MONIKA JINDAL,JAIPUR vs. ITO, WARD-6(2), JAIPUR, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 503/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2011-12 cuke Monika Jindal ITO, Vs. B-52, Lal Kothi Shopping Centre, Ward-6(2), Jaipur Tonk Road, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AVGPM 1685 A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. P. C. Parwal jktLo dh vksj ls@ Revenue by : Smt. Monisha Chaudhary (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 21/09/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 19/10/2023 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM

This appeal filed by assessee is arising out of the order of the National Faceless Appeal Centre, Delhi dated 26/06/2023 [here in after (NFAC)] for assessment year 2011-12, which in turn arise from the order of the ITO, Ward-6(2), Jaipur dated 03.12.2018 passed under section 143(3)/147 of the Income Tax Act, 1961 [ here in after Act ].

2. In this appeal, the assessee has raised following grounds: - 2 Monika Jindal, Jaipur vs. ITO “1. The Ld. CIT(A), NFAC has erred on facts and in law in upholding the action of AO in adopting the sales consideration of the plot u/s 50C as per sale deed dt. 23.03.2011 at Rs. 22,37,143/- as against actual sales consideration of Rs. 14 lacs as per sale agreement dt. 11.02.2011 on which date the DLC value of plot was Rs. 12,26,170/- and thereby computing the short term capital gain on sale of plot at Rs. 12,24,593/- as against Rs. 3,87,450/- worked out by the assessee thus confirming the addition of Rs. 8,37,143/-.

2. The appellant craves to alter, amend and modify any ground of appeal

3. Necessary cost be awarded to the assessee.”

Thus, the assessee had failed to disclose fully and truly all facts necessary for his assessment. Therefore, the case was selected under scrutiny assessment after recording reasons for issue of notice under 148 of the I.T.

Act, 1961 and after getting approval from the competent authority. Notice u/s 148 was issue on 27.3.2018. The assessee has e-filed her return of income for assessment year 2011-12 on 10.05.2018 in response to the notice u/s 148 issued declaring total income of Rs. 2,87,510/-. Notice u/s Notice u/s 143(2) was issued on 6.11.2018. In response to these notices, reply received from Shri Rakesh Kumar Bardia, CA and AR of the assessee on line/off line to the notices issued to the assessee from time to time and submitted necessary details and explanations, which are placed on file.

The assessee has shown income of Rs. 2,87,510/- in the return of income filed in response to the notice u/s 148. During assessment proceedings the assessee filed reply to the notices issued and furnished details/evidences in respect of the notice issued u/s 142(1).

3.1 As there was a dispute between the actual consideration at Rs. 14,00,000/- shown by the assessee and value adopted for stamp duty purpose was Rs. 22,37,143/-, the assessee was asked to show cause as to why the said addition should not be made. The assessee filed the reply but the same was not accepted by the ld. AO and the addition of difference of amount (Rs. 22,37,143/- - Rs. 14,00,000/-) for an amount of Rs. 8,37,143/- was made as income of the assessee.

4. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A)/NFAC. The ld. CIT(A)/NFAC vide paras 6 to 9 hold that :

4 Monika Jindal, Jaipur vs. ITO “6. The ground nos. 1 to 3 are interrelated so discussing these points together. The issue in ground no. 1 is regarding the addition of Rs. 8,37,143/- made by the AO on account of Short Term Capital Gains. 6.1 During the appellate proceeding, while going through assessment order it is found that in response to the notice u/s 148 the assessee has filed her return of income for the A.Y. 2011-12 on 10.05.2018 declaring total income of Rs. 2,87,510/-. Further AO found that the sale consideration of the property has shown Rs. 14.00.000/- instead of Rs. 22,37,143/-in sale deed. AO issued notice to appellant to submit the detailed explanation. Appellant replied the same but not accepted by AO because of the facts mentioned in his submission is related to provision of section 50C(1) which was inserted in Finance Act, 2016 with effect from 01.04.2017 and the case related to the A.Y. 2011-12 so the provision of section 50C(1) is not applicable in that case. Considering above facts AO has made addition and assessed total income of Rs. 11,24,655/-. 6.2 I have carefully examined assessment order, all the submissions of the appellant and material available on records. It is found that appellant has not submitted detailed explanation of the following transaction discussed above. However, during the entire course of assessment as well as appeal proceedings while explaining sale consideration, the appellant has failed to controvert AO's- contention. Hence, the addition made by AO is found correct. The grounds of the appeal of the appellant are dismissed.

is general in nature and is considered to be a dismissed ground for statistical purposes. Accordingly, all the grounds of appeal are dismissed.

