Late Amrutlal Odhavji Pandya, L/H Harish Amrutlal Pandya, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-4 (3) , RAJKOT-GUJARAT

ITA 61/RJT/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0182 (ITAT-RAJKOT)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 24-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D R CHHATRE
• Assessee Lawyers: DM RINDANI
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C; 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT [CONDUCTED THROUGH E COURT AT AHMEDABAD] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.61 AND 62 /RJT/2016 / ASSTT. YEAR: 2006-2007 LATE AMRUTLAL ODHAVJI PANDYA L/H. HARISH AMRUTLAL PANDYA MATRU KRUPA ALKAPURI STREET NO.3 RAJKOT 360 005. VS ITO, WARD - 4(3) RAJKOT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI D.M. RINDANI, AR REVENUE BY : SHRI D.R. CHHATRE, SR.DR / DATE OF HEARING : 23/08/2016 / DATE OF PRONOUNCEMENT: 24/08/2016 $%/ O R D E R PER BENCH : PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD.CIT(A)-2, RAJKOT OF EVEN DATED I.E. 15.12.2015 PASSED FOR THE ASSTT.YEAR 2006-07. ITA NO.62/RJT/2 016 EMERGES OUT OF PENALTY IMPOSED UNDER SECTION 272B OF THE INCOME TA X ACT, 1961. 2. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT PENALTY WAS IMPOSED BY THE AO ON THE GROUND THAT ASSESSEE FAILED TO DISCLOSE PERMANENT ACCOUNT NUMBER. IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE ASSESSEE EXPIRED ON 7.12.2007. HE WAS A PENSIONER. HE HAS NO TAXABLE INCOME, THEREFORE, HE HAS NOT OBTAINED ANY ITA NO.61 AND 62/RJT/2016 2 PAN. THE LD.AO HAS TAKEN UP THE PROCEEDINGS UNDER SECTION 147 AGAINST THE DECEASED ON THE GROUND THAT HE SOLD A PIECE OF LAND FOR CONSIDERATION OF RS.3.00 LAKHS, WHEREAS THE STAMP DUTY VALUATION AUT HORITY HAS CONSIDERED THE VALUE OF THIS PLOT FOR THE PURPOSE OF STAMP DUTY AT RS.6,60,913/-. THEREFORE, ACCORDING TO THE AO, THE ASSESSEE FAILED TO DISCLOS E TRUE CAPITAL GAIN ON SALE OF THIS PROPERTY. UNDER THIS ASSUMPTION, THE LD.AO HA S VISITED THE ASSESSEE WITH PENALTY UNDER SECTION 272B FOR NON-FURNISHING OF TH E PAN. 3. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES, WE ARE OF THE VIEW THAT THE ASSESSEE DOES NOT DESERVE TO BE VISITED WI TH PENALTY UNDER SECTION 272B, BECAUSE, HIS INCOME WAS BELOW TAXABLE INCOME. HE HAS NOT FILED RETURN OF INCOME. AS FAR AS ALLEGED ESCAPEMENT OF LONG TE RM CAPITAL GAIN BY INVOKING DEEMING PROVISION UNDER SECTION 50C IS CON CERNED, WE WILL DEAL WITH THIS ISSUE IN LATER PART OF THIS ORDER IN ITA NO.61/RJT/2016. THERE SHOULD BE TAXABLE INCOME WHICH MANDATES THE ASSESSE E TO SUBMIT PAN. THEREFORE, WE ALLOW THIS APPEAL AND DELETE PENALTY. 4. NOW WE TAKE ITA NO.61/RJT/2016. HE HAS SHOWN VA LUE OF THE PROPERTY AT RS.3.00 LAKHS. THE AO HAS GOT INFORMAT ION FROM THE OFFICE OF SUB-REGISTRAR THAT VALUE OF THE PROPERTY WAS RS.6,6 0,917/- AND THE VENDEE WAS SUPPOSED TO PAY STAMP DUTY OF RS.55,524/-. ARM ED WITH THIS INFORMATION, HE INITIATED PROCEEDING UNDER SECTION 147 OF THE ACT UPON LEGAL HEIRS OF LATE SHRI AMRUTLAL ODHAVJI PANDYA, AND ULT IMATELY WITH THE AID OF SECTION 50C, HE ADOPTED SALE CONSIDERATION OF RS.6, 60,917/- FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN AS CONTEMPLATED IN SECTION 48 OF THE INCOME TAX ACT. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUT SET SUBMITTED THAT THE AO HAS BASED HIS FINDING ON SOME WRONG ASSUMPTION O F FACTS. HE DREW OUR ATTENTION TO PAGE NO.19A OF THE PAPER BOOK WHEREIN A CERTIFICATE TAKEN FROM ITA NO.61 AND 62/RJT/2016 3 DEPUTY COLLECTOR, STAMP VALUATION DEPARTMENT HAS BE EN PLACED ON RECORD. ORIGINAL CERTIFICATE IS IN GUJARATI, AND IT HAS BEE N PLACED ON PAGE NO.18 AND 19. ACCORDING TO THE ASSESSEE, STAMP DUTY OF RS.27 ,200/- WAS PAID ON SALE DEED, AND THE VALUE OF THE PROPERTY FOR THE PURPOSE OF STAMP DUTY WAS TAKEN AT RS.3.00 LAKHS. THE LD.DR, ON THE OTHER HAND, DREW OUR ATTENTION TOWARDS PAGE NO.27 OF THE PAPER BOOK. ON THIS PAGE A DOCUMENT, VIZ. CALCULATED MARKET VALUE DETAIL REPORT HAS BEEN PLACED. ACCORDING TO THE LD.DR, THIS DOCUMENT EXHIBITS MARKET VALUE OF THE PROPERTY AT RS.6,60,91 3/- AND CALCULATED DUTY IS RS.55,524/-. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE TH ROUGH THE RECORD. SECTION 50C CONTEMPLATES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUED, AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE AD OPTED BY AN AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF ST AMP DUTY, IN RESPECT OF SUCH TRANSFER, THEN THE VALUE SO ADOPTED OR ASSE SSED SHALL, FOR THE PURPOSE OF SECTION 48 BE DEEMED TO BE THE FULL VALU E OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. AS FAR AS APPLICABILITY OF SECTION 50C IS CONCERNED, THERE IS NO DISPUTE BE TWEEN THE PARTIES. THE DISPUTE RELATES TO ACTUAL DETERMINATION OF THE VALU E OF THE PROPERTY. IN ORDER TO RESOLVE THIS CONTROVERSY, IT IS IMPERATIVE UPON US TO TAKE NOTE OF THE ENDORSEMENT MADE BY THE DEPUTY COLLECTOR AVAILA BLE AT PAGE NO.19A OF THE PAPER BOOK AS WELL AS DOCUMENTS REFERRED TO BY THE LD.DR. BOTH DOCUMENTS READ AS UNDER: ENGLISH TRANSLATION OF REGISTERED SALE DEED (PG. 18 OF PAPER BOOK) ENDORSEMENT ITA NO.61 AND 62/RJT/2016 4 STAMP DUTY VALUATION CELL, RAJKOT DVISION-1 AS MENTIONED IN DOCUMENT NO.1046, DATED 31/01/2006 CASE NO.196/06, THE STAMP DUTY OF RS.27,200/- ON AMOUNT OF RS.3,00,000/-. AS THE AMOUNT MENTIONED IN THE REGISTERED DOCUMENTS IS EQUAL TO THE PREVAILING MARKET PRICE THEREFORE NO DIFFERENTI AL STAMP DUTY OR PENALTY IS PAYABLE AS PER RULE 31(C). RAJKOT DATE : 20/04/2006 DEPUTY COLLECTOR STAMP DUTY VALUATION DEPARTMENT, RAJKOT CITY- DIVISION-1 VILLAGE NAME RAJKOT-11 DOCUMENT NO. 1046 DOCUMENT YEAR 2006 DOCUMENT ID 20 MARKET VALUE 660913 PROPERTY MARKET VALUE 660913 PROPERTY CONAMT 300000 CONSIDERATION AMOUNT 300000 CALCULATED DUTY 55524 USED DUTY 25200 SD/- SUB-REGISTRAR, RAJKOT-2 7. A PERUSAL OF BOTH THESE DOCUMENTS WOULD INDICAT E THAT ACTUAL AMOUNT ON WHICH STAMP DUTY PAID WAS ONLY ON RS.3 LA KHS. EVEN IN THE DOCUMENT REFERRED BY THE LD.DR, THEY REFER TO MARKE T VALUE OF RS.6,60,913/-, BUT STAMP DUTY AUTHORITY HAS NOT CHA RGED THE ASSESSEE ON THIS VLAUE. THEY HAVE CHARGED STAMP DUTY ON RS.3.0 0 LAKHS ONLY AND THAT IS THE CONSIDERATION CONSIDERED BY THE ASSESSEE. I N VIEW OF THE ABOVE ITA NO.61 AND 62/RJT/2016 5 SITUATION, WE DO NOT SEE ANY REASON TO CONFIRM THE ADDITION MADE BY THE AO. WE ALLOW APPEAL OF THE ASSESSEE AND DELETE IMP UGNED ADDITION MADE BY THE AO. 8. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 24 TH AUGUST, 2016 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER