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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SHRI WASEEM AHMED
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)-2, Rajkot, dated 09/04/2017 ( in short “Ld.CIT(A)”) arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") dt. 28/03/2015 relevant to the Assessment Year 2011-12.
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The assessee has raised the following grounds of appeal:
The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The learned CIT(A) erred on facts as also in law in not considering the Fair Market value of the property as on 01.04.1981 determined by the DVO on the ground that same is beneficial to assessee. The AO may kindly be directed to adopt market value as on 01.04.1981 as determined by the valuation officer while working out the capital gain. 3. The learned CIT(A) erred on facts as also in law in not admitting the additional evidence furnished during the appellate proceedings and thereby confirming the addition of ? 6,95,2057- made on account of alleged unexplained cash deposits in bank account. The AO may kindly be directed to admit additional evidences and delete the addition made.
Your Honour's appellant craves leave to add, amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.
The 1st issue raised by the assessee is that the learned CIT (A) erred in not considering the value of the property as on 1st April 1981 determined by the DVO.
Briefly stated facts are that the assessee is an individual and an employee of Irrigation Department of Gujarat Government. The assessee is 1/10th owner in agricultural land which was sold during the year at ₹67 lakhs only. However, the AO found that the value determined for stamp duty purposes was of Rs. 2,24,60,000 only. Accordingly, the AO has taken the 1/10th share of the value of Rs. 22,46,000.00 as sale consideration belonging to the assessee. Thus the AO worked out the capital gain as detailed under:
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Full Value of Property (Sec 50C) Rs.22,46,000/- Less: Cost of Acquisition x Index cost of sael/index cost of purchase (Rs.98,824(1/10th of 9,88,240 x 711/100 = Rs.7,02,639/- Rs.7,02,639/- Rs.15,43,,361/- Less Deduction u/s.54 (Sale Rs.11,00,000 + stamp Exp. Rs.1,34,900/- + Registration charges Rs.11,480/- =Rs.12,46,380 Rs.12,46,380/- Long Term Capital Gain Rs.2,96,981/-
The aggrieved assessee preferred an appeal to the learned CIT (A). The assessee before the learned CIT (A) inter-alia submitted that the DVO had valued the property as on 1st April 1981 at ₹18,41,700.00 whereas he has taken the value as on 1st April 1981 at Rs. 9,88,240.00 only. However, the AO was under the obligation to take the value of the property as on 1st April 1981 in determining the long-term capital gain as per DVO valuation.
3.1 The assessee also submitted that the AO was under the obligation to allow the relief to the assessee even the assessee failed to claim the same in the income tax return. The assessee in this regard placed his reliance on the CBDT Circular No. 14 (XL-35) dated 11-4-1955.
3.2 However, the learned CIT (A) found that the DVO has declared the stamp duty value for ₹ 1,65,30,600 for the purpose of Stamp duty. Accordingly, the learned CIT (A) directed the AO to take the sale consideration as value suggested by the DVO. However, the learned CIT (A) rejected the contention of the assessee for taking the value of the property as on 1st April 1981 as determined by the DVO.
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Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us.
The learned AR before us filed a paper book running from pages 1 to 67 and submitted that the assessee is liable to tax on the income as per the provisions of law. Accordingly, the AO is under the obligation to take the value of the property as on 1st April 1981 as determined by the DVO.
On the other and the learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions and perused the materials available on record. The issue in the instant case relates to the value to be taken as on 1st April 1981 to determine the long-term capital gain. The assessee has taken the value as on 1st April 1981 at ₹ 9,88,240.00 whereas the DVO has valued the property as on 1st April 1981 at ₹ 18,41,700.00 only. Accordingly, the assessee claimed his cost of acquisition as on 1st April 1981 at ₹ 1,84,170.00 being 10% share in the property during the proceedings. However, the claim of the assessee was rejected by the authorities below.
6.1 The provisions of the Income Tax Act require to levy the tax on the income as per the provisions of law. Accordingly, the assessee is entitled to the relief/benefit which he has not claimed in the income tax return but deserves for the same. Thus the AO is under the obligation to extend all the benefits for which assessee is entitled under the provisions of law. In the case on hand, the assessee has shown lesser value as his cost of acquisition as on 1st April 1981 whereas as per the DVO the value of the property as on 1st Page 4 of 7
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April 1981 was higher than the value declared by the assessee. Accordingly, the assessee is entitled to the relief in the cost of acquisition of the impugned property in pursuance to the DVO report though the same was not claimed by the assessee.
6.2 At this juncture we are inclined to refer the contents of the circular issued by the CBDT as discussed above which reads as under:
“3. Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Department.”
6.3 From the above circular, it is clear that the Revenue should not take any benefit for the ignorance of the assessee. Accordingly, the assessee should get the benefit for which he deserves. In the given facts and circumstances the assessee deserves higher value of the cost of acquisition as on 1st April 1981 as per the report of the DVO. Therefore in our considered view, the value as determined by the DVO as on 1st April 1981 should be accepted while working out the capital gain tax liability. In view of the above, we reverse the order of the authorities below and direct the AO to take the value as determined by the DVO for the cost of acquisition of the impugned property as on 1-4-1981. Hence the ground of appeal of the assessee is allowed.
The 2nd issue raised by the assessee is that the learned CIT (A) erred in not admitting the additional evidence furnished during the appellate proceedings.
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The assessee during the year has deposited cash/other credits in his saving bank account amounting to ₹6,95,005.00 but failed to justify the source of such deposits in his bank account. Therefore the same was added to the total income of the assessee.
The aggrieved assessee preferred an appeal to the learned CIT-A. The assessee before the learned CIT (A) files additional evidence to justify the source of the cash deposited in his bank account. But the learned CIT (A) did not admit the additional evidence filed by the assessee by observing that the assessee was provided sufficient opportunity of being heard during the assessment proceedings. Accordingly, the learned CIT (A) confirmed the order of the AO.
Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us. At the outset, we note that the assessee was issued the show cause notice by the AO vide dated 18th March 2014 to justify the source of cash in the bank account. However, the assessee expressed his inability vide letter dated 24th of March 2014 to file the documentary evidence in support of the deposit of cash in the bank account on the ground of ill health. But the AO without considering the request of the assessee has rejected his contention by observing that the assessment is getting time-barred by 31st March 2014.
9.1 Considering the reasons for not filing the supporting evidence before the AO, we are of the view that the learned CIT (A) should have admitted the additional evidence placed by the assessee in the interest of justice and fair play. Accordingly, we direct the AO to admit the additional evidence as
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discussed above and adjudicate the issue afresh as per the provisions of law. Hence the ground of appeal of the assessee is allowed for statistical purposes.
In the result, the appeal partly allowed for statistical purposes.
Order pronounced in the Court on 26/04/2019 at Ahmedabad.
-Sd- -Sd- (Ms. MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 26/04/2019 Manish
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