8. The matter has been considered. The order u/s 143(3) of the Act has been carefully examined. Considering the facts of the case and submission of the appellant, the AO was right in calculating total assessed income of Rs. 11,24,655/- u/s 143(3) of the I.T. Act, 1961.

9. In the result, the appeal of the appellant is dismissed.”

5. As the assessee did not received any favor from the appeal so filed before the ld. CIT(A). The present appeal is filed on the grounds as raised here in above in para 2. In support of the grounds so raised by the written submission:

1. The assessee filed the return in response to notice u/s 148 on 10.05.2018 declaring total income of Rs.2,87,510/- (PB 4-5). It includes income from short term capital gain of Rs.3,87,450/- on sale of Plot No.14, Milap Nagar Yojna, Tonk Road, Jaipur for Rs.14 lacs vide agreement to sale dt. 11.02.2011 (PB 6-10).

3. The AO based on the value assessed by the stamp authorities took deemed sales consideration u/s 50C at Rs.22,37,143/- and worked out short term capital gain at Rs.12,24,593/- as against Rs.3,87,450/- and thus made addition of Rs.8,37,143/- by not accepting the contention of assessee that DLC value as on the date of agreement should be adopted for the reason that proviso to section 50C(1) was inserted by FA, 2016 w.e.f. 01.04.2017 and thus not applicable for AY under consideration.

6 Monika Jindal, Jaipur vs. ITO 2. It is submitted that first proviso to section 50C was inserted by FA, 2016 w.e.f. 01.04.2017 to provide that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer. The second proviso further provides that the first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed, on or before the date of the agreement for transfer. Though this amendment is made effective from AY 2017-18 but since it seeks to relief the assessee from undue hardship, therefore, it has a retrospective effect as held in the following cases:-

CIT Vs. Vummudi Amarendran (2020) 429 ITR 97 (Madras) (HC) (PB 25-31) The relevant Para 10 of the order reads as under:-

Bellandur Chikkagurappa Jayaramareddy Vs. ACIT (2023) 226 DTR 17 (Bang.) (Trib.) (PB 32-33) The head note of the decision reads as under:-

Capital gains—Computation—Applicability of proviso to s. 50C(1) vis-a-vis stamp duty valuation—Contention of the assessee that transfer took place

7 Monika Jindal, Jaipur vs. ITO on date of JDA on 1st March, 2013 and relevant value as on the date of JDA or the date of MOU (8th April, 2013) to be applied, instead of applying guidelines value on 12th August, 2013 in view of proviso to s. 50C(1) is sustainable—There was payment of Rs. 2,50,00,000 on 23rd Nov., 2011 by cheque—Proviso to s. 50C(1) is retrospective in nature—Since part of consideration already been passed through MOU, it cannot be said that no consideration is paid on the date of MOU—Also, the assessee has proved that 2nd proviso to s. 50C(1) is satisfied since the assessee has paid part of sale consideration on the date of MOU dt. 8th April, 2013—Therefore, the guidence value has to be computed as prevailing on the date of MOU dt. 8th April, 2013 for the purpose of determination of capital gains. Dharamshibhai Sonani Vs. ACIT (2016) 142 DTR 62 (Ahmedabad) (Trib.) (PB 34-35) The head note of the decision reads as under:-

Capital gains—Computation—Retrospective applicability of provisos to s. 50C(1)—Sec. 50C provides for a rebuttable presumption that the value, for the purpose of computing stamp duty, adopted by the stamp duty valuation authority represents fair indication of the market price of the property sold— However, there is sometimes considerable time gap in parties agreeing to a transaction (i.e., agreement to sell) and the actual execution of the transaction (i.e., sale deed), and yet, it is the value as on the date of execution of sale deed which is recognized by s. 50C for the purpose of computing the capital gain—In such case the very comparison between the value as per sale deed and the value as per stamp duty valuation, accordingly, ceases to be devoid of a rational basis because these two values represent the values at two different points of time—Income-tax Simplification Committee set up in the year 2015 took note of this incongruity and based on the recommendation of the first report of this committee, two provisos have been inserted in s. 50C vide Finance Act, 2016 w.e.f. 1st April, 2017—Admittedly, this amendment in the scheme of s. 50C has been made to remove an incongruity, resulting in undue hardship to the assessee— Hence, such an amendment has to be treated as effective from the date on which the law, containing such an undue hardship or incongruity, was introduced—Viewed thus, the proviso to s. 50C should also be treated as curative in nature and applicable with retrospective effect from 1st April, 2003, i.e., the date effective from which s. 50C was introduced.

In view of above, addition of Rs.8,37,143/- made by AO & confirmed by Ld. CIT(A) be directed to be deleted.”

5.1. To support the contentions so raised in the written submission the ld. AR of the assessee also submitted a paper book containing following documents / evidence:-

S. No. Particulars Pg. No. Filed before AO/CIT(A) 1 Copy of submission filed before ld. CIT(A) 1-3 CIT(A) 2 Copy of return acknowledgement along with computation of total income 4-5 Both 3 Copy of sale agreement dt. 11.02.2011 6-10 Both 4 Copy of sale deed dt. 23.03.2011 11-22 Both 5 Chart showing DLC rate effective from 27.05.2010 & 09.03.2011 23-24 Both 6 Copy of decision of Hon’ble Madras High Court in case of CIT vs. 25-31 Reference Vummudi Amarendran (2020) 429 ITR 97 7 Copy of decision of Hon’ble ITAT Bangalore Bench in case of Bellandur 32-33 Reference Chikkagurappa Jayaramareddy vs. ACIT (2023) 226 DTR 17 8 Copy of decision of Hon’ble ITAT Ahemedabad Bench in case of 34-35 Reference Dharamshibhai Sonani Vs. ACIT (2016) 142 DTR 62 5.2 The ld. AR of the assessee, in addition to the above submitted that as on the date of giving advance to the assessee the consideration was Rs. 14,00,000/-. Out of which Rs. 10,00,000 was paid by cheque no. 001588 dated 11.02.2011 and Rs 4,00,000/- by cash. Thus, the whole consideration was paid on 11.02.2011. Whereas the ld. AO has considered the stamp duty value prevailing as on the date of final document dated on 23.03.2011.

The ld. AR of the assessee also submitted a DLC rate chart effective from 27.5.2010 and 09.03.2011 and supported that the difference added on account of DLC rate as on the date of document is not valid considering the peculiar facts of the case. In support of the contention he relied upon the that if the assessee demonstrated that the value as on date of agreement was lower than the stamp duty value as on date of agreement and the money has been paid by cheque before date of agreement to sale and therefore, the stamp duty value as on date of agreement should be accepted. The ld. AR of the assessee submitted that the assessee has received amount for consideration at Rs. 14,00,000/- as date of agreement and therefore, the value adopted at the time of registration is merely the levy as per the stamp duty but for the purpose of income tax act the rate prevailing as on the date of agreement to sale will prevail. The ld. AR of the assessee submitted certified copy of increase in DLC rate which were effective from 09.03.2011 whereas in this case, the agreement was duly executed on 11.02.2011 and therefore, the revision of DLC rate will not be applicable to the facts of this case of the assessee.

Special provision for full value of consideration in certain cases. 50C. (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer: Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer: Provided further that the first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic

11 Monika Jindal, Jaipur vs. ITO clearing system through a bank account or through such other electronic mode as may be prescribed7, on or before the date of the agreement for transfer: Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and ten per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48, be deemed to be the full value of the consideration. (2) Without prejudice to the provisions of sub-section (1), where— (a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed or assessable by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation 1.—For the purposes of this section, "Valuation Officer" shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). Explanation 2.—For the purposes of this section, the expression "assessable" means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed or assessable by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer. agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer even the subsequent condition that the consideration should have been transferred as on the date of the agreement which is evident from the notarized agreement to sale consideration filed by the assessee. The ld. AR of the assessee demonstrated that Rs. 10,00,000/- was paid by cheque before date of agreement to sale. Therefore, the stamp duty value as on date of agreement should be accepted. The ld. AR of the assessee in his paper book filed the certified copy of increase in DLC rate which were effective from 09.03.2011 whereas in this case, the agreement was duly executed on 11.02.2011. Therefore, the revision of DLC rate will not be applicable to the case of the assessee. The bench also noted that based on this agreement placed on record coupled with the transfer of money for agreement to sale, it is clear that the agreement to sell was made on 11.02.2021 wherein the consideration was fixed at Rs. 14,00,000/-. The agreement was duly executed before Notary Public and as per the certified copy of DLC rate it is was increased from 09.03.2011 i.e. after the agreement to sell. The ld. AR of the assessee considering the provision of law and facts as placed on record also relied upon the various case laws. Based on the similar set of facts the coordinate Bench of Ahmedabad ITAT in the case of Dharamshibhai Sonani vs. ACIT (2016) 142 DTR 62 held as under:-

“[9] So far as the amendment to Section 50C being retrospective in effect is concerned, there is no doubt about the legal position. I hold the provisos to Section 50C being effective from 1st April 2003. This is precisely what the learned counsel has prayed for. In his detailed written submissions, he has made out of a strong case for the amendment to Section 50C being treated as retrospective and with effect from 1st April 2003. The plea of the assessee is indeed well taken and deserves acceptance. What follows is this. The matter will now go back to the Assessing Officer. In case he finds that a registered agreement to sell, as claimed by the assessee, was actually executed on 29.6.2005 and the partial sale consideration was received through banking channels, the Assessing Officer, so far as computation of capital gains is concerned, will adopt stamp duty valuation, as on 29.6.2005, of the property sold as it existed at that point of time. In case the assessee is not content with this value being adopted under section 50C, he will be at liberty to seek the matter being referred to the DVO for valuation, again as on 29.6.2005, of the said property. As a corollary thereto, the subsequent developments in respect of the property sold (e.g. the conversion of use of land) are to be ignored. It is on this basis that the capital gains will be recomputed. With these directions, the matter stands restored to the file of the Assessing Officer for adjudication de novo, after giving an opportunity of hearing to the assessee and by way of a speaking order. I order so. [10] As I part with the matter, I may make one more observation. The amendment in Section 50C was brought in to provide relief to the assessee in a situation in which the stamp duty valuation of a property has risen between the date of execution of agreement to sell and execution of sale deed, as is the norm rather than exception, but the real estate market is now traversing through a difficult phase and there can be situations in which there is a fall in the stamp duty valuation rates with the passage of time. Such a situation has actually arisen in many places in the country, such as in Gurgaon (http://www.hindustantimes.com/gurgaon/for-the-first-time-circle-rates- reduced-in-gurgaon/storycjp6e72TeGS9H5jJIALAGP.html), New Delhi (http://www.delhismartcities.com/blogs/high-circlerates-causing-slump-realty- reduce-delhi-government/), and even in Dehradun (Uttarakhand) (http://www.tribuneindia.com/news/uttarakhand/relief-to-property-buyers-as-circle

14 Monika Jindal, Jaipur vs. ITO ratescut-50-pc/247805.html) and some other places. It is therefore possible that, at first sight, first proviso to Section 50C may seem to work to the disadvantage of the assessee in certain situation in the event of the word ‘may’ being construed as mandatory in application, but then one cannot be oblivious to the fact that this proviso states that “the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer (emphasis supplied)” making it clearly optional to the assessee, and that, in any event, what has been brought by the lawmakers as a measure of relief to the taxpayers cannot be construed as resulting in a higher tax burden on the taxpayers. Of course, assuming that my understanding of this statutory provision is in harmony with the legislative intention, insertion of words “at the option of the assessee” between “stamp valuation authority on the date of agreement may” and “be taken for the purposes of computing full value of consideration for such transfer”, in first provisio to Section 50C(1), could have made the legal provision even more unambiguous.”

7.1 Respectively following the ratio of judicial precedent cited and relied upon we find force in the argument and evidences placed on record and hold that the date of agreement be taken for the purpose of computing the full value of consideration for transfer of capital assets. Therefore, considering that aspect of the matter, we hold that the stamp duty rate at the time of agreement to sale should prevail the DLC rate as on date of transfer and therefore, we direct the ld. AO to take appropriate evidence of DLC rate from the assessee and grant the consequential relief to the assessee.

In terms of these observation the appeal of the assessee is allowed for statistical purpose.

15 Monika Jindal, Jaipur vs. ITO Order pronounced in the open court on 19/10/2023. Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 19/10/2023 *Ganesh Kumar, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Monika Jindal, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward-6(2), Jaipur 3. vk;dj vk;qDr@ The ld CIT vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 503/JP/2023) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत