AMIT GIRDHARBHAI PATEL,VADODARA vs. THE ACIT, CIRCLE-1(1)(1), VADODARA
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD “B” BENCH
Before: Smt. Annapurna Gupta, Accountant Member
And Shri T.R. Senthil Kumar, Judicial Member
Amit Girdharbhai Patel
D-9, Navdeep Society,
Behind Gokuldham
Society,
Manjalpur-GIDC Road,
Manjalpur, Vadodara,
Gujarat-390011
PAN: ACQPP7377M
(Appellant)
Vs
The ACIT
Circle-1(1)(1),
Vadodara
(Respondent)
Assessee Represented: Shri Tushar Hemani, Sr. Adv. &
Shri Parimalsinh B. Parmer, ARs.
Revenue Represented: Shri Abhijit, Sr. D.R.
Date of hearing
: 18-06-2025
Date of pronouncement : 14-08-2025
आदेश/ORDER
PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the appellate order dated 29.02.2024 passed by the Commissioner of Income Tax
(Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2012-13. Assessment Year. 2012-13
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2. Brief facts of the case is that the assessee is an individual filed his Return of Income for the Asst. Year 2012-13 declaring total income of Rs.90,38,230/-. Regular assessment u/s. 143(3) of the Act was completed on 10-02-2015 accepting the returned income.
Subsequently, the Assessing Officer received information that the assessee sold an immovable property for a consideration of Rs.1,02,00,000/- whereas the stamp duty value was Rs.2,39,32,400/- thereby attracting provisions of Section 50C of the Act. Therefore the assessment was reopened by issuing a notice u/s. 148 of the Act dated 31-03-2019. 2.1. In response, the assessee filed Return of Income on 02-04-
2019 declaring the same total income of Rs.90,38,230/-. The Assessing Officer noted that the assessee made a registered
Agreement of Sale (Banakhat) on 16-02-2010 with one Shri Nilesh
V Shah to transfer the land located at R.S. No. 556 Moje Chapad,
Vadodara for a consideration of Rs.80,00,000/- and a sum of Rs.9,00,000/- received by the assessee as advance. As per the terms and conditions of the Banakhat, possession was to be given to Shri Nelesh V. Shah after receipt of full consideration of Rs.80,00,000/-. In the meantime, Shri Nilesh V. Shah made an agreement with Shri Rameshbhai Manibhai Patel to transfer the impugned land for consideration of Rs.1,02,00,000/-. The final sale deed was registered on 13-03-2012 vide document No. 2889/2012. The Stamp Duty Valuation Authority valued the land at Rs.2,39,32,400/-. In the registered sale deed, the assessee was the Seller, Shri Rameshbhai Manibhai Patel was the Purchaser and Shri Nilesh V. Shah was shown as the Confirming Party.
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3.1. Further it was noted by the A.O. that the assessee did not give possession of the impugned land to Shri. Nilesh V Shah at the time of Banakhat. So there was no transfer in view of the provisions of section 2(47) of the Act. However, in the final sale deed dated
13/03/2012, the assessee appeared as the seller and the property was sold at the consideration less than the stamp duty value thereby attracting the provisions of section 50C of the Act.
2. In the appellate order No.CAB/5-933/2014-15 dated 26/11/2015 in the case of Shri. Nilesh V Shah for the AY 2012-13, the Ld. CIT(Appeals) remarked that in this case the transfer did not take place as per section 2(47) of the Act and hence the provisions of Section 50C would not be applicable in the hands of Shri. Nilesh V Shah but would be applicable in the case of Shri. Amit G Patel i.e. the assessee herein. The relevant portion of the appellate order is reproduced here as follows:-
"Therefore, the provisions of section 50C of the Act may be applicable in the cases of Srhi Amit G. Patel, Shri Kirit D.
Patel and Shri Arvind G. Patel, but not in the case of the assesse, as no "transfer." of property took place in his case, in terms of section 2(47) of the Act. In view of the fact that the assessee is not a seller of the property, the provisions of section 50C of the Act cannot be invoked in his case.
However, the Assessing Officer is directed to examine the applicability of the provisions of section 147 and 50C in the cases of Shri Amit. G. Patel, Shri Kirit D. Patel and Shri
Arvind G. Patel."
3. Since there was a difference between the Stamp Duty Value and Sale Consideration, the provisions of Section 50C of the Act
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were applied in this case and the AO made addition of Rs.1,37,32,400/- [Rs.2,39,32,400 Rs.1,02,00,000] to the total income of the assessee for the Asst. Year 2012-13. 4. Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal:
1. The Ld. AO has erred in law and on facts of the case in reopening the assessment u/s. 147 of the Act. Under the facts and circumstances of the case, the action of reopening is without juri iction and is not permissible either in law or on facts.
The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in making addition of Rs. 1,37.32,400/- u/s. 50C of the Act.
Both the lower authorities failed to appreciate the commercial arrangement of the transaction. The impugned land has been sold during the year under consideration by the confirming parties (Mr. Nilesh V. Shah & Others) and not the appellant. It is the substance of the transaction and not the form which needs to be considered.
Both the lower authorities failed to appreciate that the impugned land has been transferred by the appellant in the preceding year (A.Y. 2011-12) by virtue of Section 2(47) of the Act and capital gain on such transfer has been duly offered to tax in the preceding year.
Alternatively and without prejudice, the stamp duty valuation as on the date of agreement to sale shall be adopted as per the first proviso to Section 50C of the Act introduced by Finance Act, 2016. It is well settled that the first proviso to Section 50C of the Act is curative in nature, thus applicable retrospectively.
Alternatively and without prejudice, the addition u/s. 50C of the Act shall be restricted to the share of the appellant (1/3rd share) in the impugned land.
Alternatively and without prejudice, reference ought to have been made to DVO.
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8. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed.
The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s. 234A/B/C/D of the Act.
The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.
Ld. Sr. Counsel Shri Tushar Hemani appearing for the Assessee submitted that his arguments of three-fold namely the full payment was received by the assessee on 16-02-2011 itself i.e. Asst. Year 2011-12 and possession was also handed over in A.Y. 2011-12. In view of Section 2(47)(v) of the Act transfer took place in the Asst. Year 2011-12 which has been accepted by the Revenue. Thus there is no taxable event occurred in Asst. Year 2012-13. Therefore the question of addition u/s 50C in the Asst. Year 2012-13 does not arise.
1. The second fold of the arguments of Ld. Sr. Counsel is that since the consideration as per Agreement to Sale dated 16-02-2010 was Rs. 80,00,000/- higher than the prevailing Jantri rate of Rs. 75,57,600/- no addition can be made u/s 50C of the Act, as per proviso to Section 50C inserted by Finance Act, 2016 wherein the date of agreement fixing the amount of consideration and the date of registration, for transfer of capital asset are not the same value adopted or assessed or assessable by Stamp Valuation Authority
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and the date of agreement may be taken for computing full value of consideration. Thus Ld. Counsel relied upon the decision of this Tribunal in the case of D. Soni Vs. ACIT [2016] reported in 161 ITD
627 (Ahmedabad).
2. Third fold of argument of Ld. Sr. Counsel is the assessee had 1/3rd share in the land. Hence the A.O. was not justified in making entire addition u/s 50C of the Act in assessee’s hand. Whereas assessee offered Capital Gain in the A.Y. 2011-12 by filing Return of Income paid appropriate tax thereon. Therefore the impugned addition is not justified and the same deserves to be deleted.
Per contra Ld. Sr. D.R. Shri Abhijit appearing for the Revenue supported the order passed by the lower authorities. Ld.Sr. D.R. further submitted that the appellate order passed by Ld. CIT(A) in the case of Shri Nilesh V. Shah has attained finality and no further appeal filed by the Revenue before this Tribunal. Thus requested to confirm the addition made by the lower authorities.
We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee. For the Asst. Year 2011-12, the assessee declared short term capital gain on sale of the land at Chapad, Baroda showing short term capital gain of Rs.5,32,993/- by calculating the purchase cost of the land of Rs.21,33,663/- on 26-05-2009 and sale value (assessee’s 1/3rd share) of Rs.26,66,656/- on 16-12- 2011. Further the assessee along with two other co-owners entered into a registered Agreement of Sale (Banakath) dated 16-02-2010 to I.T.A No. 811/Ahd/2024 A.Y. 2012-13 Page No Amit Girdharbhai Patel vs. ACIT
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transfer the land to Shri Nilesh V. Shah & 4 others for a consideration of Rs.80,00,000/-. On entering the Agreement of Sale, the assessee received Rs.9,00,000/- from Nilesh V. Shah and other four buyers vide cheque payments dated 16-02-2010 and agreed to pay the balance Rs.71,00,000/- before 16-02-2011 and hand over the possession of land to the Purchasers. It is thereafter,
Sale Deed was registered on 13-03-2012 i.e. A.Y. 2012-13 which acknowledged the receipt of full consideration of Rs. 1.02 crores vide cheque payments dated 07-01-2012 and also possession handed over to the buyer of the property namely Rameshbhai M.
Patel, wherein Nilesh V. Shah was the Confirming Party. Based on the above transactions, the assessee filed his Return of Income for the Asst. Year 2011-12 on 23-11-2011 declaring short term capital gain of Rs.5,32,993/-. It is thereafter, based on the appellate order passed by the Ld. CIT(A) in the case of Shri Nilesh V. Shah relating to the Asst. Year 2012-13, the case of the assessee namely Amit G.
Patel was reopened to apply the provisions of Section 50C of the Act.
1. The first fold of argument by Ld. Senior Counsel that the assessee received full consideration on 16-02-2011 and possession was also handed over in A.Y. 2011-12, as per Section 247(v) of the Act, there is no taxable event in the Asst. Year 2012-13. We have considered the materials available on record, though the Sale Deed was registered in A.Y. 2012-13 and therefore the question of addition u/s 50C does not arise in the hands of the assessee. Since, it is undisputed fact that the Agreement of Sale was entered on 16-02-2010 between the assessee and two other co-owners with I.T.A No. 811/Ahd/2024 A.Y. 2012-13 Page No Amit Girdharbhai Patel vs. ACIT
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Nilesh V. Shah and four others to sell the property for a consideration of Rs. 80,00,000/- and received Rs. 9,00,000/- as advance vide cheque payment dated 16-02-2010. It is further seen from the Notarized “Deed of Undertaking” dated 13-03-2012, the details of payment of full consideration of Rs.80,00,000/- with dates, cheque numbers and Bank details are provided which were between 16-02-2010 to 16-03-2011 by various installments. Thus as per the Banakhat, the full sale consideration was paid by Nilesh
V. Shah to the assessee in the A.Y. 2011-12 itself and thereby possession of the land was also handed over to Nilesh V. Shah.
2. Pursuant to the above transaction, assessee offered his share of capital gain in the Asst. Year 2011-12 by filing his Return of Income on 23-11-2011 claiming Short Term Capital Gain of Rs.5,32,933/- which is not disputed by the Revenue. However the sale deed is registered for a consideration of Rs.1.02 crores on 13- 03-2012 to one Shri Rameshbhai M. Patel wherein Nilesh V. Shah is held to be a Confirming Party and the assessee and two others as the Sellers. In the appellate proceedings of Nilesh V. Shah, Ld. CIT(A) held that the provisions of Section 50C of the Act will be applicable in the hands of Sellers, thereby the assessments of the assessee and two co-owners were been reopened by the department. The Assessing Officer merely proceeded with making addition of Rs.1,37,32,400/- being difference between market value and registered value u/s 50C in its entirety in the hands of the assessee (leaving behind the two co-owners of share) for the Asst. Year 2012-13 which is legally not justified. Thus the first and third fold of argument of the assessee are in favour of the assessee and I.T.A No. 811/Ahd/2024 A.Y. 2012-13 Page No Amit Girdharbhai Patel vs. ACIT
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the additions made u/s 50C by the assessing officer is invalid in law and liable to be deleted.
3. The second fold of argument namely prevailing Jantri Rate as far the date of agreement and payment of advance by way of cheque payments through banking transactions is to be considered, irrespective of the registration of the land taken place in subsequent year. Undisputedly the Agreement of Sale was entered on 16-02-2010 and registered with the Sub-