INCOME TAX OFFICER, BARAN vs. SHRI CHAIN SINGH SINGHVI, BARAN

PER VIJAY PAL RAO, J.M. This appeal by the revenue is directed against the order dated 29th November, 2017 of ld. CIT (A), Kota for the assessment year 2011-12. The revenue has raised the following grounds of appeal :-

“ On the facts and in the circumstances of the case the ld. CIT (A), Kota has erred in :- (i) Deleting the addition of Rs. 77,94,725/- ignoring and without appreciating the fact that the AO made the addition u/s 50C on the basis of value of property determined by the DIG (Stamps); (ii) The appellant craves liberty to raise additional ground and to modify/amend the ground of appeal at the time of hearing.”

2 ITA No. 106/JP/2018 Shri Chain Singh Singhvi, Baran.

declared capital gain of Rs. 1,44,400/- from sale of land for a consideration of Rs.

12,00,000/-. The AO received an information from Stamp Valuation Authority

whereby the DLC value of the land was taken at Rs. 89,94,725/- instead of Rs.

12,00,000/-. Accordingly, the AO reopened the assessment to assess the capital

gain based on the revised valuation of the land by the Stamp Valuation Authority. In

the reassessment, the AO took the full value consideration at Rs. 89,94,725/- in

terms of section 50C of the IT Act and consequently computed the capital gain of

Rs. 79,39,125/- as against the capital gain declared by the assessee of Rs.

1,44,400/-. The assessee challenged the action of the AO before the ld. CIT (A).

The ld. CIT (A) after considering the order of the Tax Board pursuant to which the

value of the land was finalized at Rs. 12,00,000/- and deleted the addition made by

the AO.

material on record. The ld. D/R has submitted that the AO has computed the capital

gain as per the provisions of section 50C of the Act as the order of the Tax Board

was not available before the AO at the time of passing the assessment order.

On the other hand, the ld. A/R has submitted that the order of the Tax Board is not

an additional evidence but it is an order passed by the authority whereby the earlier

order of enhancing the value of the land by Stamp Valuation Authority was reversed

and the original value of the land at Rs. 12,00,000/- was restored.

3 ITA No. 106/JP/2018 Shri Chain Singh Singhvi, Baran.

3.1. Having considered the rival submissions as well as relevant material on

record, we find that the Rajasthan Tax Board, Ajmer vide order dated 21st April,

2017 remanded the matter of valuation of land for the purpose of stamp duty to the

Collector Stamps Kota. Pursuant to the said order, the Collector Stamps, Kota vide

order dated 3rd October, 2017 has determined the value of the land at Rs.

12,00,000/- for stamp duty purpose. Accordingly, the enhancement in the value by

the Stamp Valuation Authority was again revised to the original value of Rs.

12,00,000/-. The ld. CIT (A) has decided the issue by considering all these facts as

under :-

“I have gone through assessee's submission and AO's findings.

The entire matter in the Grounds of appeals raised pertains to the enhancement in the valuation of the DLC rate and resultant figure of consideration worked out by the supervisory authority to the Sub Registrar, Chhabra, the DIG (Stamps), Kota.

The appellant's plea was that the value was revised after substantial perod of time and that under the impression that this was taxable gains he had filed Capital gains related return though he later realized that the land being agricultural was covered by the notification No 9447 dated 6.01.1994 and the Baran municipality had not been notified then so his land could not be categorized as urban, hence not eligible for claim u/s.2(14).

On the other hand, the only basis of the enhancement done by the A.O u/s 50C was the value increased by the DIG (Stamps), Kota, treating the land as commercially assessable. The appellant who was in appeal to the Rajasthan Kar Board against the refrred order of the DIG (Stamps), Kota has got relief from the Board which directed the Collector (Stamps) , Kota to reassess the sale value of the said property at three times of Agricultural land vide the order dated 21/04/2017. The Tax Board has also held that the land, though agricultural, but is within the Baran municipal limits but has not .acquired any commercial character. However, its agricultural operations also not being proved, the assessability was fixed at three times of the agricultural land rates.

Following the above order of the tax board, the Collector (Stamps) Court vide their order dated 03.10.2017 has made re-valuation of the said agriculture land in response to order dated

4 ITA No. 106/JP/2018 Shri Chain Singh Singhvi, Baran.

21.04.2017 of the Rajasthan Tax Board, and valuation of the said agriculture land has been finalized at Rs. 12,00,000/-, which value the appellant has already declared for Capital Gains purposes in his return.

Thus the very 'basis on which the A.O had based, his own valuation u/s 50C and created additional demand has now been liquidated by the orders referred above. In view of the same and the above discussion 1 hold that-

The land in question was not proved to be used for agricultural operations and was rightly brought within the purview of Capital Gains Tax as also shown in the return filed. The same was not eligible for exemption u/s 2(14) of the I.T. Act. This part of the Grounds of appeal is dismissed.

Secondly, in view of the above discussed orders of the revenue authorities, the valuation has to be taken at Rs. 12,00,000/- and Capital Gains tax computed accordingly. The addition based on the value of Rs. 89,94,725/- is not upheld and is directed to be deleted.”

In view of the facts and circumstances of the case when the AO made the addition

on the basis of the enhanced valuation by the Stamp Valuation Authority which was

subsequently revised to the original valuation of Rs. 12,00,000/-, then the addition

made by the AO would not survive. Accordingly, we do not find any error or

illegality in the impugned order of the ld. CIT (A).

Order pronounced in the open court on 14/05/2018. Sd/- Sd/- ¼ HkkxpUn½ ¼ fot; iky jkWo ½ (BHAGCHAND) ( VIJAY PAL RAO ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member

Tk;iqj@Jaipur fnukad@Dated:- 15/05/2018. das/

5 ITA No. 106/JP/2018 Shri Chain Singh Singhvi, Baran.

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