Shri Nitin Umedbhai Patel, Bharuch V. The Income tax Officer,Ward-1, Bharuch

ITA 629/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6157 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDAN HEARING CONCLUD
• Assessee Lawyers: M K PATEL
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 143(3)

Judgement Text

ITA NO. 629 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] ITA NO. 629 /AHD/20 13 ASSESSMENT Y EAR: 200 9 - 10 NITIN UMEDBHAI PA T EL, ... .......... . APPELLANT 11, PATEL SOCIETY,BHARUCH 392 002. [PAN: A ERPP 3462 N ] VS. INCOME TAX OFFICER , WARD 1 , BHARUCH . ... .. ......... RESPONDENT APPEARANCES BY M.K. PATEL FOR THE A PPELLANT K . MADHUSUDAN FOR THE R E SPONDENT HEARING CONCLUDED ON: 0 8 .02 .2017 ORDER PR ONOUNCED ON : 26 . 0 4 .2017 O R D E R PER PRAMOD KUMAR , AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF LEARNED CIT(A) S ORDER DATED 26.12.2012 , IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCO ME TAX ACT 1961, FOR THE ASSESSMENT YEAR 2009 - 10. 2. GRIEVANCES RAISE D IN THIS APPEAL ARE AS FOLLOWS : - 1) THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN PARTLY CONFIRMING THE ADDITION OF RS.48,17,155/ - MADE U/S.50C OF THE ACT. 2) THAT ON FACTS AND IN LAW IT OUGHT TO HAVE BEEN HELD THAT NO ADDITION IS CALLED FOR, AS THE DECLARED SALE PRICE IS AS PER THE PREVAILING JANTRY RATE DECLARED BY STAMP VALUATION AUTHORITIES. ITA NO. 629 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 2 OF 4 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE AS FO LLOWS. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE, ALONG - WITH HIS PARTNER, HAS SOLD 5,905.45 METERS OF LAND FOR RS 71,62,850 BUT THE STAMP DUTY VALUATION , ON THE BASIS OF WHICH SALE DEED WAS EXECUT ED, FOR THE SAID LAND IS @ RS 4,000 PER METER. THE ASSESSING OFFICER WAS THUS OF THE VIEW THAT VALUE OF THE LAND, UNDER SECTION 50C, COMES TO RS 2,36,21,800 AND THE SHARE OF THE ASSESSEE WORKS OUT TO RS 1,18,10,900 AS AGAINST THE SALES CONSIDERATION OF RS 34,50,475 SHOWN BY THE ASSESSEE. ON THESE FACTS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE DIFFERENCE OF RS 83,60,425 NOT TO ADDED TO THE INCOME OF THE ASSESSEE AS UNDISCLOSED CAPITAL GAINS. THE MATTER WAS REFERRED TO DVO FOR VALUATION OF LAND, AND HE VALUED THE LAND @ RS 2,800 PER SQUARE METER. THE ASSESSING OFFICER, NEVERTHELESS, PROCEEDED WITH COMPUTATION OF CAPITAL GAINS BY ADOPTING THE STAMP DUTY VALUATION RATE OF RS 4,000 PER SQUARE METER. ACCORDINGLY, AN ADDITION OF R S 83,60,425 WAS MADE TO THE CAPITAL GAINS SHOWN BY THE ASSESSEE. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT COMPLETE SUCCESS. LEARNED CIT(A) RESTRICTED THE ADDITION BY ADOPTING THE DEEMED VALUE OF SALES CONSIDERATION @ RS 2,800 PER METER, I.E. ON THE BASIS OF VALUATION DONE BY THE DVO, AND THUS RESTRICTED THE ADDITION TO RS 48,17,155. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4 . LEARNED COUNSEL FOR THE ASSESSEE POINTS OUT THAT THERE ARE GLARING E RRORS IN THE VALUATION REPORT BY THE DVO BUT THE CIT(A) HAS COMPLETELY IGNORED ASSESSEE S SUBMISSIONS ON THIS ASPECT OF THE MATTER. IT IS CONTENDED THAT THE CIT(A) HAS PROCEEDED TO TREAT THE VALUATION REPORT AS THE GOSPEL TRUTH BUT IF THERE ARE GLARING ERR ORS IN THE REPORT, THE CIT(A) SHOULD HAVE DEALT WITH THE VALUATION REPORT ON MERITS. IT IS THEN POINTED OUT THAT THE DVO HAS TAKEN THREE COMPARABLE INSTANCES OF RS 2,110 PER METER, ITA NO. 629 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 3 OF 4 RS 1,804 PER METER AND RS 1,500 PER METER BUT ENDED UP TAKING THE AVERAGE V ALUE AT RS 2,800 PER METER - AS AGAINST RS 1,805 PER METER, WHICH IS THE CORRECT AVERAGE. IT IS POINTED OUT THAT THERE IS APPARENTLY AN INADVERTENT ERROR INASMUCH AS RS 2,800 IS ADOPTED AS AGAINST RS 1,800. LEARNED COUNSEL ALSO POINTS OUT CERTAIN OTHER MIST AKES IN THE VALUATION REPORT AND URGES US TO REDUCE THE DVO VALUATION FIGURE APPROPRIATELY. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELI ES UPON THE STAND OF THE CIT(A). WHILE HE DOES NOT DISPUTE THAT THE TRIBUNAL HAS THE POWERS TO TINKER WI TH THE VALUATION ADOPTED BY THE DVO, HE SUBMITS THAT THERE ARE NO GLARING ERRORS AS SUCH WHICH CAN BE RECTIFIED. 5. WE FIND THAT THE COMPARABLE SALES INSTANCES, WHICH IS ADMITTEDLY BASIS OF VALUATION BY THE DVO - AS STATED BY HIM IN SO MANY WORDS IN THE VA LUATION REPORT ITSELF, TAKEN BY THE DVO ARE THREE - FIRST, OF SALE OF 189.50 METER LAND PLOT @ RS 2,110; SECOND - OF SALE OF 135.78 METER OF LAND PLOT @ RS 1,804; AND, THIRD - OF SALE OF 233.70 METER LAND PLOT @ RS 1,500. ON THE BASIS OF THESE THREE TRANSACTI ONS, THE VALUATION @ RS 2,800 INDEED DOES NOT MAKE ANY SENSE. THE AVERAGE RATE IN THESE CASES IS ABOUT RS 1,800 PER SQUARE METER, EVEN THOUGH THE SIZE OF PLOTS ARE MUCH SMALLER WHICH OBVIOUSLY FETCH HIGHER VALUE PER METER. IN THESE CIRCUMSTANCES, IN OUR CO NSIDERED VIEW, IT IS INDEED A GLARING ERROR IN THE DVO S REPORT TO ADOPT THE VALUATION RATE OF RS 2,800 PER SQUARE METER. IT APPEARS TO BE AN INADVERTENT ERROR TO HAVE ADOPTED THE RATE OF RS 2,800 PER SQUARE METER AS AGAINST RS 1,800 PER SQUARE METER. IN A NY CASE, IN OUR CONSIDERED VIEW, IT WILL CLEARLY MEET THE ENDS OF JUSTICE TO ADOPT RS 1,800 PER SQUARE METER AS VALUATION OF THE LAND. WE, THEREFORE, DEEM IT FIT AND PROPER TO MODIFY THE RATE ACCORDINGLY AND DIRECT THE ASSESSING OFFICER TO GRANT RELIEF ON THE BASIS OF DEEMED SALES CONSIDERATION UNDER SECTION 50 C, SO ARRIVED AT. ITA NO. 629 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 4 OF 4 6. WITH THE OBSERVATIONS AS ABOVE, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER. 7. IN THE RESULT, THE APPEAL IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNC ED IN THE OPEN COURT ON THIS 26 TH DAY OF APRIL , 2017 . SD/ - SD/ - MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 26 TH DAY OF APRIL , 201 7 . PBN/* COPIES TO : (1) THE AP PELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD