SHYAM KUMAR JAIN,JAIPUR vs. ITO (TDS), JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1085/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2010-11 cuke Shri Shyam Kumar Jain The ITO Vs. 169/421, Heera Path, Mansarovar, Ward-2(5), Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AECPJ 7090 P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by: Shri B.M. Dasot (C.A.) jktLo dh vksj ls@ Revenue by : Smt. Roonipal (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 05/02/2020 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 07/02/2020 vkns'k@ ORDER

PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 30.09.2016 of the ld. CIT(A)-I, Jaipur for the assessment year 2010-11. The assessee has raised following grounds:-

“1. Under the facts and circumstances of the case and in law, the ld. Commissioner of Income Tax (Appeals)I Jaipur has erred in confirming the sale consideration of the immovable property taken by the Assessing Officer Ward 2(5) for computation of long

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

term capital gain at Rs. 26848688.00 under section 50C as against actual sale consideration received amount to Rs. 91,00,000.00 while making assessment under section 143(3) on the basis of notice issued under section 147 and 148. 2. The ld. Commissioner of Income Tax (Appeals)I Jaipur has arbitrary and contrary to the facts erred in confirming the finding giving by the Assessing Officer Ward 2(5) that benefit of appeal filed by the purchaser and proceeding pending before the Rajasthan Tax Board against the revaluation order of Addition Commission (Stamp) cannot be given as the assessee is not party to the proceeding before Tax Board in the matter of revaluation for stamp duty purpose. 3. The ld. Commissioner of Income Tax (Appeals)I Jaipur has arbitrary and contrary to the facts erred in confirming the finding giving by the Assessing Officer Ward 2(5) for rejection of indexed cost given by the assessee and not judiciously determining the indexed cost of the property for purpose of calculating long term capital gain. 4. The proceeding initiated under section 147 and 148 are bad in law. 5. Under the facts and circumstances of the case and in law, the ld. Commissioner of Income Tax, Circle-6, Jaipur has erred in initiating penalty proceeding u/s 271(1)(c) of the Act. 6. The appellant craves leave to add, amend and modify all or any ground of appeal on or before the date of hearing.”

long term capital gain by adopting deemed full value consideration U/s

50C of the IT Act. The assessee is an individual and during the year 2

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

under consideration sold immovable property situated at A-1-B Sawai

Jai Singh Highway, Banipark, Jaipur for a consideration of Rs.

91,00,000/- vide sale dated 19.08.2009. During the course of

assessment proceedings, the AO noted that the Additional

Commissioner (Stamp) enhanced the value of the property for the

purpose of stamp duty at Rs. 2,68,48,688/-. The AO accordingly,

proposed to adopt full value consideration by invoking the provisions of

Section 50C of the Act and consequently the addition on account of long

term capital gain was made by the AO by taking deemed full value

consideration as determined by the Additional Commissioner (Stamp).

The assessee challenged the action of the AO before the ld. CIT(A) but

could not succeed.

property in question was a residential property however, after the sale

deed the Additional Commissioner (Stamp) enhanced the valuation by

considering the said property as commercial one therefore,

enhancement was made by treating the property as commercial one as

against residential. The purchaser challenged the order of the Additional

Commissioner (Stamp) enhancing the value four stamp duty purpose

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

purpose before the Rajasthan Tax Board and vide order dated

07.03.2018 the Rajasthan Tax Board has set aside the order of the

Additional Commissioner (Stamp) and held that the property remains as

residential one when there is no change of land use from residential to

commercial. He has filed a copy of the order dated 07.03.2018 passed

by the Rajasthan Tax Board and submitted that the original sale

consideration as well as stamp duty valuation has been restored by the

Rajasthan Tax Board. Thus the ld. AR has submitted that the addition

made by the AO and sustained by the ld. CIT(A) is liable to be deleted.

not available either the AO or before the ld. CIT(A), therefore, the AO

was justified in making the addition as per provisions of Section 50C of

the Act.

available on record we note that the Assessing Officer has made the

addition of long term capital gain by invoking the provisions of Section

50C of the Act and took the deemed full valuation consideration as

enhanced value of property for stamp purpose by Additional

Commissioner (Stamp). The order of the Additional Commissioner

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

(Stamp) dated 09.10.2013 was challenged before the Rajasthan Tax

Board and vide order dated 07.03.2018. The Rajasthan Tax Board set

aside the order of the Additional Commissioner (Stamp). It was also

held that the property in question was residential property and

remained as a residential one when there was not change of use from

residential to commercial. Once the enhanced the value of the property

for stamp duty purpose has been set aside by the Rajasthan Tax Board

then addition made by the AO based on the said enhanced value would

not survive. Accordingly, in the facts and circumstances of the case

when the sale consideration declared by the assessee is finally accepted

as stamp duty valuation then no addition is called. Accordingly, the

addition made by the AO U/s 50C of the Act is deleted.

improvement. The assessee claimed that he has incurred an amount of

Rs. 4,04,718/- for renovation of the property in question for the F.Y.

1983-84 however, no supporting evidence was filed by the assessee

before the AO. Before the ld. CIT(A), the assessee produce confirmation

from the contractor regarding the work carried out at the property of

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

the assessee. The ld. CIT(A) rejected the said additional evidence

sought to be filed by the assessee.

the additional evidence before the ld. CIT(A) but the same was rejected

on the ground that there were discrepancy in the details given in the

said confirmation. The ld. AR has submitted that the area mentioned in

the confirmation is inadvertent stated as square meter instead of square

feet thus due to this mistake in the said confirmation it cannot be

rejected. Thus the ld. AR has submitted that the said additional

evidence may be considered and the indexed cost of improvement may

be allowed while computing the long term capital gain.

has filed a valuation report wherein the valuer has estimated fair

market value of land as well as cost of constructed area as on

01.04.1981 which was accepted by the AO. In the absence of any

evidence or any valuation determined by the valuer the claim of the

assessee is devoid any substance. She has relied upon the order of the

authorities below.

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

material on record. Though the assessee has claimed the cost of

improvement/renovation of the property at Rs. 4,04,718/- however, no

evidence was produce by the assessee before the AO. Before the ld.

CIT(A), the assessee sought to produce the additional evidence in the

shape of confirmation from the contractor stated to have carried out the

work. The ld. CIT(A) has considered the additional evidence sought to

be filed by the assessee in para 3.3.1 (iii)(iv) as under:-

“(iii) During the appellate proceedings, the appellant has not submitted any reason why the above additional evidence was not filed before the AO at the time of assessment proceedings and thus the same cannot be admitted as additional evidence under Rule 46A of the I.T. Rules. It is to be noted from the above document that total of 3679.25 square meter was constructed by the said contractor on account of rooms, corridors etc. and the cost of construction was stated at Rs. 110/- per sq. mtr. and the total amount was stated at Rs. 4,04,718/-. However, it is noted from the valuation report of the Registered Valuer that the land on which the property was constructed was admeasuring only 341.80 Square Meters and the plinth area was 341.50 square meter. Further, for the cost of construction as on 01.04.1981, the valuer has taken the rate of Rs. 632/- per sq. mtr. I am not able to comprehend, how appellant can construct 3679 Square Meters on a plot of 341.50 square meters. Further, if the alleged construction was made in the year 1983-84 as claimed by the appellant, the appellant can get a valuation report from a 7

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

registered valuer for the same. As per the valuation report, some renovation was stated to be done in the year 1984 and not the construction as claimed by the appellant and the valuation was in respect of first floor of the property only and the valuer has taken the value of land in relation to first floor at Rs. 8,58,480/- being 70% of the value of land underneath the property under consideration. Further, during the appellate proceedings, the appellant was required to state whether any return of income was filed in order to ascertain whether the appellant had the capacity or the funds for the alleged construction as claimed and it was stated that the appellant had not filed any return of income for the relevant year. It appears that the appellant has not come forward with clean hand during the appellate proceedings. (iv) Therefore, looking to the totality of facts and circumstances of the case and in view of the above discussion, it is held that the appellant failed to substantiate its claim that it incurred a sum of Rs. 4,04,718/- on account of construction in the immovable property under consideration during the FY 1983-84 and thus the AO was justified in disallowing claim of the appellant in respect of cost of improvement and consequently, the indexed cost of improvement.”

Thus the ld. CIT(A) has pointed out to various discrepancy in the

additional evidence filed by the assessee regarding the covered area

and the plinth area in the said additional evidence comparison to the

same as per the valuation report. These facts as pointed out by the ld.

CIT(A) are taken from the record and there is no dispute that in the

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

additional evidence in the shape of confirmation from the contractor the

total area is mentioned as 3679.25 square meter whereas the plinth

area as stated in the valuation report is 3679.25 square feet. Therefore,

it appears that the figures were taken from the valuation report but

instead of mentioning the area in square feet it is stated in square

meter in the additional evidence. The cost of construction as on

01.04.1981 is applied by the valuer @ Rs. 632 per square meter,

therefore, the rate given in the additional evidence is even more than

cost of construction of the property. Hence, when the claim of

improvement is more than the cost of construction of the said area then

the addition evidence produced by the assesee is full of discrepancy

and also not giving the true and correct basis does not inspire

confidence. Accordingly, we do not find any error or illegality in the

impugned order of the ld. CIT(A) qua this issue.

assessee has stated at bar that the assessee does not press ground no.

4 and the same may be dismissed as not pressed. The ld. DR has raised

no objection if ground no. 4 of the assessee’s appeal is dismissed as not

ITA No. 1085/JP/2016 Shri Shyam Kumar Jain vs. ITO

pressed. Accordingly the ground no. 4 of the assessee’s appeal is dismissed being not pressed. In the result, the appeal filed by the assessee is partly allowed.

Order pronounced in the open court on 07/02/2020.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 07/02/2020. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Shyam Kumar Jain, Jaiapur 2. izR;FkhZ@ The Respondent- ITO, Ward-2(5), Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 1085/JP/2016} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत