JAVED ALI ANSARI,BHADOHI V. A.C.I.T., CIRCLE - 1, VARANASI

ITA 74/VNS/2023

AI Insights

The case involves Javed Ali Ansari, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which upheld the AO's decision regarding the undervaluation of a property sale. The property was sold for Rs. 99,50,000, whereas the stamp valuation was Rs. 1,60,00,000. The AO added Rs. 60,50,000 to the assessee's income as long-term capital gain, which was also confirmed by the CIT(A). The assessee contested that the sale was a distress sale and the actual market value was lower than the stamp value, necessitating a reference to the DVO for a proper valuation. The Tribunal agreed with the assessee's contention and remanded the matter back to the AO for a detailed valuation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473598 (ITAT-VARANASI)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 11-09-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 07-07-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA MEENA
• Assessee Lawyers: R.K. JAISWAL
• Keywords: Capital asset; Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 54; 50C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, VARANASI BEFORE: SHRI B.R. BASKARAN, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.74/VNS/2023 (Assessment Year :2016-17) Javed Ali Ansari Javed Rugs Rotaha, Persipur Bhadohi Uttar Pradesh- 221 402 Vs. ACIT, Circle-1 Varanasi PAN/GIR No.ADIPA7766L (Appellant) .. (Respondent) Assessee by Shri R.K. Jaiswal Revenue by Smt. Kavita Meena Date of Hearing 11/09/2024 Date of Pronouncement 29/11/2024 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 16/05/2023 passed by NFAC, Delhi for the quantum of assessment passed u/s.143(3) for the A.Y.2016-17. 2. In the grounds of appeal assessee has raised following grounds:- ITA No.74/VNS/2023 Javed Ali Ansari 2 “1. Because the learned C.I.T. Appeal (NFAC), Delhi while concurring with A.O. failed to appreciate the facts of the case and the provision of law as contained in sec. 50C(2), by simply re- producing the facts of the case and the replies filed by the appellant before the A.O., which is highly unjust. 2. Because learned C.I.T. Appeal (NFAC) Delhi failed to appreciate that in cases of objection based on the DISTRESS SALES, the reference to valuer is a must u/s. 50C(2) of the I.T. Act, which the A.O. failed to discharges in the guise of miss-statement of facts. He further failed to take cognisance of investment made u/s. 54F, the addition of Rs. 60,50,000=00 made in LTCG is unwarranted and against the facts of the case. 3. Because the learned C.I.T. Appeals (NFAC) Delhi, failed to take cognisance of the omission by A.O. of letter filed by the purchaser on 10.12.2018 in response to the notice issued by the A.O. u/s. 133A(6) of the I.T. Act to him, where he (the purchaser) asserted the total payment at Rs. 99,50,000=00 only.” 3. The brief facts are that assessee has filed return of income declaring total income of Rs.1,42,33,110/- on 30/03/2017. The ld. AO noted that assessee has sold a capital asset for Rs.99,50,000/- whereas the value of land as per the Stamp Valuation Authority was Rs. 1,60,00,000/-. The assessee has calculated the long term capital gain at ‘Nil’ after claiming exemption u/s.54F. The ld. AO held that since stamp valuation of the property was Rs.1,60,00,000/- therefore, under deeming provision of Section 50C assessee has undervalued the sale consideration and accordingly, the difference of Rs.60,50,000/- was added. This finding of the AO has also been confirmed by the ld. CIT(A). ITA No.74/VNS/2023 Javed Ali Ansari 3 4. After hearing both the parties and on perusal of the record it is seen that assessee had declared long term capital gain in the following manner:- LTCG: From sale of Land Full value of consideration Rs 99,50,000/- Cost of acquisition without indexation Rs 27,03,818/- Less: Deduction u/s 54 F Rs 97,43,000/- LTCG NIL 5. However, the stamp value of the said property which was sold was Rs. 1,60,00,000/-. Before us it has been stated that actually the property was sold at Rs.99,50,000/- and ld. AO had issued notice u/s.133A(6) to the purchaser who had filed a letter on 10/12/2018 stating that he has actually paid Rs.99,50,000/- only. The contention of the assessee was that he intended to buy flat in Mayur Vihar, New Delhi for which he had sold one patch of barren land at village Rewra Persipur, Bhadohi to one Shri Ram Gopal Goval, who had paid only Rs.99,50,000/- because property was not able to fetch the value of circle rate, thus assessee was thus forced to sell the property below the circle rate. Assessee has also further stated that actual market rate was far less looking to the quality of the land and the area. Since assessee had disputed the valuation therefore, we are of the opinion that proper course should be that, this matter should be restored back to the ld. AO who can refer the matter to the DVO for getting proper valuation. Under the deeming provision of ITA No.74/VNS/2023 Javed Ali Ansari 4 Section 50C, valuation done by the stamp valuation authority has to be taken sale value and incase assessee disputes the value, matter should be referred to the DVO to ascertain the correct value. Accordingly, ld. AO should refer the matter to the DVO to ascertain the market value and confront the report to the assessee to seek his explanation or objection. Accordingly, appeal of the assessee is allowed for statistical purposes. 6. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on 29/11/2024. Sd/- (B.R. BASKARAN) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Varanasi; Dated 29 /11/2024 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Varanasi 1. The Appellant 2. The Respondent. 3. The CIT(A), Varanasi. 4. CIT 5. DR, ITAT, Varanasi 6. Guard file. //True Copy// "