Manoj J. Gandhi, Ahmedabad V. ACIT, Central Circle-2(4), Ahmedabad

ITA 625/AHD/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1485 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-04-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 09-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (VIRTUAL COURT) BEFORE: SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER MANOJ J. GANDHI, M5 LABH DECORATORS, F-1, SHARDA SHOPPOING CENTRE, PRITAMNAGAR, ELLISBRIDGE, AHMEDABAD-380006 PAN: ACTPG4254H (APPELLANT) VS THE ACIT, CENTRAL CIRCLE-2(4), A-304, 3 RD FLOOR AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD (RESPONDENT) REVENUE BY: SHRI KAMLESH MAKWANA, SR. D.R. ASSESSEE BY: SHRI TEJ SHAH, A.R. DATE OF HEARING : 02-12-2020 DATE OF PRONOUNCEMENT : 10-12-202 0 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2012-13, ARISES FRO M ORDER OF THE CIT(A)-12, AHMEDABAD DATED 23-08-2016, IN PROCEEDI NGS UNDER SECTION 143(3) R.W.S. 153B(1)(B) OF THE INCOME TAX ACT, 196 1; IN SHORT THE ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ORDER OF THE A.O. IN M AKING AN ADDITION OF RS. ITA NO. 625/AHD/2018 ASSESSMENT YEAR 2012-13 I.T.A NO. 625/AHD/2018 A.Y. 2012-13 PAGE NO SHRI MANOJ J. GANDHI VS. ACIT 2 21,25,789/- BEING LONG TERM CAPITAL GAIN ARISING O N THE SALE OF LAND U/S. 50C OF THE ACT. 3. THE FACT IN BRIEF IS THAT ASSESSMENT U/S. 143(3) R.W.S. 153B(1)(B) OF THE INCOME TAX WAS FINALIZED ON 27 TH MARCH, 2014. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT ASSE SSEE HAS SOLD AGRICULTURAL LAND SITUATED AT VILLAGE DEHGAM FOR RS. 38 LACS TO SHRI CHIMANLAL ARCHANBHAI AND OTHERS ON 9 TH MARCH, 2012 AND THE ASSESSEE HAS CLAIMED SHORT TERM CAPITAL LOSS FOR RS. 4,13,736. ON EXAMI NATION OF THE DETAIL FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER HA S NOTICED THAT ON THE BASIS OF STAMP DUTY PAID THE SALE PRICE OF THE SOLD LAND COMES TO RS. 83, 37,000/- AGAINST SALE VALUE OFFERED BY THE ASSESSEE AT RS. 3 8 LACS. ON THE BASIS OF AFORESAID INFORMATION, THE ASSESSING OFFICER OBSERV ED THAT THERE WAS NET SALE CONSIDERATION OF RS. 45, 37,000/- IN RESPECT OF LAN D SOLD BY THE ASSESSEE. ON QUERY, THE ASSESSEE EXPLAINED THE REASONS BEHIND SE LLING THE SAID LAND AT THE AFORESAID PRICE WERE THE DISPUTE/LITIGATIONS INVOLV ED IN THE POSSESSION OF THE LAND AND NOT PROVIDING MAIN ROAD TO APPROACH THE LA ND. THE ASSESSEE HAS ALSO FILED COPIES OF DOCUMENTS RELATED TO CRIMINAL APPLICATION FILED IN GUJARAT HIGH COURT ETC. ON THE BASIS OF THE DETAIL FILED, THE ASSESSEE EXPLAINED TO THE ASSESSING OFFICER THAT HE WAS NOT IN A POSITION TO PHYSICALLY, MENTALLY AND LEGALLY FIGHT TO SOLVE THE VARIOUS LEGAL ISSUES AND LITIGATION PERTAINING TO THE SAID LAND. UNDER THESE CIRCUMSTANCES, THE SAID LAN D WAS SOLD TO THE LOCAL PERSON WHO HAS OFFERED HIM THE MAXIMUM AMOUNT OF RS . 38 LACS AS PURCHASE CONSIDERATION. THE ASSESSING OFFICER HAS NOT ACCE PTED THE SUBMISSION OF THE ASSESSEE STATING THAT THE LAND UNDER CONSIDERAT ION WAS SITUATED WITHIN TWO KILOMETER FROM THE LOCAL LIMIT OF MUNICIPALITY AS P ER THE LETTER RECEIVED FROM I.T.A NO. 625/AHD/2018 A.Y. 2012-13 PAGE NO SHRI MANOJ J. GANDHI VS. ACIT 3 TALATI ON 18 TH MARCH, 2014. THE ASSESSING OFFICER HAS ALSO NOT A CCEPTED THE VARIOUS LITIGATION POINTED OUT BY THE ASSESSEE PERT AINING TO THE SOLD LAND AND COMPUTED THE LONG TERM CAPITAL GAIN ON THE BASIS OF STAMP DUTY TO THE AMOUNT OF RS. 28,87,550/-. AFTER REJECTING THE CLA IM OF SHORT TERM CAPITAL LOSS OF RS. 4,13,736/-, THE ASSESSING OFFICER HAS M ADE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE OF RS. 21,25,789/- BEING A L ONG TERM CAPITAL GAIN ON THE SALE OF THE SAID LAND. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS SOLD AGRICULTURAL LAND ON 9 TH MARCH, 2012 AND ASSESSEE HAS SHOWN SALE CONSIDERATION AT RS. 38 LACS. HOWEVER ON THE BASIS OF STAMP DUTY PAID THE ASSESSING OFFICER HAS VALUED THE DEEMED SALE CONSID ERATION AT RS. 83,37,000/-. THE ASSESSING OFFICER HAS ALSO NOTICE D THAT SAID LAND WAS SITUATED WITHIN TWO KILOMETER FROM THE LOCAL LIMIT OF MUNICIPALITY. THEREFORE, HE HAS COMPUTED LONG TERM CAPITAL GAIN A T RS. 22,87,550/-. CONSIDERING THE SHARE OF THE ASSESSEE OF 67% IN THE SOLD LAND, THE ASSESSING OFFICER HAS MADE ADDITION OF LONG TERM CAPITAL GAIN AT RS. 21,25,789/- TO THE TOTAL INCOME OF THE ASSESSEE. DURING THE COURSE O F ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS BROUGHT TO THE NOTICE OF THE ASSESSEE THAT THE TITLE OF THE LAND WAS NOT CLEAR AND THERE WAS A DIFFICULT Y IN OBTAINING THE POSSESSION OF THE LAND AND NOT PROVIDING OF APPROAC H ROAD ETC. SUPPORTED BY COPIES OF CASE FILED BEFORE THE HONBLE HIGH COURT OF GUJARAT BY THE OTHER I.T.A NO. 625/AHD/2018 A.Y. 2012-13 PAGE NO SHRI MANOJ J. GANDHI VS. ACIT 4 PERSONS ENCLOSED AT PAGE NO. 7 TO 18 OF THE PAPER B OOK FILED BY THE ASSESSEE. THE DETAIL OF SUBMISSION FILED BEFORE THE LD. ASSES SING OFFICER BY THE ASSESSEE IS REPORTED AS UNDER:- 'WITH REFERENCE TO THE ABOVE SUBJECT, I HAD RECEIVE D A SHOW CAUSE NOTICE VIDE LETTER NO. ACIT/CC- 2(4)/M.J. GANDHI/2013-14 DATED 24.03.2014, REGARDIN G THE PROFIT ON SALE OF AGRICULTURE LAND SITUATED AT DEHGAAV FOR AN AMOUNT OF RS. 38 LACS IN WHICH MY SHARE WAS 67% AS PER THE SALE DEED. YOU HAD NOTICED THAT THE VALUE OF THE LAND IS AMOUN TING TO RS. 83.37 LACS AS PER THE STAMP DUTY PAID BY THE BUYER. AS THIS AGRICULTURAL LAND IS SIT UATED WITHIN 2 KMS FROM THE DEHGAAV MUNICIPALITY AREA, IT SHOULD BE TAXED AS LONG TERM CAPITAL GAIN ON STAMP DUTY PAID VALUE. WE HEREBY SUBMIT AS UNDER: I HAD PURCHASED THE SAID LAND FROM SHRI NAYANBHAI A MIN AND THEIR FAMILY ' MEMBERS ON O1.O7.2008. THE DOCUMENT VALUE, WAS 36.50 LACS AND THE STAMP DUTY HAS BEEN PAID BY AN AMOUNT OF RS. 1.79 LACS. THE TOTAL IS RS. 38.29 LACS. THE COST OF MY SHARE IS RS. 25,65,430. AT THE TIME OF PURCHASE OF THIS LAND, MR. NAYAN AMIN HAD STATED TO PROVIDE APPROACH ROAD FROM THE MAIN' ROAD TO THE SAID LAND AND HAD TAKEN THE RESPONSIBILITY F OR REMOVING/ TRANSFERRING OF PAGE WHO WAS LIVING ON SAID LAND FROM LAST SEVERAL YEARS. ON THE SAID U NDERSTANDING WE HAD PURCHASED THE LAND. AFTER PURCHASING THE SAID LAND, WE HAD REPEATEDLY REQUEST ED TO MR. NAYAN AMIN TO PROVIDE THE APPROACH ROAD AND COMPEL MR. PAGI TO VACATE THE POS SESSION ON THE LAND. MR. AMIN WAS MAKING EFFORTS TO FULFILL HIS COMMITMENTS BUT IN THE MEANT IME, HE EXPIRED AND HIS FAMILY MEMBERS WERE NOT KEEN TO SOLVE OUR ISSUES. WE HAD ALSO APPROACHED TO MR. PAGI TO VACATE OUR LAND BUT HE WAS NOT READY FOR THE SAME. GRADUALLY THE PROBLEM HAD BEEN CONVERTED INTO A LEGAL ISSUE. THE PAGI AND HIS FAMILY HAS FILED POLICE COMPLAINT AGAINST AS AND TH E ISSUE HAS BEEN TRANSFERRED TO THE COURT. THE RELATED DOCUMENTS I.E. COPY OF POLICE COMPLAINT- DO CUMENT RELATED TO CRIMINAL APPLICATION FILED IN GUJARAT HIGH COURT, ETC ARE ENCLOSED HEREWITH FOR Y OUR CONSIDERATION. WE FURTHER SUBMIT THAT I AM A BUSINESSMAN, LIVING I N AHMEDABAD. NOW THE LAND WAS UNDER LITIGATION AND I AM NOT IN POSITION TO PHYSIC ALLY, MENTALLY AND LEGALLY FIGHT WITH THE OPPONENT PERSON TO SOLVE THIS ISSUE. THEREFORE, I HAVE DECID ED TO COME OUT FROM THIS PROBLEM BY DISPOSING THE SAID LAND AT THE BEST PRICE AVAILABLE IN THE MA RKET. HENCE, WE APPROACHED TO THE INTERESTED PARTIES AND EXPLAINED ALL THE FACTS. THE BUYERS OF THE SAID LAND ARE LOCAL PERSONS AND TOOK THE SAID MATTER ON THEIR OWN PART AND OFFERED US THE MAXIMUM AMOUNT OF RS. 38LACS AS PURCHASE CONSIDERATION FOR THE LAND. AFTER CONSIDERING OUR O WN POSITION, WE HAVE DECIDED TO SELL THIS LAND AT THE RATE OF RS. 38 LACS AND SETTLE THE ISSUE FOREVE R. THEREFORE, OUR ACTUAL SALES CONSIDERATION IS RS. 38 LACS ONLY WHICH WE HAVE RECEIVED FROM THE BUYER, SHOWN IN THE PURCHASE DOCUMENTS, CREDITED IN OUR BOOKS OF ACCOUNTS AND CLAIMED AS LONG TERM CAPI TAL GAIN. WE FURTHER SUBMIT THAT YOU HAD GIVEN SHOW CAUSE FOR CONSIDERING THE SELLING PRICE ON THE BASIS OF STAMP DUTY PAID WHICH IS NOT APPLICABLE IN OUR CASE AS THE LAND WAS UNDER DISPUTE AND LITIGATION. THE STAMP DUTY HAS BEEN PAID TO GET THE DOCUMENTS REGISTERED AS PER THE BUYER WAS INTERESTED TO GET IMMEDIATE REGISTRATION. THEREFORE , BY CONSIDERING THE FACTS, KINDLY DO NOT TAKE ANY ADVANCE VIEW. IF YOU REQUIRE ANY FURTHER INFORM ATION, KINDLY INFORM US BEFORE TAKING ANY ADVERSE VIEW.' IT IS OBSERVED THAT THE ASSESSING OFFICER HAS NOT SPECIFICALLY CONTROVERTED THE VARIOUS LEGAL ISSUES RAISED BY THE ASSESSEE IN THE AFORESAID SUBMISSION IN HIS FINDING. THE LD. CIT(A) HAS DISMISSED THE APPE AL OF THE ASSESSEE STATING THAT THERE WAS NO CATEGORICAL REQUEST MADE BY THE A SSESSEE BEFORE THE ASSESSING OFFICER THAT THE VALUATION MAY BE REFERRE D TO THE DEPARTMENTAL I.T.A NO. 625/AHD/2018 A.Y. 2012-13 PAGE NO SHRI MANOJ J. GANDHI VS. ACIT 5 VALUATION OFFICER. HOWEVER, ON PERUSAL OF THE SUB MISSION MADE BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS POINTED OUT THE SPECIFIC CIRCUMSTANCES AS ELABORATED ABOVE IN THIS ORDER AND IN THE SUBMISSION OF THE ASSESSEE WA S WHICH LEAD TO SELLING OF THE LAND AT RS. 38 LACS. IN THE LIGHT OF THE ABOV E FACTS/CIRCUMSTANCES, WE CONSIDER THAT THE ASSESSEE HAS CATEGORICALLY BROUGH T TO THE NOTICE OF THE ASSESSING OFFICER THAT THE VALUE ADOPTED BY THE STA MP VALUATION AUTHORITY IN HIS CASE EXCEED THE FAIR MARKET VALUE OF THE PROPER TY AS ON THE DATE OF TRANSFER BECAUSE THE CIRCUMSTANCES CITED AS SUPRA IN THIS ORDER. THEREFORE, WE CONSIDER THAT TO VERIFY THE FACTS REPORTED BY T HE ASSESSEE, THE ASSESSING OFFICER COULD HAVE REFERRED THE ISSUE FOR VALUATION OF THE SOLD CAPITAL ASSET TO A DEPARTMENTAL VALUATION OFFICER UNDER THE PROVISIO N OF SECTION 50C(2) OF THE ACT. IN THE LIGHT OF THE ABOVE OF FACTS AND CI RCUMSTANCES, WE RESTORE THIS CASE TO THE FILE OF THE ASSESSING OFFICER FOR DECID ING THE ISSUE OF LONG TERM CAPITAL GAIN EARNED ON SALE OF THE IMPUGNED LAND AF RESH AFTER REFERRING THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER. THERE FORE, THIS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10-12-2020 SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT AC COUNTANT MEMBER AHMEDABAD : DATED 10/12/2020 / COPY OF ORDER FORWARDED TO:- I.T.A NO. 625/AHD/2018 A.Y. 2012-13 PAGE NO SHRI MANOJ J. GANDHI VS. ACIT 6 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,