The Asstt. Commissioner of Income Tax, Circle-1(2), Surat V. Shri Bakulkumar Anilbhai Patel, Surat

ITA 628/AHD/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2054 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 14-03-2017
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER . / ITA.NO.628/AHD/2017 [ [ / ASSTT. YEAR: 2012-13 ACIT, CIR.1(2) SURAT. VS. SHRI BAKULKUMAR ANILBHAI PATEL 14, PATEL FALIYU, ALTHAN CHORYASI, SURAT 394 210. PAN : ABBPP 1532 C / (APPELLANT) / (RESPONDENT) REVENUE BY : SMT.SMITA NAIR, SR.DR ASSESSEE BY : SHRI AKSHAY MODI, CA / DATE OF HEARING : 15/11/2018 / DATE OF PRONOUNCEMENT: 15/11/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF LD.CIT(A)-2, SURAT DATED 2.12.2016 FOR THE ASSTT.YEAR 2012-13. 2. SOLITARY GRIEVANCE OF THE REVENUE IS THAT THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.91,58,013/- WHICH WAS ADDED BY THE AO UNDER SECTION 50C OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE EMANATING FROM THE ORDERS OF THE REVENUE AUTHORITIES ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME BY DECLARING TOTAL INCOME AT RS.28,90,760/- AND AGRICULTURAL INCOME OF RS.81,560/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT. IN THE SCRUTINY ASSESSMENT THE LD.AO NOTICED INTERALIA THAT THE ASSESSEE ALONG WITH THE OTHER CO-OWNER HAVE ITA NO.628/AHD/2017 2 SOLD LAND SITUATED AT MAGADALLA, SURAT FOR TOTAL CONSIDERATION OF RS.2,28,37,500/- AND PAID STAMP DUTY OF RS.17,26,600/- ON 7.12.2011. ACCORDING TO THE AO, JANTRI RATE OF THE PROPERTY DETERMINED BY THE STAMP VALUATION AUTHORITY WAS AT RS.3,52,35,000/-. HE WORKED OUT THE DIFFERENCE THESE TWO AMOUNTS OF RS.123,97,500/- TREATED AS CAPITAL GAIN COVERED UNDER SECTION 50C. THE LD.AO CONSTRUED THE SHARE OF THE ASSESSEE TO BE 77% AND WORKED OUT CAPITAL GAIN IN THE HANDS OF THE ASSESSEE AT RS.95,47,075/-. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE ORDER OF THE AO AND SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION. THE RELEVANT FINDING CONTAINED IN THE ORDER OF THE LD.CIT(A) READS AS UNDER: 6.1.1 I HAVE CONSIDERED THE ASSESSMENT ORDER AS WELL AS THE SUBMISSIONS OF THE APPELLANT. THE GROUNDS OF APPEAL GROUND NO.1 PERTAINS TO MAKING ADDITION OF RS.91,58,013/- BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT THOUGH THE ASSESSEE HAD SHOWN FULL CONSIDERATION AS PER THE JANTRI VALUE AS| PER HIS 50% SHARE. THE AO FOUND THAT THE APPELLANT ALONGWITH THE OTHER COOWNER HAVE PURCHASED AGRICULTURE LAND AT MAGADALLA, SURAT FOR TOTAL CONSIDERATION OF RS. 4,35,000/-. THIS AGRICULTURE LAND WAS SOLD ON 07.12.2011 THROUGH A REGISTERED SALE DEED FOR RS. 2,28,37,500/-. THE INFORMATION RECEIVED FROM THE STAMP VALUATION AUTHORITY VALUED THE PROPERTY AS PER JANTRI RATE AT RS. 3,52,35,000/-. THE AO HELD THAT THE APPELLANT HAD RECEIVED AN AMOUNT OF RS. 1,76,17,500/- AS HIS SHARE IN AGRICULTURE LAND SOLD WHICH WAS 77.14% OF THE TOTAL DOCUMENTED SALES CONSIDERATION. THE AO CALCULATED THE CAPITAL GAINS ON THE 77.14% SHARE OF RS. 3,52,35,000/- AND MADE THE ADDITION OF RS. 91,58,013/-. THE APPELLANT SUBMITTED THAT THE LAND WAS PURCHASED FOR RS. 4,35,000/- ON 20.05.2004 IN WHICH HE WAS HAVING 50% SHARE AND HIS SHARE OF RS. 2,47,500/- WAS SHOWN IN THE BOOKS OF ACCOUNTS YEAR AFTER YEAR TILL THE DATE OF SALE. THE AMOUNT OF RS. 2,475,00/- WAS SHOWN TOWARDS PURCHASE OF LAND IN THE AUDIT REPORT FILED ALONGWITH THE RETURN OF INCOME. THE SAID LAND WAS SOLD ON 07.12.2011 FOR RS. 2,28,37,500/- WHEREIN THE STAMP DUTY OF RS. 17,26,600/- WAS PAID BY THE PURCHASER AND NOT THE SELLER. THE APPELLANT HAD RECEIVED THE LAND SALE CONSIDERATION AS PER THE JANTRI VALUE THOUGH THE ACTUAL VALUE WAS LESS AS PER THE SALE DEED. THE JANTRI VALUE WAS DETERMINED AT RS. 3,52,35,000/- ITA NO.628/AHD/2017 3 AND THE APPELLANT HAD SHOWN 50% OF THE SHARE BEING RS. 1,76,17,500/- IN THE BOOKS OF ACCOUNT AND THE CAPITAL GAIN HAVE BEEN PAID ACCORDINGLY. 6.1.2. ON THE PERUSAL OF THE DETAILS, IT IS OBSERVED THAT THE APPELLANT HAS SHOWN THE 50% OF THE PURCHASE AMOUNT OF RS. 2,47,500/- IN THE BOOKS OF ACCOUNT SINCE 2004-05 WHICH CLEARLY ESTABLISHES THAT HE WAS HAVING 50% OF THE SHARE IN THE PROPERTY. DURING THE ASSESSMENT PROCEEDINGS ITSELF, THE APPELLANT HIMSELF REQUESTED THE AO TO CALL THE OTHER CO-OWNER SHRI VELJIBHAI N RAMANI TO ASCERTAIN THE FACT THAT BOTH CO-OWNERS ARE HAVING 50% SHARE EACH IN THE PROPERTY. THE AO IN THE ASSESSMENT ORDER HERSELF HAS MENTIONED THAT THE OTHER CO-OWNER WAS CALLED SUMMON U/S 131 WHO HAD GIVEN IN WRITING VIDE HIS LETTER DATED 13.03.2015 THAT HIS SHARE IN THE PROPERTY IS 50% AND HE ALSO SUBMITTED A SATAKHAT DRAWN ON 04.03.2008 WHICH CLEARLY MENTIONS THAT BOTH THE CO-OWNERS HAVING 50% EACH SHARE IN THE PROPERTY. THE AO HAS IGNORED THESE FACTS. THE APPELLANT HIMSELF HAS SHOWN 50% OF THE AMOUNT AS PER THE JANTRI VALUE OF RS.1,76,17,500/- IN HIS RETURN OF INCOME AND THE LTCG HAS BEEN CALCULATED ACCORDINGLY. THE FINDING OF THE AO THAT THE APPELLANT WAS HAVING 77.124% SHARE IS INCORRECT FINDING AND FACTUALLY WRONG. HENCE, THE ADDITION MADE BY THE AO OF RS.91,58,013/- IS DELETED AND THE GROUND OF APPEAL IS ALLOWED. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE VALUE OF THE LAND DECLARED IN THE REGISTERED SALE DEED WAS RS.2,28,37,500/-, HOWEVER FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IT WAS VALUED AT RS.3,52,35,000/-. THE ASSESSEE IN HIS BOOKS OF ACCOUNTS RECOGNIZED VALUE AT RS.1,76,17,500/- WHICH WAS 50% OF THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY. THE LD.AO CONSTRUED THIS ACTION OF THE ASSESSEE, AS IF HE HAS RECEIVED 77.14% SHARE IN THE SALE VALUE. THE STAND OF THE ASSESSEE WAS THAT HE WAS CONSCIOUS OF THE FACT THAT LONG TERM CAPITAL GAIN WOULD BE COMPUTED BY TAKING INTO CONSIDERATION DEEMED VALUE CONTEMPLATED UNDER SECTION 50C OF THE ACT. THEREFORE, FROM THE VERY BEGINNING, HE HAS RECOGNIZED THAT SALE VALUE IN HIS BOOKS OF ACCOUNTS. THE LD.CIT(A) HAS RECORDED A FINDING OF FACT THAT THE ASSESSEE WAS HAVING ONLY 50% SHARE. HE RECOGNIZED 50% SHARE IN THE SALE VALUE. HIS RECOGNITION IS BASED ON THE DEEMED VALUE OF RS.3,52,35,000/-. ON THE OTHER HAND, THE LD.AO CONSTRUED THIS RECOGNITION AS IF OUT OF ITA NO.628/AHD/2017 4 RS.2,28,37,500/-. THE ASSESSEE HAS RECEIVED 77.47% SHARE. THIS CONSTRUCTION AT END OF THE AO IS TOTALLY MISREADING OF THE FACT, WHICH HAS BEEN CORRECTED BY THE LD.CIT(A). THEREFORE, WE DO NOT FIND ANY REASONS TO INTERFERE IN THE ORDER OF THE LD.CIT(A), WHICH IS UPHELD, AND THE GROUND OF APPEAL OF THE REVENUE IS REJECTED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 15 TH NOVEMBER, 2018 AT SURAT. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER