SHRI KIRITBHAI BHIKHABHAI PATEL,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-14(3), AHMEDABAD

SMC-ITA No. 384/Ahd/2016 Kiritbhai Bhikhabhai Patel vs. ITO AY : 2010-11 Page 1 of 4

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD [ Before Shri Pramod Kumar, Accountant Member ] ITA No. 384/Ahd/2016 Assessment Year : 2010-11 Kiritbhai Bhikhabhai Patel ......…………......Appellant Flat No.101, Jivabhai Tower, Lad Society Road, Vastrapur, Ahmedabad-380 054 [PAN : ACPPP 7268 N]

Vs.

Income Tax Officer .......................Respondent Ward 14(3), Ahmedabad

Appearances by: Written submission - for the appellant VK Singh, for the respondent

Date of concluding the hearing : 19.06.2018 Date of pronouncing the order : 20.09.2018

O R D E R 1. By way of this appeal, the assessee-appellant has challenged correctness of the order dated 14th December 2015, passed by the by the CIT(A)-4, Ahmedabad, in the matter of assessment under section 143(3) of the Income-tax Act, 1961 for the assessment year 2010-11.

“1.1 That on the facts and in the circumstances of the case and as per law, learned CIT(Appeals) erred in sustaining the additions of Rs.17,78,350 on the Ground of Undisclosed Long term capital gain on sale of Agricultural Land. 1.2 That learned CIT (Appeals) was ought to have accepted the F.M.V., of Rs. 1587710, as on 1-04-1981 as estimated by the Government Approved Valuer against value, as on same date, of Rs.735948, estimated by the D.V.O. appointed u/s. 55A of the I.T. Act, 1961. 1.3 That learned CIT (Appeals) was ought to have consider the fact that A.O. had no jurisdiction, as per law prevailing for the year under consideration, under section 55A of the Income-tax Act, 1961 as value determined by the Government Approved Valuer, for the land under

SMC-ITA No. 384/Ahd/2016 Kiritbhai Bhikhabhai Patel vs. ITO AY : 2010-11 Page 2 of 4

consideration, was higher than same determined by the D.V.O. As per the ratio laid down by jurisdictional Tribunal and High Court, in various cases, learned A.O. had no jurisdiction under section 55A of the I.T.Act as per the facts of the case.

1.4 Without prejudice. Learned CIT (Appeals) failed to bring on record any reason for accepting the value determined by the D.V.O. and rejecting the value estimated by the Government Approved Valuer.” 3. To adjudicate on this appeal, a few material facts need to be taken note of. The assessee before us is a salaried tax payer and, during the relevant previous year, he along with some co-owners sold an agricultural land for a consideration of Rs.1.01 crores. In the computation of capital gains on the sale of land, the valuation of property as on 01.04.1981 was taken at Rs.15,77,710/-. This valuation was done by a Government Approved Valuer by adopting the rate of Rs.339/- per square meter. The Assessing Officer was of the view that the rate is very excessive and he, therefore, referred the matter to the District Valuation Officer (DVO). As per the DVO’s report, the land was valued at Rs.7,53,948/- by adopting the rate of Rs.162/- per square meter on the basis of comparable sale instances. Accordingly, the capital gains were recomputed by adopting the fair market value as on 01.04.1981 at Rs.17,78,350/-. Aggrieved, inter alia, by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A). It was, inter alia, contended that the Assessing Officer did not have jurisdiction to make a reference to the DVO under Section 55A of the Act on the facts of this case. Learned CIT(A) rejected the same and observed as follows:-

“7.3 Before me, it was argued on behalf of the appellant that since F.M.C. of the land under consideration as determined by the Registered Valuer appointed by the appellant was higher, learned AO had no jurisdiction under Section 55A as it applicable for the year under consideration.

7.4 I have considered the rival submissions, relevant provisions of the Income-tax Act for the year under consideration and judicial pronouncement. In my considered view, in the instant case appellant had not disclosed the income from sale of Urban Agricultural Land in his return of income for the year under consideration. It was only when AO issued notice under section 142(1) calling for information relating to the Gain on sale of land under consideration, appellant appointed Registered Valuer to determine F.M.V. of the land as on 01.04.1981. Hence, in my considered view Assessing Officer had jurisdiction under sub-clause (ii) of cl. (b) of Section 55A of the I.T. Act, which deals with other relevant circumstances in the opinion of the Assessing Officer to refer the valuation of capital asset to a valuation officer.

SMC-ITA No. 384/Ahd/2016 Kiritbhai Bhikhabhai Patel vs. ITO AY : 2010-11 Page 3 of 4

7.5 Appellant had also raised issue regarding taxability of capital gain on sale of land under consideration on the ground that same is agricultural land and does not come under the definition of “Capital Asset as per the provisions of section 2(14)(iii)(a) or (b) of the IT Act, 1961”. Since, during the course of assessment proceedings or even during the hearing of appeal, appellant had not submitted any credible evidences in support of his contention nor before me any evidences in support has been furnished, this ground of the appellant is not sustainable. On these findings, the action of the AO and additions of Rs.17,78,350/- on the ground of undisclosed long term capital gain are confirmed. This ground of appeal is dismissed.”

SMC-ITA No. 384/Ahd/2016 Kiritbhai Bhikhabhai Patel vs. ITO AY : 2010-11 Page 4 of 4

prices so far as that era is concerned. However, as I have set aside the very reference to the DVO on the facts of the present case, it is not necessary to deal with this aspect of the matter in much detail. I leave it at that for the time being.

Sd/-

Pramod Kumar (Accountant Member) Ahmedabad, the 20th day of September, 2018 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File

By order