VINAYA ABHIJIT GAJENDRAGADKAR,PUNE V. ITO WARD 2(3), PUNE

ITA 585/PUN/2025

AI Insights

The case involves Vinaya Abhijit Gajendragadkar, who, along with 16 co-owners, entered into a Joint Development Agreement for the sale of immovable property. The Income Tax Officer made additions for long-term capital gains for A.Y. 2012-13 and A.Y. 2014-15 based on the same transaction. The Tribunal found that the AO erred in making additions for both years and emphasized that the Fair Market Value for tax purposes should be considered as of the date the agreement was entered into, not the date of the conveyance. The Tribunal also noted procedural lapses in the handling of the appeal for A.Y. 2012-13, leading to its remand for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126815 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Other Referred Cases: PCIT (C) vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH SRIVASTAVA
• Assessee Lawyers: SHARAD VAZE
• Keywords: Set aside; Reasonable cause; Sale consideration of property below Jantri Value; Fair market value; Grounds of appeal; National Faceless Appeal; HRA; AMP; Section 56(2)(vii)(b); Statistical purposes; Department
• Section: 56(2)(vii)(b); 15

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.586 and 585/PUN/2025 Assessment Years : 2012-13 and 2014-15 Vinaya Abhijit Gajendragadkar, B-2, Kailas Dham, Aundh Road, Kirkee – 411 020 Pune, Maharashtra PAN : ARJPG6163C Vs. Income Tax Officer, Ward-2(3), Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned two appeals at the instance of assessee pertaining to assessment years 2012-13 and 2014-15 are directed against the separate orders both dated 14.02.2024 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income Tax Act, 1961 (in short ‘the Act’) which inturn are arising out of the respective Assessment orders passed u/s.144 r.w.s.147 of the Act. 2. The common grievance in both the instant appeals is firstly against the addition made for long term capital gain of Rs.30,61,600/- and Rs.32,62,366/- for A.Yrs. 2012-13 and 2014- 15 and secondly that the addition on similar ground has been made for both the impugned assessment years and thirdly no fair opportunity was granted by ld.CIT(A). Appellant by : Shri Sharad Vaze Revenue by : Shri Akhilesh Srivastava Date of hearing : 21.04.2025 Date of pronouncement : 25.04.2025 ITA Nos.586 and 585/PUN/2025 Vinaya Abhijit Gajendragadkar 2 3. At the outset, Ld. Counsel for the assessee submitted that the transaction in question is regarding the sale of immovable property held by the assessee and other 16 co-owners. It was submitted that the Joint Development Agreement was entered on 29.05.2007 and advance was paid through cash and cheque modes. Thereafter, Confirmation Deed was firstly entered on 30.11.2010 and then Revised Joint Development Agreement was entered on 09.02.2011 and possession given in the month of July 2011. He also submitted that on 29.09.2013 the Conveyance Deed was finally executed after the completion of Joint Development Agreement. The consideration received by the assessee and other co-owners was Rs.4,65,23,384/- whereas the value adopted by the Stamp Valuation Authority for calculating the stamp duty was Rs.7.19 crore He further stated that firstly the valuation of the property for the purposes of stamp duty should be adopted as prevailing on the date of entering the Joint Development Agreement on 25.05.2007 when the advance was paid through Banking Channel. Secondly, it was contended that the taxability of the transaction could be examined for the year A.Y. 2012-13 but not for A.Y. 2014-15. However, Ld. AO has made addition on the very same ground of calculating the long term capital gain on the alleged transaction for A.Y. 2012-13 as well as A.Y. 2014-15. He also referred to the paper book for both the impugned years placed on record running into 96 pages containing all the necessary details. 4. On the other hand, ld. Departmental Representative supported the orders of the lower authorities. 5. We have heard the rival contentions and perused the record placed before us. Ld. AO has made addition for long term capital ITA Nos.586 and 585/PUN/2025 Vinaya Abhijit Gajendragadkar 3 gain at Rs.30,61,600/- and Rs.32,62,366/- for A.Yrs. 2012-13 and 2014-15. Both these additions have been made by way of calculating the long term capital gain from the very same transaction wherein the assessee along with other 16 co-owners entered into Development Agreement with Om Ved Turnkey Project Developers on 29.05.2007 for the sale of immovable property situated at Village Mouje Charholi, Taluka Haveli, District Pune. Sale agreement was revised vide Joint Development Agreement dated 09.02.2011 (possession given in the month of July, 2011) for consideration of Rs.4,65,23,384/- but the stamp duty was calculated on the Fair Market Value of the property at Rs.7.91 crore. Details of the documents and payments received by the assessee and other co-owners is as under : A. Chronology of Events : Sr. Event Date Remark 1 Token Advance 01/02/2007 Cash as Visar Pavati 2 Token Advance 25/05/2007 Token against Development Agreement 3 Joint Development Agreement (JDA) 29/05/2007 JDA executed for Rs.500.00 lakhs. One Tenant in the Court 4 Confirmation Deed 30/11/2010 Executed after Court settlement of the dispute 5 Revised JDA 09/02/2011 Price revised to Rs.465.23 with the liability of litigant tenant 6 Possession July 2011 Possession after receipt of total consideration 7 Conveyance 29/09/2013 Conveyance executed after completion of JDA. Stamp duty value Rs.791.28 lakhs B. Detail of Sale Consideration : Sr. Date Total Payment Assessee’s share Cheque Number for Assessee 1 01/02/2007 3,33,000 6,937 By cash 2 25/05/2007 6,67,000 13,875 Ch.No.032014 ITA Nos.586 and 585/PUN/2025 Vinaya Abhijit Gajendragadkar 4 3 18/10/2010 1,00,00,000 4,16,567 Ch.No.032081 4 18/02/2011 13,80,846 58,026 Ch.No.032228 5 15/04/2011 1,13,80,846 4,74,202 Ch.No.032221 6 03/06/2011 1,13,80,846 4,74,202 Ch.No.032235 7 30/07/2011 1,13,80,846 4,74,202 Ch.No.032233 Total Rs. 4,65,23,384 19,11,074 6. From perusal of the above details, we firstly notice for entering into Development Agreement, advance in cash was received on 01.02.2007 and through banking channel vide Cheque bearing No.032014 on 25.05.2007. Therefore, in view of 2nd proviso to section 56(2)(vii)(b) of the Act for the purposes of stamp duty valuation, Fair Market Value as on 25.05.2007 should have been considered by Ld. AO for calculating long term capital gain for the year when the consideration is received and possession is passed on. We further notice that the AO has made the addition for the very same transaction for A.Y. 2012-13 and A.Y. 2014-15. The reason for such addition for A.Y. 2012-13 was the possession given by the assessee and other co-owners in July, 2011 and the reason for making addition for A.Y. 2014-15 is because the Conveyance Deed was executed on 29.09.2013. We however are of the view that ld. AO should have examined the transaction of long term capital from the alleged sale of immovable property by the assessee and other co-owners while calculating the income for A.Y. 2012-13 only and ld. AO grossly erred in making the addition for the very same transaction for A.Y. 2014-15. 7. We therefore set-aside the impugned order for A.Y. 2014-15 and delete the impugned addition made by Ld. AO. 8. So far as appeal for A.Y. 2012-13 is concerned, we notice that the impugned order is exparte and ld.CIT(A) has not passed a speaking order. Hon’ble Bombay High Court in the case of PCIT ITA Nos.586 and 585/PUN/2025 Vinaya Abhijit Gajendragadkar 5 (C) vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bombay) has held that ld.CIT(A)/NFAC is obliged to dispose of the appeal on merits even in an exparte order. In view thereof and considering the submissions of the assessee, we deem it proper to restore the issue on merits to the file of ld.CIT(A) for necessary adjudication to be carried out in light of our observations (supra) about application of both the provisos to section 56(2)(vii)(b) of the Act and calculation of Fair Market Value of the immovable property in question as on 25.05.2007 for calculating the Long Term Capital Gain. Ld.CIT(A) shall pass a speaking order as contemplated u/s.250(6) of the Act. Needless to say, the assessee will be given reasonable opportunity of hearing. Assessee is further directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the ld.CIT(A) shall be free to proceed in accordance with law. Findings of ld.CIT(A) is set aside and effective grounds of appeal raised by the assessee on merits in the instant appeal for A.Y. 2012-13 are allowed for statistical purposes. 9. In the result, the appeal of the assessee for A.Y. 2014-15 is allowed and appeal for A.Y. 2012-13 is allowed for statistical purposes. Order pronounced on this 25th day of April, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 25th April, 2025. Satish ITA Nos.586 and 585/PUN/2025 Vinaya Abhijit Gajendragadkar 6 आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "