Shri Mukesh Natvarlal Nagralawala, Dahod V. The ACIT(OSD), Panchamahal Range, Godhra

ITA 592/AHD/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8331 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-09-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 50C

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.592/AHD/2014 / ASSTT. YEAR: 2010-11 MUKESH NATVARLAL NAGRAWALA GARBADA CROSSING INDORE ROAD DAHOD 389 151. PAN : ABBPN 0202 B VS. ACIT(OSD) PANCHMAHAL RANGE, GODHRA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVETIA, AR REVENUE BY : SHRI MUDIT NAGPAL, SR.DR ! ' / DATE OF HEARING : 05/03/2018 #$% ! ' / DATE OF PRONOUNCEMENT: 15/05/2018 &' / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-VI, BARODA DATED 1.11.2013 PASSED FOR THE ASSTT.YEAR 2010-11. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.44,24,800/- IN THE COMPUTATION OF SHORT TERM CAPITAL GAIN ARISING TO T HE ASSESSEE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 14.8.2010 DECLARING TOTAL INCOME AT RS .27,84,468/-. THE ASSESSEE HAS SOLD FOUR PIECES OF LAND THROUGH F OUR SALE DEEDS ITA NO.592/AHD/2014 2 OF DIFFERENT DATES DURING THE YEAR. THE AGGREGATE SALE CONSIDERATION SHOWN BY THE ASSESSEE IS OF RS.7.75 L AKHS. THE LD.AO HAS OBSERVED THAT STAMP DUTY VALUATION AUTHOR ITY HAS VALUED VALUE OF THIS PROPERTY AT RS.51,99,800/-. W ITH THE AID OF SECTION 50C, THE LD.AO ADOPTED THE SALE CONSIDERATI ON FOR THE PURPOSE OF COMPUTING GAIN UNDER SECTION 48 EQUIVALE NT TO THE AMOUNT ON WHICH STAMP DUTY WAS PAID. IN OTHER WORD S, HE REPLACED THE ACTUAL SALE CONSIDERATION ALLEGED TO H AVE BEEN RECEIVED AT RS.7.75 LAKHS WITH RS.51,99,800/-. HE MADE ADDITION OF RS.44,24,800/-. APPEAL TO THE CIT(A) DID NOT BR ING ANY RELIEF TO THE ASSESSEE. 4. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT S UB-SECTION (2) OF SECTION 50C AUTHORISE THE ASSESSEE TO MAKE A REQUEST TO THE AO FOR REFERRING THE MATTER TO THE VALUATION OF FICER FOR DETERMINING FAIR MARKET VALUE OF THE PROPERTY ON TH E DATE OF TRANSFER. IN OTHER WORDS, THE CASE OF THE ASSESSEE IS THAT IF AN ASSESSEE DISPUTED DETERMINATION OF SALE VALUE ACCOR DING TO THE STAMP DUTY VALUATION, THEN THE MATTER WOULD BE REFE RRED TO THE DVO FOR DETERMINING FMV AND AFTER THAT REPORT, THE LD.AO WAS REQUIRED TO ADOPT THE CONSIDERATION OF THE CAPITAL ASSETS FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. HE FURTHER CONT ENDED THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE FOR MAKING AN APPLICATION UNDER SECTION 50C(2), AND THEREFORE, BOTH ORDERS DE SERVES TO BE SET ASIDE. 5. THE LD.DR, ON THE OTHER HAND CONTENDED THAT THE ASSESSEE HIMSELF HAS NEVER RAISED ANY OBJECTION AND HAS NOT FILED APPLICATION BEFORE THE AO. ITA NO.592/AHD/2014 3 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD. SECTION 50C PROVIDES THAT WHERE THE CO NSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS L ESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY FOR THE PURPOS E OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALU E SO ADOPTED OR ASSESSED SHALL FOR THE PURPOSES OF SECTION 48, BE D EEMED TO BE THE FULL VALUE OF THE CONSIDERATION. IN OTHER WORDS, F ULL CONSIDERATION MENTIONED IN SECTION 48 IS TO BE REPLACED BY THE CO NSIDERATION ON WHICH VALUE OF THE PROPERTY WAS ADOPTED FOR THE PUR POSE OF PAYMENT OF STAMP DUTY. HOWEVER, SUB-SECTION (2) OF SECTION 50C PROVIDES THAT WHERE (A) THE ASSESSEE CLAIMS BEFORE AO THAT VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALU ATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MA RKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; OR SUCH VA LUE HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION BEFORE ANY AUTHORITY OR COURT, THE AO MAY REFER THE VALUATION OF THE CAPITA L ASSETS TO A VALUATION OFFICER. IT IS PERTINENT TO OBSERVE THAT THE LD.AO OUGHT TO HAVE GIVEN AN OPPORTUNITY TO THE ASSESSEE FOR MAKIN G AN APPLICATION FOR THE PURPOSE OF SECTION 50C(2) OF TH E ACT. WHEN THE ASSESSEE HAS DISPUTED ADOPTION OF VALUE EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY WAS PAID, THEN THE LD.CIT(A) IT SELF OUGHT TO HAVE CALLED FOR A REPORT UNDER SECTION 50C(2) OF TH E ACT. THE FAILURE OF THE LD.REVENUE AUTHORITIES FOR NOT PROVI DING ASSESSEE AN OPPORTUNITY FOR GETTING THE VALUE OF THE CAPITAL AS SET DETERMINED BY THE DVO IS AN IRREGULARITY WHICH DESERVES TO BE RECTIFIED. THEREFORE, WE ALLOW THE APPEAL OF THE ASSESSEE; SET ASIDE BOTH THE ORDERS AND RESTORE THIS ISSUE TO THE FILE OF THE AO FOR RE- ADJUDICATION. THE LD.AO SHALL MAKE REFERENCE UNDER SECTION ITA NO.592/AHD/2014 4 50C(2) TO THE DVO AND OBTAIN REPORT OF THE DVO FOR DECIDING THE VALUE REQUIRED TO BE DEEMED AS FULL SALE CONSIDERAT ION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 15 TH MAY, 2018. SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER SD/- (RAJPAL YADAV) JUDICIAL MEMBER