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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR
PER MAHAVIR PRASAD, JM:
This appeal has been preferred by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-6, Ahmedabad [ in short ‘CIT(A)’], appeal No. CIT(A)-6/167/14-15 dated 24.03.2017 arising from
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the assessment order dated 11.11.2014 and following grounds have been taken by the assessee:
“Learned Commissioner of Income tax (Appeals) (ld. CIT(A)) has erred in confirming the valuation taken by ld. AO by ignoring the provisions of section 50C(2) of the Act. He ought to have referred the matter to the DVO for determined FMV of the property sold. The ld. AO may please be directed to refer the matter to the DVO to meet the ends of justice.
Ld. CIT (A) as well as Id. AO has erred in working out STCG at Rs.1538130/- without giving sufficient opportunity to the appellant and has violated the principal of natural justice. The order passed by ld. AO as well as CIT(A) may please be set aside on this particular point of infirmity of the orders in the interest of justice.
Ld. CIT{A) has erred in not allowing legal ground regarding applicability of the provisions of sec. 50C (2) of the Act though the same was claimed during the remand proceedings on the plea that the same was not claimed in during the assessment proceedings. This ground being legal ground can be taken at any stage of the proceedings. It is most humble prayer of the appellant that either ld. CIT(A) or ld. AO please be directed to refer the matter to the DVO considering the legality of ground to meet the ends of justice.”
Facts of the case are that:
"4. Short Term Capital Gain During the course of proceedings, it was noticed that during the F.Y. 2011-12, the assesses along with other 7 other co-owners had purchased a land situated at RS No. 96/3 at Village Didoli, Surat (now within Surat City) for o consideration of Rs. 1,93,20,000/- as per sale deed made on 30.06.2011. For the said purchase of land, the assessee nod contributed Rs.18,00,000/-. The said land was sold by the assessee along with other 7 co-owners for a consideration of Rs. 2,10,00,000/-as per sale deed made on 24.01.2012. During the course of proceedings it was also noticed that the stamp duty paid by the purchaser on the said land was amounted to Rs.13,52,000/-. It was further noticed that the assessee had received Rs. 26,25,000/- out of sale price of Rs. 2,10,00,000/- on account of this transaction, which works out to 12.5%. However, he has not offered any capital gain in his return of income filed for A.Y. 2012-13 in respect of the property sold by him along with other 7 co-owners during the F.Y. 2011-12. Moreover, during the course of proceedings it was noticed that the stomp duty paid by the purchaser for the purchase of land (value of which was Rs. 2,10,00,000/- as per sale deed made on 24.01.2012) was amounted to Rs.13,52,000/- because the value of the land adopted by the stamp valuation authority for the purpose of payment of stamp duty works out to Rs.2,76,02,040/-, but the value shown in the sale deed is Rs. 2,10,00,000/-. Therefore, the
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provisions of section 50C of the Income Tax Act, 1961 was clearly attracted in the assessee's case. For the sake of brevity, the relevant provisions of section 50C are reproduced as under: - "Special provision for full value of consideration in certain cases. 50C (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed (or assessable) by any authority of o State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed for assessable) shall, for the purpose of section 48, be deemed to be full value of the consideration received or accruing as a result of such transfer" Accordingly, the sale value of the said land is considered at Rs. 2,76,02,040/- instead of Rs. 2,10,00,000/- u/s. 50C of the Act and 12.5% of the said value works out to Rs. 34,50,255/- which is the consideration deemed to be received by the assessee on account of the land sold by him alongwith other 7 co-owners as per sale deed dtd. 24.01.2012, u/s. 50C of the Act. In the circumstances, vide this office letter No.BNR/Ward-2(3)/GVM/50-C/14-15 dtd. 03.11.2014 the assessee was asked to show cause as to why on addition of Rs. 15,38,130/- on account of short term capital gain should not be made to the assessee's total income declared for A.Y. 2012-13 u/s. 50C of the Act. The assessee, however, has neither made any submission against the said letter nor made any objection against the proposal of the revenue. Therefore, the short term capital gain of the assessee during the F. Y. 2011-12 on account of sale of land as per sale deed mode on 24.01.2012 is worked out as under: Sale value of the land as per section : Rs.2,76,02,040 50C of the Act as discussed above Consideration deemed to be received by the assessee out of Rs. 2,76,02,040/- as per section 50C of the Act @ 12.5% : Rs. 34,50,255 Less: Cost of acquisition : Rs 19,12,125 (Rs.18,00,000/- against cost and Rs. 1,12,125/-) --------------------- Short Term Capital Gain : Rs. 15,38,130
Accordingly, short term capital gain of Rs. 15,38,130/- is added to the total income of the assessee by the AO.
Against the addition of Rs.15,38,130/-, the assessee preferred first statutory appeal before the learned CIT(A) who dismissed the appeal of the assessee.
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Now, by way of second appeal, assessee is before us.
We have gone through the relevant record and impugned order. In this case, the dispute is with regard to calculation of capital gain tax. Revenue authorities have taken value of the land as per jantri price whereas assessee’s contention is that jantri price is not correct value and assessee requested lower authorities to refer this matter to the District Valuation Officer to determine the exact value of the property but learned AO did not exceed his prayer and made addition of Rs.15,38,130/-.
In support of its contention, learned AR cited the order of the co- ordinate ‘SMC’ Bench in ITA No. 3208/Ahd/2015, order dated 22.08.2017, wherein it is held:
“5. I have heard the rival submissions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. I find that as noted by the Tribunal in the case of Narendra Dahyabhai Patel vs. ITO (supra) the law is now well settled that even in the absence of a specific request from the assesses, the A.O. has to give an option to the assessee to follow the course provided by law under section 50C(2). There is a direct decision to this effect by Hon'ble Calcutta High Court in the case of Sunil Kumar Agarwal vs. CIT [(2015) 372 ITR 83 (Cal]. No judicial precedence to the contrary has been brought to my notice. Respectfully following the esteemed view of the Hon'ble Calcutta High Court in the case of Sun// Kumar Agarwal vs. CIT (supra), I uphold the plea of the assessee and remit the matter to the file of Assessing Officer for adjudication denovo after referring the matter to the DVO under section 50C(2). As the matter has been remitted to the file of Assessing Officer with the above directions, it is not really necessary to deal with other aspects of the matter."
Thus, having parity with the aforesaid judgment and in the interest of justice, we also think it proper to set aside this matter to the file of the AO who will refer this issue to District Valuation Officer to determine the value
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of the property and thereafter, AO will decide the issue of capital gain as per provisions of law after affording opportunity of being heard to the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes as stated above.
This Order pronounced in Open Court on 25/03/2019
Sd/- Sd/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 25/03/2019 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।