MAROTRAO LAXMAN KHADSE,NAGPUR vs. INCOME TAX OFFICER, WARD 3(4), NAGPUR

ORDER

PER DR. DIPAK P. RIPOTE, AM:

“1. On the facts and in circumstances of the case the Learned CIT (Appeals) erred in law on merit in confirming addition of Rs.95,99,915/- as Long Term Capital Gain.

3. The assessee craves for leave to add, amend, alter or delete any of the grounds of appeal with the permission of the Hon’ble Tribunal.”

Submission of ld.AR : 2. At the time of hearing, no one appeared on behalf of the assessee. No one had appeared for hearing on 20.12.2023 and 29.01.2024. However, assessee had filed a paper book on 28.11.2023. The paper book contains written submission, copy of agreement dated 01.05.2008 in Marathi Language, Copy of Bank Statement, Copy of Ready Reckoner Rate for 2008. The relevant part of the written submission is reproduced here as under : “Ground No.1 : Addition of Rs.95,99,915/- as Long Term Capital Gain ………

The assessee has sold Agricultural Land for actual consideration Rs.70 Lakhs. Its stamp valuation was Rs.229.13 Lakhs. It was valued by the Valuation Officer of Income Tax Department to Rs.142.209 Lakhs.

The Property was agreed to be sold vide agreement dated 01st May 2008 for Rs.70.00 Lakhs. In agreement the Assessee has received Rs.1,00,000/-. The assessee has received Rs.50,000/- by cheque dated 01/05/2008.

The valuation of land should be considered as on 01.05.2008 instead of 30.12.2013. The stamp valuation of sold land was Rs.40 lakhs in 2008. The consideration received by the assessee is Rs.70 Lakhs, therefore, consideration received is more than stamp duty value.”

Findings & Analysis : 5. We have heard ld.DR for the Revenue. We have studied the submission filed by the assessee on 28.11.2023. We have also studied the orders of ld.CIT(A) and AO.

5.1 In this case, the AO received information that assessee had sold land admeasuring 1.00 Hectare(2.47 Acre), PH No.37A, Kh. No.149/2 at Mouza Hudkeshwar Dist.Nagpur on 30.12.2013 for a total consideration of Rs.70,00,000/- (Market Value for Stamp duty purpose is Rs.2,29,13,000/-). The AO issued noticed under section 148 to the assessee. Assessee filed return of income for A.Y.2014-15 on 31.03.2016 declaring long term capital gain of Rs.2,37,809/- by taking sale consideration at Rs.70,00,000/-. Assessee also claimed exemption under section 54B of Rs.40,80,000/- being invested in new agricultural land. The AO issued show cause to the assessee stating that why long-term capital gain shall not be calculated as per section 50C of the Act. Subsequently, AO referred the issue to the valuation officer of the Income Tax Department. The DVO vide his report dated 14.11.2019, arrived at the value of the land as on 30.12.2013 at Rs.1,42,20,900/-. The AO accordingly, calculated long term capital gain. The AO rejected assessee’s claim of cost of improvement of Rs.6 Lakhs for non-submission of details. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A). Ld.CIT(A) in para 7.4 observed that assessee failed to file reply to various notices issued by ld.CIT(A). The ld.CIT(A) held that AO’s order is as per law and upheld the addition.

5.2 Thus, it is observed that assessee had not made proper submissions before the ld.CIT(A) and AO. However, assessee had filed copy of agreement to sale dated 01.05.2008 for the impugned land situated at 37A, Kh. No.149/2 Hudkeshwar, Nagpur admeasuring 1.00 Hectare. According to the assessee, assessee had entered into the transaction for sale of the impugned land by agreement to sale dated 01.05.2008 for Rs.70 Lakhs. It is mentioned in the said agreement that assessee had received Rs.50,000/- on 01.05.2008. Assessee has also filed copy of bank statement to demonstrate the receipt of Rs.50,000/- on 01.05.2008. However, these documents were not filed before the AO and ld.CIT(A). Therefore, these documents become additional evidence. As per Rule 29 of the Income Tax Appellate Tribunal Rules, 1963, the ITAT has the power to admit additional evidence. In this case, the assessee is an agriculturalist who does not understand intricacies of the Income Tax Act. Therefore, the assessee could not make proper representation before the ld.CIT(A) and Assessing Officer. Before us, assessee has filed copy of the agreement to sale(in Marathi) dated 01.05.2008. This is a crucial evidence to decide the issue valuation of the land qua section 50C of the Act. If this evidence is not admitted, grave injustice will be done with the assessee. By admitting the evidence, no prejudice is caused to the Income Tax Department as Income Tax Department will be getting opportunity to verify the evidence.

5.3 The Hon’ble Punjab and Haryana High Court in the case of CIT Vs. Mukta Metal Works336 ITR 555(P & H) held as under : Quote,“15. As regards question 5, relating to additional evidence, we are of the opinion that the report of the Forensic Science Laboratory was a relevant material and so was the affidavit dated 27.12.2004 of the searched person. The additional evidence was necessary for just decision of the matter. At best, the deponent could be produced for cross-examination. The additional evidence can be allowed in the interest of justice if the same is authentic and necessary for the decision of the issue raised before the Tribunal. In the facts and circumstances, the Tribunal was not justified in declining to consider the additional evidence comprising of the opinion of the laboratory of the Government examiner and also the affidavit of the author of the diary, though the documents had direct bearing on the issue.” Unquote 5.4 Similarly, the Hon’ble Delhi High Court in the case of R Dalmia Vs. CIT 113 ITR 522 (Delhi) has observed as under : Quote, “it was submitted, again, merely in passing, and as an adjunct to the main submission on which we have already dwelt, that the Tribunal was in error in admitting the balance-sheets and profit and loss accounts of J.T. as additional evidence at the hearing of the appeal. It was conceded that the Tribunal had the power to admit additional evidence, and also that the Evidence Act, 1872, did not apply to its proceedings. There is no question of law which arises out of the course which the Tribunal followed, and the grievance of the assessee is simply that the additional evidence was admitted. No prejudice whatsoever was caused to him because the matter was remitted to the Appellate Assistant Commissioner for recording such further evidence as the assessee might care to offer. He chose to produce none. Whether to admit the additional evidence or not was for the Tribunal to decide. It had a discretion, and it was not suggested that it had acted on any wrong principle.” Unquote.

5.5 Therefore, in these facts and circumstances of the case, respectfully following the Hon’ble High Court(supra), we admit the additional evidence filed by the assessee, which is agreement to sale and copy of bank statement. Since these evidences were not before the AO and ld.CIT(A), we set-aside the order of the AO to the AO for de-novo adjudication after

Marotrao Laxman Khadse [A] considering these additional evidences. The AO shall grant opportunity to the assessee. Assessee shall file all necessary documents before the Assessing Officer. Accordingly, appeal of the assessee is allowed for statistical purpose.