Shri Bharatkumar Maneklal Thakkar, HUF, Ahmedabad V. The Income Tax Officer, Ward-11(4), Ahmedabad

ITA 667/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8565 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 24-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D R THAKKAR
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 667/AHD/2015 (ASSESSMENT YEAR: 2011-12) BHARATKUMAR MANEKLAL THAKKAR [HUF] C/O. P. BHARATKUMAR MANEKLAL SAHAKARI LATI BAZAR-1, JAGANNATHJI ROAD, AHMEDABAD-380022 V/S INCOME TAX OFFICER, WARD- 11 (4), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAAHT1727R APPELLANT BY : SHRI D. R. THAKKAR, AR RESPONDENT BY : SHRI JAMES KURIAN, SR. D.R. ( )/ ORDER DATE OF HEARING : 31 -08-201 7 DATE OF PRONOUNCEMENT : 06-09-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-5, AHMEDABAD DATED 26.02.2015 PERTAINING TO A.Y. 2011- 12. ITA NO. 667/ AHD/2015 . A.Y. 2011-1 2 2 2. THE ASSESSEE IS AGGRIEVED BY THE ADOPTION OF THE FA IR MARKET VALUE AS ON 01.04.1981 FOR THE PURPOSE OF CALCULATION OF LONG T ERM CAPITAL GAIN. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE R ETURN OF INCOME WAS FILED ELECTRONICALLY DECLARING TOTAL INCOME AT RS. 1,61,7 76/- ON 21.02.2012. 4. THE RETURN WAS SELECTED FOR SCRUTINY THROUGH CASS A ND ACCORDINGLY STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 5. WHILE SCRUTINIZING THE RETURN OF INCOME AND ON THE BASIS OF THE AIR DETAILS AVAILABLE WITH THE DEPARTMENT, THE A.O. SOUGHT EXPL ANATION IN RESPECT OF THE SALE OF PROPERTY AND THE WORKING OF THE CAPITAL GAI NS. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE VALUE ADOPTED OR ASSESSED SHOULD NO T BE TAKEN FOR THE PURPOSE OF SECTION 48 AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. ASSESSEE FILED A DETAILED REPLY EXPLAINING THE CONDITION OF THE PROP ERTY AND STRONGLY STATING THAT DUE TO THE PROPERTY BEING SITUATED IN A LOWER CLASS AREA, THERE WAS DIFFICULTY IN GETTING GOOD BUYER BECAUSE FULL AND CLEAR POSSESSIO N WAS NOT AVAILABLE WITH THE ASSESSEE AND THE PROPERTY IS SITUATED IN AN ECONOMI CALLY BACKWARD AREA. IT WAS REQUESTED TO ACCEPT THE SALE VALUE OF RS. 61.41 LAC S INSTEAD OF THE STAMP DUTY VALUE OF RS. 1,21,49,800/-. THE ASSESSEE FURTHER RE QUESTED THE A.O. TO REFER THE MATTER TO THE DVO AS PER THE PROVISIONS OF SECTION 50C(2) OF THE ACT. 6. THE SUBMISSIONS OF THE ASSESSEE DID NOT FIND ANY FA VOUR WITH THE A.O. WHO PROCEEDED BY ADOPTING THE STAMP DUTY VALUE AND COMP UTED LONG TERM CAPITAL GAIN QUA THE SHARE OF THE ASSESSEE AS THERE WERE OT HER CO-OWNERS, SEVEN IN NUMBERS. ITA NO. 667/ AHD/2015 . A.Y. 2011-1 2 3 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT IN THE CASE OF ONE OF THE CO- OWNER NAMELY MEHUL NARENDRA THAKKAR, THE VALUATION REPORT OF THE DVO WAS CALLED FOR WHEREIN THE `DVO HAS TAKEN THE FAIR MARK ET VALUE AT RS.70,96,000/- IT WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT THE DVO HAS WORKED OUT THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01. 