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Income Tax Appellate Tribunal, “RAJKOT” BENCH, RAJKOT
Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD
PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax(Appeals)-1, Rajkot (‘CIT(A)’ in short), dated 22.12.2017 arising in the assessment order dated 27.03.2015 passed by the Assessing Officer (AO) under s. 143(3) r.w.s. 148 of the Income Tax Act, 1961 (the Act) concerning AY 2007-08.
The grounds of appeal raised by assessee reads as under:
“1. The learned Commissioner of Income Tax (Appeals) - 1, Rajkot has erred in confirming the action of the assessing officer in respect of
ITA No. 39/Rjt/2018 [Smt. Indumatiben G Parmar vs. ITO] A.Y. 2007 -08 - 2 - re-opening the assessment u/s.147 of the I T Act is unwarranted, unjustified and bad in law 2. The learned Commissioner of Income Tax (Appeals) - 1, Rajkot has erred in confirming the action of the assessing officer in respect of wrongly pass the order u/s. 143(3) r.w.s. 148 of the I T Act is unwarranted, unjustified and bad in Law. 3. The learned Commissioner of Income Tax (Appeals) - 1, Rajkot has erred in confirming the action of the assessing officer in respect of wrongly apply the section 50C of the Act and adopted the value of the property as per the Stamp Duty Authority and added to the total income of Rs.3,69,0607- is unwarranted, unjustified and bad in law. 4. The learned Commissioner of Income Tax (Appeals) - 1, Rajkot has erred in confirming the action of the assessing officer in respect of wrongly mentioned the facts in his body of order, it is totally against the facts of the case and pass the order with prejudice mind and making the addition on surmises and conjecture basis is unwarranted, unjustified and bad in Law. 5. The learned Commissioner of Income Tax (Appeals) - 1, Rajkot has erred in confirming the action of the assessing officer in respect of wrongly calculate the indexation Cost of Acquisition is also unwarranted, unjustified and bad in law. 6. The learned Commissioner of Income Tax (Appeals) - 1, Rajkot has erred in confirming the action of the assessing officer in respect of wrongly mentioned the facts in his body of order and pass the ex- party order is unwarranted, unjustified and bad in law. 7. The learned Commissioner of Income Tax (Appeals) - 1, Rajkot has erred in confirming the action of the assessing officer in respect of charging the interest u/s.234A, 234B & 234C is unwarranted, unjustified and bad in law. 8. The learned Commissioner of Income Tax (Appeals) - 1, Rajkot has erred in confirming the action of the assessing officer in respect of initiated the penalty proceedings u/s. 274 r.w.s. 271(1)(c) of the I T Act is unwarranted, unjustified and bad in law.”
As per Ground No.1, the assessee seeks to challenge the jurisdiction assumed under s.147 of the Act, the aforesaid ground is dismissed and not pressed.
Ground Nos. 2 to 6 concerns addition of Rs.3,69,000/- by applying Section 50C of the Act.
ITA No. 39/Rjt/2018 [Smt. Indumatiben G Parmar vs. ITO] A.Y. 2007 -08 - 3 -
The grievance of the assessee is against the application of Section 50C of the Act and taking the sale consideration as per District Valuation Officer’s report as against the sale consideration declared by the assessee.
We have carefully considered the rival submissions on the issue and perused the order of the CIT(A). The CIT(A) has rejected the case of the assessee for adoption of sale consideration having regard to Section 50C of the Act. The CIT(A) has also examined the dispute of indexed cost of improvement. The CIT(A) has dealt with the issues raised as under:
“6.3 Ground of appeal no 3 In this ground the grievance of the assessee is against application of section 50C and taking the sale consideration as per DVO's report as against that declared by the assessee. I find that the AO has concluded that: "Considering the valuation report, the long term capital gain is re- computed as under: Total sale consideration Rs.4,34,700/- (FMV as per valuation report Rs.3,49,400+Rs.5,20,000 =Rs.8.69,400/-, 50% share ofRs.8,69,400/-=Rs.4,34,700/-) Less: indexed cost : Cost of acquisition (33590+685+2690+3760=40725 x 50%) =20362x519/161=65640 Rs. 65,640/- Long Term Capital Gain Rs.3,69,060/- Having considered relevant facts and rival contentions I find that in view of objection by the assessee against adopting the sale consideration at the value assessed by the Stamp duty Valuation authority, the AO of other co- seller had referred the impugned properties for valuation to District Valuation Officer. The DVO lowered his first estimate after considering the objections of the co-seller. Therefore, in view of the provisions of the section 50C, the AO's action in adopting the value estimated by DVO (which fortunately for assessee is lower than the Stamp Duty Valuation) is fairly valid and reasonable and therefore, calls for no interference. The ground of appeal is rejected.
6.4, Ground of appeal no. 5 The appellant in support of this ground has argued at length that he ought to have been allowed indexed cost of improvement. I find that the assessee failed to prove before AO that he incurred any cost of improvements. The A.O. has observed that- "Neither any details nor any documentary evidences in respect of cost of improvement viz copy of lay out plan, copy of completion
ITA No. 39/Rjt/2018 [Smt. Indumatiben G Parmar vs. ITO] A.Y. 2007 -08 - 4 - certificate, copy of the bills e/c. are submitted. In view of the same, the contention of cost of improvement W not accepted. Therefore, the same is taken as nil. " I also find that in case of other co-seller Shri Dharmendrasinh D Parmar The AO has very elaborately and cogently discredited the affidavit of said contractor claiming to have carried out the alleged construction. Besides, the AO'S observation in that case that cost of construction claimed on boundary etc. was 10 times the cost of purchase of plot itself is also noteworthy. I also find from the sale deed that what has been sold are plots of land, The sale deed does not mention that the plots were sold with any construction on them. Therefore, in my considered opinion, the assessee's claim of cost of construction has been rightly rejected by the AO. The action of the AO is upheld and ground of appeal is rejected.”
The assessee could not dispute the finding of the CIT(A) in the course of hearing successfully. We find the reasoning laid by the CIT(A) to be on sound footing. Without repeating the observations of the CIT(A), we endorse the same.
In the result, the appeal of the assessee is dismissed on merits.
This Order pronounced in Open Court on 08/07/2019
Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 08/07/2019 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 ।