SATISH ZUMBERLAL FIRODIA,,AHMEDNAGAR vs. INCOME TAX OFFICER,, AHMEDNAGAR

Agricultural Lands Tribunal, Ahmednagar, it is manifest that the

transfer of the land in question by means of Sale Deed dated 07-

12-2010 came to be declared invalid and the disputed property was

directed to be surrendered to the State Government after expiry of

time period for filing of appeal against this order. On a pertinent

query, the ld. AR submitted that the assessee did not file any

appeal against the order passed by the Tehsildar and Agricultural

Lands Tribunal, Ahmednagar and further that the disputed property

was also not transferred to the State Government. He further

claimed that the assessee has no knowledge of any appeal having

been filed by other co-owners. Thus, it is manifest that there is an

apparent contradiction in the part reply submitted on behalf of the

16 ITA No. 669/PUN/2017 Satish Z. Firodia

assessee vis-à-vis the terms of the order of the Tehsildar and

Agricultural Lands Tribunal, Ahmednagar. Firstly, the ld. AR has

not drawn my attention towards either the relevant provision under

which the Tehsildar and Agricultural Lands Tribunal set aside the

registered sale deed or the copy of petition challenging the

registered sale deed before such Tribunal. Secondly, arguendo, that

the Tehsildar and Agricultural Lands Tribunal was competent to do

so, then his order should have taken its logical conclusion, namely,

the disputed property should have vested in the State Government

after the expiry of the time for filing appeal against the order. Per

contra, the ld. AR submitted that the property in question has not

vested in the State Government. There are so many loose ends on

this issue. The ld. AR denied to have any information about all

such aspects, which in my considered opinion have an important

bearing on the question. If the registered Sale Deed has itself been

set-aside, to which the assessee is one of the co-owners as

transferor and no further transfer has taken place inasmuch as the

property has come back to the co-owners, then there cannot be any

question of capital gain arising in the hands of the assessee. Au

contraire, if the order of Tehsildar and Agricultural Lands

Tribunal, Ahmednagar itself has been set-aside in further appeal,

17 ITA No. 669/PUN/2017 Satish Z. Firodia

then, of course, the assessee will be obliged to pay tax on capital

gain on the transfer of the property taking place by means of the

registered Sale Deed on 07-12-2010 in the year under

consideration. In the third scenario of the property in question

getting vested in the State Government, again several

consequences will follow as regards the timing and the amount of

computation of capital gain. These aspects of the matter have

remained unanswered. At this stage, it is relevant to mention that

the argument about the order of the Tehsildar and Agricultural

Lands Tribunal, Ahmednagar, dated 9.11.2013 setting aside the

registered sale deed executed in the year 2010, was taken up before

the Tribunal for the first time. No such plea was there before the

AO or the ld. CIT(A) that the sale made through registered Sale

Deed 07-12-2010 was set-aside by the Tehsildar and Agricultural

Lands Tribunal, Ahmednagar, even though the impugned order

came to be passed in the year 2016, much after the order of the

Tehsildar and Agricultural Lands Tribunal, Ahmednagar.

Considering these peculiar facts, I am of the considered opinion

that this issue needs consideration at the end of the AO in the hue

of the above discussion.

18 ITA No. 669/PUN/2017 Satish Z. Firodia

IV. Computation of capital gain – Reference to the DVO

that the stamp value was excessive and the matter of valuation be

referred to the DVO, which the AO did not accept. I find that there

is a categorical mention of this contention in the assessment order

at page 8 para 7(e) of the assessment order. Section 50C(2) of the

Act provides that where the assessee claims, inter alia, before the

Assessing Officer that the value adopted etc. by the stamp

valuation authority under sub-section (1) exceeds the fair market

value of the property as on the date of transfer, the Assessing

Officer may refer the valuation of the capital asset to a Valuation

Officer. The word `may’ as used herein has been interpreted by the

Hon’ble High Courts as `shall’, meaning thereby, that when the

assessee makes a request to the AO for making a reference to the

DVO, the AO is bound to do so and then adopt the value so

determined in place of the stamp value as the full value of

consideration in the computation of capital gains. Despite the

specific request of the assessee, the AO did not make any such

reference to the DVO and proceeded to compute capital gain on the

basis of the stamp value only.

19 ITA No. 669/PUN/2017 Satish Z. Firodia

would be in the fitness of things if the impugned order is set-aside

and the matter is restored to the file of AO for re-deciding the issue

afresh as per law in terms of discussion made herein above.

Needless to say, the assessee will be allowed a reasonable

opportunity of hearing.

the decisions referred by both the sides, to the extent germane to

the issues in appeal, have been taken into consideration.

purposes. Order pronounced in the Open Court on 16th March, 2022.

Sd/- (R.S.SYAL) उपा�य�/ VICE PRESIDENT पुणे Pune; �दनांक Dated : 16th March, 2022 Satish

20 ITA No. 669/PUN/2017 Satish Z. Firodia

आदेश क� ��त�ल�प अ�े�षत / Copy of the Order is forwarded to : 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. The CIT(A)-2, Pune 4. The Pr.CIT-1, Pune 5. �वभागीय ��त�न ध, आयकर अपील!य अ धकरण, पुणे “SMC” / DR ‘SMC’, ITAT, Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER,

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 14-03-2022 Sr.PS 2. Draft placed before author 16-03-2022 Sr.PS 3. Draft proposed & placed -- JM before the second member 4. Draft discussed/approved -- JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement Sr.PS on 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk Date on which file goes to 10. the A.R. 11. Date of dispatch of Order. *