04.1981 AT RS. 2,55,185/- FOR THE PURPOSE OF COST OF ACQUISITION. TAKING A LE AF OUT OF THE ASSESSMENT IN THE CASE OF THE CO-OWNER NAMELY MEHUL N. THAKKAR, T HE LD. CIT(A) DIRECTED THE A.O. TO ACCEPT THE VALUATION DONE IN THAT CASE AND RESTRICTED THE COMPUTATION OF LONG TERM CAPITAL GAIN AT RS. 8,78,864/-. THE L D. CIT(A) ACCEPTED THE FMV AS ON 01.04.1981 AS DETERMINED BY THE DVO AT RS. 2, 55,185/-. 8. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT DURING THE YEAR UNDER CONSIDERATION, THERE WAS NO PROVISION TO REFER THE MATTER TO THE VALUATION OFFICER FOR THE DETERMINATION OF FAIR MARKET VALUE AS ON 01.04.1981. IT IS THE SAY OF THE LD. COUNSEL THAT ADOPTION OF THE FAIR MA RKET VALUE AS ON 01.04.1981 IS NOT ONLY ERRONEOUS BUT BAD IN LAW. PER CONTRA, T HE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT IN ONE OF THE CO-OW NER NAMELY MEHUL N. THAKKAR, THE MATTER OF VALUATION WAS REFERRED TO TH E DVO AND THE DVO HAS VALUED THE PROPERTY AT RS. 70,96,000/- AS ON THE DA TE OF SALE I.E. 09.08.2010. WE, THEREFORE, DO NOT FIND ANY ERROR IN THE FINDING S OF THE LD. CIT(A) FOR ADOPTION OF THE SALE VALUE AT RS. 70,96,000/-. TO T HIS EXTENT, THE ORDER OF THE LD. CIT(A) IS CONFIRMED. HOWEVER, WE FIND THAT THE DVO HAS ALSO DETERMINED THE FMV AS ON 01.04.1981 WHICH WAS NOT PERMISSIBLE FOR THE ASSESSMENT YEAR ITA NO. 667/ AHD/2015 . A.Y. 2011-1 2 4 UNDER CONSIDERATION. OUR VIEW IS ALSO FORTIFIED BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF GAURANGIBEN S. SODHAN IN TAX APPEAL NO. 149 TO 151 OF 2013 45 TAXMANN.COM 35 6. 10. WE FURTHER FIND THAT THE ASSESSMENT IN THE CASE OF MEHUL N. THAKKAR WAS CHALLENGED BEFORE THE LD. CIT(A) AND THE LD. CIT(A) VIDE ORDER DATED 21.07.2015 IN APPEAL NO. CAB/4-342/2014-15 HAS HELD AS UNDER:- 3.3. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSIONS FILED BY THE AUTHORIZED REPRESENTATIVE. I AM INCLINED TO ACC EPT ONLY ONE CONTENTION OF THE APPELLANT THAT THE VALUATION OF LAND AS ON 01.04.19 81 CANNOT BE DONE BY THE ASSESSING OFFICER TO REDUCE THE FMV AS DECLARED BY THE ASSESSEE ON THE BASIS OF THE REPORT OF THE REGISTERED VALUER. ACCORDINGLY, T HE ASSESSING OFFICER IS DIRECTED TO ADOPT THE VALUATION GIVEN BY REGISTERED VALUER A T RS. 8,70,000/- AS ON 01.04.1981 INSTEAD OF RS. 2,55,185/- ADOPTED BY THE DVO. THIS WILL BE IN ACCORDANCE WITH THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GAURANGIBEN S. SODHAN (SUPRA) CITED BY THE LD. AUTH ORIZED REPRESENTATIVE. 11. WE ALSO FIND THAT THE FINDING IN THE CASE OF THE CO -OWNER ATTAINED FINALITY. THEREFORE, FOLLOWING THE SAME, WE HOLD ACCORDINGLY. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 06- 09- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 06/09/2017 RAJESH