The ACIT, Sabarkantha Circle, Himatnagar V. Smt. Jitendrakumar D. Jadeja, Himatnagar

ITA 935/AHD/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3498 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report; Tax effect; Capital Gains
• Section: 143(3); 50C; 201; 154

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 935/AHD/2018 ( ASSESSMENT YEAR : 2012-13) THE ASSISTANT COMMISSIONER OF INCOME TAX SABARKANTHA CIRCLE, HIMATNAGAR / VS. SMT. JITENDRAKUMARI D. JADEJA RIVER VIEW BUNGLOW, MEHTAPURA, HIMATNAGAR - 383001 ./ ./ PAN/GIR NO. : AAZPJ5325Q ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SANTOSH KARNANI, SR. D.R. / RESPONDENT BY : NONE DATE OF HEARING 11/10/2019 !'# / DATE OF PRONOUNCEMENT 13/11/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, AHMEDABAD (CIT(A) IN SHORT), DATED 04.12.2017 ARI SING IN THE ASSESSMENT ORDER DATED 03.03.2015 PASSED BY THE ASSESSING OFFI CER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCER NING AY. 2012-13. 2. WHEN THE MATTER WAS CALLED FOR HEARING, NONE APP EARED FOR THE ASSESSEE. THE MATTER WAS ACCORDINGLY PROCEEDED EX PARTE. ITA NO. 935/AHD/18 [ACIT VS. SMT. JITENDRAKUMARI D. JADEJA] A.Y. 2012-13 - 2 - 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: 1 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY SIMPLY ACCEPTING THE VALUATION AS PER THE DVO'S REPORT. 1.1 THE LD. CIT(A) ERRED IN LAW IN NOT APPRECIATIN G THAT THE DVO'S REPORT MAY BE BINDING ON THE AO, BUT IS NEVER BINDI NG ON THE APPELLATE AUTHORITY. 1.2 THE LD. CIT(A) ERRED IN LAW AND ON FACTS BY NO T APPRECIATING THAT THE SAID REPORT OF THE DVO HAD BEEN PREPARED ARBITR ARILY AND WITHOUT MAKING ANY REFERENCE TO THE PREVAILING JANT RI RATE, WHICH HAS NOT ONLY RENDERED THE WHOLE SECTION 50C OTIOSE AND REDUNDANT BUT ALSO THE CONCEPT OF JANTRI RATES WHICH ARE PUBL ISHED BY THE LOCAL GOVERNMENT AFTER ASCERTAINING THE GROUND REAL ITY. 1.3 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS B Y NOT APPRECIATING THAT THE SAID REPORT OF THE DVO HAS BEEN PREPARED A RBITRARILY AS THE DVO HAS ARRIVED AT VALUE OF SUCH PLOTS @RS. 197 7/-PER SQM ON 31.03.2012, @ RS. 2140/-PER SQM ON 31.03.2013 AND @ RS. 2414/- PER SQM ON 31.03.2014, WITHOUT ANY RATIONAL BASIS. 2 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY NOT APPRECIATING THAT THE REFERENCE MADE BY THE DVO TO CERTAIN SALE RATES AS PER THE AVAILABLE REGISTRATION DEEDS WAS ARBITRARY AS THE D VO HAS FAILED TO APPRECIATE THAT IN THE INSTANT CASE ALMOST 48%-50% AREA HAD BEEN LEFT FOR THE ROADS AND OTHER AMENITIES, WHICH HAS N OT BEEN FACTORED BY THE DVO WHILE VALUING SUCH PLOTS OF LAND. 3 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT IN ITS VALUATION REPORT, THE DVO, FOR DETERMINATION OF FMV HAS NOT CONSIDERED THE FACTORS AS DELINEATED BY THE HON'BLE APEX COURT IN THE CASE OF CHIMANLAL HARGOVINDDAS VS SPECIAL LAND ACQUISITION OFFICER AIR 1988 SC 1652,1656-58. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E ON BEHALF OF THE REVENUE IN ITS APPEAL. AS POINTED OUT, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SOLD 131 PLOTS OF LAND FOR TOTAL C ONSIDERATION OF RS.2,82,35,000/- WHEREAS ITS VALUE ADOPTED BY STAMP DUTY AUTHORITY IS RS. 5,53,13,965/-. IN THE COURSE OF SCRUTINY ASSESSMEN T, THE AO HAS SUBSTITUTED THE FULL VALUE OF CONSIDERATION AT RS.5,53,13,965/- IN VIEW OF SPECIAL PROVISIONS OF SECTION 50C OF THE ACT AND CONSEQUENT LY ADDED THE AMOUNT OF RS.2,70,78,965/- AS CAPITAL GAINS IN THE HANDS OF T HE ASSESSEE. THE ASSESSEE HOWEVER DEFENDED HER CASE BY SUBMITTING A VALUATION REPORT FROM THE GOVERNMENT APPROVED REGISTERED VALUER, WHICH WAS NO T TAKEN COGNIZANCE BY THE AO. ITA NO. 935/AHD/18 [ACIT VS. SMT. JITENDRAKUMARI D. JADEJA] A.Y. 2012-13 - 3 - 5. IN THE FIRST APPEAL, THE ASSESSEE REITERATED ITS SUBMISSION FOR ADOPTING THE VALUE ASSIGNED BY THE REGISTERED VALUER. THE C IT(A) FOUND MERIT IN THE PLEA OF THE ASSESSEE TO SOME EXTENTS AND GRANTED PA RTIAL RELIEF HAVING REGARD TO THE DISTRICT VALUATION OFFICER VALUATION REPORT. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) IS REPRODUCED HEREU NDER: 2.3. DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ASSESSMENF ORDER AND SUBMISSIONS OF THE APPELLANT. THE APPELLANT HAS SHOWN 131 PLOTS FOR RS.2,82,35,000/-. HOWEVER, AS PER THE STAMP VALUATI ON AUTHORITY, THE VALUE ASSESSED WAS AT RS.5,53,13,965/-. THE AO, THEREFORE , INVOKING THE PROVISIONS OF SECTION 50C MADE THE ADDITION OF RS.2 ,70,78,965/-. THE APPELLANT HAS CONTENDED THAT VALUE DETERMINED BY ST AMP VALUATION AUTHORITY WAS MUCH HIGHER AND HAD FILED DETAILED OB JECTION BEFORE THE AO ON 18/02/2005. THE APPELLANT HAS ALSO SUBMITTED VAL UATION REPORT FROM THE GOVERNMENT APPROVED REGISTERED VALUER, HOWEVER, THE AO IGNORING THE PROVISIONS OF SECTION 50C WITHOUT MAKING REFERENCE TO THE DVO ADOPTED THE VALUE ASSESSED BY STAMP VALUATION AUTHORITY AS A DEEMED CONSIDERATION. THE PROPERTY IN SUBSEQUENT ASSESSMEN T WAS REFERRED TO THE DVO FOR VALUATION AS ON 31/03/2012, 31/03/2013 AND 31/03/2014 AS THE PROPERTY WAS SOLD IN THREE YEARS. THE VALUATION GIV EN BY THE DVO IS AS UNDER:- SL. NO. PROPERTY ESTIMATED VALUE (RS.) DECLARED VALUE (RS.) AS ON 1 PLOTS HAVING S. NO. 430 AND 431, MEHTAPURA CIVIL CAMP AREA, NEAR BORDER OF PARBADA AND SAVAGADH VILLAGE, HIMMATNAGAR 2,94,68,905/- NOT KNOWN 31/03/2012 3,24,32,214/- NOT KNOWN 31/03/2013 6,07,00,778/- NOT KNOWN 31/03/2014 2.4. THE AO IN THE ASSESSMENT ORDER U/S. 143(3) FOR ASSESSMENT YEAR 2013- 14 HAS TAKEN DEEMED VALUE OF CONSIDERATION AS DETER MINED BY THE DVO AT RS.3,24,34,214/-. THE AO IN THE ASSESSMENT YEAR 201 4-15, HAS TAKEN THE DEEMED VALUE OF CONSIDERATION AT RS.7,58,50,733/- O N THE BASIS OF STAMP VALUE AUTHORITY IN HIS ORDER U/S. 143(3). THE AO HA S SUBSEQUENTLY, VIDE ORDER DATED 29709/2017 HAS RECTIFIED THE ORDER U/S. 154 BY TAKING THE VALUE OF CONSIDERATION AT RS.3,51,33,250/- AS DETER MINED BY DVO. CONSIDERING THE ABOVE FACTS, THE AO IS DIRECTED TO TAKE THE FULL VALUE OF THE CONSIDERATION AS ASSESSED BY THE DVO AS PER SEC TION 50C(3). IN VIEW OF THE ABOVE, THE GROUNDS OF APPEAL ARE PARTLY ALLOWED . ITA NO. 935/AHD/18 [ACIT VS. SMT. JITENDRAKUMARI D. JADEJA] A.Y. 2012-13 - 4 - 6. AS CAN BE NOTICED FROM THE ORDER OF THE CIT(A), THE FULL VALUE OF CONSIDERATION AS ASSESSED BY DISTRICT VALUATION OFF ICER AS PER SECTION 50C(3) OF THE ACT WAS ADOPTED FOR THE PURPOSES OF D ETERMINATION OF CAPITAL GAINS. WE DO NOT SEE ANY ERROR IN THE AFORESAID AP PROACH OF THE CIT(A). WE THUS SEE NO MERIT IN THE APPEAL OF THE REVENUE. BE THAT AS IT MAY THE TAX EFFECT OF THE DISPUTE RAISED BY THE REVENUE ALS O APPEARS TO BE LESS THAN RS.50 LAKHS AND ACCORDINGLY HIT BY RECENTLY ISSUED CBDT CIRCULAR NO.17 OF 2019 DATED 08/08/2019. THEREFORE, SEEN FROM ANY ANGLE THE APPEAL OF THE REVENUE IS NOT SUSTAINABLE. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. SD/- SD/- (RAJPAL YADAV) (PRADIP KU MAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBE AHMEDABAD: DATED 13/11/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 13/11/201 9