Shri Kantibhai Mafatlal Patel, Surat V. The Income Tax Officer, Ward-1(2)(6), Surat

ITA 744/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7228 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST IMPUGNED PASSED
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report; Condonation of delay; Set aside

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ITA NO.744/AHD/2017 ASSESSMENT YEAR: 2012-13 KANTIBHAI MAFATLAL PATEL, PLOT NO.7, BHATHENA-2, BHATHENA IND. SOC.-2, ANJANA, SURAT- 395 001. [PAN: AAOPP 1528 J ] VS. THE INCOME TAX OFFICER, WARD-1(2)(6), SURAT. (APPELLANT) (RESPONDENT) ORDER PER H.S. SIDHU, JM: THIS APPEAL FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER PASSED BY THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-2, SURAT DATED 07.11.2016 PERTAINING TO ASSESSMENT YEAR 2012-13. 2. GROUND RAISED BY THE ASSESSEE READS AS UNDER: 1. WHETHER, ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, LD.AO ERRED IN CALCULATING THE CAPITAL GAIN OF RS.1,19,425/- ON SALE OF URBAN AGRICULTURAL LAND? 2. WHETHER, ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, LD. AO ERRED IN MAKING ADDITION OF RS.9,23,009/- U/S.50C OF THE ACT ON SALE OF AGRICULTURAL LAND? ASSESSEE BY SHRI DIVYANG SHAH CA DEPARTMENT BY SHRI R.P.RASTOGI SR.DR DATE OF HEARING 17 .0 7 .2019 DATE OF PRONOUNCEMENT 18 .0 7 .2019 2 3. WITHOUT PREJUDICE TO OUR ABOVE GROUNDS OF APPEAL, WHETHER, ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, LD. AO ERRED IN NOT REFERRING THE VALUATION OF AGRICULTURAL LAND TO DVO U/S.50C(2) OF THE ACT? 3. THE APPEAL FILED BY THE ASSESSEE IS DELAY BY 47 DAYS. IN RESPONSE TO THE CONDONATION OF DELAY THE ASSESSEE FILED APPLICATION DATED 05.06.2017 AND ALSO FILED AN AFFIDAVIT DATED 24.05.2017. AFTER GOING THROUGH THE CONTENTION RAISED BY THE ASSESSEE AND THE APPLICATIONS BY AFFIDAVIT, WE ARE OF THE VIEW THAT DELAY DESERVED TO BE CONDONED AND WE CONDONE THE DELAY OF 47 DAYS AND ADMIT THE APPEAL FILED BY THE ASSESSEE FOR HEARING. 4. AT THE TIME OF HEARING, THE LD.COUNSEL FOR THE ASSESSEE DID NOT PRESS THE GROUND NO.1, THEREFORE THE ISSUE INVOLVED IN THE GROUND NO.1 REGARDING CALCULATING OF CAPITAL GAIN OF RS.1,19,425/- ON SALE OF URBAN AGRICULTURAL LAND IS DISMISSED AS NOT PRESSED, ACCORDINGLY THIS GROUND OF APPEAL IS DISMISSED AS NOT PRESSED. 5. AS REGARDS TO THE ISSUE INVOLVED IN THE GROUND NO.2 AND 3 THE LD.COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE ALONG WITH OTHERS HAS SOLD IMMOVABLE PROPERTIES, ONE OF THEM IS JAYANTIBHAI KUSHALDAS PATEL HAS ALSO FILED APPEAL I.E. IN ITA NO.743/AHD/2017 FOR A.Y. 2012- 13, PARA 13 BEFORE THE ITAT WHICH CAME UP FOR HEARING BEFORE THE ITAT SURAT BENCH, SURAT ON 25.03.2019 AND HEARD AND DECIDED ON 3 28.03.2019 ADJUDICATED THE SAME ISSUE INVOLVED IN THE PRESENT APPEAL AND THE ITAT HAS SEA-ASIDE THE FINDING OF LD.CIT(A) AND RESTORED THIS ISSUE TO FILE OF THE ASSESSING OFFICER FOR DETERMINING THE SAME AFRESH AFTER OBTAINING REPORT FROM THE VALUATION OFFICER. HE REQUESTED THAT SIMILAR ORDER / DIRECTION MAY BE ISSUED TO THE LD.CIT(A) IN THE ASSESSEE CASE ALSO. HE HAS ALSO FILED A COPY OF ORDER OF ITAT DATED 28.03.2019. 6. THE LD.DEPARTMENTAL REPRESENTATIVE (DR) DID NOT OPPOSE TO THE REQUEST OF THE LD.COUNSEL FOR THE ASSESSEE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD, ESPECIALLY THE REVENUE AUTHORITIES ALONG WITH ORDER OF ITAT SURAT BENCH, SURAT PASSED IN ITA NO.743/AHD/2017 FOR A.Y. 2010-11 SHRI JAYANTIBHAI KHUSHALDAS PATEL VS. ITO, WARD-1(2)(6), SURAT FOR THE SAKE CONVENIENCE THE RELEVANT PORTION OF THE TRIBUNAL IN PARA 14 TO 17 ARE REPRODUCED AS UNDER : 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS POINTED OUT THE LD. COUNSEL FOR THE ASSESSEE, THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ANIL KUMAR JAIN (SUPRA), HAS DEALT WITH SIMILAR ISSUE. IN THE SAID CASES, THE TRIBUNAL HAS HELD THAT WHERE FAIR MARKET VALUE PROPERTY IS CLAIMED TO BE LESS THAN THE STAMP DUTY VALUATION, VALUATION IS TO BE REFERRED VALUATION OFFICER BEFORE INVOKING DEEMING PROVISION OF SECTION 50C. 15. SIMILARLY, THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS SET ASIDE THE SIMILAR ISSUE TO THE FILE OF THE AO FOR DETERMINING THE LONG TERM CAPITAL GAIN AFRESH 4 AFTER OBTAINING REPORT FROM THE VALUATION OFFICER. THE RELEVANT PARA OF THE ORDER READS AS UNDER: FROM A READING OF THE PROVISIONS OF SECTION 50C(2), IT IS CLEARLY MANDATED THAT WHEN AN ASSESSEE CHALLENGE OR OBJECT TO THE ASSESSING OFFICER ADOPTING THE GUIDELINE VALUE OF THE PROPERTY FOR STAMP DUTY PURPOSES IN PLACE OF THE STATED CONSIDERATION IN THE SALE DEED FOR THE PURPOSES OF COMPUTING LTCG, THEN THE ASSESSING OFFICER OUGHT TO REFER THE PROPERTY FOR VALUATION TO THE VALUATION OFFICER OF THE INCOME TAX DEPARTMENT. IN THE INSTANT CASE, IT IS SEEN THAT THE ASSESSEES OBJECTION, TO THE ASSESSING OFFICERS ADOPTION OF THE DUTY VALUATION AT RS.35,50,950/- IN THE SALE DEED, WERE REJECTED BY THE CIT(A) AS NO OBJECTION WAS CLAIMED TO HAVE RAISED BEFORE THE AO. WE ARE, THEREFORE, OF THE VIEW THAT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 50C(2)(A), THE AO SHOULD HAVE MADE A REFERENCE TO THE VALUATION OFFICER OF THE INCOME TAX DEPARTMENT FOR VALUATION OF THE SAID PROPERTY. THE PROVISIONS OF SECTION 50C(3), THEN COME INTO PLAY STIPULATING THE CIRCUMSTANCES AND MANNER FOR ADOPTING THE VALUE OF THE PROPERTY (I.E. GUIDELINE VALUE OR AS PER VALUATION REPORT) IN COMPUTING THE LTCG. THE AO IN NOT COMPLYING WITH THE EXPRESS PROVISIONS OF SECTION 50C(2)(A) OF THE ACT OF MAKING A REFERENCE TO THE VALUATION OFFICER FOR VALUATION OF THE PROPERTY AND THE LD. CIT(A) IS NOT DIRECTING HIM TO DO SO WHEN THE MATTER WAS IN APPEAL, IN OUR OPINION, HAVE BY SUCH ACTION DENIED THE ASSESSEE HIS RIGHT TO HAVE THE PROPERTY VALUED BY THE VALUATION OFFICER OF THE INCOME TAX DEPARTMENT WHERE IS STAMP DUTY VALUATION IS MUCH HIGHER THAN THE DECLARED FAIR MARKET VALUE BY THE ASSESSEE. WE ARE OF THE CONSIDERED OPINION THAT THIS ACTION BY THE ASSESSING OFFICER IS VIOLATIVE OF THE PROVISIONS OF SECTION 50C(2) OF THE ACT. SINCE THIS GOES TO THE VERY ROOT OF THE MATTER IN THE INSTANT CASE, WE, IN THE INTEREST OF JUSTICE AND EQUITY REMIT THE ISSUE FOR LIMITED PURPOSE ONLY FOR DETERMINATION OF FAIR MARKET VALUE AS TO BE DETERMINED BY THE DVO AS ON DATE OF TRANSFER FOR COMPUTATION OF LONG-TERM CAPITAL GAIN ON SALE OF PROPERTY BY THE ASSESSEE AS ON 07.07.2011 TO THE FILE OF THE ASSESSING OFFICER FOR TAKING THE CONSIDERATION BY MAKING A REFERENCE TO THE VALUATION OFFICER OF THE INCOME TAX DEPARTMENT TO VALUE THE SAID PROPERTY AND TO COMPUTE THE LTCG AFTER RECEIPT OF THE VALUATION REPORT OF THE SAID PROPERTY. WE MAY MAKE IT CLEAR THAT THE OTHER FINDINGS ON THE ISSUE UNDER CONSIDERATION OF LD. CIT(A) WILL REMAIN INTACT. 15. IN THE AFORESAID CASE THE AO HAD ADOPTED THE STAMP DUTY VALUATION REJECTING THE CLAIMED BY THE ASSESSEE WHICH WAS CONFIRMED BY THE CIT(A). SIMILARLY, IN THE PRESENT CASE THE LD. CIT(A) AO HAS UPHELD THE STAMP DUTY VALUE ADOPTED BY AO REJECTING THE CONTENTION OF THE ASSESSEE. SINCE THE CO-ORDINATE BENCH HAS SET ASIDE THE SIMILAR ISSUE TO THE FILE OF AO FOR FRESH ADJUDICATION WITH THE DIRECTION TO DECIDE THE ISSUE AFRESH AFTER OBTAINING THE REPORT FROM VALUATION OFFICER, WE RESPECTFULLY FOLLOWING THE ORDERS PASSED BY THE COORDINATE BENCH AND OTHER BENCHES DISCUSSED ABOVE, SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF AO FOR DETERMINING THE SAME AFRESH AFTER OBTAINING REPORT FROM THE VALUATION OFFICER. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 5 8. AFTER GOING THROUGH THE ORDER PASSED BY THE ITAT SURAT BENCH, SURAT IN ITA NO.743/AHD/2016 WE ARE OF THE CONSIDERED VIEW THAT REQUEST OF THE ASSESSEE SHOULD BE ACCEPTED AND WE ACCEPT THE SAME BY SET-ASIDE THE FINDING OF THE LD.CIT(A) AND RESTORE THE ISSUE IN DISPUTE TO FILE OF THE ASSESSING OFFICER FOR DETERMINING THE SAME AFRESH AFTER OBTAINING REPORT FROM THE VALUATION OFFICER. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 18-07-2019. SD/- SD/- (O.P. MEENA) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18/07/2019 GANGADHARA RAO.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. PR.CIT 4. CIT(A) 5. DR / / TRUE COPY / / / / TRUE COPY / / ASST. REGISTRAR, ITAT, SURAT