Shri Karsanbhai Keharbhai Barad, Ahmedabad V. The Income tax Officer, Ward-11(3), Ahmedabad

ITA 987/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8742 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 20-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N P PATEL
• Assessee Lawyers: MEHUL P SODHU
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Fair market value; Competent authority
• Section: 50C; 68

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.987/AHD/2015 ( / ASSESSMENT YEAR : 2010-11) KARSANBHAI KEHARBHAI BARAD 20/82, VISHNU COLONY VIRATNAGAR BAPUNAGAR AHMEDABAD-380024 / VS. THE ITO WARD-11(3) AHMEDABAD $ ./ ./ PAN/GIR NO. : APEPB 7725 E ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI MEHUL P.SODHU ($'*) / RESPONDENT BY : SHRI N.P. PATEL, SR.DR +,*- / DATE OF HEARING 02/08/2017 ./0*- / DATE OF PRONOUNCEMENT 10 / 08 /2017 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-5, AHMEDABAD [CIT(A) IN SHORT] DATED 30/01/2015 FOR THE ASSESSMENT YEAR (AY) 2010-11. ITA NO.987/AHD/ 2015 KARSANBHAI K. BARAD VS. ITO ASST.YEAR 2010-11 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE R EAD AS UNDER:- 1. THE LD.CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRM ING THE ADDITION OF RS.1,95,000/- MADE BY THE LD.A.O. 2. THE LD.CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRM ING THE ADDITION OF RS.29,48,720/- MADE U/S.50C OF THE INCOME TAX ACT, 1961, BY THE LD.A.O. IN RESPECT OF CAPITAL GAIN ARISING OUT OF T RANSFER OF CAPITAL ASSET BEING LAND BY ADOPTING VALUATION ADOPTED BY STAMP V ALUING AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. 3. CONCERNING GROUND NO.1, THE ASSESSING OFFICER (A O) OBSERVED THAT BANK STATEMENT OF THE ASSESSEE REVEALS PIECEME AL DEPOSIT IN CASH AGGREGATING TO RS.1,95,000/- WHICH COULD NOT BE EXP LAINED. HE ACCORDINGLY INVOKED SECTION 68 OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE CIT(A) CONFIRMED THE A FORESAID ACTION. WITH THE ASSISTANCE OF THE LD.AR FOR THE ASSESSEE B EFORE US, WE FIND THAT IT IS THE CASE OF THE ASSESSEE THAT AFORESAID CASH DEP OSIT IN THE BANK IS FROM AGRICULTURAL INCOME AND INTERNAL CASH ACCRUALS WHIC H IS SUPPORTED BY CASH BOOK AND OTHER RECORDS. WE FIND THAT THE CIT(A) HA S NOT GIVEN REFERENCE TO THE AFORESAID DOCUMENTS WHILE ADJUDICATING AGAIN ST THE ASSESSEE. WE CONSIDER IT EXPEDIENT THAT THE PLEA OF THE ASSESSEE IS RE-EXAMINED DE NOVO IN ACCORDANCE WITH LAW IN THE LIGHT OF SUBMISSIONS MADE IN THIS REGARD. CONSEQUENTLY, THE ISSUE IS SET ASIDE TO THE FILE OF THE AO FOR DE NOVO CONSIDERATION. NEEDLESS TO SAY, REASONABLE OPPORTU NITY SHALL BE GRANTED TO THE ASSESSEE WHILE ADJUDICATING THE ISSUE. ITA NO.987/AHD/ 2015 KARSANBHAI K. BARAD VS. ITO ASST.YEAR 2010-11 - 3 - 4. GROUND NO.2 CONCERNS ADDITION OF RS.29,48,720/- MADE BY INVOKING S.50C OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED TO AS 'THE ACT') IN RESPECT OF CAPITAL GAIN ARISING ON TR ANSFER OF CAPITAL ASSET BY REPLACING THE ACTUAL SALE CONSIDERATION CLAIMED TO BE RECEIVED WITH VALUATION ASSIGNED BY COMPETENT AUTHORITY FOR THE P URPOSE OF STAMP DUTY VALUATION. IT IS THE CASE OF THE ASSESSEE THAT HE HAS SOLD CERTAIN AGRICULTURAL LAND SITUATED AT SINGARWA, AHMEDABAD F OR RS.21 LAKHS AS PER SALE-DEED. THE SALE-DEED WAS REGISTERED WITH THE C OMPETENT AUTHORITY. THE AO OBSERVED THAT FOR THE PURPOSES OF STAMP DUT Y VALUATION, THE PRICE OF THE PROPERTY UNDER SALE WAS VALUED AT RS.9 1,06,200/- BY THE REGISTERING AUTHORITY. CONSEQUENTLY, THE AO ADOPTE D DEEMED SALE PRICE FOR THE PURPOSE OF DETERMINATION OF CAPITAL GAINS. THE DIFFERENTIAL AMOUNT WAS THUS SUBJECTED TO TAXATION TOWARDS LONG TERM CAPITAL GAIN (LTCG) IN TERMS OF S.50C AFTER TAKING INTO ACCOUNT PROPORTIONATE RIGHTS OF THE ASSESSEE AS CO-OWNER. RESULTANTLY, ADDITION OF RS.29,48,720/- WAS MADE IN THE HANDS OF THE ASSESSEE TOWARDS LTCG HAVI NG REGARD TO DEEMED SALE CONSIDERATION OF THE AGRICULTURAL LAND. IN FIRST APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE AO IN TERMS OF S ECTION 50C OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'T HE ACT'). 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE TRIBUNAL. ITA NO.987/AHD/ 2015 KARSANBHAI K. BARAD VS. ITO ASST.YEAR 2010-11 - 4 - 6. THE LD.AR FOR THE ASSESSEE CONTENDED BEFORE US THAT ASSESSEE HAD DULY DISPUTED THE STAMP DUTY VALUATION BEFORE THE A O VIDE LETTER DATED 03/02/2014 AS APPEARING AT PAGE NO.11 OF THE PAPER- BOOK. THEREFORE, ISSUE REQUIRES TO BE SET ASIDE FOR EXAMINATION OF T HE FAIR MARKET VALUE (FMV) AT THE END OF THE AO IN TERMS OF SECTION 50C OF THE ACT. 7. IN VIEW OF THE EXPRESS OBLIGATION ENJOINED ON AO UNDER S.50C(2) OF THE ACT, WE FIND MERIT IN THE PLEA OF THE ASSESSEE. SECTION 50C(2) PROVIDES THAT THE AO IS UNDER DUTY TO EXAMINE THE A SPECTS OF THE FAIR MARKET VALUE WHEN SO DISPUTED BY THE ASSESSEE BEFOR E AO. ACCORDINGLY, WE CONSIDER IT EXPEDIENT TO REMIT THE ISSUE BACK TO THE FILE OF THE AO FOR DE NOVO EXAMINATION IN ACCORDANCE WITH LAW AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THIS REGARD. THE ASSESSEE ON ITS PART SHALL BE ENTITLED TO ADDUCE SUCH EVIDENCES AS MAY BE CONSIDER EXPEDIENT TO SUPPORT ITS CLAIM THAT VALUE ADOPTED B Y STAMP VALUATION AUTHORITY EXCEEDS FAIR MARKET VALUE ON THE DATE OF TRANSFER. 8. AS A RESULT, GROUND NO.2 OF ASSESSEES APPEAL IS SET ASIDE AND RESTORED BACK TO THE FILE OF AO FOR FRESH DETERMINA TION. ITA NO.987/AHD/ 2015 KARSANBHAI K. BARAD VS. ITO ASST.YEAR 2010-11 - 5 - 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 10 / 08 /2017 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 10/ 08 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-5, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 2.8.17 (DICTATION-PAD 8-PA GES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3.8.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.10.8.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.8.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER