KAMLESHBHAI BALDEVBHAI PATEL,KALOL V. THE ITO, WARD-1, MEHSANA

ITA 197/AHD/2025

AI Insights

The case involves an appeal by Kamleshbhai Baldevbhai Patel against the order of the CIT(A) confirming the addition of Rs. 13,54,794 to his income for the assessment year 2013-14, under section 50C of the Income Tax Act. The addition was based on the difference between the sale consideration of a property and its jantri value. The Assessing Officer had reopened the case under section 147, following which a notice under section 148 was issued. The Tribunal examined whether the assessment was valid and whether section 50C applied, ultimately finding that the sale consideration exceeded the jantri value, thus section 50C did not apply.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708465 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2013-2014
• Other Referred Cases: Devindraben Rajeshbhai Sharma vs. ITO ITA No. 1229/Ahd/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURESH CHAND MEENA
• Assessee Lawyers: JIGENSH SHAH
• Keywords: Sale consideration of property below Jantri Value; Tax effect
• Section: 147; 148; 142(1); 50C; 80C

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Kamleshbhai Baldevbhai Patel, Shubh Water Suppliers B/12, Shrifal Society Panchvati Area, Kalol (N.G.), 382721 Gujarat, India PAN: BHOPP4268F (Appellant) Vs The ITO, Ward-1, Mehsana (Respondent) Assessee by: Shri Jigensh Shah, A.R. Revenue by: Shri Suresh Chand Meena, Sr. D.R. Date of hearing : 03-07-2025 Date of pronouncement : 15-07-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 27-06- 2024 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2013-14. 2. The grounds of appeal are as under:- “1. The impugned assessment made u/s 147 of the Income Tax Act is invalid and void ab initio as the notice u/s 143(2) issued during the course of proceeding u/s 148 was time barred and therefore, the Ld. AO had assumed invalid jurisdiction. ITA No. 197/Ahd/2025 Assessment Year 2013-14 I.T.A No. 197/Ahd/2025 Kamleshbhai Baldevbhai Patel, A.Y. 2013-14 2 2. Ld CIT(A) has erred in confirming the addition made by the AO of Rs. 13,54,794/- by invoking provisions contained u/s 50C of the Act. 3. The Appellant craves leave to add, amend and modify all or any ground of appeal on or before the date of hearing. Total tax effect Rs. 5,95,658/-” 3. The assessee filed return of income for assessment year 2013-14 on 03-12-2013 declaring at Rs. 2,08,630/-. The case of the assessee was re-opened u/s. 147 of the Act on the basis of available information regarding sale of immovable property and notice u/s. 148 of the Act was issued on 14-03-2013. In response to notice u/s. 148 of the Act, the assessee filed return of income on 06-02-2025 declaring income of Rs. 2,10,440/-. As per the information, the assessee along with other 11 co-owners sold immovable property/land bearing survey no. 928/1/A situated village Ola, Kalol for consideration of Rs. 46,00,000/- during the assessment year 2013-14. As per the information, stamp duty paid for the sale transaction was Rs. 9,29,500/-, accordingly value of the property as per stamp duty comes to Rs. 1,89,69,388/-. There was a difference of Rs. 1,43,69,388/- in sale value as per registered deed and value as per jantri rate. Thus, the Assessing Officer observed that provisions of section 80C of the Act was also applicable in assessee’s case. The assessee has not disclosed any capital gain in return of income for the relevant year, therefore the income arises out of sale of the immovable property was not offered for taxation. After taking cognizance of the assessee’s reply, the Assessing Officer held that since the value as per jantri rate was higher than actual sale rate, provisions of sections 50C of the Act clearly applicable in the case of the assessee. The assessee ought to have disclosed the capital gain in return of income by I.T.A No. 197/Ahd/2025 Kamleshbhai Baldevbhai Patel, A.Y. 2013-14 3 considering jantri value of the sold property. Thus, the Assessing Officer made addition of Rs. 13,54,794/- being 7.142% share to Rs. 1,89,09,388/-. 4. Being aggrieved by the Assessing Officer, the CIT(A) dismissed the appeal of the assessee. 5. The ld. A.R. submitted that the impugned assessment made u/s. 147 of the Income Tax Act is invalid and void ab initio as the notice u/s. 143(2) issued during the case of proceedings u/s. 148 was time barred and therefore the ld. A.R. has assumed invalid jurisdiction. 6. From the perusal of records, it can be seen that the notice was issued on 14-03-2020. Notice u/s. 142(1) of the Act dated 29-09-2020 was issued and thus proceedings were well within the time and thus this ground is treated dismissed. 7. As regard ground no. 2, the ld. A.R. submitted that the Assessing Officer was not right in making addition of Rs. 13,54,794/- by invoking proceedings u/s. 50C. Since banakhat was made on 06-02-2010 and notarized on 27-07-2010, old jantry rates i.e. rates effective till 17-04-2011 were applicable to the said transaction. The ld. A.R. submitted that the rate of non- agricultural land situated in the said land as per old jantri rates which arises at Rs. 37,93,750/-. However assessee and co- owners has sold the land and therefore when the land is sold more than the jantry value, provisions of section 50C will not be applicable. I.T.A No. 197/Ahd/2025 Kamleshbhai Baldevbhai Patel, A.Y. 2013-14 4 8. The ld. D.R. relied upon the assessment order and the order of the CIT(A) 9. We have heard both the parties and perused all the relevant material available on record. There is a delay of 54 days for which the assessee has filed application and the same is condoned. It is pertinent to note that as per old jantri rates, rate of non-agricultural land being from 3035 sq. mt. is Rs. 1250 per sq. mt. Thus jantri value of the land is at Rs. 37,93,750/-. The assessee and the co-owners sold the land for the consideration of Rs. 46,00,000/- which is more than the jantri value. The said land value is more than the jantri value, therefore the provisions of section 50C are not applicable. The banakhat categorically pointed by the A.R. whereby it was agreed upon to make the sale of concerned land which was duly made in the registered sale deed related to the aforesaid amount of the transaction. The A.R. relied upon the decision of the Tribunal in case of Devindraben Rajeshbhai Sharma vs. ITO ITA No. 1229/Ahd/2024 wherein it is categorically mentioned that the value on the date of entering into an agreement has to be considered as sale value in accordance with law of the provisions of section 50C of the Act. Thus, in the present case also, the value as on the date of entering into an agreement was properly justified by the assessee and therefore provisions of section 50C of the Act will not be applicable. Thus, ground no. 2 is allowed. 10. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 15-07-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member I.T.A No. 197/Ahd/2025 Kamleshbhai Baldevbhai Patel, A.Y. 2013-14 5 Ahmedabad : Dated 15/07/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "