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Facts
The assessee, an individual, did not file a return of income for AY 2014-15. The case was reopened, and a notice u/s 148 was issued. The assessee later filed a return declaring income. The Assessing Officer (AO) observed that the assessee sold land at a value lower than the stamp duty valuation and invoked Section 50C for LTCG.
Held
The Tribunal held that the reopening u/s 147 was rightly done. However, regarding the addition u/s 50C, it was noted that the assessee paid stamp duty on the agreed value and not the jantry value, and the DVO's report supported the sale consideration. Therefore, the deletion of addition by CIT(A) was justified.
Key Issues
1. Whether the reopening of assessment u/s 147 was validly done. 2. Whether the addition made by the AO u/s 50C on account of LTCG was justified.
Sections Cited
147, 148, 142(1), 139, 50C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Dr. BRR Kumar & Ms. Suchitra Kamble
आदेश/ORDER
Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 09-01-2025 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2014-15.
The grounds of appeal
are as under:-
1. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in holding that the impugned notice having been issued beyond four years from the last date of the relevant assessment year, without appreciating the fact that the case of the assessee pertains to AY 2014-15 and notice u/s 148 of the Act was issued in the case of the assessee on 13.03.2019 which is well within four years from the end of the relevant year?"
2. "Whether on the facts and in the circumstances of the case and in law the Ld CIT(A) has erred in deleting addition u/s 50C of the Act of Rs. 5,68,77,945/ on account of LTCG without appreciating the facts of the ease? 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 4. It is, therefore, prayed that the order of Ld CIT(A) may be set aside and that of the Assessing Officer be restored.?"
The assessee is an individual and not filed return of income for assessment year 2014-15. As per the information available with the Assessing Officer, the case was reopened u/s. 147 of the Act after recording reasons and prior approval of the competent authority. Notice u/s. 148 of the Act was issued on 13-03-2019 through ITBA on assessee’s email as well as by speed post and was duly served upon the assessee. In response to the notice u/s. 148, the assessee had not filed his return of income for assessment year 2014-15. Thereafter, notice u/s. 142(1) of the Act along with questionnaire was issued to the assessee with a request to furnish his return of income. The assessee vide submission dated 27-12-2019 stated that the assessee filed return in response to notice u/s. 148 on 27-12- 2019 declaring total income at Rs. 5,13,930/-. The Assessing Officer observed that during the year under consideration, the assessee sold land in parts to different parties through sale deed No. 6867/2013 and 6868/2013 on 26-09-2013. The sale consideration of the properties were taken as Rs. 1,79,00,000/- and Rs. 2,13,50,000/- on which stamp duty of Rs. 22,12,500/- and Rs. 25,88,000/- were paid. Accordingly, the jantry value i.e. stamp duty valuation of the properties comes to Rs. 4,51,50,000/- and Rs. 5,28,15,945/- which exceeded the sale value consideration of the properties. Thus, the Assessing Vasudev Tripathi, A.Y. 2014-15 Officer held that the provisions of section 50C applies in the case of assessee. After issuing statutory notices, the assessee filed submissions. After going through the submissions, the Assessing Officer pointed out the following points which are as follows:- • The assessee had entered into agreement to sale (Banakhat) of land at Survey No. 597 sarkehej vide agreement No. 406 dated 29/12/2009 with Siraj Nagani and agreement No.333 dated 24.10.2009 with Salim Nagani. The said documents were notiarized with notary. It is important to mention that the documents were only notarized but not registered. No agreement is valid till it is registered with Sub Registrar office. • Further, on verification of the documents it was noticed that the assessee had claimed to have received an amount of Rs 4,00,000/- on 04/04/2006 from each party as token amount however, banakhat agreement that too notarized but not registered. The said non judicial stamp paper of Rs. 50X2 for Rs. 100 were purchased on 30/09/2009 and notarized on 29/12/2009 and 24.10.2009. • The assessee claimed that he had received amount mentioned in banakhat on 04/04/2006 but the agreements were made on 24.10.2009 & 29.12.2009 i.e. after four and half years of initial payment as claimed by the assessee, which seems to be not in practical as per the prevailing in the market for land dealing. • It is also pertinent to mention that said details of notarized agreements were not specified in the Registered deed executed by the assessee for sale of the said property vide document No.6867 & 6868 registered with Sub Registrar, Ahmedabad-04, Paldi, Ahmedabad on 26/09/2013. • However, on verification of the Registered deed of the document, it was noticed that at para 2 of page 8 of the Registered document that Banakhat Agreements were registered with Ahmedabad (West City) in Book No. I at Sr. No. 1260 & 1261 respectively on 04/09/2012. • Thus from the registered deed executed by the assessee vide document No. 6867 & 6868 dated 26/09/2013, it is clear that the banakhat agreements were made on 04/09/2012 and not 29/12/2009 as claimed by the assessee. • Further, meanwhile the land was converted into Non agricultural land on 31/03/2011. • Initially the land was agriculture land, however the same was converted to Non-Agriculture land, therefore the nature of the land changed and so Agreement of sale became invalid.”
