HEMINA SANDIPKUMAR SHAH,GANDHINAGAR vs. THE ITO, WARD-2, GANDHINAGAR

The assessee is an individual and filed return of income at Rs.7,12,160/- for which the income tax return was rejected. The case was reopened in respect of the observation that the assessee sold the immovable property in the Assessment Year 2012-13. The Assessing Officer issued notice under Section Assessment Year: 2012-13 Page 2 of 3 148 of the Income Tax Act, 1961 on 28.03.2019. Notice under Section 142(1) of the Act was issued on 21.08.2019. In response to the notices, the assessee filed return of income declaring income of Rs.7,12,160/-. The Assessing Officer observed that the assessee derived income from partnership firm, sold immovable property and computed capital gain at Rs.3,49,150/-. The Assessing Officer, however, invoked provisions of Section 50C of the Act and recomputed capital gain at Rs.15,83,000/- and made addition of Rs.12,33,850/-.

Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.

The Ld. AR submitted that the assessee made Banakhat before the Jantri rate increased on 08.04.2011 and the assessee made Banakhat on 28.01.2011. In fact, the possession was also given on 28.01.2011 along with part payment received before 01.04.2011. As the Jantri value increased after finalisation of the Banakhat, so the sale consideration cannot increase because Banakjhat already done and possession given at the Jantri valuation cannot be taken when it is prior to the hike for the Jantri valuation. The Government has amended the Act in Section 50C that if stamp duty valuation is revised after part payment is received and the Banakhat is done, then Banakhat value is to be taken and not the revised stamp duty valuation. The Ld. AR relied upon the decision of the Tribunal in the case of Rasilaben Yogeshbhhai Patel vs. ITO (ITA No.631/Ahd/2019, order dated 07.10.2022).

The Ld. DR submitted that the stamp valuation should be taken into account and in fact the CIT(A) in paragraph no.5 has categorically mentioned that the Assessing Officer should restrict cost of acquisition/improvement to Rs.31,70,000/- against the assessee’s claim of Rs.35,01,700/-. The assessee, in fact, has not given any documents related to the agreement before the CIT(A) and, therefore, the additional capital gain by invoking provisions of Section 50C of the Act applied by the Assessing Officer cannot be faulted.

Heard both the parties and perused all the relevant material available on record. From the perusal of the Banakhat/date of agreement as well as details Assessment Year: 2012-13 Page 3 of 3 given for the Jantry value and the stamp value prior to revision in the Jantri value, it appears that the assessee has partly made payment and, therefore, the contention of the assessee that the effect of first proviso to Section 50C of the Act will be applicable in the assessee’s case and, therefore, the stand taken by the Assessing Officer as well as the CIT(A) does not sustain. Thus, appeal of the assessee is allowed.

In the result, appeal filed by the assessee is allowed.