SHRI UDAYVIRSINGH BHADAURIA,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-6(1) NOW WARD-7(2)(5), AHMEDABAD

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ITA 568/AHD/2016Status: DisposedITAT Ahmedabad12 October 2018AY 2011-124 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) should have accepted the assessee's request to refer the matter to the Departmental Valuation Officer (DVO) for proper valuation. Therefore, the matter was set aside and remanded back to the Assessing Officer.

What were the facts?

The assessee sold non-agricultural land and did not offer the short-term capital gain arising from the difference between the sale deed value and the Jantri rate. The Assessing Officer made an addition based on the Jantri value, which was confirmed by the CIT(A).

What were the issues?

Whether the CIT(A) erred in not referring the property valuation to the DVO when the assessee disputed the Jantri rate as the fair market value.

Which sections of the Income-tax Act were involved?

Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: SHRI PRAMOD KUMAR & SHRI MAHAVIR PRASAD

For Appellant: Shri Bhavesh Shah, AR

PER MAHAVIR PRASAD, JUDICIAL MEMBER

1.

This appeal by the Assessee is directed against the order of the Ld. CIT(A)-5, Ahmedabad dated 04.01.2016 pertaining to A.Y. 2011-12 and following ground has been taken:

ITA No. 568/Ahd/2016 2 . A.Y. 2011-12 1- The addition of Rs. 51,90,900/- on account of difference between Jantri Rate and Document Price of the property u/s. 50C of the Act confirmed by the Ld. CIT(A) may kindly be deleted or give necessary direction for referring the matter to DVO. 2- Such and further relief as the nature and circumstances of the case may justify.

2.

During the year under consideration, the assessee has sold non-agricultural land on 03.07.2010 for Rs.85,00,000/- at Survey No,386/3,4,5,6 and 7 at Village Saijpur Bogha, District Ahmedabad. On perusal of sale deed it was noticed that the purchaser has paid stamp duty for Rs.6,71,500/-. The determined Jantri value comes to Rs. 1, 37,04,08 1/-. As per Section 5 OC the sale consideration should be taken as per Jantri Value. Therefore, Jantri value is taken at Rs. 1,37,04,081/-. The working of capital gain is as under:- Sale consideration Rs.1,37,04,081/- Less: Purchase value Rs.70,00,000/- StampDuty Rs. 3.43.000/- Registrationfee Rs. 70, 180/- Rs. 74.13.180/- Rs. 62.90.900/- Less: Cost of improvement Rs. 11,00,000/- Short Term Capital Gain Rs.51,90,900/-

3.

The assessee has not shown short term capital gain in return of income. Therefore, a show cause was given to the assessee vide this office letter No.ITO/Ward-6(l)/UBB/F-60/show cause/2013-14 dated 23.12.2013 to show cause as to why addition of Rs.51,90,900/- should not be made in his total income. In response to show cause, the assessee vide letter dated 17.02.2014 submitted that he had filed a petition in Gujarat High Court and order may be kept in abeyance till the decision of Court or last date for passing the order whichever is earlier. The next hearing of assessee in Gujarat High

ITA No. 568/Ahd/2016 3 . A.Y. 2011-12 Court is fixed for 12.04.2014 and the assessment is getting barred by limitation on 31.03.2014, I have therefore no alternative except to finalize the order on the merit. The assessee has not offered any explanation to show cause till date of order. It is, therefore, held that the assessee has no explanation to show cause and accordingly addition of Rs.51,90,900/- is made. "

4.

Against the addition of Rs. 51,90,900/-, assessee preferred first statutory appeal before the ld. CIT(A) and request him to refer this matter to the DVO in order to ascertain the market value of the property. But ld. CIT(A) did not accept the plea of the assessee and confirm the addition of Rs. 51,90,900/-.

5.

Now appellant is before us.

6.

Appellant contended before us that there are various factors affected the market rate of property and said property situated in backward area where majority of the population are living below the poverty line and the property was situated just across public toilets hence the fair market value of the property was low and not representative of the Jantri value.

7.

We are of the considered opinion, that ld. CIT(A) should have accepted the prayer of the appellant for referring the matter to the DVO for valuation of the property but he failed to do so. Therefore, in these circumstances, we think it proper to set aside the order and send this matter back to the file of the ld. Assessing Officer who will refer this matter to the DVO in order to find out the exact value of the property. Thereafter, A.O. will decide the matter as per law.

ITA No. 568/Ahd/2016 4 . A.Y. 2011-12 8. In the result, appeal filed by the Assessee is allowed for statistical purpose.

Order pronounced in Open Court on 12 - 10- 2018

Sd/- Sd/- (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad: Dated 12 /10/2018 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad

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