Shri Navinbhai C.Patel, Surat V. The Income tax Officer.Ward-9(3)., Surat

ITA 880/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0921 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 02-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 880/AHD/2013 (ASSESSMENT YEAR: 2007-08) SHRI NAVINBHAI C. PATEL C/8, SHIVAM APARTMENT, IC GANDHI SCHOOL, SUMUL DAIRY ROAD, SURAT-395003 V/S INCOME TAX OFFICER, WARD- 9 (3), SURAT (APPELLANT) (RESPONDENT) PAN: AGMPP3813E APPELLANT BY : SHRI M.K. PATEL, AR RESPONDENT BY : SHRI K. MADHUSUDAN, SR. D.R. ( )/ ORDER DATE OF HEARING : 02 -08-201 6 DATE OF PRONOUNCEMENT : 05 -08-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS IS AN APPEAL BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-V, SURAT DATED 15.01.2013 PERTAINING TO A.Y. 2007-08. ITA NO. 880/ AHD/2013 . A.Y.2007-08 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN PARTLY CONFIRMING THE ADDITION MADE U/S. 50C OF THE ACT BY ADOPTING THE VALUE OF PROPERTY SOLD. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS AND ON THE BASIS OF AN INFORMATION , THE A.O. FOUND THAT THE A SSESSEE HAS SOLD IMMOVABLE PROPERTY HAVING LAND AREA 3448.91 SQ. MTR . FOR A CONSIDERATION OF RS. 73.50 LACS. THE A.O. NOTICED T HAT STAMP VALUATION AUTHORITY HAS DETERMINED THE VALUE OF THE SAID PROP ERTY AT RS. 1,03,97,100/-. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE VALUE SHOWN BY THE STAMP VALUATION AUTHORITY SHOULD NOT BE ADOPTED FOR THE COMPUTATION OF CAPITAL GAINS. ASSESSEE FILE D A DETAILED REPLY STATING THAT PROVISIONS OF SECTION 50C ARE NOT MAND ATORY AS THE ASSESSEE MAY SELL HIS PROPERTY BELOW THE GUIDELINE VALUE FOR VARIOUS REASONS. THE REPLY FIELD BY THE ASSESSEE DID NOT FI ND ANY FAVOUR WITH THE A.O. BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT, THE A.O ADOPTED THE STAMP DUTY VALUATION AND RECOMPUTED THE CAPITAL GAINS AND MADE AN ADDITION OF RS. 41,69,100/-. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND STRONGLY CONTENDED THAT THE LAND IN QUESTION HAS BEEN VALUED WRONGLY AS THE PROPERTY WAS NOT FREE FROM ENCUMBRANCES AND WAS IN POSSESSION OF OLD TENANTS. 5. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) FOUND THAT A REFERENCE TO THE AVO WAS MADE BY THE A.O. U/ S. 50C(2) OF THE ACT AND THE AVO SUBMITTED HIS VALUATION REPORT DATE D 28.06.2012 WHEREIN THE FAIR MARKET VALUE OF THE PROPERTY HAS B EEN SHOWN AT RS. 76,22,100/- AGAINST THE DECLARED VALUE OF RS. 73,50 ,000/-. THE LD. ITA NO. 880/ AHD/2013 . A.Y.2007-08 3 CIT(A) FURTHER FOUND THAT THE VALUATION REPORT HAS BEEN PREPARED AFTER TAKING INTO CONSIDERATION THE OBJECTIONS RAISED BY THE ASSESSEE BEFORE THE AVO. THE LD. CIT(A) DIRECTED THE A.O. TO CONSID ER THE VALUE ADOPTED BY THE AVO AT RS. 76,22,100/- AND WORKED OU T THE CORRECT CAPITAL GAINS. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT HIS OB JECTIONS WERE NOT CONSIDERED BY THE VALUATION OFFICER. 8. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. 9. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORI TIES BELOW. WE FIND THAT STAMP DUTY VALUATION OF THE IMPUGNED PROPERTY AS TAKEN BY THE A.O. WAS AT RS. 1,03,97,100/-. WHEN THE ASSESSEE OB JECTED TO THIS VALUE, THE MATTER WAS REFERRED TO THE AVO DURING TH E COURSE OF THE APPELLATE PROCEEDINGS. THE STAMP DUTY VALUATION OF THE IMPUGNED PROPERTY WAS REDUCED TO RS. 76,22,100/-. IT APPEARS THAT ALL THE OBJECTIONS OF THE ASSESSEE HAVE BEEN DULY CONSIDERE D BY THE VALUATION OFFICER. HOWEVER, IN OUR CONSIDERED OPINION, THERE IS A POSSIBILITY OF CERTAIN OBJECTIONS WHICH ARE NOT CONSIDERED BY THE AVO. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE REDUCE TH E VALUATION OF THE PROPERTY TAKEN AT RS. 76,22,100/- TO RS. 75,00,000/ -. THIS SHOULD MEET THE ENDS OF JUSTICE. THE A.O. IS DIRECTED TO R E-COMPUTE THE CAPITAL GAINS BY TAKING THE FULL VALUE OF SALE CONS IDERATION AT RS. 75,00,000/- . ITA NO. 880/ AHD/2013 . A.Y.2007-08 4 10. APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 05 - 08- 20 16. SD/- SD/- (R.P.TOLANI) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD