Shri Prahladbhai Hargovandas Patel, Sidhpur V. The Income tax Officer,Ward-2, Patan

ITA 851/AHD/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9685 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 30-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS SONIA KUMAR
• Assessee Lawyers: M J SHAH
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Fair market value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND S.S. GODARA JUDICIAL MEMBER I.T.A. NO 851/AHD/2012 (ASS TT. YEAR 2008-09) PRAHLADB H AI HARGOVANDAS PATEL, PROP. OF HARGOVAN SHANKARLAL PATEL, PROP. OF ISHITA PRINTS, NAZAMPURA, SIDHPUR. PAN ACDPP 9305 N VS INCOME TAX OFFICER, WARD-2 PATAN. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI M. J. SHAH. REVENUE BY MRS.SONIA KUMAR, SR.D.R. / DATE OF HEARING : 29-06-2015 / DATE OF PRONOUNCEMENT: 17-7-2015 / O R D E R PER S.S. GODARA JUDICIAL MEMBER: ITA NO. 851/ AHD/2012 ASSESSMENT YEAR 2008-09 SHRI PRAHLADBHAI H. PATEL. 2 THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 , ARISES FROM ORDER DATED 3-2-2012 PASSED BY THE CIT (A) GAN DHINAGAR, AHMEDABAD IN CASE NO.CIT(A)-GNR/124/2010-11, UPHOLD ING ADDITIONS OF SHORT TERM CAPITAL GAINS OF RS.16,29,650/- UNDER SECTION 50C, A SUM OF RS.1.90 LACS BEING THE ESTIMATION OF EXPENSES FO R EARNING AGRICULTURAL INCOME AND DISALLOWANCE OF DEPRECIATIO N ON MOTOR CAR @ 20% FOR ALLEGED PERSONAL USE AMOUNTING TO RS.40,757 /-, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT,1961 FOR SHORT THE ACT . 2. WE COME TO THE FIRST ISSUE OF SHORT TERM CAPITAL GAIN OF RS.16,29,650/-. THE ASSESSEE PURCHASED 1/2 SHARE IN THE CAPITAL ASSET/PROPERTY N O.39/2 (OLD SURVEY NO.72), SURAT F OR RS.2.21 LACS ON 28-9-2005. HE SOLD IT ON 5-11-2007 FOR RS.2.45 LAC. THERE IS NO DISPUTE ABOUT THE NATURE OF CAPITAL GAINS INVOLVED. THE PR OPERTYS VALUE FOR THE PURPOSE OF STAMP VALUATION WAS RS.37,01,300/-. THE ASSESSING OFFICER SOUGHT TO INVOKE SECTION50C OF THE ACT FOR ADOPTING THE SAME AS FAIR MARKET VALUE OF THE PROPERTY SOLD. THE ASSESSEE OR HIS DO NOT SEEM TO HAVE ANY OBJECTIONS THERETO. THIS MADE THE ASSESSI NG OFFICER TO COMPUTE IMPUGNED SHORT TERM CAPITAL GAINS OF RS.16, 29,650/- IN ASSESSMENT ORDER DATED 20-12-2010. 3. THE ASSESSEE PREFERRED APPEAL. HE PLEADED COMMUN ICATION GAP AND LAPSE OF INSTRUCTIONS WITH HIS COUNSEL. CERTAIN DEPRECATING FACTORS IN VALUE OF THE PLOT SUCH AS PROPERTYS LOCATION IS OUTSKIRTS OF SURAT CITY, HEAVY LOAD POWER LINE PASSING OVER IT, SUDAS RESTR ICTIONS ON ITS COMMERCIAL EXPLOITATION, AIRPORT VICINITY BARRING H EIGHT OF CONSTRUCTION RAISED THEREUPON, LOW LYING WATER ACCUMULATIONS, ON GC PIPELINE ITA NO. 851/ AHD/2012 ASSESSMENT YEAR 2008-09 SHRI PRAHLADBHAI H. PATEL. 3 PASSING BENEATH THE PLOT, SALTY WATER AND LACK OF I NDEPENDENT APPROACH ROAD WERE ALSO QUOTED. THE CIT (A) OBSERV ES THAT SEC. 50C DOES NOT ENVISAGE ANY SUCH INTERFERENCE IN LOWER AP PELLATE PROCEEDINGS WITHOUT ASSESSEES CORRESPONDING PLEA R AISED IN SCRUTINY. 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE CASE FILE. THERE IS NO DISPUTE THAT THE ASSESSEE OR HIS COUNSE L DID NOT PRAY FOR A REFERENCE TO THE DVO U/S.50C IN THE COURSE OF SCRUT INY. THE ASSESSING OFFICER ACCORDINGLY ADOPTED STAMP VALUE AS FAIR MAR KET VALUE OF THE ASSET SOLD. THE CIT (A) HOLDS SUCH A PLEA TO BE BA RRED IN APPELLATE PROCEEDINGS. THE HONBLE CALCUTTA HIGH COURT IN (2 014) 47 TAXMANN.COM 158 (CAL.) SUNILKUMAR AGARWAL VS. CIT H OLDS THAT EVEN IN A CASE WHERE NO SUCH PLEA IS TAKEN, IT IS BOUNDE D DUTY OF AN ASSESSING OFFICER TO GIVE A FAIR TREATMENT IN ADOPT ING THE AFORESAID REFERENCE PROCEDURE. IT IS PRAYED ACCORDINGLY THAT THIS ISSUE BE REMANDED FOR DENOVO PROCEEDINGS AS PER LAW. THE REVENUE IS NOT ABLE TO CITE ANY CASE LAW TO THE CONTRARY. THIS ASS ESSEES LEGAL PLEA CHALLENGING ACTION OF THE LOWER AUTHORITIES IN NOT MAKING ANY REFERENCE DESERVES MERIT. AT THE SAME TIME, WE FIND THAT THE IMPUGNED ASSESSMENT YEAR IS 2008-09 AND MUCH WATER HAS FLOWN DOWN THE STREAM. IT WOULD NOT BE IN LARGER INTEREST OF JUST ICE TO RESTORE THE PROCEEDINGS BACK TO THE ASSESSING AUTHORITY AFTER A LONG TIME SPAN OF ALMOST 7 YEARS FROM THE IMPUGNED ASSESSMENT YEAR. I T DOES NOT REQUIRE MUCH LENGTHIER OBSERVATIONS THAT THIS IS A HIGHLY SUBJECTIVE ISSUE WHEREIN THE PARTIES STICK TO THEIR RESPECTIVE ESTIMATE/VALUATIONS. POSSIBILITY OF THUMB RULE APPLICATION IN ADOPTING V ALUATION SOMEWHERE BETWEEN THE RESPECTIVE ESTIMATIONS IS NEVER RULED O UT. THE REVENUES STRESS HEREIN IS ON STAMP VALUATION OF RS.18,50,650 /- AS AGAINST THE ITA NO. 851/ AHD/2012 ASSESSMENT YEAR 2008-09 SHRI PRAHLADBHAI H. PATEL. 4 ASSESSEES STAND IN SUPPORT OF THE SALE PRICE QUOTE D AT RS.2,45,000/-. DEPRECIATING FACTORS QUOTED (SUPRA) IN THE LOWER AP PELLATE PROCEEDING HAVE NOWHERE BEEN SPECIFICALLY REBUTTED. THE ASSESS EE HAS ALSO NOT EXERCISED HIS OPTION AT THE FIRST AVAILABLE OPPORTU NITY. WE TAKE INTO ACCOUNT ALL THESE FACTS AND HOLD THAT INTEREST OF J USTICE WOULD BE MET IF THE FAIR MARKET VALUE OF THE ASSESSEES PLOT IS FIN ALIZED TO BE THAT OF RS.6 LACS LUMPSUM. WE ORDER ACCORDINGLY. THE ASSES SING OFFICER IS DIRECTED TO PASS A CONSEQUENTIAL ORDER. THE ASSESSE ES FIRST SUBSTANTIVE GROUND IS TREATED AS PARTLY ALLOWED. 5. THE ASSESSEES SECOND GROUND CHALLENGES ADDITION ON ACCOUNT OF UNEXPLAINED AGRICULTURAL EXPENSES OF RS.1,90,007 /- MADE IN THE COURSE OF ASSESSMENT AND AFFIRMED IN THE LOWER APPE LLATE ORDER. HE DECLARED NET AGRICULTURAL INCOME OF RS.4,75,000/-. HE PLACED ON RECORD PHOTOCOPIES OF EXTRACTS IN RESPECT OF THE EXPENDITU RE INCURRED. THE ASSESSING OFFICER ACCORDINGLY ADDED 40% OF THE NET INCOME AS CORRESPONDING EXPENDITURE CITING LACK OF COGENT EVI DENCE. THE CIT (A) HAS REJECTED ASSESSEES ARGUMENTS ON THIS ISSUE. 6. HEARD BOTH SIDES. RECORDS PERUSED. IT IS TO BE SEEN THAT RIGHT FROM A.Y. 2005-06 TILL 2011-12, THE REVENUE HAS BEE N ACCEPTING ASSESSEES AGRICULTURAL INCOME RETURNED WITHOUT MAK ING ANY SUCH EXPENDITURE DISALLOWANCE. THE SUCCEEDING ASSESSMEN T YEAR INVOLVES SEC. 143(3) ASSESSMENT PROCEEDINGS. THE REVENUE DOE S NOT CONTROVERT THIS FACTUAL POSITION. WE ADOPT CONSISTE NCY IN THESE CIRCUMSTANCES IN ABSENCE OF ANY DISTINCTION ON FACT S AND DELETE THIS ADDITION OF RS.1,99,007/- OF UNEXPLAINED EXPENDITUR E. THIS GROUND SUCCEEDS IN ASSESSEES FAVOUR. ITA NO. 851/ AHD/2012 ASSESSMENT YEAR 2008-09 SHRI PRAHLADBHAI H. PATEL. 5 7. THIS LEAVES US WITH THE ASSESSEES THIRD GROUND CHALLENGING DISALLOWANCE OF DEPRECIATION OF RS.40,757/- @ 20% O F THE CLAIM FOR ALLEGED PERSONAL USAGE. THE ASSESSEE ONLY MAKES ORA L SUBMISSIONS FOR DELETING THE SAME. HE FAILS TO REBUT THE CIT (A )S FINDINGS THAT NO OTHER MOTOR VEHICLE IS USED FOR PERSONAL PURPOSES. WE UPHOLD THE IMPUGNED FINDINGS IN THESE CIRCUMSTANCES. THIS SUB STANTIVE GROUND FAILS. THIS ASSESSEES APPEAL ITA 851/AHD/2012 IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 17 TH JULY,2015 AT AHMEDABAD. SD/- SD/- (PRAMOD KUMAR) (S.S. GODARA) ACCOUNTANT MEMBER. JUDICI AL MEMBER AHMEDABAD. DATED 17 / 7 /2015 PATKI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! () / THE CIT(A)-GADHINAGAR, AHMEDABAD 5. $%& '', , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) ! '#$, &' / ITAT, AHMEDABAD ITA NO. 851/ AHD/2012 ASSESSMENT YEAR 2008-09 SHRI PRAHLADBHAI H. PATEL. 6 1. DATE OF DICTATION- 14-7-2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER :14-7-2015 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P .S./P.S. 14-7-2015 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT : 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER