BY ASSESSEE IN DUE ACCORDANCE WITH THE LAW , THE LD. AO REOPENED THE CASE OF ASSESSEE BY ISSUING NOTICE U/S 148 OF THE ACT ( APB 19) . ON PERUSING THE SAID NOTICE AND THE REASONS RECORDED FOR ISSUING THE SAME ( APB 20) , IT WAS FOUND THAT THE ALLEGATION OF ESCAPEMENT OF INCOME IS BEING MADE AGAINST THE ASSE SSEE ON THE GROUND THAT VALUE OF SUBJECT PROPERTY AS DETERMINED BY SUB-REGISTRAR-II, KOTA (T HE REGISTERING AUTHORITY) STOOD REVISED AND ENHANCED BY THE ORDER OF THE DIG (STAMPS), KOTA DATED 13.09.2011 TO RS.1,07,30,782/- ( APB 27 & BACKSIDE) AND THAT THE ASSESSEE WAS LIABLE TO PAY CAPITAL GAI N BY TAKING SUCH ENHANCED VALUE AS THE FULL VALUE OF CONSIDERATION I N TERMS OF SECTION 50C OF THE ACT. IN RESPONSE TO THE SHOW-CAUSE NOTICES ISSUED BY THE LD . AO, DETAILED SUBMISSIONS WERE MADE AND OBJECTIONS WERE RAISED AGAINST THE REOPENING OF ASSESSMENT WHICH WERE COMPLETELY IGNORED BY THE LD. AO WHO PROCEEDED TO PASS THE IMP UGNED REASSESSMENT ORDER U/S 147/143(3) OF THE ACT WHEREIN HE MADE ADDITION OF R S.60,80,782/- BY SUBSTITUTING THE VALUE DECLARED BY ASSESSEE AS ADOPTED BY THE REGISTERING AUTHORITY, WITH VALUE REVISED / ENHANCED BY DIG (STAMPS) (AS MENTIONED ABOVE) AND CALCULATED CAPITAL GAIN ACCORDINGLY. IN THIS REGARD, IT IS SUBMITTED THAT WHILE PASSING THE IMPUGNED ORD ER THE LD. AO HAD COMPLETELY IGNORED THE FOLLOWING FACTS: 1. THAT, THE ASSESSEE HAD FILED THE RETURN OF INCOME O N 25.09.2010 AND THE CAPITAL GAIN WAS DECLARED DULY IN ACCORDANCE WITH THE VALUE ADOPTED BY THE REGISTERING AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY AT THE TIME OF SALE. THEREFORE, THERE WAS NO INFIRMITY IN THE RETU RN SO FILED BY ASSESSEE IN AS MUCH AS THE ASSESSEE HAD DULY DECLARED THAT VALUE O F SALE CONSIDERATION WHICH WAS ADOPTED BY THE REGISTERING AUTHORITY AT THE REL EVANT TIME I.E. AT THE TIME OF REGISTRATION OF SALE DEED. NOW, MERELY BECAUSE S UCH VALUE CAME TO BE ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 8 ENHANCED SUBSEQUENTLY, IT DOES NOT RENDER THE RETUR N SO FILED AND CAPITAL GAIN DECLARED THEREIN AS INCORRECT. 2. THAT, THE VALUE CONTEMPLATED U/S 50C OF THE ACT IS THE VALUE ASSESSED AT THE TIME OF REGISTRATION BY THE COMPETENT REGISTERING A UTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. MERELY ON THE BASIS OF SUBSE QUENT ENHANCEMENT IN THE SAID VALUE, NO ALLEGATION OF ESCAPEMENT OF INCOME C AN BE MADE. IT IS A WELL SETTLED LAW, THAT FOR THE PURPOSE OF INVOKING THE P ROVISION OF SECTION 147, ESCAPEMENT OF INCOME HAS TO BE ESTABLISHED BY THE D EPARTMENT AND MERE CHANGE OF OPINION CANNOT BE SUBSTITUTED FOR THE SAT ISFACTION OF THE ASSESSING OFFICER REGARDING ESCAPEMENT OF INCOME. IN THE PRES ENT CASE, THE PROVISION OF SECTION 147 HAVE BEEN INVOKED MERELY ON THE BASIS O F FUTURE EVENTS WHICH UNDOUBTEDLY AMOUNTS TO CHANGE OF OPINION AND NOWHER E SUGGESTS ANY INCOME HAVING ESCAPED. THEREFORE, THE IMPUGNED ASSESSMENT IS CLEARLY BAD IN LAW. 3. THAT, THE PROPERTY SOLD BY ASSESSEE WAS ESSENTIALLY A RESIDENTIAL PLOT WITHOUT ANY CONSTRUCTION AND NO CONVERSION OF LAND USE THER EOF INTO A COMMERCIAL PLOT HAD BEEN EXECUTED WHICH IS CLEARLY APPARENT FROM TH E COPY OF SALE DEED ( APB 1-10) , HOWEVER , THE LD. DIG (STAMPS) HAS REVISED AND ENHANCED THE VALUE OF PROPERTY (FOR STAMP DUTY PURPOSES) WITHOUT ANY BASI S AND WITHOUT CONFRONTING THE ISSUE TO THE ASSESSEE, THEREBY PASSING THE ORDE R DATED 13.09.2011 IN AN EX- PARTE MANNER ( APB 27) . THE SAID ORDER DATED 13.09.2011 HAS BEEN CHALLENG ED BY ASSESSEE BEFORE THE RAJASTHAN TAX BOARD VIDE REV ISION PETITION NO. REVISION/STAMP/1256/12/KOTA AND THE SAME IS PENDING BEFORE THE HONBLE TAX BOARD. THIS FACT WAS DULY BROUGHT TO THE NOTICE OF LD. AO ALSO VIDE REPLY DATED 13.02.2013 (APB 25-26) . 4. THAT, THE LD. AO HAS DETERMINED THE VALUE OF SUBJEC T PROPERTY ON THE BASIS OF ITS FUTURE USE / NATURE AND NOT ON THE BASIS OF ITS CONTEMPORARY USE / NATURE (I.E. AT THE TIME OF SALE OF PROPERTY) WHICH IS CLEARLY I MPERMISSIBLE IN LAW AND GOES BEYOND THE PROVISION OF SECTION 50C OF THE ACT. IT IS SUBMITTED THAT ALL THESE CRUCIAL FACTS WERE B RUSHED ASIDE BY THE LD. AO AND HE WENT ON TO MAKE THE IMPUGNED ADDITION BY REOPENING THE CASE OF ASSESSEE U/S 148 WHICH IS CLEARLY BAD IN LAW. NEVERTHELESS, DURING THE COURSE OF APPELLATE P ROCEEDINGS BEFORE LD. CIT(A), ALL THESE FACTS ALONG WITH RELEVANT EVIDENCES (ALREADY SUBMIT TED BEFORE LD. AO) WERE SUBMITTED BEFORE LD. CIT(A) WHO AFTER PERUSING THEM CAREFULLY PASSED A VERY REASONED ORDER, ACKNOWLEDGING THEREIN ALL THE ABOVE-MENTIONED FACTS IN LIGHT OF T HE SETTLED LAW REGARDING SECTION 147 AND SECTION 50C AND THEREBY DELETED THE ADDITION MADE B Y LD. AO. THE RELEVANT PORTION OF THE ORDER OF LD. CIT(A) IN PARA I TO PARA V ARE REPRODU CED AS UNDER: I THE ASSESSEE FILED RETURN OF INCOME ON 25.09.2010 AND AT THAT TIME ONLY THE VALUE ASSESSED BY DEPUTY REGISTRAR, KOTA II WAS AVAILABLE WITH THE ASSESSEE. THE ASSESSEE DECLARED THE SAME IN ITS RETURN OF INCOME. THEREFOR E, AT THE TIME OF FILING THE RETURN, THE ASSESSEES RETURN WAS CORRECT ON THE BASIS OF F ACTS AVAILABLE AT THAT TIME. THE VALUE OF PROPERTY WAS ENHANCED TO RS.1,07,30,782/- BY THE DIG (STAMPS) ON 30.09.2011. THEREFORE, THE ASSESSEE CANNOT BE EXPEC TED TO ANTICIPATE WHAT WOULD HAPPEN IN FUTURE AND DECLARE THE INCOME. II) WHEN THERE WAS NO MISTAKE IN THE RETURN FILED, IT CANNOT BE PRESUMED THAT INCOME HAS ESCAPED ASSESSMENT. THEREFORE, THE ASSESSMENT CANNO T BE REOPENED ONLY ON THE BASIS ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 9 OF FUTURE EVENT. THE MISTAKE (IF ANY) COULD HAVE BE EN RECTIFIED U/S 155(15) ONLY. INVOKING THE PROVISION OF SECTION 147 / 148, IN MY OPINION, WAS BAD IN LAW. III) FOR SUCH EVENTUALITY, SECTION 155(15) IS AVAIL ABLE IN THE INCOME TAX ACT, 1961. FOR READY REFERENCE, THE SAME IS REPRODUCED BELOW: [15] WHERE IN THE ASSESSMENT FOR ANY YEAR, A CAP ITAL GAIN ARISING FROM THE TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS COMPUTED BY TAKING THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER TO BE THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN ACCORDANCE WITH SUB-SEC TION(1) OF SECTION 50C, AND SUBSEQUENTLY SUCH VALUE IN REVISED IN ANY APPEAL OR REVISION OR REFERENCES REFERRED TO IN CLAUSE(B) OF SUB-SECTION(2) OF THAT SECTION, THE ASSESSING OFFICER SHALL AMEND THE ORDER OF ASSESSMENT SO AS TO COMPUTE THE CAPITAL GA IN BY TAKING THE FULL VALUE OF THE CONSIDERATION TO BE THE VALUE AS SO REVISED IN SUCH APPEAL OR REVISION OR REFERENCE; AND THE PROVISIONS OF SECTION 154 SHALL, SO FAR AS MAY BE, APPLY THERETO, AND THE PERIOD OF FOUR YEARS SHALL BE RECKONED FROM THE END OF THE PREVIOUS YEAR IN WHICH THE ORDER REVISING THE VALUE WAS PASSED IN THAT APPEAL OR REVISION OR REFERENCE.]. AS THE MATTER WAS PENDING BEFORE THE RAJAS6HAN TAX BOARD, AJMER, THE AO SHOULD HAVE WAITED TILL THE DECISION OF RAJASTHAN TAX BOAR D, AJMER AND REVISED THE ASSESSED INCOME AFTER DETERMINATION OF VALUE IN SUCH APPEAL / REFERENCE. IV) THE PROPERTY IN QUESTION WAS A PLOT WITHOUT ANY CONSTRUCTION AND THE SAME WAS NOT CONVERTED INTO A COMMERCIAL PLOT. AS THERE WAS NO C ONSTRUCTION ON THE PLOT, THE NATURE OF PROPERTY COULD NOT BE DECIDED ON THE BASIS OF IT S ACTUAL USER ALSO. VALUATION BY CHANGING THE NATURE THE NATURE OF PLOT (I.E. FROM R ESIDENTIAL TO COMMERCIAL) WAS APPARENTLY NOT CORRECT. V) IN MY OPINION, THE VALUE ASSE4SSED U/S 50C IS TH E VALUE ASSESSED AT THE TIME OF REGISTRATION AND IS THE VALUE CERTIFIED U/S 54 BY T HE STAMP VALUATION AUTHORITY. THE VALUE ASSESSED BY DIG (STAMP), TAX BOARD ETC. FALLS IN THE CATEGORY OF VALUE AS SO REVISED IN SUCH APPEAL OR REVISION OR REFERENCE [T HIS PHRASE IS TAKEN FROM SECTION 155(15)]. CONSIDERING THE ABOVE, IT IS HELD THAT FOR THE PURP OSES OF SECTION 50C, THE VALUE OF PROPERTY AS ASSESSED BY STAMP VALUATION AUTHORITY ( IN THIS CASE DY. REGISTRAR, KOTA- II) IS THE CORRECT VALUE. THE SUBSEQUENT VALUATION ON APPEAL OR REVISION OR REFERENCE IS TO BE DEALT U/S 155(15). THEREFORE, THE VALUE ASSES SED BY DY. REGISTRAR, KOTA-II AT RS.46,50,000/- SHOULD HAVE BEEN TAKEN AS VALUE ASSE SSED U/S 50C. IT IS ALSO HELD THAT THE VALUE OF PROPERTY SHOULD H AVE BEEN DETERMINED ON THE BASIS OF ITS CATEGORY (RESIDENTIAL OR COMMERCIAL) AT THE TIM E OF SALE AND NOT ON THE BASIS OF ITS FUTURE POTENTIAL / USE. THEREFORE, THE VALUE OF PRO PERTY AT RS.46,50,000/- BY TREATING THE PROPERTY AS RESIDENTIAL PROPERTY WAS THE CORREC T VALUE OF PROPERTY FOR THE PURPOSES OF INCOME TAX ACT, 1961. A BARE PERUSAL OF THE ABOVE OBSERVATIONS OF LD. CIT (A) WOULD CLEARLY SHOW THAT THE ORDER OF LD. CIT(A) IS VERY WELL REASONED ORDER, PASSED AFTE R DUE EXAMINATION OF ACTUAL FACTS AND CIRCUMSTANCES OF THE CASE AND AFTER PAYING DUE REGA RD TO THE LAW SQUARELY APPLICABLE IN THE FACTS OF THE CASE AND THUS, LEAVES NO SCOPE FOR INT ERFERENCE ON ANY GROUNDS. ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 10 THEREFORE, IN LIGHT OF THE ABOVE IT IS PRAYED THAT THE OBSERVATIONS OF THE LD. CIT(A) MAY PLEASE BE UPHELD AND THIS GROUND OF APPEAL RAISED B Y REVENUE BE DISMISSED. REVENUES GROUND OF APPEAL NO. II: UNDER THIS GROUND OF APPEAL THE REVENUE HAS CONTEND ED THAT THE ASSESSEE WAS UNDER LEGAL OBLIGATION TO REVISE HIS RETURN OF INCOME AND DECLA RED CAPITAL GAIN IN ACCORDANCE WITH THE ORDER OF DIG (STAMPS), KOTA DATED 13.09.2011 WHEREB Y THE DLC VALUE OF PROPERTY SOLD BY ASSESSEE WAS REVISED. IN THIS REGARD, IT IS SUBMITTED THAT THIS CONTENTIO N OF REVENUE IS INCORRECT, MISPLACED AND DOES NOT DESERVE INDULGENCE INASMUCH AS THERE IS NO PROV ISION IN THE INCOME TAX ACT, 1961 WHICH CASTS THIS OBLIGATION ON THE ASSESSEE, NOR HAS THE REVENUE SPECIFIED AS TO THE WHAT MANNER AND BY WHAT REASON SUCH OBLIGATION IS CAST UPON ASSESSE E. AS HAS ALREADY BEEN POINTED OUT, THE ASSESSEE HAS DULY DISCHARGED HIS OBLIGATION BY DECL ARING CAPITAL GAIN IN ACCORDANCE WITH THE VALUE DETERMINED BY STAMP VALUATION AUTHORITY IN TE RMS OF SECTION 50C OF THE ACT AT THE TIME OF REGISTRATION OF SALE DEED OF SUBJECT PROPERTY AN D SINCE THE BUYER HAD NOT ACCEPTED SUCH REVISION IN THE VALUE ENHANCED BY STAMP AUTHORITY A ND THE MATTER IS STILL PENDING BEFORE THE RAJASTHAN TAX BOARD, THERE WAS NO OCCASION FOR ASSE SSEE TO REVISE THE RETURN OF INCOME. THE ASSESSEE HAD SOLD A RESIDENTIAL PROPERTY WHICH IN N O MANNER CAN BE VALUED IN TERMS OF A COMMERCIAL PROPERTY. THEREFORE, THE ASSESSEE HAD DU LY DISCHARGED HIS LEGAL OBLIGATION IN TERMS OF THE ABOVE AND NO FURTHER OBLIGATION AS CON TENDED BY THE REVENUE EXISTS WHEN THE MATTER IS SUB JUDICE BEFORE APPROPRIATE APPELLATE F ORUM. THEREFORE, IN LIGHT OF THE ABOVE, THIS GROUND OF AP PEAL RAISED BY REVENUE DOES NOT DESERVE ANY CREDENCE AND THUS, SHOULD BE DISMISSED. REVENUES GROUND OF APPEAL NO. III: IN THIS REGARD, IT IS SUBMITTED THAT THE LD. CIT (A ) HAS CORRECTLY HELD THE ACTION OF LD. AO IN INVOKING THE PROVISION OF SECTION 147 AS BAD IN LAW . AS HAS BEEN SUBMITTED ABOVE, IT IS WELL SETTLED LAW THAT NO ACTION U/S 148 / 147 CAN BE TAK EN UNLESS THE ASSESSING OFFICER RECORDS A PROPER SATISFACTION REGARDING THE ESCAPEMENT OF INC OME. IN THE PRESENT CASE HOWEVER, NEITHER THE REASONS RECORDED BY LD. AO, NOR THE FACTS OF TH E CASE SUGGESTS ANY ESCAPEMENT OF INCOME SINCE THE VERY FOUNDATION OF REOPENING THE ASSESSME NT I.E. THE ENHANCED VALUE OF SALE CONSIDERATION FOR STAMP DUTY PURPOSES IS CHALLENGED AND FINAL DECISION IS PENDING EVER TILL DATE. IN OTHER WORDS THE LD. AO HAS FAILED TO RECOR D ANY SATISFACTION AS MANDATED U/S 147 OF THE ACT. THEREFORE, IN LIGHT OF THE ABOVE, THIS GROUND OF AP PEAL RAISED BY REVENUE DOES NOT DESERVE ANY CREDENCE AND THUS, SHOULD BE DISMISSED. REVENUES GROUND OF APPEAL NO. IV AND V: IN THIS REGARD IT IS SUBMITTED THAT THE LD. CIT (A) HAS RIGHTLY HELD THAT THE CHARGING OF CAPITAL GAINS BY LD. AO WAS BAD IN LAW AS THE SAME IS BASED ON SUBSEQUENT REVISED VALUATION OF THE SUBJECT PROPERTY BY HOLDING ITS USE ON COMMERCIAL B ASIS IN SPITE OF THE FACT THAT THE SAME WAS RESIDENTIAL PLOT AS ON THE DATE OF SALE AND WAS SOL D BY ASSESSEE AS SUCH WHICH IS APPARENT FROM THE SALE DEED ITSELF. AS HAS BEEN SUBMITTED AB OVE, THE ASSESSEE HAD PURCHASED THIS PLOT AS A RESIDENTIAL PLOT AND HAS SOLD THE SAME AS SUCH . THE PLOT WAS NEVER PUT TO ANY COMMERCIAL ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 11 USE, NOR ITS NATURE WAS CONVERTED TO COMMERCIAL AND THEREFORE, FURTHER PURPOSE OF CHARGING CAPITAL GAIN THE FULL VALUE OF CONSIDERATION COULD NOT HAVE BEEN TAKEN BY CONSIDERING THE SAME AS COMMERCIAL PROPERTY. IN THIS CASE AS HAS BEEN SU BMITTED ABOVE, THE PROVISION OF SECTION 50C DULY STOOD COMPLIED WITH BY THE ASSESSEE INASMU CH AS THE FULL VALUE OF CONSIDERATION DECLARED BY ASSESSEE WAS WELL IN CONFORMITY WITH TH E VALUE ADOPTED BY THE STAMPS VALUATION AUTHORITY AT THE TIME OF SALE. NEITHER THE PROVISIO N OF SECTION 50C, NOR SECTION 147 REQUIRE DECLARATION OF CAPITAL GAIN ON THE BASIS OF FUTURE USE / VALUATION OF THE PROPERTY AND THEREFORE, A PLAIN READING OF SECTION 50C WOULD REVEAL THAT TH E VALUE ADOPTED BY THE REGISTERING AUTHORITY AT THE TIME OF SALE ALONE WOULD BE CONSID ERED AS THE FULL VALUE OF CONSIDERATION IN TERMS OF SECTION 50C OF THE ACT. EVEN OTHERWISE, LD . CIT(A) HAS CATEGORICALLY GIVEN HIS FINDING AT PAGE 14 OF THE ORDER THAT THE AO CAN REV ISE THE ORDER U/S 155(15) AFTER THE DECISION OF RAJASTHAN TAX BOARD. SINCE SECTION 155(15) CATEG ORICALLY PROVIDES THE REMEDIAL MEASURE IN A CASE WHERE THE VALUE OF SALE CONSIDERATION IS SUB SEQUENTLY REVISED BY STAMP AUTHORITIES THUS THERE REMAINED NO SCOPE WITH LD. AO TO INITIATE THE PROCEEDINGS U/S 148 AND MADE THE ADDITIONS MORE PARTICULARLY WHEN SUCH REVISION IS U NDER CHALLENGE. THEREFORE, IN LIGHT OF THE ABOVE, THESE GROUNDS OF APPEAL RAISED BY REVENUE DESERVES NO CREDENCE AND THUS, DESERVES TO BE DISMISSED. REVENUES GROUND OF APPEAL NO.VI: THIS GROUND OF APPEAL IS GENERAL IN NATURE AND REQU IRES NO REPLY. THEREFORE, IN LIGHT OF THE SUBMISSIONS MADE ABOVE, IT IS HUMBLY PRAYED THAT THE ORDER OF LD. CIT (A) MAY PLEASE BE UPHELD AND THE APPEAL OF DEPA RTMENT MAY BE DISMISSED. 2.5 WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE ENHANCEMEN T MADE BY THE DIG, STAMPS, KOTA IN THE VALUE DETERMINED BY SUB REGISTR AR-II, KOTA HAS NOT BEEN ACCEPTED AND CHALLENGED BEFORE THE COMPETENT A UTHORITY WHERE THE DECISION IS STILL PENDING. FOR THIS KIND OF SITUATI ON SPECIFIC PROVISION HAS BEEN PROVIDED IN THE INCOME TAX ACT U/S 155(15) WHI CH READ AS UNDER: 155(15) WHERE IN THE ASSESSMENT FOR ANY YEAR, A C APITAL GAIN ARISING FROM THE TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS COMPUTED BY TAKING THE FULL VA LUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 12 TRANSFER TO BE THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN ACCORDANCE WITH SUB-SECTIO N (1) OF SECTION 50C , AND SUBSEQUENTLY SUCH VALUE IS REVISED IN ANY APPEAL OR REVISION OR REFERENCE REFERRED TO IN CLAUSE (B) OF SUB-SECTION (2) OF THAT SECTION, THE ASSESSI NG OFFICER SHALL AMEND THE ORDER OF ASSESSMENT SO AS TO COMPUT E THE CAPITAL GAIN BY TAKING THE FULL VALUE OF THE CONSID ERATION TO BE THE VALUE AS SO REVISED IN SUCH APPEAL OR REVISI ON OR REFERENCE; AND THE PROVISIONS OF SECTION 154 SHALL, SO FAR AS MAY BE, APPLY THERETO, AND THE PERIOD OF FOUR YE ARS SHALL BE RECKONED FROM THE END OF THE PREVIOUS YEAR IN WHICH THE ORDER REVISING THE VALUE WAS PASSED IN TH AT APPEAL OR REVISION OR REFERENCE. IT IS NOTED THAT THE LD. CIT(A) WHILE ALLOWING THE APPEAL OF THE ASSESSEE ALSO MADE SPECIFIC REMARK THAT THE AO CAN REVISE TH E ORDER U/S 155(15) OF THE I.T. ACT, 1961 AFTER THE DECISION OF RAJASTHAN TAX BOARD, AJMER. HENCE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF TH E CASE, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) WHICH IS SUSTA INED. THEREFORE THE DEPARTMENTAL APPEAL IS DISMISSED MORE PARTICULARLY WHEN THE AO HAS POWER TO MAKE RECTIFICATION OF THE ORDER IN TERMS O F THE PROVISIONS AS ENVISAGED U/S 155(15) OF THE ACT. THUS THE APPEAL O F THE REVENUE IS DISMISSED. ITA NO. 572/JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYEN DRA KUMAR AGARWAL, BARAN . 13 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 /10/2016 SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 /10/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE- 2, KOTA 2. IZR;FKHZ@ THE RESPONDENT- SHRI SATYENDRA KUMAR AGARWAL, BARA N 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.572/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR