Ritaben Parshottamdas Patel, Ahmedabad V. Income Tax Officer, Ward-4(2)(4), Ahmedabad

MA 10/AHD/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7287 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 11-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Fair market value; Valuation report

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER MISC. APPLICATION NO.10 /AHD/2019 IN ./ ITA NO.783 /AHD/2015 / ASSESSMENT YEAR: 2011-12 SMT.RITABEN PARSHOTTAMDAS PATEL AHMEDABAD. VS ITO, WARD-4(2)(4) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI VINOD TANWANI, SR.DR / DATE OF HEARING : 19/07/2019 /DATE OF PRONOUNCEMENT : 29/07/2019 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : PRESENT MA IS DIRECTED AT THE INSTANCE OF THE REVENUE POINTING OUT APPAREN T ERROR IN THE ORDER OF THE TRIBUNAL DATED 4.6.2018 PASSED IN ITA NO.783 /AHD/2015. 2. BRIEF FACTS OF THE CASE ARE THAT HE ASSESSEE WAS HAVING 1/16 TH SHARE OF A PROPERTY WHICH WAS SOLD FOR CONSIDERATION OF R S.5,10,00,000/-. FOR THE PURPOSE OF CALCULATING THE LONG TERM CAPITAL GA IN, COST OF ACQUISITION AS ON 1.4.1981 WAS TAKEN AT RS.67,98,400/-. THIS C OST WAS TAKEN ON THE BASIS OF REGISTERED VALUERS REPORT. THE AO REFERR ED THIS MATTER TO THE DVO WHO OPINED THE VALUE OF THE PROPERTY AS ON 1.4. 981 AT RS.36,54,000/-. BY ADOPTING THIS COST OF ACQUISITI ON, THE LD.AO HAS MADE THE ADDITION IN THE COMPUTATION OF LONG TERM CAPITA L GAIN. ON APPEAL, THE LD.CIT(A) HAS OBSERVED THAT DVO HAS SUBMITTED S UPPLEMENTARY MA NO.10/AHD/2019 - 2 - VALUATION REPORT DETERMINED ON 9.1.2014. ACCORDING TO THIS DVOS REPORT, THE MARKET VALUE OF THE PROPERTY AS ON 1.4. 1981 WAS DETERMINED AT RS.12,61,103/- AS AGAINST RS.36,54,000/- TAKEN O RIGINALLY. THEREFORE, THE LD.CIT(A) HAS ISSUED NOTICE FOR ENHANCEMENT OF CAPITAL GAIN REQUIRED TO BE DETERMINED IN THE HANDS OF THE ASSESSEE. TH E AO HAS DETERMINED THE CAPITAL GAIN AT RS.13,97,290/-. THE LD.CIT(A) HAS RE-DETERMINED WHILE ENHANCING THE FIGURE AT RS.24,60,637/-. THE LD.CIT(A) HAS FURTHER MADE ADDITION OF RS.10,63,347/-. ACCORDING TO THE ASSESSEE, THE TRIBUNAL HAS DELETED THE ADDITION MADE BY THE AO, BUT NOT DE LETED THE ADDITION MADE BY THE LD.CIT(A) BY WAY OF ENHANCEMENT. 3. IN RESPONSE TO THE NOTICE OF HEARING, NONE HAS C OME PRESENT ON BEHALF OF THE ASSESSEE. 4. WITH THE ASSISTANCE OF THE LD.DR WE HAVE GONE TH ROUGH THE RECORD CAREFULLY. THE POWER OF RECTIFICATION UNDER SECTIO N 254(2) OF THE INCOME TAX ACT CAN BE EXERCISED ONLY WHEN THE MISTAKE, WHI CH IS SOUGHT TO BE RECTIFIED, IS AN OBVIOUS PATENT MISTAKE, WHICH IS A PPARENT FROM THE RECORD AND NOT A MISTAKE, WHICH IS REQUIRED TO BE E STABLISHED BY ARGUMENTS AND LONG DRAWN PROCESS OF REASONING ON PO INTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. BASICALLY, T HERE IS NO APPARENT ERROR IN THE ORDER OF THE TRIBUNAL. THE TRIBUNAL H AS DELETED THE ADDITION, IF ANY, COMPUTED ON THE BASIS OF DVOS REPORT BECAU SE THE TRIBUNAL HAS OBSERVED THAT IF THE VALUE OF THE PROPERTY SHOWN BY THE ASSESSEE AS ON 1.4.1981 IS MORE THAN THE FAIR MARKET VALUE, THEN T HE AO HAS NO JURISDICTION TO MAKE REFERENCE TO THE DVO. IN THE ABSENCE OF ANY REFERENCE TO THE DVO, CAPITAL GAIN HAS TO BE COMPUT ED ON THE BASIS OF REGISTERED VALUERS REPORT SUBMITTED BY THE ASSESSE E. FOR THIS MA NO.10/AHD/2019 - 3 - PROPOSITION, THE TRIBUNAL HAS RELIED UPON THE DECIS ION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GAURANGIN IBEN S. SHODHAN, 367 ITR 238. THE TRIBUNAL HAS TAKEN INTO CONSIDERA TION AMENDMENT EFFECTED IN SECTION 55A W.E.F. 1.7.2012. THIS FIND ING OF THE TRIBUNAL, THOUGH COVERED THE ADDITION MADE BY THE AO AS WELL AS THE LD.CIT(A), BUT IF IT DOES GIVE ANY CONFUSION WHILE DETERMINING THE TAXABLE INCOME OF THE ASSESSEE, THEN, WE MAY REITERATE THAT ONCE R EFERENCE TO THE DVO IS INVALID, THEN BOTH THE REPORTS SUBMITTED BY HIM ARE REQUIRED TO BE IGNORED AND THE CAPITAL GAIN IN THE HANDS OF THE AS SESSEE IS TO BE COMPUTED BY TAKING COST OF ACQUISITION AS ON 1.4.19 81 ON THE BASIS OF REGISTERED VALUERS REPORT. IN OTHER WORDS, THE AD DITION MADE BY THE AO AS WELL AS ENHANCED BY THE LD.CIT(A), BOTH ARE NOT SUSTAINABLE. MA OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE MISC. APPLICATION OF THE ASSE SSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29 TH JULY, 2019. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER