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आदेश/Order PER ANNAPURNA GUPTA, A.M. : The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-2, Ludhiana (in short CIT(A) dated 26.07.2017 passed u/s 250 (6) of the Income Tax At, 1961 (in short referred to as ‘Act’). 2. At the outset it was pointed out that this is the second round before I.T.A.T. and the sole issue relates to the computation of Long Term Capital Gain earned by the assessee on sale of property. Drawing our attention to the facts of the case, as reproduced at para 3 of the CIT(A)’s order, it was pointed out that the assessment had been framed on the assessee for the impugned year u/s 143(3) of the Act making addition on account of Long Term Capital
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Gain earned by the assessee on sale of property by adopting
the sale consideration of the property at Rs.45 lacs as
against sale consideration disclosed by the assessee at Rs.30
lacs. This was done for the reason that the A.O. found that
there was cutting in the sale deed and the figure original
typed at Rs.45 lacs had been changed to Rs.30 lacs manually
and the cutting had not been countersigned/attested by the
Registering Authority. The A.O. also found that stamp duty
had been paid on the amount of Rs.45 lacs and, therefore,
he was of the opinion that as per the provisions of section
50C of the Act, the sale consideration for the purpose of
computing Long Term Capital Gain on the sale of property
was to be adopted at Rs.45 lacs and not Rs.30 lacs as
submitted by the assessee .Accordingly addition was made to
the extent of long term capital so earned by the assessee on
sale of property. Aggrieved with this order the assessee filed
appeal before the CIT(A) who upheld the order of the A.O.
The matter was further carried in appeal to the I.T.A.T. who
in turn set aside the case to the file of the A.O. directing
him to verify the actual sale consideration received by the
assessee from the purchaser, by issuing summons to him
and also to verify the value of the sale declared for the
purpose of valuation under the Stamp Duty Act and
thereafter to adopt the value whichever is higher of the two,
as per the provisions of section 50C of the Act.
During set aside proceedings, information was called
from the purchaser of the property, M/s Akme Projects Ltd.,
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u/s 133(6) of the Act, in response to which copy of the
account of the assessee as appearing in its books was
submitted showing payments of Rs.30 lacs through DD
issued by Canara Bank for the said purpose. The A.O. also
called for information from the Punjab National Bank (in
short ‘PNB’) with whom the original sale deed was kept by
the purchaser who supplied the same copy of the sale deed
as was submitted to the A.O. by the assessee. The A.O. also
obtained copy of the sale deed directly through Suvidha
Centre which was also the same. The A.O., however, again
adopted the sale consideration of the property at Rs.45 lacs
since as per the A.O. this was the value accepted by the
Stamp Value Authority, for the purpose of payment of stamp
duty, the purchaser having paid stamp duty on such value
and also for the reason that there were cuttings on the sale
deed which were not countersigned/attested by the
Registering Authority. Thus the A.O. in the set aside
proceedings reiterated the initial assessment framed on the
issue.
The matter was carried in appeal before the Ld.CIT(A),
who upheld the order of the A.O. finding merit in the
findings of the A.O. in this regard. The relevant findings of
the CIT(A) at paras 5.2 and 5.3 are as under:
“5.2 I have considered the observations of the Assessing Officer as made by him in the set aside assessment order while adopting the sale consideration of the property at Rs.45,00,000/- and thereafter computing taxable value of the long term capital gain at Rs.17,52,961/-. I have also considered the written submissions filed by the assessee through his learned AR vide letter dated 24.07.2017 on the issue under reference. I have further considered order of the
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Honorable ITAT, Chandigarh dated 07.11.2013 vide which certain directions were issued to the Assessing Officer which were to be followed by him before completing set aside assessment. I have again considered the other material placed by the learned AR of the assessee on record. On careful consideration of the rival contentions, it has been noticed that the purchaser has confirmed that the consideration paid by it to the assessee through demand draft was Rs.30,00,000/- but the stamp valuation authority has accepted the value for payment of stamp duty at Rs.45,00,000/-. As per directions of Honorable ITAT, the higher of value which has been paid by the4 purchaser or which has been accepted by the stamp valuation authority for payment of stamp duty is to be adopted for the purpose of computing long-term capital gain earned by the assessee on the sale of impugned property in this case. I am also of the opinion that the value to be adopted for the purpose of computing long-term capital gain on the sale of property will be Rs.45,00,000/- and not Rs.30,00,000/-. The plea of the assessee that the purchaser has inadvertently purchased stamp papers is an afterthought and cannot be accepted as no prudent person will do that. I also do not agree with the plea of the assessee that value for the purpose of payment of stamp duty is Rs.4,78,125/-. In fact, also cannot be said to be the fair market value as the assessee has himself sold property for Rs.30,00,000/-. Under such circumstances, the action of the Assessing Officer in adopting the sale consideration of the property for computing long-term capital gain at Rs.45,00,000/- in this case and thereafter computing the taxable value of the long term capital gain at Rs. 17,52,961- cannot be said to be unjustified. 5.3 In view of the above stated facts and in the circumstances of the case, I am of the opinion that the Assessing Officer is fully justified in adopting the sale consideration of the property for computing long-term capital gain at Rs.45,00,000/- in this case and thereafter computing the taxable value of the long term capital gain at Rs. 17,52,961/-. So, the addition of Rs. 17,52,961/- made by the Assessing Officer to the returned income of the assessee on account of long-term capital gain earned by the assessee on the sale of property in this case is, therefore, upheld. In the result grounds No. 1, 2, 3 and 4 of appeal taken by the assessee are dismissed.” 5. Aggrieved by the same, the assessee has come up in
appeal before us, raising following grounds:
1) That learned CIT Appeals-2 and A0 could not understand the directions of the lerned Income Tax Appellate Tribunal Chandigarh Beanches A. As per order dated 07.11.2013 para 13 @ page 7 of the order directions are clear , purchaser purchased the property @ Rs.3000000/- and not 4500000/- which the AO duly verified from the purchaser.
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That the learned Commissioner Of Income Tax (Appeals 2) Ludhiana has erred in Law and facts by taking the sale value of land U/s 50Camountingto Rs 4500000/- instead of Rs 3000000/- That the sale value of Land U/s 50C is 301ac and not 451ac 3. That the market value of the land is 30 Lac which the assessee received. And the market value as per stamp duty is Rs478125/-only. 4. That the appellant craves' leave to add or amend any grounds of appeal before it is finally disposed off.” 6. During the course of hearing before us, the Ld. counsel
for assessee reiterated the contentions made before the
lower authorities. Drawing our attention to the directions of
the I.T.A.T. in the first round, as reproduced in the order of
the A.O. at para 3.2, the Ld. counsel for assessee pointed
out that the directions were clearly and unambiguous
requiring the A.O. to verify the actual consideration
received by the assessee for the sale of the impugned
property by issuing summons to the purchaser and to verify
the stamp duty value of the property and thereafter adopt
the value whichever is higher of the two, for the purposes of
computing capital gains earned, as per the provisions of
section 50C of the Act. The Ld. counsel for assessee
thereafter pointed out that both necessary enquiries had
been carried out by the A.O. and the purchaser had verified
paying consideration of Rs.30 lacs for the sale of such
property and copy of the sale deed procured both from the
bank, with which the purchaser had kept the sale deed and
also from Suvidha Centre, had confirmed the fact that the
sale deed filed by the assessee was the correct sale deed.
Our attention was drawn to the relevant documents placed
in the Paper Book as under:
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1) Account of Hem Raj in the books of Akme Projects Ltd P.B. No.8
2) Letter from M/s PNB Housing Finance Limited P.B. No.9 3) Copy of Sale deed dt.19.10.2005 Vasika no.11612 received from PNB Housing Finance Ltd. P.B. No.10-26
4) Sale Deed dt.19.10.2005 P.B No.60-76
5) Translated copy of Sale Deed dt.19.10.2005 P.B. No.77-78
The Ld. counsel for assessee contended that having
complied with the directions of the I.T.A.T. and finding no
infirmity in the contentions made by the assessee in the
first round, there was no reason to reiterate the addition
made. It was stated that the purchaser had verified paying
Rs.30 lacs for the property. It was contended that the copy
of the sale deed supplied by the purchaser from PNB and
procured by the A.O. from the Suvidha Centre also had the
same cuttings in it as was present in the sale deed
submitted by the assessee to the A.O. confirming the
authenticity of the sale deed originally submitted by the
assessee and proving bonafides of the assessee that actual
consideration received was Rs.30 lacs and the stamp duty
had been inadvertently paid on a value of Rs.45 lacs by the
purchaser.
The Ld. DR, on the other hand, relied upon the orders
of the A.O. and the CIT(A) pointing out the fact that the
stamp duty had been paid on the consideration mentioned
of Rs.45 lacs and the cuttings in the deed replacing the
figure of consideration with Rs.30 lacs was not
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countersigned/attested by the Registering Authority and
hence the version of the assessee could not be believed.
We have heard the rival contentions, perused the
orders of the authorities below and also gone through the
documents to which our attention was drawn. The issue
before us relates to the computation of capital gains earned
on the sale of property,which the assessee had returned by
taking sale consideration of Rs. 30 lacs,while the Revenue
contended that the figure to be adopted was Rs. 45 lacs .
The directions of the I.T.A.T. in first round, while restoring
the issue to the AO, was to conduct inquiries for
determining the actual sale consideration received by the
assessee and the value of the property adopted for stamp
duty purposes ,for the purpose of adopting the higher of
the two values as per the provisions of section 50C of the
Act. The reason for the same was that the copy of the sale
deed submitted by the assessee in the first round had
cuttings with the figure of sale consideration of Rs.45 lacs
being cut and replaced with Rs. 30 lacs. The sale deed had
such cuttings at various pages, at page No.1 of the
registration deed there was a cutting on Rs.45 lacs and
amount after cutting was Rs.30 lacs. On page No.2, instead
of bank draft there was pay order mentioned and again on
the number of pay order there was a change. Similarly, on
page 3 the amount of Rs.30,00,000/- had been mentioned
after cutting. On page 11 there was cutting on amount of
Rs.30,00,000/- and in words there was a cutting on Rs.
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Thirty lakhs. Similarly, there was cutting on Rs.22,50,000/-
to Rs.15,00,000/- and in words there was cutting of
Rs.Fifteen lakhs. All the cuttings were signed by the
purchaser and buyer . All the aforesaid are admitted facts
which find mention in the written submissions filed by the
Ld.Counsel for the assessee before the CIT(A), and which
are reproduced at para 5.1 of his order.The cuttings
however were not countersigned/attested by the Registering
Authority.Also stamp duty was found to have been paid at
the value of Rs. 45 lacs,which the assessee claimed to have
paid inadvertently. In view of the said discrepancies ,which
rendered the determination of the actual sale consideration
and also the stamp duty value of the property difficult ,the
aforestated direction was given by the ITAT.
However ,we find that the inquiries conducted in the
second round have not delivered the desired information as
directed by the ITAT in the first round. In the second round
also the copies of the same sale deed were filed before the
AO ,both by the purchaser of the property,M/s Akme
Projects Limited and the bank where the purchaser had
kept the sale deed. These sale deeds also had the same
unauthenticated cuttings in them and were on stamp paper
of value which corroborated with the sale consideration of
Rs. 45 lacs. The cuttings on the copy of sale deeds not
authenticated by the registering authority supplemented
with the fact that stamp duty was paid on the higher sale
consideration of Rs. 45 lacs, casts doubts on the
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authenticity of the document.The fact that the deed was
submitted by the purchaser or the bank where the copy was
kept by the purchaser makes no difference and does not
make the document authentic. The said facts also do not
lend any credibility to the explanation of the assessee that
the higher stamp duty was paid inadvertently.
In the light of the above facts, we hold that the
authenticity of the document is clearly not established and
it is difficult to believe the version of the assessee that the
document submitted was an authentic sale deed duly
registered with the Land Revenue Authorities.In the absence
of an authenticate sale deed, the determination of the
actual sale consideration of the property and the value
adopted for stamp duty purposes, as directed by the ITAT in
the first round, cannot be legitimately made. It is therefore
necessary to obtain the authentic /original sale deed by
directly from the Registering authorities, calling for the
necessary records maintained in this regard. We find that
the AO had directed the assessee to procure a copy of the
sale deed from the registering authorities but ,we note from
the assessment order that the assessee had failed to do so.
We therefore set aside the matter back to the CIT(A) to
obtain the copy of the sale deed from the concerned
Revenue/Registering authorities and thereafter
determine the actual sale consideration and value adopted
for stamp duty purposes . The issue may thereafter be
10 ITA No.1415/Chd/2017 A.Y.2006-07
decided in accordance with law. We may add that the assessee be given due opportunity of hearing in this regard.
In the result, the appeal of the assessee is, therefore, allowed for statistical purposes.
Order pronounced in the Open Court.
Sd/- Sd/- �दवा �संह अ�नपणा� ग�ता (ANNAPURNA GUPTA) (DIVA SINGH) �याय�क सद�य/ Judicial Member लेखा सद�य/ Accountant Member �दनांक /Dated: 1st November, 2018 *रती* आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to :
अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आय�त / CIT 4. आयकर आय�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File
आदेशानसार / By order, सहायक पंजीकार/ Assistant Registrar