Thus, the Assessing Officer held that the jantry value of the property was fixed at Rs. 4,51,50,000/- and Rs. 5,28,15945/- and accordingly stamp duty paid on the same was Rs. 22,12,500/- and Rs. 25,88,000/- respectively. The purchaser not raised any contention before the revenue/said authorities for the said valuation nor filed any appeal against the same and Vasudev Tripathi, A.Y. 2014-15 therefore the Assessing Officer recomputed the long term capital gain thereby making addition of Rs. 5,68,77,945/- as undisclosed long term capital gain.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
The ld. D.R. submitted that the CIT(A) erred in holding that the notice was issued beyond four years from the last date of the relevant assessment year without appreciating the fact that the case of the assessee pertains to assessment year 2014-15 and notice u/s. 148 of the Act was issued in the case of the assessee on 13-03-2019 which is well within four years from the end of the relevant year. The ld. D.R. submitted that the reopening u/s. 147 was rightly done by the Assessing Officer as the reasons for reopening was categorically mentioned by the case of the assessee was reopened.
The ld. A.R. relied upon the order of the CIT(A).
We have heard both the parties and perused all the relevant material available on record. It is pertinent to the note that the assessment year i.e. of 2014-15 and since the assessee has not filed any return of income u/s. 139 of the Act after recording the proper reasons and prior approval, the Assessing Officer has rightly reopened the case u/s. 147 of the Act. The observation of the ld. CIT(A) is not justified. Thus, ground no. 1 of the Revenue’s appeal is allowed.
Vasudev Tripathi, A.Y. 2014-15 8. As regards ground no. 2 related to the merits, the ld. D.R. submitted that the addition u/s. 50C on account of LTCG was not rightly deleted by the CIT(A) as the assessee without any supporting evidence has taken a sale consideration value at much lower price than the actual jantry value of the property. The ld. D.R. further submitted that as per the banakhat the value was computed in 2009 but the registration was done in 2013. The DVO’s report was ignored by the Assessing Officer but the actual jantry value was taken rightly by the Assessing Officer. Thus, the ld. D.R. relied upon the assessment order.
The ld. A.R. submitted that in fact the Assessing Officer has referred the matter to the DVO and as per the DVO’s report, the calculated capital gain was accepted by the assessee and the assessee has paid long term capital gain on sale of the property. The ld. A.R. relied upon the decision of Hon’ble Gujarat High Court in case of PCIT vs. Ravjibhai Nagjibhai Thesia 388 ITR 358. The ld. A.R. also submitted that the assessee has actually sold on the price which was mentioned in the banakhat dated 24-10-2009 and 29-12-2009 agreement (banakhat dated 04-04- 2006). The ld. A.R. further submitted that the Revenue has not pointed out that the assessee paid more stamp duty or there was more consideration taken by the assessee.
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has paid the stamp duty on the value which was actually mentioned in the agreement and as per the transaction agreed in the year 2006 itself. The revenue at no point of time has made out a case that the assessee received more amount than the amount mentioned in the agreement. The assessee has Vasudev Tripathi, A.Y. 2014-15 also paid the taxes on the valuation which was shown by the DVO as per the reference of the Assessing Officer and therefore the Assessing Officer cannot counter the DVO’s report once the Assessing Officer himself referred the matter to the DVO. The terms agreed upon for the consideration of selling of those two properties were actually received by the assessee which was demonstrated by the assessee at the time of the assessment proceedings. Thus, CIT(A) has rightly deleted the addition and there is no need to interfere with the same. Thus, ground no. 2 is dismissed.
In the result, the appeal of the Revenue is partly allowed.
Order pronounced in the open court on 15-10-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 15/10/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद