The DCIT, Central Circle-1(4), Ahmedabad V. Late Vijay G. Kashikar, Maharashtra

ITSSA 178/AHD/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3869 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 12-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA M AGRAWAL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Income from undisclosed sources; Document seized; Source of fund; Onus to prove; Documents seized
• Section: 69C; 50C; 153A; 69; 132

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD L LL LK KK KOZJH OZJH OZJH OZJH OLHE OLHE OLHE OLHE VGEN VGEN VGEN VGEN] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; ,OA OAOA OA EK/ EK/EK/ EK/KQFERK KQFERK KQFERK KQFERK JKW; JKW;JKW; JKW;] U; ] U;] U; ] U;KF KFKF KF;D ;D ;D ;D LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T(SS)A. NO. 178/AHD/2017 ( / ASSESSMENT YEAR : 2012-13) DCIT, CENTRAL CIRCLE 1(4), AHMEDABAD, ROOM NO.302, 3 RD FLOOR, AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD / VS. LATE VIJAY G. KASHIKAR, LEGAL HEIR SMT. JAYMALA VIJAY KASHIKAR, KASHIKAR WADA, NR. OLD ITWARI STAND, ITWARI, NAGPUR, MAHARASHTRA 440 002 ./ ./ PAN/GIR NO. : AEIPK 9857 Q ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SMT. APARNA M. AGRAWAL, CIT-D.R. / RESPONDENT BY : SHRI DHIREN SHAH, A.R. / DATE OF HEARING 27/06/2018 !'# / DATE OF PRONOUNCEMENT 20/08/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-1 3/AHD/361/2016- 17 DATED 16.01.2017 ARISING IN THE MATTER OF ASSESS MENT ORDER PASSED UNDER S.143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1 961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 27.03.2014 RELEVANT TO ASSESSMENT YEAR (AY) 2012-13. IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 2 - 2. THE GROUND OF APPEAL RAISED BY THE REVENUE IS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS), HAS ERRED IN LAW AND/ OR ON FACTS IN DELETING THE ADDITION MADE ON ACCOUN T OF UNACCOUNTED INVESTMENT IN IMMOVABLE PROPERTY OF RS.1,02,43,500/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. 3. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A SSESSING OFFICER ON ACCOUNT OF UNACCOUNTED INVESTMENT IN IMMOVABLE PROP ERTY OF RS. 1,02,43,500/-. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES HIS INCOME UNDER THE HEAD SALARY, CAPITAL G AIN AND INCOME FROM OTHER SOURCES. THERE WAS A SEARCH CONDUCTED AT THE PREMISES OF THE ASSESSEE U/S 132 OF THE ACT DATED 21 ST JULY 2011. DURING THE SEARCH, CERTAIN DOCUMENTS WERE SEIZED. AS PER THE SEIZED DO CUMENT (BEARING NO. 42 OF ANNEXURE A/1), IT WAS FOUND THAT THE ASSESSEE HAS PURCHASED A PROPERTY LOCATED AT PLOT NO. 270, CITY SURVEY NO. 1 26 VIDE AGREEMENT DATED 4TH JULY 2011 FOR A CONSIDERATION OF RS. 54,7 2,000/- ONLY. HOWEVER, AS PER SEIZED DOCUMENT (BEARING NO.19 OF A NNEXURE A/1), IT WAS FOUND THAT THE IMPUGNED PROPERTY WAS VALUED AT RS.1,57,15,500/- FOR STAMP DUTY PURPOSE. IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 3 - IT WAS ALSO FOUND THAT THE SAME VALUE OF THE PROPER TY WAS ALSO SHOWN AT RS.1,57,15,500/-, AS PER PAGE NO.15 OF ANNEXURE A/1 OF THE SEIZED DOCUMENTS. IN VIEW OF ABOVE, THE AO OPINED THAT THE ASSESSEE H AS INVESTED RS.1,02,43,500/- (1,57,15,500.00-54,72,000.00) BEIN G THE DIFFERENCE BETWEEN THE DOCUMENTED PRICE AND THE VALUATION REPO RT FROM HIS UNDISCLOSED INCOME I.E. AN UNACCOUNTED INVESTMENT. ACCORDINGLY, THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN THE DIFFERENCE OF RS.1,02,43,500/- AS DISCUSSED ABOVE. THE ASSESSEE IN COMPLIANCE TO IT SUBMITTED THAT HE AGREED TO PURCHASE THE IMPUGNED PROPERTY DATED 8 TH DECEMBER 2006 FOR A VALUE OF RS. 30,59,760/- ONLY. HOWEVER, AT THAT RELEVANT TIME, T HE MARKET VALUE OF THE IMPUGNED PROPERTY WAS APPROXIMATELY RS.65,00,000/- AS PER THE GOVERNMENT RULES FOR THE VALUATION OF THE PROPERTY. BUT, AN AGREEMENT WAS MADE FOR A VALUE OF RS. 30,59,760/- BETWEEN THE ASSESSEE AND THE OWNER OF THE PROPERTY ON 8 TH DECEMBER 2006 BECAUSE THE IMPUGNED PROPERTY WAS DISPUTED. HOWEVER, ONE OF THE CO-OWNER OF THE PROPERTY SHRI GURUMEET SANTOK SINGH THETI ASSURED THE ASSESS EE TO SETTLE DOWN THE DISPUTE BEFORE THE ACTUAL DATE OF SALE/TRANSFER TO THE ASSESSEE. HOWEVER, THE DISPUTE WAS NOT SETTLED UNTIL THE F.Y. 2010-11, BUT THE ASSESSEE TO SECURE THE PAYMENT MADE EARLIER DECIDED TO GET THE AGREEMENT FOR THE PURCHASE OF THE PROPERTY REGISTERED WITH TH E GOVERNMENT. AS PER THE GOVERNMENT RULES, THE ASSESSEE WAS TO PAY STAMP DUTY @5.5% OF THE IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 4 - GOVERNMENT VALUE OF THE PROPERTY IN CASE THE AGREEM ENT TO PURCHASE IS REGISTERED. THEREFORE, THE ASSESSEE IN THE FINANCIA L YEAR 2011-12 REGISTERED THE AGREEMENT TO PURCHASE WHEREIN THE PR OPERTY WAS VALUED AT RS.1,57,15,500/- AS PER THE GOVERNMENT RULES, AND A CCORDINGLY THE ASSESSEE PAID THE STAMP DUTY AMOUNTING TO RS. 8,64, 360/-. HOWEVER, IN THE YEAR UNDER CONSIDERATION, THE ASSES SEE AGREED TO BUY THE IMPUGNED PROPERTY FOR A CONSIDERATION OF RS.54,72,0 00/- I.E., ACTUAL PURCHASE CONSIDERATION. THE ASSESSEE ALSO TRIED TO GET NOC FROM THE JURISDI CTIONAL DEVELOPMENT AUTHORITY, BUT THE SAME WAS DENIED AS THE PROPERTY WAS IN DISPUTE. THE ASSESSEE ALSO CLAIMED THAT THE AGREEMENT TO PUR CHASE WAS REGISTERED AT A NOTIONAL VALUE, WHICH IS NOT REPRESENTING THE ACTUAL PURCHASE PRICE. THEREFORE, THE SAME CANNOT BE CONSIDERED AS THE PUR CHASE PRICE OF THE PROPERTY. THE TRANSFER OF THE PROPERTY HAS NOT TAKEN PLACE AS DEFINED U/S 2(47) OF THE ACT TILL THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS ONLY MADE THE PART PAYMENT TO THE OWNERS OF THE LAND WITHOUT TAKING ANY POSSESSION OF THE LAND. THE ASSESSEE SUBMITTED THAT THERE WAS NO INCRIMINAT ING DOCUMENT FOUND DURING SEARCH SUGGESTING THAT THE ASSESSEE HAS MADE ANY INVESTMENT OUT IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 5 - OF HIS UNDISCLOSED INCOME. ACCORDINGLY, THERE IS NO QUESTION OF TREATING THE DIFFERENCE OF RS.1,02,43,500/- AS AN UNDISCLOSE D INVESTMENT OF THE ASSESSEE. HOWEVER, THE AO DISBELIEVED THE VERSION OF THE ASSE SSEE AND HELD THAT THE TRANSFER HAD TAKEN PLACE IN PURSUANCE OF THE PR OVISION OF SECTION 2(47) OF THE ACT R.W.S 53A OF THE TRANSFER OF PROPE RTY ACT. ACCORDINGLY, THE AO CONCLUDED THAT THE ASSESSEE HAD MADE AN INVE STMENT OUT OF HIS UNDISCLOSED INCOME FOR RS.1,02,43,500/- AND THE SAM E WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO LD. CI T(A). THE ASSESSEE BEFORE THE LD CIT(A) SUBMITTED THAT THE AG REEMENT TO PURCHASE WAS REGISTERED ONLY TO SECURE RIGHT IN THE IMPUGNED PROPERTY. THE ASSESSEE ALSO SUBMITTED THAT THE FINAL CONVEYAN CE DEED HAD NOT BEEN REGISTERED IN HIS FAVOR UNTIL NOW. THERE WAS NO DOCUMENT FOUND DURING THE SEARCH PROCE EDING IN THE NATURE OF INCRIMINATING MATERIAL EVIDENCING THAT THE ASSES SEE HAS INVESTED OUT OF HIS UNDISCLOSED INCOME. IN VIEW OF ABOVE, THE ASSESSEE SUBMITTED THAT THE T RANSFER OF THE PROPERTY HAD NOT TAKEN PLACE AND THEREFORE THERE IS NO QUEST ION OF INVOKING THE PROVISION OF SECTION 2(47) OF THE ACT R.W.S 53A OF THE TRANSFER OF PROPERTY ACT. SIMILARLY, THE PROVISION OF SECTION 5 0C OF THE ACT CANNOT IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 6 - BE APPLIED IN THE CASE OF THE ASSESSEE BEING BUYER OF THE PROPERTY. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSE SSEE DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- 6. IN MY VIEW, THE CONCLUSION DRAWN BY THE A.O. I S NOT CORRECT AS THERE IS NOT FINAL PURCHASE AGREEMENT EXECUTED BETW EEN THE BUYER AND THE SELLER, AS POINTED OUT BY THE APPELLANT. THE FA CT THAT IT IS ONLY AN AGREEMENT TO PURCHASE IS ALSO NOT DENIED BY THE A.O . ANYWHERE IN HIS ASSESSMENT ORDER. FURTHER, THE EXISTENCE OF FAIR MA RKET VALUE, WHICH IS HIGHER THAN THE CONSIDERATION SHOWN IN THE PURCHASE AGREEMENT, DOES NOT INDICATE PAYMENT OF CASH BEING OF THE DIFFERENT IAL AMOUNT. NOTICEABLY, THE ASSESSMENT ORDER DOES NOT HIGHLIGHT ANY EVIDENCE OF THE CASH PAYMENT FOR THE PURCHASE OF THE SAID PROPERTY. THE ASSESSMENT ORDER IS ALSO SILENT ABOUT ANY INVESTIGATIONS BEING CARRIED OUT FOR INDICATING THAT A CASH CONSIDERATION WAS PAID FOR A CQUISITION OF THIS PROPERTY. 6.1 THE APPELLANT HAS CONTENDED THAT DEEMING FICTI ON PROVISIONS OF SECTION 50C OF THE ACT FOR COMPUTING CAPITAL GAIN I S APPLICABLE IN THE CASE OF SELLER AND NOT IN THE CASE OF PURCHASER AND IN SUPPORT OF THE SAID CONTENTION, APPELLANT RELIED UPON THE DECISION OF H ON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SARJAN REALTIES LTD. [ 2013] 40 TAXMANN.COM 398, CIT VS. MEGHJIBHAI POPATBHAI VIRAN I [2013] 35 TAXMANN.COM 100 (GUJ) AND OTHER JUDICIAL PRONOUNCEM ENTS OF ITAT AHMEDABAD AS WELL AS VARIOUS OTHER JUDICIAL PRONOUN CEMENTS OF HIGH COURTS AND TRIBUNALS. THE APPELLANT HAS TAKEN A CON TENTION THAT BY INVOKING THE DEEMING FICTION OF SECTION 50C IN THE CASE OF PURCHASER, NO ADDITION CAN BE MADE ON ACCOUNT OF ANY UNEXPLAINED INVESTMENT U/S. 69 AND/OR 69B OF THE ACT. I AM IN AGREEMENT WITH THE C ONTENTION OF THE APPELLANT THAT DEEMING FICTION OF PROVISIONS OF SEC TION 50C OF THE ACT CANNOT BE APPLIED IN THE CASE OF PURCHASER AND BY T AKING THE VALUATION DONE BY THE STAMP AUTHORITY, NO ADDITION CAN BE MAD E IN THE CASE OF PURCHASER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN T HE CASE OF PURCHASER AS HELD BY THE DECISIONS OF GUJARAT HIGH COURT CITED SUPRA AND VARIOUS OTHER JUDICIAL PRONOUNCEMENTS RELIED UP ON BY THE APPELLANT IN THE GIST OF ARGUMENTS. IN VIEW OF THE ABOVE, IN MY OPINION, THE CONCLUSION DRAWN BY THE A.O. THAT A CASH CONSIDERATION OF RS.1,02,43,500/- WAS M ADE AND ITS ADDITION AS UNACCOUNTED INVESTMENT IN IMMOVABLE PROPERTY IS UNSUSTAINABLE. THE IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 7 - SAME THEREFORE, IS DIRECTED TO BE DELETED. THIS GRO UND RAISED BY THE APPELLANT IS ALLOWED. BEING AGGRIEVED BY THE ORDER OF LD CIT(A) REVENUE I S IN APPEAL BEFORE US. THE LD. DR BEFORE US SUBMITTED THAT THE DIFFERE NCE BETWEEN THE VALUE SHOWN BY THE ASSESSEE IN THE AGREEMENT TO PURCHASE AND THE VALUE ADOPTED FOR STAMP DUTY SHOULD BE TREATED AS INCOME FROM OTHER SOURCES U/S 56(2)(VII) OF THE ACT. THE LD. DR VEHEMENTLY SU PPORTED THE ORDER OF THE AO. ON THE OTHER HAND, LD. AR FOR THE ASSESSEE BEFORE U S SUBMITTED AS UNDER: THE RESPONDENT ASSESSEE HAS TO SUBMIT THAT DEEMING FICTION PROVISIONS OF SECTION 50C FOR COMPUTATION OF CAPITAL GAIN IS A PPLICABLE IN THE CASE OF SELLER AND NOT IN THE CASE OF PURCHASER. THE RES PONDENT ASSESSEE IN SUPPORT OF THE AFORESAID CONTENTION RELIES UPON THE FOLLOWING JUDICIAL PRONOUNCEMENTS:- 1. THE HON'BLE JURISDICTIONAL GUJARAT HIGH COURT I N THE CASE OF COMMISSIONER OF INCOME-TAX-IV V. SARJAN REALTIES LT D. [2013] 40 TAXMANN.COM 398 (GUJARAT) HELD AS UNDER:- 'SECTION 50C OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN CASES [APPLICABILITY OF] - ASSESSING OFFICER MADE AN ADDI TION ON BASIS OF DIFFERENCE IN VALUATION OF LAND BY TREATING SAME AS UNEXPLAINED INVESTMENT - TRIBUNAL HOLDING THAT PROV ISIONS OF SECTION 50C WOULD APPLY TO A SELLER ONLY AND NOT TO A PURCHASER, DELETED SAID ADDITION - WHETHER DEEMING FICTION CRE ATED BY SECTION 50C WHICH SUBSTITUTES CONSIDERATION RECEIVE D ON SALE OF A CAPITAL ASSET BY STAMP DUTY VALUATION IS APPLICABLE ONLY IN CASE OF A SELLER AND NOT BUYER OF PROPERTY - HELD, YES - WHETHER, THEREFORE, TRIBUNAL WAS JUSTIFIED IN DELETING IMPUG NED ADDITION - HELD, YES [PARA 7] [IN FAVOUR OF ASSESSEE]' 2. CIT VS., MEGHJIBHAI POPATBHAI VIRANI [2013] 35 TAXMANN.COM 100 (GUJ) IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 8 - SECTION 50C OF THE INCOME-TAX ACT, 1961 - CAPITAL G AINS - SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAI N CASES - WHETHER REVENUE CANNOT TAKE RECOURSE TO SECTION 50C IN CASE OF PURCHASER OF PROPERTY - HELD, YES [PARA 9] [IN FAVO UR OF ASSESSEE]' 3. IN DY. CIT V. VIRJIBHAI KALYANBHAI KUDADIA (2013 ) 49 (II) ITCL 3954 (AHD 'D' TRIB) (2012) 138 ITD (AHD-TRIB) 255 : 2013 ) 151 TTJ 219 (AHD-TRIB) DURING THE ASSESSMENT PROCEEDINGS FROM THE PARTICUL ARS FURNISHED BY THE ASSESSEE ASSESSING OFFICER NOTED T HAT ASSESSEE HAD PURCHASED CERTAIN LANDS AND THERE WAS LOT OF VARIAT ION BETWEEN THE PURCHASE PRICE SHOWN BY ASSESSEE AND THE JANTRI PRI CE AND, ALSO OBSERVED THAT ASSESSEE HAD PAID ADDITIONAL STAMP DU TY ON THE LAND ACQUIRED. AFTER CONSIDERING CERTAIN INSTANCES OF MA RKET PRICE ASSESSING OFFICER CONCLUDED THAT THE PRICE AT WHICH THE SALE DEED WERE EXECUTED WERE QUITE LOW. AFTER INVOKING PROVISION OF SECTION 50C THE ASSESSING OFFICER MADE ADDITION OF UNDISCLOSED INVESTMENT UND ER SECTION 69B. IT WAS HELD THAT - (A) SECTION 69B IS A DEEMING FICTION. IT IS PROVIDED TH AT ADDITION CAN BE MADE BY THE ASSESSING OFFICER WHEN THE FOLLOWING THREE CONDITIONS ARE SATISFIED (1) IF IT IS FOUND THAT TH E ASSESSEE HAD MADE INVESTMENT OR THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, (2) I F IT IS FOUND THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS OR I N ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES EXCEEDS THE AMOUNT RECORDED IN THAT BEHALF IN THE BOOKS OF ACCO UNT MAINTAINED BY THE ASSESSEE, AND (3) EITHER THE ASSE SSEE OFFERS NO EXPLANATION ABOUT SUCH EXTRA AMOUNT OR THE EXPLANAT ION OFFERED BY HIM IS NOT SATISFACTORY. THE ABOVE CONDITIONS ARE CUMULATIVE. IF ALL THESE C IRCUMSTANCES EXIST, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE IN COME OF THE ASSESSEE FOR THE FINANCIAL YEAR IN WHICH THE SAID I NVESTMENT WAS MADE OR THE ASSESSEE BECAME THE OWNER OF BULLION, E TC. (B) SECTION 50C IS A DEEMING PROVISION WHERE UNDER THE STAMP DUTY RATE IS TREATED AS FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTING CAPITAL GAIN UNDER SECTION 48. IT IS APPL ICABLE TO THE SELLER OF PROPERTY AND THEREFORE CANNOT BE INVOKED IN CASE OF PURCHASER OF PROPERTY FOR THE PURPOSE OF SECTION 69 B. IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 9 - COMMISSIONER (APPEALS) HAS GIVEN A FINDING THAT THE ASSESSING OFFICER HAS NOT MADE ANY INDEPENDENT INQUIRY OR COL LECTED CORROBORATIVE EVIDENCE TO JUSTIFY THE ADDITION. SECTION 50C CREATES A LEGAL FICTION FOR TAXING CAPI TAL GAINS IN THE HANDS OF THE SELLER AND IT CANNOT BE EXTENDED FOR T AXING THE DIFFERENCE BETWEEN APPARENT CONSIDERATION AND VALUA TION DONE BY THE STAMP VALUATION AUTHORITIES AS UNDISCLOSED I NVESTMENT UNDER SECTION 69. (C) PROVISIONS OF SECTION 50C CANNOT BE APPLIED FOR MAK ING ADDITION UNDER SECTION 69B. IN THE PRESENT CASE SINCE THE AS SESSING OFFICER HAS RELIED ON THE JANTRI RATES WITHOUT BRINGING ANY MATERIAL ON RECORD TO PROVE THAT ASSESSEE HAS IN FACT MADE INVE STMENTS OVER AND ABOVE THAN THAT RECORDED IN THE BOOKS, NO ADDIT ION CAN BE MADE IN THE PRESENT CASE AND THEREFORE NO INTERFERE NCE IS CALLED FOR TO THE ORDER OF COMMISSIONER (APPEALS). 4. DY. CIT VS. VALLABHBHAI PURSHOTTAMBHAI SU RANI (2013) 50 (II) ITCL 177 (AHD-TRIB) : (2012) 54 SOT 556 (AHD-TRIB). ASSESSING OFFICER CANNOT MADE ADDITION UNDER SECTIO N 69B ON THE BASIS OF VALUE ADOPTED BY STATE VALUATION AUTHORITI ES, AS SECTION 50C IS A DEEMING PROVISION AND MORE SO, IT IS APPLI CABLE IN CASE OF SELLER OF PROPERTY AND NOT IN CASE OF PURCHASER OF PROPERTY. 5. IN ITO V. HARLEY STREET PHARMACEUTICALS LTD. (2010) 3 5 (II) ITCL 128 (AHD B'-TRIB): (2010) 6 ITR 182 (AHD 'B'-TRIB): 2010 38 SOT 486 (AHD B'-TRIB), IT WAS HELD THAT SECTION 50C CREATES A LEGAL FICTION FOR TAXING CAPITAL GAINS IN THE HANDS OF TH E SELLER AND IT CANNOT BE EXTENDED FOR TAXING THE DIFFERENCE BETWEEN APPARENT CONSIDERATION AND VALUATION DONE BY STAMP VALUATION AUTHORITIES AS UN DISCLOSED INVESTMENT UNDER SECTION 69. IN FACT, SECTION 69 IT SELF IS A LEGAL FICTION WHEREBY INVESTMENT INTO AN ASSET IS TREATED AS INCO ME IF IT IS NOT DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT. NO FURTH ER LEGAL FICTION FROM ELSEWHERE IN THE STATUTE CAN BE BORROWED TO EXTEND THE FIELD OF SECTION 69. MERELY BECAUSE FOR THE PURPOSE OF STAMP DUTY, P ROPERTY IS VALUED AT A HIGHER COST, IT CANNOT BE SAID THAT ASSESSEE HAS MADE HIGHER PAYMENT THAN WHAT IS STATED IN THE SALE DEED. IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 10 - 6. IN ITO V. VENU PROTEINS INDUSTRIES (2010) 36 (II ) ITCL 243 (AHD 'B'-TRIB) : (2010) 4 ITR 602 (AHD-TRIB) THE ASSESSEE PURCHASED A PLOT AND PAID STAMP DUTY. THEREAFTER THE CONCERNE D AUTHORITY CHARGED AN ADDITIONAL STAMP DUTY VALUING THE PROPERTY AT A HIGHER SIDE. CONSEQUENT TO THE POSSESSION OF THIS INFORMATION AS SESSING OFFICER CONCLUDED THAT ASSESSEE HAD UNDERVALUED PROPERTY. H E REOPENED THE ASSESSMENT AND MADE THE ADDITION BY APPLYING PROVIS IONS OF SECTION 50C. COMMISSIONER (APPEALS) HELD THAT APPLICABILITY OF SECTION 50C IS PRIMA FACIE INCORRECT AS IT PERTAINS TO CHARGING OF CAPITAL GAINS WHICH IS TO BE CONSIDERED IN THE HANDS OF THE SELLER. IT WAS HELD THAT ASSESSING OFFICER WAS NOT CORRECT IN REOPENING THE ASSESSMENT AND MAKING ADDITIONS BY APPLYING SECTION 50C ON THE PURCHASER OF THE PROPERTY SINCE THIS SECTION PERTAINS TO CHARGING OF CAPITAL GAINS WHICH WAS TO BE CONSIDERED IN THE HANDS OF SELLER. THE HIGHER REGIS TRATION VALUE IN ITSELF DOES 'NOT PROVE THE FACT THAT THE TRANSACTION HAD T AKEN PLACE AT A FIGURE DIFFERENT FROM THAT RECORDED BY THE ASSESSEE'S BOOK S. 7. THE MADRAS HIGH COURT IN THE CASE OF CIT VS. T.S. RAJAM (1980) 125 ITR 207 (MAD), RELYING ON THE DECISION OF SUPREME COURT IN THE CASE OF CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO. LTD. V. CIT (1978) 113 ITR 84 (SC), HELD THAT LEGAL FICTIONS ARE CREATED ONLY FOR A DEFINITE PURPOSE AND ARE THEREFORE, TO BE LIMITED F OR THE PURPOSE FOR WHICH THEY ARE CREATED AND SHOULD NOT BE EXTENDED B EYOND THEIR LIMITED FIELD. SIMILAR VIEW WAS TAKEN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT RADHADEVI MOHATTA V. CWT (1981) 129 ITR 229 (BOM), WHILE INTERPRETING THE PROVISIONS OF SECTION 7(1) O F WEALTH TAX ACT, HELD THAT THOUGH LEGAL FICTION SHOULD BE GIVEN FULL EFFE CT BUT IT CANNOT BE CARRIED BEYOND THE PURPOSE FOR WHICH IT IS INTENDED . THE LEGAL FICTION IS LIMITED TO THE DIRECTION CONTAINED IN THE DEEMING S ECTION AND NOT BEYOND. 8. IN THE CASE OF CIT V. NARESH KHATTAR HUF (2003) 261 ITR 664 (DEL) : (2003) 130 TAXMAN 15 (DEL) THE HONBLE DELHI HIGH COURT HAS HELD THAT TO INVOKE THE PROVISIONS OF SECTION 69B, THE BURDEN IS ON THE REVENUE TO PROVE THAT THE REAL INVESTMENT EXCEEDS T HE INVESTMENT SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. 9. SECTION 69/69B CONTAIN EXPRESSION 'MAY' WHICH IS NOT AKIN TO 'SHALL' IN NATURE. THEREFORE, THE DEEMING PROVISION CREATING LEGAL FICTION UNDER SECTION 50C FOR THE PURPOSE OF SECTION 48 REG ARDING FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUED TO THE SELLER, CA NNOT BE EXTENDED TO IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 11 - THE PROVISIONS OF SECTION 69, IN THE CASE OF A PURC HASER VIDE ITO V. INDERJIT KAUR (2012) 50 SOT 377 (CHAND A TRIB). IN ITO V. SMT. ANSHU JAIN (2010) 33 (II) ITCL 551 (JP 'A'-TRIB) : 2010) 36 SOT 263 (JP 'A'-TRIB), THE ASSESSEE CONTENDED THAT THERE WAS A PURCHASE OF LAND WHICH WAS EVIDENCED BY PURCHASE DEED AND DURING THE ASSESSMENT PROCEEDINGS A REPLY WAS SUBMITTED CO NTENDING THEREIN THAT NO AMOUNT OVER AND ABOVE THE CONSIDERATION OF RS.32 LAKHS HAD BEEN PAID BY ASSESSEE. THE MATTER WAS REFERRED TO T HE DEPARTMENTAL VALUATION OFFICER WHICH ASSESSED THE AMOUNT TO RS.4 021500 WHEREAS THE CONTENTION OF ASSESSING OFFICER WAS THAT THE SU B-REGISTRAR HAD ASSESSED THE VALUE FOR STAMP DUTY PURPOSES AMOUNTIN G TO RS.4480803 RESPECTIVELY WHICH WAS NOT SUBSTANTIATED BY ANY MAT ERIAL EXCEPT THE RATES PRESCRIBED BY THE REGISTERING AUTHORITY FOR A PARTICULAR AREA OR LOCALITY ON THE PRICE OF LAND. ASSESSING OFFICER MA DE ADDITION OF RS.821500/-. BEFORE COMMISSIONER (APPEALS), ASSESSE E CONTENDED THAT THE SELLER OF THE SAID PROPERTY COULD BE SUMMONED T O VERIFY THE GENUINENESS AND CORRECTNESS OF THE AMOUNT AND THE T RANSACTION COULD BE CORROBORATED BY BOTH THE CONTRACTING PARTIES. HOWEV ER, HE REJECTED ASSESSEE'S CONTENTION. IT WAS HELD THAT THE CASE SET UP BY ASSESSEE WAS TH AT ONCE THERE IS INVOKING OF PROVISIONS OF SECTION 50C AND THEREAFTE R THE PROVISIONS OF SECTION 69B HAVE BEEN INVOKED THEN THE PRIMARY EVID ENCE FOR CONSIDERATION AND APPRECIATION COMING INTO PLAY IS THAT OF SECTION 69B, WHEREIN THE ADDITION IS BEING MADE BY INVOKING THE DEEMING PROVISION AND THE ONUS TO PROVE WITH REGARD TO THE PAYMENT OV ER AND ABOVE THE DECLARED AMOUNT IS ON THE REVENUE AND THERE CANNOT BE TRANSACTION UNILATERALLY BY ASSESSEE HIMSELF TILL A CORROBORATI VE PIECE OF DIRECT EVIDENCE HAS BEEN BROUGHT ON THE RECORD. WHEN NO CO RROBORATIVE PIECES OF EVIDENCE WAS PLACED ON RECORD BY REVENUE TO SUBS TANTIATE THE CONTENTION RAISED, EMERGING FROM THE ORDER UNDER CH ALLENGE, IN FORM OF VERIFICATION FROM THE SELLER, THEN ASSESSEE CANNOT BE PUT TO TAX ON THE LAPSE OF THE DEPARTMENT. 10. IN CIT VS. KHOOBSURAT RESORTS (P) LTD. (2013) 51 (I) I TCL 320 (DEL-HC) : (2012) 211TAXMAN 510 (DEL) : (2013) 256 CTR (DEL) 371, THE ASSESSEE ACQUIRED SIX PROPERTIES AND, VALUATION DECLARED BY ASSESSEE FOR STAMP DUTY PURPOSE WAS MORE OR LESS SAME AND WH ERE IT WAS LOW, STAMP DUTY WAS PAID ACCORDINGLY AS PER STAMP ACT. A SSESSING OFFICER HELD THAT PROVISION OF SECTION 50C WAS APPLICABLE C ONSIDERATION PAID BY IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 12 - ASSESSEE WAS MUCH MORE AND THUS HE ADDED DIFFERENCE THEREOF AS ESCAPED CONSIDERATION. IT WAS HELD THAT PROVISION OF SECTION 50C IS NOT AP PLICABLE IN THE CASE OF ACQUISITION OF PROPERTY IN ASSESSEE'S CASE AS IT IS APPLICABLE IN RESPECT OF ESCAPED INCOME OF A SELLER AND ALSO, DEEMED FICTION COULD NOT BE APPLIED TO ADD DIFFERENCE IN VALUATION I.E. CIRCLE RATE AND PURCHASE PRICE OF PROPERTY IN ASSESSEE'S HANDS WHERE STAMP DUTY WA S PAID BY ASSESSEE ACCORDING TO STAMP ACT. THE EXPRESS PROVISION OF SE CTION 50C ENABLING THE REVENUE TO TREAT THE VALUE DECLARED BY AN ASSES SEE FOR PAYMENT OF STAMP DUTY, IPSO FACTO, CANNOT BE A LEGITIMATE GROU ND FOR CONCLUDING THAT THERE WAS UNDERVALUATION, IN THE ACQUISITION O F IMMOVABLE PROPERTY. IF PARLIAMENTARY INTENTION WAS TO ENABLE SUCH A FINDING, A PROVISION AKIN TO SECTION 50C WOULD HAVE BEEN INCLU DED IN THE STATUTE BOOK, TO ASSESS INCOME ON THE BASIS OF SIMILAR FICT ION IN THE CASE OF THE ASSESSEE WHO ACQUIRES SUCH AN ASSET. NO DOUBT, THE DECLARATION OF A HIGHER COST FOR ACQUISITION FOR STAMP DUTY MIGHT BE THE STARTING POINT FOR AN INQUIRY IN THAT REGARD ; THAT INQUIRY MIGHT EXTE ND TO ANALYZING SALE OR TRANSFER DEED EXECUTED IN RESPECT OF SIMILAR OR NEI GHBOURING PROPERTIES, CONTEMPORANEOUSLY AT THE TIME OF THE TRANSACTION. Y ET, THE FINDING CANNOT START AND CONCLUDE WITH THE FACT THAT SUCH S TAMP DUTY VALUE OR BASIS IS HIGHER THAN THE CONSIDERATION MENTIONED IN THE DEED. THE COMPULSION FOR SUCH HIGHER VALUE, IS THE MANDATE OF THE STAMP ACT, AND PROVISION WHICH LEVY STAMP DUTY AT PREDETERMINED OR NOTIFIED DATES. 11. S. M. CHANDRASHEKAR VS. ITO WARD 1(4), BANGALO RE [2016] 76 TAXMANN.COM 278 (BANGALORE TRIB BENCH 'C' 'SECTION 50C, READ WITH SECTION 69, OF THE INCOME-T AX ACT, 1961 - CAPITAL GAINS - SPECIAL PROVISION FOR COMPUTATION OF FULL VALUE CONSIDERATION (PURCHASE OF HOUSE) - ASSESSMENT YEAR 2006-07 - WHETHER PROVISIONS OF SECTION 50C IS APPLICABLE ONL Y FOR RECEIPT OR AMOUNT ACCRUED IN HANDS OF SELLER ON SALE OF CAP ITAL ASSET; SAID PROVISION CANNOT BE APPLIED IN ASSESSING INCOM E OF PURCHASER UNDER SECTION 69 - HELD, YES [PARA 11] [I N FAVOUR OF ASSESSEE]' THEREFORE, THE ADDITION MADE BY THE LD. A.O IN THE CASE OF RESPONDENT ASSESSEE BEING THE PURCHASER, IN A.Y. 2012-13 ON TH E BASIS OF THE DEEMING FICTION OF SECTION 50C TAKING THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY AND MAKING THE ADDITION O N ACCOUNT OF IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 13 - DIFFERENCE BETWEEN THE AGREEMENT TO SALE PRICE AND VALUATION OF PROPERTY FOR LEVY OF STAMP DUTY AS ON THE DATE OF R EGISTRATION OF AGREEMENT TO SALE TREATING THE SAME AS UNDISCLOSED INVESTMENT IN IMMOVABLE PROPERTY AMOUNTING TO RS. 1,02,43,5007- B Y INVOKING THE PROVISIONS OF SECTION 50C OF THE I.T. ACT, 1961 IS CONTRARY TO THE PROVISIONS OF LAW AS THE PROVISIONS OF SECTION 50C IS NOT APPLICABLE IN THE CASE OF PURCHASER. 12. THE RESPONDENT ASSESSEE HUMBLY SUBMITS THAT TH E BURDEN OF PROVING ACTUAL CONSIDERATION IN SUCH TRANSACTION IS MORE THAN WHAT WAS STATED IN THE AGREEMENT AND/OR IN THE BANAKHAT AGRE EMENT IS ON THE REVENUE AND THE LD. A.O CANNOT MERELY RELY UPON THE VALUE DETERMINED FOR PAYMENT OF STAMP DUTY AS THE RESPONDENT ASSESSE E HAS SUBMITTED CLEARLY IN HIS SUBMISSION THAT THE IN THE STATE OF MAHARASHTRA, IF THE DOCUMENT/ OR ANY AGREEMENT IS REQUIRED TO BE REGIST ERED THEN STAMP DUTY HAS TO BE PAID AS PER THE READY RECKONER RATE PREVAILING FOR THAT PERIOD AND THE RESPONDENT ASSESSEE HAD ALSO SUBMITT ED THAT THE SAME AGREEMENT WAS MADE FOR PROTECTION AND SECURING THE PAYMENT MADE TO THE PROPERTY OWNER, WITHOUT MAKING ANY INDEPENDENT ENQUIRY WITH THE LAND REVENUE AUTHORITIES FOR ASCERTAINING THE COMPA RATIVE SALES INSTANCES IN THE SAME AREA IN THE SAME PERIOD AND W ITHOUT REFERRING THE MATTER TO THE VALUATION OFFICER. THE RESPONDENT ASS ESSEE RELY UPON THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. P.V. KALYANASUNDARAM 282 ITR 259. THE RESPONDENT ASSESSE E INVITE YOUR HONOURS ATTENTION TO THE OBSERVATION MADE BY THE HO N'BLE HIGH COURT IN PARA 3 AS UNDER:- 'WE FIND THAT IT IS THE UNIFORM VIEW OF THE COURTS AND ALSO HELD BY THE APEX COURT IN K.P. VARGHESE VS. ITO (1981) 2 4 CTR (SC) 358 : (1981) 131 ITR 597 (SC) THE BURDEN OF PROVING ACTUAL CONSIDERATION IN SUCH TRANSACTION IS THAT OF THE RE VENUE. CONSIDERING THE ENTIRE GAMUT OF THE CASE, WE FIND T HAT THE REVENUE HAS FAILED TO DISCHARGE ITS DUTIES AND AS H ELD BY THE LEARNED CIT (A) INSTEAD MADE UP A CASE ON SURMISES AND CONJECTURES WHICH CANNOT BE ALLOWED. THE HON'BLE HIGH COURT FURTHER OBSERVED IN PARA 4 A S UNDER :- 'WE ALSO FOUND THAT THE AO DID NOT CONDUCT ANY INDE PENDENT ENQUIRY RELATING TO (HE VALUE OF THE PROPERTY PURCH ASED. HE MERELY RELIED ON THE STATEMENT GIVEN BY THE SELLER. IF HE WOULD IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 14 - HAVE TAKEN INDEPENDENT ENQUIRY BY REFERRING THE MAT TER WITH THE VALUATION OFFICER, THE CONTROVERSY COULD HAVE BEEN AVOIDED. FAILING TO REFER THE MATTER WAS A FATAL ONE' IN THE PRESENT CASE , THE LD. A.O HAS NOT CARRIED O UT ANY INDEPENDENT INQUIRY WITH THE LAND REVENUE AUTHORITY IN ORDER TO ASCERTAIN THE COMPARATIVE SALES INSTANCES OF THE LAND IN THE VICI NITY AREA FROM THE LAND REVENUE AUTHORITY AND ALSO FAILED TO BRING ON RECORD ANY CONCRETE MATERIAL EVIDENCE TO ESTABLISH THE ALLEGATION AND T HEREFORE, THE BURDEN CAST UPON THE ASSESSING AUTHORITY UNDER THE PROVISI ONS OF THE IT. ACT, 1961 AND AS PER THE JUDICIAL PRONOUNCEMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE VS. ITO 131 ITR 597 (SC) HAS NOT BEEN DISCHARGED AND ACCORDINGLY THE ADDITION MADE B Y THE LD. A.O ON THE BASIS VALUATION AS ON THE DATE OF SALE TO BE TR EATED AS UNEXPLAINED INVESTMENT IS UNJUSTIFIED AND BAD IN LAW. 13. THE RESPONDENT ASSESSEE HAS TO HUMBLY SUBMIT T HAT NO ADDITION CAN BE MADE IN THE CASE OF RESPONDENT ASSESSEE U/S. 69/69B OF THE ACT FOR WHICH RELIANCE IS PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT VS. P.K. NOORJAHAN 237 ITR 570 (SC), WHEREIN IT HAS BEEN HELD AS UNDER:- 'IN THE CORRESPONDING CLAUSE OF THE BILL WHICH WAS INTRODUCED IN PARLIAMENT, WHILE INSERTING SECTION 69A IN THE INCO ME-TAX ACT, 1961, THE WORD ''SHALL' HAD BEEN USED BUT DURING TH E COURSE OF CONSIDERATION OF THE BILL AND ON THE RECOMMENDATION OF THE SELECT COMMITTEE, THE SAID WORD WAS SUBSTITUTED BY THE WORD 'MAY'. THIS CLEARLY INDICATE THAT THE INTENTION OF PARLIAMENT IN ENACTING SECTION 69 WAS TO CONFER A DISCRETION ON T HE INCOME-TAX OFFICER IN THE MATTER OF TREATING THE SOURCE OF INV ESTMENT WHICH HAS NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESS EE AS THE INCOME OF THE ASSESSEE AND THE INCOME-TAX OFFICER I S NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOME IN EVE RY CASE WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY. THE QUESTION WHETHER THE SOURCE OF TH E INVESTMENT SHOULD BE TREATED AS INCOME OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE. IN OTHER WORDS, A DISCRETION HAS BEEN CONFERRED ON THE INCOME-TAX OFF ICER UNDER SECTION 69 OF THE ACT TO TREAT THE SOURCE OF INVEST MENT AS THE INCOME OF THE ASSESSEE IF THE EXPLANATION OFFERED B Y THE ASSESSEE IS NOT FOUND SATISFACTORY AND THE SAID DISCRETION H AS TO BE IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 15 - EXERCISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANC ES OF THE PARTICULAR CASE. HELD, DISMISSING THE APPEAL, THAT IN THE INSTANT CA SE, THE TRIBUNAL HAD HELD THAT THE DISCRETION HAD NOT BEEN PROPERLY EXERCISED BY THE INCOME-TAX OFFICER AND THE APPELLATE ASSISTANT COMMISSIONER TAKING INTO ACCOUNT THE CIRCUMSTANCES IN WHICH THE ASSESSEE WAS PLACED AND THE TRIBUNAL HAD FOUND THAT THE INVESTME NTS COULD NOT BE TREATED AS INCOME OF THE ASSESSEE. THE HIGH COUR T HAD AGREED WITH THE SAID VIEW OF THE TRIBUNAL. THERE WAS NO ER ROR IN THE FINDING RECORDED BY THE TRIBUNAL. SECTION 69 COULD NOT BE INVOKED IN RESPECT OF THE INVESTMENTS OF THE ASSESS EE'. THE LD. AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD . CIT-A. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE IN THE PRESENT CA SE HAS PURCHASED A PROPERTY VIDE AGREEMENT TO SALE DATED 4 TH JULY 2011. THE PROPERTY WAS VALUED AT RS. 1,57,15,500.00 FOR THE PURPOSE OF STA MP DUTY ON WHICH THE STAMP DUTY WAS PAID FOR RS. 8,64,360.00 DURING THE YEAR UNDER CONSIDERATION. HOWEVER, THE ASSESSEE CLAIMED THAT AN AGREEMENT TO PURCHASE THE PROPERTY WAS ENTERED ON 8 TH DECEMBER 2006 FOR RS. 30,59,760.00 WHICH WAS SUBSEQUENTLY REVISED AT RS. 54,72,000.00 DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE CLAIMED TO HAVE PURCHAS ED THE PROPERTY AT THE VALUE LESS THAN THE STAMP DUTY VALUE AS IT WAS DISP UTED PROPERTY. BUT THE ASSESSEE HAD TO PAY THE STAMP DUTY AT RS. 1,57,15,5 00.00 FOR GETTING THE AGREEMENT TO SALE REGISTERED. HOWEVER, THE AO TREAT ED THE DIFFERENCE OF THE AMOUNT OF RS. 1,02,43,500.00 AS UNACCOUNTED INV ESTMENT IN THE PROPERTY. IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 16 - HOWEVER, THE LEARNED CIT-A HAS DELETED THE ADDITION MADE BY THE AO BY OBSERVING THAT PROVISIONS OF SECTION 50C OF THE ACT ARENT APPLICABLE TO THE PURCHASER. FROM THE PRECEDING DISCUSSION, WE OBSERVE THAT THER E WAS A SEARCH CONDUCTED ON THE ASSESSEE DATED 21/07/2011. BUT THE RE WAS NO DOCUMENT FOUND DURING THE SEARCH SUGGESTING THAT THE ASSESSE E HAS INVESTED IN THE PROPERTY OUT OF THE INCOME FROM UNDISCLOSED SOURCES . THE ONLY BASIS FOR MAKING THE ADDITION WAS THE VALUATION OF THE PROPER TY MADE FOR THE STAMP DUTY. THUS IN THE ABSENCE OF ANY DOCUMENTARY EVIDEN CE, WE HOLD THAT THERE WAS NO INVESTMENT MADE BY THE ASSESSEE OUT OF UNDISCLOSED SOURCES OF INCOME IN THE IMPUGNED PROPERTY. SIMILARLY, WE ALSO NOTE THAT THE PROVISIONS OF SECT ION 50C APPLY TO THE SALE OF THE PROPERTY AND NOT TO THE PURCHASE OF THE PROPERTY. THEREFORE NO ADDITION ON THE BASIS OF STAMP DUTY VALUATION CAN B E MADE UNDER SECTION 50C OF THE ACT. IN THIS CONNECTION, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. MEGHJIBHAI POPATBHAI VIRANI REPORTED IN 35 TAXMANN. COM 100 WHEREIN IT WAS HELD AS UNDER : 9. AS FAR AS THE THIRD QUESTION IS CONCERNED, THIS VE RY QUESTION HAS BEEN CONSIDERED BY US IN TAX APPEAL NO. 2296 OF 2009 IN THE CASE OF CIT V. VISHAL SUSHILKUMAR PODDAR,DATED JUNE 22, 2011,WHEREBY THIS COURT HAS DECIDED THIS ISSUE BY HOLDING THAT THE RE VENUE CANNOT TAKE RECOURSE TO SECTION 50C OF THE ACT IN CASE OF PURCH ASER OF THE PROPERTY IN FOLLOWING TERMS : '4. WITH REGARD TO THE SECOND ISSUE, THE SAME RELAT ES TO ADDITION UNDER SECTION 69C. A FLAT WAS PURCHASED BY THE ASSESSEE A T ATHWA LINES, SURAT WHERE THE OFFICE OF THE SUB-REGISTRAR HAD LEVIED AD DITIONAL STAMP DUTY BY VERIFYING THE PROPERTY AT RS. 28,50,928/-. THE PROV ISION OF SECTION 50C OF THE ACT WAS APPLIED BY THE ASSESSING OFFICER RELYIN G ON EARLIER DECISIONS OF IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 17 - ITS OWN IN THE CASE OF THE ASSESSEES. THE TRIBUNAL CONCLUDED THAT THE PROVISIONS OF SECTION 50C WAS NOT APPLICABLE TO THE PURCHASER. THE RELEVANT FINDINGS OF THE TRIBUNAL IN IT A NO.1749/A HD/2008 WERE RELIED UPON, WHICH ARE AS UNDER:- '10. AFTER CAREFUL CONSIDERATION OF THE RIVAL SUBMI SSIONS, FACTS AND CIRCUMSTANCES OF THE CASE, PROVISIONS OF THE LAW AS WELL AS DECISIONS(S) OF HON'BLE SUPREME COURT AND VARIOUS BENCHES RELIED UP ON BY PARTIES, WE ARE OF THE OPINION THAT THE CIT(A) WAS NOT JUSTIFIE D IN CONFIRMING THE ADDITION BY DRAWING THE ANALOGICAL PROVISIONS OF SE CTION 50-C OF THE ACT. THE CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT IF THIS PROPOSITION IS TO BE ACCEPTED, THEN THE DEEMING PROVISIONS OF SECT ION 50-C OF THE ACT WILL BECOME INOPERABLE. HE, FURTHER, HELD THAT SECTIONS 50-C OF THE ACT IS APPLICABLE TO THE SELLER AND PROVIDES THAT THE VALU ATION MADE BY THE STAMP VALUATION AUTHORITY IS TO BE DEEMED AS THE CONSIDER ATION RECEIVED BY THE SELLER. HAVING SAID SO, THE CIT(A) FURTHER HELD THA T ' THE CONVERSE WILL ALSO HAVE TO BE ACCEPTED AS TRUE, I.E., THE VALUATION OF THE STAMP VALUATION AUTHORITY WILL HAVE TO BE DEEMED AS THE CONSIDERATI ON PAID BY THE PURCHASER OF THE PROPERTY AS WELL.' 5. THE TRIBUNAL HELD THAT THE APPELLATE AUTHORITY H AS NO RIGHT EITHER TO ADD OR TO DELETE ANY WORD FROM THE PROVISIONS OF LAW UN LESS THERE IS A SCOPE OF INTERPRETATION. WITH NO AMBIGUITY IN SECTION 50C AN D THERE BEING NO SCOPE OF APPLYING THE SAID PROVISION TO THE PURCHASER, IT DELETED THE ADDITION MADE UNDER SECTION 69C TO THE TUNE OF RS. 7,88,929/ -. 6. RESULTANTLY, IT CAN BE INESCAPABLY CONCLUDED THA T THERE IS NO INFIRMITY IN THE REASONINGS GIVEN BY THE TRIBUNAL. THE INTERPRET ATION MADE BY IT REQUIRES OR CALLS FOR NO INTERFERENCE.' SIMILARLY, WE ALSO RELY ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SARJAN REALITIES LTD. REPORTED IN 40 TAXMANN.COM 398 WHEREIN IT WAS HELD AS UNDER: 7. CLEARLY THUS, SECTION 50C OF THE ACT BY A DEEMING FICTION SUBSTITUTES THE CONSIDERATION RECEIVED ON SALE OF A CAPITAL ASS ET BY STAMP DUTY VALUATION. SUCH DEEMING FICTION, HOWEVER, IS APPLIC ABLE ONLY IN CASE OF A SELLER FOR THE PURPOSE OF SECTION 48 OF THE ACT. IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 18 - THE ARGUMENT OF THE LD. DR IS THAT THE DIFFERENCE B ETWEEN THE ACTUAL AMOUNT OF AGREEMENT AND STAMP VALUE CAN BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE UNDER SECTION 56(2)(VII) OF T HE ACT. IN THIS CONNECTION, WE NOTE THAT THERE WAS NO ALLEGATION BY ANY OF THE LOWER AUTHORITY FOR MAKING THE ADDITION UNDER SECTION 56( 2)(VII) OF THE ACT. HENCE WE CANNOT IMPROVE THE CASE OF THE REVENUE. IN THIS CONNECTION, WE FIND SUPPORT FROM THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF SANMAR SPECIALITY CHEMICALS LTD. VS. ITO RE PORTED IN 108 ITR 267 WHEREIN IT WAS HELD AS UNDER : 6. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CAS E, WE FIND THAT THERE IS NO ERROR IN THE ORDER PASSED BY THE TRIBUN AL IN REMANDING THE MATTER FOR FRESH CONSIDERATION TO THE ASSESSING OFF ICER. BUT, HOWEVER, THE LEARNED COUNSEL FOR THE APPELLANT POINTED OUT T HAT THE OBSERVATIONS AND DIRECTIONS ISSUED BY THE TRIBUNAL ARE INCORRECT . IN ANY EVENT, WE HAVE INDICATED IN THE PRECEDING PARAGRAPHS THAT THE TRIBUNAL HAS NO POWER UNDER THE INCOME TAX ACT TO ENHANCE THE ASSES SMENT IN AN APPEAL. EQUALLY, IT CANNOT BE DONE ON AN ORDER OF R EMAND BEING PASSED BY THE TRIBUNAL TO THE ASSESSING OFFICER. THEREFORE , WE OPINE THAT IT IS SUFFICIENT TO CLARIFY THE LEGAL POSITION AS HELD BY THE HON'BLE SUPREME COURT IN HUKUMCHAND MILLS LTD. CASE (SUPRA) AND IN MCORP GLOBAL (P) LTD. CASE (SUPRA) FOLLOWED BY THE HIGH COURT OF GUJARAT IN FIDELITY SHARES & SECURITY LTD.'S CASE (SUPRA). THE ASSESSIN G OFFICER, WHILE RECONSIDERING THE MATTER ON REMAND, SHOULD BEAR THE ABOVE LEGAL PRINCIPLE IN MIND AND THE ASSESSEE CANNOT BE DENIED WHATEVER BENEFIT HE HAS GRANTED IN THE ASSESSMENT ORDER DATED 28.02.200 3. 7. IN THE LIGHT OF THE ABOVE, THE SUBSTANTIAL QUESTIO NS OF LAW NO.2 IS ANSWERED IN FAVOUR OF THE ASSESSEE IN THE LIGHT OF THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT IN HUKUMCHAND MILLS LTD. CASE (SUPRA) AND IN MCORP GLOBAL (P) LTD. CASE (SUPRA) FOLLOWED BY T HE HIGH COURT OF GUJARAT IN FIDELITY SHARES & SECURITY LTD. CASE (SU PRA). SUBSTANTIAL QUESTIONS OF LAW NOS.1 AND 3 ARE LEFT OPEN AND THE ASSESSEE IS ENTITLED TO CANVASS ALL ISSUE BEFORE THE ASSESSING OFFICER. AS POINTED OUT EARLIER, THE ASSESSING OFFICER SHOULD BEAR IN MIND THE DECIS IONS OF THE SUPREME COURT WHILE CONSIDERING THE MATTER ON REMAND. IT(SS)A NO. 178/AHD/2017 DCIT VS. LATE VIJAY G. KASHIKAR ASST.YEAR 2012-13 - 19 - WE ALSO NOTE THAT THE REVENUE HAS ALSO NOT RAISED T HE GROUNDS IN ITS APPEAL FOR MAKING THE IMPUGNED ADDITION UNDER SECTI ON 56(2)(VII) OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INT ERFERE IN THE ORDER OF LD. CIT-A. THUS THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/08/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 20/08/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A) - 13, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD. 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 24/07/2018 (DICTATION-PAD 4 PA GES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 07/08/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 14/08/2018 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. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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