SANJEEV KUMAR MITTAL 3-J, BLOCK AREA, SHRI GANGA NAGAR-335001,RAJASTHAN vs. HARISH CHANDER MITTAL ACIT CIRCLE SRIGANGANAGAR CURRENT JURISDICTIONAL AO DCIT CC-II LUDHIANA, PUNJAB

The Assessing Officer after applying the circle rates estimated the deemed consideration in provision of Section 50C of the Act at Rs.1,11,18,800/- and thereby computed the Long Term Capital Gain at Rs.1,04,58,800/- by observing as under: “In light of the above facts, it is clear that assessee sold a commercial property i.e. Shop No. SC-021-C admeasuring 500 sq. Yards situated at 200 feet wide road in Narayan Vihar 'O' Phase 02 situated at Asarpura/Ganpatpura/ Bhankrota, Ajmer Road, Jaipur, to Sh. Sanjay Chamria on 20.09.2016 DLC value of commercial property situated at exterior location at Narayan Vihar is Rs. 26600/- per sq. meter. One 3 Sanjeev Kumar Mittal vs. Harish Chander Mittal ACIT A.Y. 2017-18

Aggrieved, assessee preferred appeal before the CIT(A). The CIT(A) confirmed the action of the AO. Aggrieved, assessee is in appeal before the Tribunal.

We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the first contention of the assessee is that for ascertaining the fair market value for the purpose of computation of deemed capital gain in term of Section 50C of the Act. The matter should have been restored to the DVO for ascertaining the same. The main contention of the assessee is that factually this property sold by assessee was a residential plot and not a commercial property. Learned Counsel for the assessee drew our attention to the relevant provisional allotment letter which is reproduced in the order of CIT(A) and that was read out by learned Counsel for the assessee. He stated that there is a plot actually and this needs verification. Learned Counsel for the assessee stated that there is a different rate for residential and commercial plot. Consequently, learned Counsel argued that this is a leasehold property obtained by assessee on patta. He stated that patta means property on leasehold. Hence, according to learned Counsel, if the property is a leasehold property, the provision of section 50C of the Act will not apply. With these objections, learned Counsel for the assessee stated that he is ready to produce his own estimate and for this he produced valuation from one Rudra Architects & Consultants dated 01.01.2025, wherein the property was valued at Rs.7,95,500/-. The Authorized Valuer after verifying the case, the complete detailed report which reads as under: “It is submitted that Mr. Sanjeev Mittal S/o Sh. Megh Raj Mittal approached us for Valuation of the Plot No. SC-021-C(D) measuring 500 4 Sanjeev Kumar Mittal vs. Harish Chander Mittal ACIT A.Y. 2017-18 Sq. Ydsın Narayan Vihaar O- Phase 2 situated at Asarpura/ Ganpatpura/Bhankatora Ajmer Road. Jaipur (Rajasthan) for the period/ year 2016 2. Mr. Sanjeev Mittal informed that he had purchased rights in the said residential plot from M/s Shree Salasar Overseas Private Limited for an amount of Rs 5,00,000/- (Rs Five Lakh only) on 13.07.2012 vide Provisional Allotment Letter dated 13.07.2012 and payment was made on 02 10 2012 Thereafter Mr. Sanjeev Mittal sold the rights of the Plot on 20.09.2016 for an amount of Rs 5.25.000/- (Rs. Five Lakh Twenty Five Thousands) to ShSanjay Chamaria S/o Sh. BR Chamaria, as the Project Narayan Vihaar O- Phase 2 was not approved by JDA (Jaipur Development Authority). An information was received through RTI on 13.04.2023 in which it is clearly mentioned that Narayan Vihaar O-Phase 2 is unapproved till date, along with photographs of the Plot which shows that the project has not been developed at all. Further, on verification of the plot and by way of local enquiries and on the basis of my experience it is certified that the plot is residential Plot and the valuation of the Plot No SC- 021-C(D) measuring 500 Sq. Ydsin Narayan Vihaar O- Phase 2 situated at Asarpura/ Ganpatpura/Bhankatora Ajmer Road Jaipur (Rajasthan), the area of which is still unproved is as under The price for the residential Plot was Rs. 1591 per Sq yd in the year 2016- 17 and It is -certified that the above rate has been given looking into the condition of the land and based on my experience and local enquires. Thus total Value of the Plot No SC-021-C(D) measuring 500 Sq. Ydsin Narayan Vihaar O- Phase 2 situated at Asarpura/ Ganpatpura/Bhankatora Ajmer Road, Jaipur (Rajasthan) was Rs. 7,95,500/- in September, 2016.”

In view of the learned Counsel for the assessee stated that the residential property should be valued at the valuation given by Registered Valuer at Rs.7,95,500/- for the purpose of computing Long Term Capital Gain. Even otherwise, he put reliance on the rates given by Sub-Registrar i.e. circle rate / DLC rate of residential property at 6800 sq. meter. When these facts were confronted to learned Sr. DR, she only requested that matter can only be restored back to the file of the AO for ascertaining the fair market value, which can be ascertained after referring the same to DVO.

After hearing both sides and going through the contentions raised, we are of the view that this being a small matter pending since long. Full facts are available admittedly. It is a fact that this is a residential plot as per the provisional allotment letter, which does not clearly depict whether it is commercial or residential and no enquiry has been conducted. The Registered Valuer has verified and found that this is a residential plot and even the developer Shri Salasar Overseas Pvt. Ltd. has categorized it is a 500 sq. yard plot, whether the same is residential or commercial it has nowhere proved by Revenue. Hence, we take it residential and direct the AO to adopt the rate of residential as information received from Sub-Registrar of circle rate/DLC rate at 6800 per sq. meter. We direct the AO to recomputed the Long Term Capital Gain after taking the DLC value of the above plot rate at Rs.6800 sq meter x 418 sq. meter had comes to Rs.28,42,400/-. The AO will re-compute the Long Term Capital Gain accordingly.

In the result, appeal of the assessee is partly allowed.