NARENDRA SINGH,JAIPUR vs. ACIT, AJMER

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh Hkkxpan] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 331/JP/2015 fu/kZkj.k o"kZ@Assessment Year : 2010-11 cuke Narendra Singh, Assistant Commissioner Vs. Raj Bhawan, 11, Shastri Nagar, of Income Tax, Ajmer-305001. Circle-2, Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGUPS 2302 K vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 325/JP/2015 fu/kZkj.k o"kZ@Assessment Year : 2010-11 cuke Assistant Commissioner Narendra Singh, Vs. of Income Tax, Raj Bhawan, 11, Shastri Nagar, Circle-2, Ajmer. Ajmer-305001. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGUPS 2302 K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Mahendra Gargieya (Adv) jktLo dh vksj ls@ Revenue by : Shri P.R. Meena (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 16/11/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 17/11/2017 vkns'k@ ORDER PER: BHAGCHAND, A.M. Both these appeals are the cross appeals, one by the assessee and another by the revenue emanates from the order of the ld. CIT(A)- Ajmer dated 29/01/2015 for the A.Y. 2010-11.

ITA 331 & 325/JP/2015_ 2 Narendra Singh Vs ACIT

admeasuring 13068 Sq.ft. bearing Khasra No. 1834 situated at Thok

Teliya, Ajmer on 06/01/2010. The declared consideration was Rs. 8.00

lacs. The Sub-registrar-cum-Stamp Duty Authority adopted the value of

land at Rs. 52,40,700/-. The DIG (Stamps) enhanced the value of land

at Rs. 1,56,95,100/-. The notice U/s 148 of the Income Tax Act, 1961

(in short the Act) was issued on 25/02/2013 after recording the

reasons. The assessee filed return of income on 30/3/2013 showing

income from various heads including the income from capital gain on

the sale of land admeasuring 13068 Sq.Ft. bearing Khasra No. 1834 at

Ajmer. In the return of income, the assessee has adopted the value of

transfer at Rs. 52,40,700/- and worked out the capital gain of Rs.

46,25,457/- after taking benefit of indexation and also for land

improvement. The Assessing Officer worked out the long term capital

gain on the basis Rs. 1,56,95,100/- as valued by the DIG(Stamps).

Assessee filed appeal before the ld. CIT(A) The grounds of appeal

taken by the assessee before the ld. CIT(A) are as under:

ITA 331 & 325/JP/2015_ 3 Narendra Singh Vs ACIT

The above grounds taken by the assessee before the ld. CIT(A) make

it clear that the assessee has challenged the adopting the value at Rs.

1,56,95,100/- as against Rs. 52,40,700/- declared by the assessee in

his return of income filed in response to notice U/s 148 of the Act.

Thus, the assessee had disputed the enhancement of value from Rs.

52,40,700/- to Rs. 1,56,95,100/-.

ITAT by taking following grounds of appeal:

Grounds of assessee’s appeal: The very action taken u/s 147 r/w 148 is bad in law without (i) jurisdiction and being void- ab-initio, the same kindly be quashed. Consequently the impugned assessment framed u/s 144/147 dated 02.02.2015 also kindly be quashed. Rs.16,00,000/-: The Id. CIT(A) erred in law as well as on the facts (ii) of the case in not considering the estimated market value of the subjected property at Rs.24,18,000/- or Rs.29,83,500/- estimated by the Registered Valuer Departmental Valuation Officer (DVO) respectively for the purpose of sec.45 r/w sec.50C so as to compute the legally correct amount of the sale consideration and consequently to compute the correct amount of the resultant capital gain there from. The decision of the Id. CIT(A) to consider the deemed sale consideration at Rs.52,42,700/- for the purpose

ITA 331 & 325/JP/2015_ 4 Narendra Singh Vs ACIT

of sec.45 r/w sec.50C and thereby consequently confirming the amount of capital gain higher by the amount of Rs.16 lacs approx., being totally contrary to the provisions of law and facts on the record, the sale consideration estimated at the lowest by the Registered Valuer be directed to be taken. Rs.16,00,000/-: The Id. CIT(A) further erred in law as well as on (iii) the facts of the case in rejecting the claim made by the assessee of adopting the lowest estimation of the sale consideration at Rs.24,18,000/- made by the registered valuer merely because the appellant itself had accepted the deemed sale consideration at Rs.52,42,700/- in as much as there is no estoppel against the statute. It was the duty on the part of the Id. CIT(A) to assess the true and correct income only based on the facts and evidences available on record as against confirming hypothetical income. The Id. CIT(A) even ignored / failed to give effect to the report of the Id. DVO who estimated the sale consideration at Rs.29,83,500/- only as against Rs.52,42,700/-. The order of Id. CIT(A) therefore, suffers from serious legal and factual infirmities and hence the lower authorities kindly be direct to adopt the lowest sale consideration for the purposes sec.45 r/w sec.50C of the Act.

(iv) The Id. AO further erred in law as well as on the facts of the case in charging interest u/s 234B & 234C of the Act. The appellant totally denies its liability of charging. The interest so charged/withdrawn, being contrary to the provisions of law and facts, kindly be deleted in full.

(v) The appellant prays your honours indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing.”

Grounds of revenue’s appeal:

In view of the facts and circumstances of the case the Ld. CIT(A), Ajmer has erred in:

ITA 331 & 325/JP/2015_ 5 Narendra Singh Vs ACIT

that the value adopted by the Collector (stamps) was rightly considered by the AO in view of deeming provisions of section 50C of the I.T. Act, 1961;

time of hearing, therefore, the same stands dismissed as not pressed.

revenue’s appeal are general in nature and do not require any

adjudication. The same are dismissed.

the interest U/s 23B & 23C of the Act. In this regard, we hold that the

charging the interest is mandatory, hence this ground of the appeal is

dismissed.

issue involved is challenging the value adopted by the ld. CIT(A). The

assessee has also submitted modified ground wherein the figure of Rs.

16.00 lacs appearing in grounds No. 2 and 3 is requested to be

replaced by the figures of Rs. 28,22,700/-. Being this is a factual error,

the Bench allow to modify the ground to that extent. IN revenue’s

ITA 331 & 325/JP/2015_ 6 Narendra Singh Vs ACIT

appeal ground No. 1 is against deleting the addition of Rs.

1,04,54,400/-.

assessee by holding as under:

3.3 I have considered the contention of the appellant as well as the assessment order, valuation report, comments of the AO thereon and comments of the Valuation Officer vide letter dated 27.01.2015. It is seen that assessee had sold the land measuring 1368 Sq. Ft. bearing Khasra No. 1834 on 06.01.2010 for Rs. 8 lacs to Shri Rajkumar Kulshresth. The said property was valued at Rs. 52,40,700/- by Sub-Registrar Ajmer for stamp duty purposes. Later on, Collector (Stamps) enhanced the value of the said property at Rs. 1,56,95,100/- and purchasing party paid the stamp duty.

The assessee has claimed that the said property was sold for Rs. 8 lacs only as this was under unauthorized possession of Shri Rajkumar Kulshresth and various other constraints i.e. said property was on a hillock having no direct access from the main road, land use of the land in the master plan was for social cultural activities only and no residential or commercial activity was legally permissible on the above property. The approved valuer has valued this property at Rs. 24,18,000/- only while the Stamp Valuation Authorities has initially adopted the value at Rs. 52,40,700/- which was later on enhanced to Rs. 1,56,95,100/- holding the same as commercial property while it was sold as agricultural land.

It is seen that the Sec. 50C(2) and Sec. 50C(3) are as under:

ITA 331 & 325/JP/2015_ 7 Narendra Singh Vs ACIT

“(2) Without prejudice to the provisions of sub-section (1), where-

(a) the assessee claims before any Assessing Officer that the value adopted or assessed by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer;

(b) the value so adopted or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, Court or the High Court,

the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of subsection (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act.

Explanation. : For the purposes of this section, "Valuation Officer" shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).

(3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer. ”

As such, where the assessee disputes the value adopted by Stamp Valuation Authority and no appeal, revisions or reference has been filed by the assessee before any other authority, Court or High Court, the AO may refer the valuation of the capital asset to the Valuation Officer for determining fair market value and the provisions of Sec. 50C(2) & 50C(3) are applicable in the case of the appellant.

In the present case, the Departmental Valuation Officer has determined the fair market value of the property at Rs. 29,83,500/-

ITA 331 & 325/JP/2015_ 8 Narendra Singh Vs ACIT

and has mentioned that the Collector (Stamps) has considered the property as commercial property and adopted the value of Rs. 1,56,95,100/-. The said property cannot be considered as commercial land in view of following points:

a. Shri Sardar Narendra Singh sold a land measuring 13068 sft. Bearing Khasra no. 1834 for consideration of Rs. Eight lacs to Shri Shiv Raj Kumar Kulshetra, who was having the unauthorized possession thereon.

b. This property is situated at hillock having no axis from the main road. For this peculiar type of land on revenue records a copy of letter dated 23.1.2015 of concerned Patwari is enclosed herewith as annex-III).

c. As per Master Plan of Ajmer for land use plan 2023 of the Town Planning Department Rajasthan (copy enclosed as annex-lV) this evaluated land is for Social or Cultural activity.

d. This property is situated to the archeological area from north side therefore no construction can be done within 100 meters as per the directives of the Central Govt. vide Gazette notification dated 30.03.2010 (copy enclosed as annexure-V). ”

In above case, though the Departmental Valuation Officer has valued the property at Rs. 29,83,500/-, the sale consideration offered by the assessee himself in the return of income filed in response to Sec. 148 of the I.T. Act (the proceedings which are for benefit for revenue only to tax escaped income) is at Rs. 52,42,700/- . The only ground raised by the assessee is that sale consideration offered by the assessee should be accepted. Accordingly the sale consideration for the purpose of long term capital gains i.e. Rs. 52,42,700/- offered by the assessee is liable to be accepted. Accordingly the addition made by the AO is deleted.

available on the record, also considered the various case laws relied

ITA 331 & 325/JP/2015_ 9 Narendra Singh Vs ACIT

upon by both sides and also considered the factual aspects of the issue.

We find that the assessee himself adopted the value at Rs. 52,40,700/-

and filed the return of income in response to notice U/s 148 of the Act.

The Assessing Officer adopted the value at Rs. 1,56,95,100/- as

adopted by the DIG (Stamps). The assessee has only challenged the

valuation adopted by the A.O. at Rs. 1,56,95,100/- before the ld.

CIT(A). The ld CIT(A) has granted the relief sought for by the assessee

in his appeal. Now what is claimed in the appeal of the assessee is not

a justified claimed. He himself has adopted the value for working out

the capital gain at Rs. 52,40,700/-. Only enhancement was challenged

before the ld. CIT(A). At the stage of CIT(A), the matter was referred

the matter to the District Valuation Officer, who has valued it around

Rs. 29,83,500/-. Now the assessee’s AR claims that this value should be

substituted for the value declared by him in his return of income. On

this issue, we are of the view that once the assessee has himself has

offered the value adopted by the Registering Officer at Rs. 52,40,700/-

and filed the return of income and paid the taxes. Then there is no

scope for reduction. He has also not agitated this valuation before the

ld. CIT(A) in any of his grounds of appeal. Only plea was to adopt the

value at Rs. 52,40,700/- in place of Rs. 1,56,95,100/-, therefore, we

ITA 331 & 325/JP/2015_ 10 Narendra Singh Vs ACIT find no merit in this plea of the ld AR of the assessee. After considering all the aspects of the matter, we sustain the order of the ld. CIT(A).

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