Sh. Vijay Kumar, Shimla V. ACIT, Shimla

ITA 7/CHANDI/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68456 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 03-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: D N VAIDYA
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, JM ITA NO. 07/CHD/2012 ASSESSMENT YEAR : 2007-08 VIJAY KUMAR VS. A.C.I.T. CIRCLE MUKERJI KI KOTHI SHIMLA CHAKKAR SHIMLA ADXPK 8348 M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI D.N. VAIDYA RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING 19.8.2013 DATE OF PRONOUNCEMENT 3.9.2013 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 21. 11.2011 OF THE LD. CIT(A), SHIMLA. 2 IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUND: THE LD. CIT(A) HAS ERRED IN LAW A ND FACTS OF THE CASE BY CONFIRMING THE ADDITION OF RS. 12,98,000/- MADE BY A.C.I.T. CIRCLE 1, SHIMLA. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE SOLD L AND AT MANALI AND NALAGARH. THE LAND AT MANALI WAS SOLD TO SMT. ARCH NA MOHI W/O SHRI D.S. MOHI FOR A TOTAL CONSIDERATION OF RS. 60 LAKHS . HOWEVER, AS PER THE COPY OF SALE DEED MARKET VALUE OF THE LAND WAS FIXED AT RS. 85,96,000/-. THE ASSESSEE WAS ISSUED A SHOW CAUSE NOTICE THAT THIS 2 VALUE SHOULD NOT BE ADOPTED AS PER SECTION 50C(1) O F THE ACT. IN RESPONSE BY LETTER DATED 27.11.2009 IT WAS SUBMITT ED AS UNDER: THE ASSESSEE HAD SOLD LAND IN MANALI VIDE AGREEMEN T TO SELL DATED 22 ND DEC 2005 FOR TOTAL CON OF RS. 60 LAKHS AND THE VALUATION OF THE SAID LAND AS PER REVENUE RECORDS O N THE DATE OF SALE IS TO BE CALCULATED AT RS. 28,156/- PER BISWA. TOTAL VALUE OF THE LAND FOR PURPOSE OF STAMP DUTY AS SUCH WAS 144 BISWAS X RS. 28,156/- WHICH COMES TO RS. 40,54,464/-. AS PER THE AGREEMENTS TO SELL THE LAND WAS TO BE RE GISTERED ON OR BEFORE 31.3.2007 AND THE STAMP DUTY ETC. TO BE BOR NE BY THE BUYER. THE STAMP PAPERS HAD TO BE PURCHASED BY THE BUYER AS PER VALUATION PREVAILING ON DATE OF REGISTRY. COPY OF DUTY NOTARIZED AGREEMENT TO SELL ALONG WITH COPY OF JAMA BANDI AND VALUATION FOR STAMP PURPOSES ON DATE OF AGREEMENT T O SELL IS ATTACHED. THE ASSESSING OFFICER DID NOT ACCEPT THE SUBMISSION S BECAUSE THERE WAS NO EVIDENCE TO SHOW THAT AGREEMENT TO SELL WAS GENUINE DOCUMENT BECAUSE SAME WAS ONLY ATTESTED FROM NOTARY. ACCORD INGLY HE ADOPTED THE SALE CONSIDERATION OF THIS LAND A T RS. 85,96,0 00/-. SINCE THE ASSESSEE WAS 50% SHARE HOLDER IN THIS PROPERTY, CAP ITAL GAIN WAS AS UNDER: HALF SHARE OF THE ASSESSEE OUT OF TOTAL CONSIDERATION OF RS. 85,96,000/- RS. 42,98,000/- LESS: PURCHAE VALUE (1/2) RS. 17,00,000/- SHORT TERM CAPITAL GAIN RS. 25,98,000/- 4 ON APPEAL SIMILAR SUBMISSIONS WERE REITERATED. T HE LD. CIT(A) DID NOT FIND FORCE IN THE SAME AND DISMISSED THE APPEAL . 3 5 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE REITER ATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND R EFERRED TO PAGE 6 & 7 OF THE PAPER BOOK WHICH IS A COPY OF THE AGREEMEN T TO SELL. THE BENCH POSED A QUERY THAT THIS AGREEMENT TO SELL DOE S NOT SHOW ANY CONSIDERATION. HE REPLIED THAT IT IS NOT NECESSARY TO RECEIVE THE CONSIDERATION AT THE TIME OF ENTERING INTO AGREEMEN T TO SELL. HE FURTHER SUBMITTED THAT IN ANY CASE THE ASSESSING OFFICER HA S NOT REFERRED THE CASE TO THE VALUATION CELL. 6 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE ST RONGLY SUPPORTED THE ORDERS OF ASSESSING OFFICER AND THE LD. CIT(A). 7 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE UN ABLE TO AGREE WITH THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSE SSEE. NO PERSON WOULD AGREE TO SELL HIS PROPERTY IN 2005 WITHOUT RE CEIVING SINGLE PENNY TILL 2007. THE LAND PRICES KEEP ON INCREASING IN TH E LONG RUN PARTICULARLY AFTER THE YEAR 2005, THE PROPERTY PRICES INCREASED SHARPLY ALL OVER INDIA, THEREFORE, THIS AGREEMENT TO SELL SEEMS TO BE AN AFTER THOUGHT BECAUSE NORMALLY NOBODY WOULD SELL HIS PROPERTY AFT ER TWO YEARS WITHOUT RECEIVING SINGLE PENNY AT THE TIME OF ENTER ING INTO AN AGREEMENT TO SELL. IN ANY CASE THE AGREEMENT HAS N O SANCTITY IN THE EYES OF LAW BECAUSE SUCH AGREEMENT CANNOT BE ENFORC ED BY EITHER PARTY IN THE ABSENCE OF CONSIDERATION. UNDER THE CONTRACT ACT, 1872 AN AGREEMENT BECOMES ENFORCEABLE IN THE LAW AND THEN I S CALLED CONTACT IF THE FOLLOWING CONDITIONS ARE SATISFIED: (I) THERE SHOULD BE VALID OFFER AND VALID ACCEPTANC E (II) THERE SHOULD BE SOME CONSIDERATION 4 (III) THERE SHOULD BE CAPACITY TO ENTER THE CONTRAC T I.E. CONTRACT CANNOT BE ENTERED BY A MINOR OR A PERSON WHO IS OF NOT A S OUND MIND. (IV) CONTRACT CAN NOT BE AGAINST LAW OR PUBLIC POLI CY. THERE ARE SOME OTHER CONDITIONS ALSO BUT THEY ARE N OT RELEVANT FOR THE PRESENT PURPOSE. THUS AN AGREEMENT WITHOUT CONSIDER ATION IS NOT A VALID AGREEMENT IN THE EYES OF LAW. THUS IT IS CLEA R THAT IT IS AN AFTER THOUGHT AND THEREFORE, WE AGREE WITH THE VIEWS OF A SSESSING OFFICER AND THE LD. CIT(A) THAT THIS AGREEMENT CANNOT BE RE CKONED. AS FAR AS THE SUBMISSION THAT THE ISSUE HAS NOT BEEN REFERRED TO THE VALUATION CELL IS CONCERNED, WE FIND NO FORCE IN THE SAME BEC AUSE SECTION 50C CLEARLY PROVIDES THAT THE ASSESSEE IS REQUIRED TO R AISE OBJECTIONS BEFORE THE ASSESSING OFFICER REGARDING VALUATION. NO SUCH OBJECTION HAS BEEN RAISED, THEREFORE, THE ASSESSING OFFICER HAS CORRE CTLY ADOPTED THE VALUATION DETERMINED BY STAMP AUTHORITIES FOR THE P URPOSE OF REGISTRATION OF SALE DEED. IN THESE CIRCUMSTANCES, WE FIND NOTHING WRONG WITH THE ORDER OF THE LD. CIT(A) AND CONFIRM THE SAME. 8 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 3.9.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 3.9.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 5