Bharatbhai Kalyanbhai Malvia, Surat vs Department Of Income Tax

ी एन0एस0 सैनी, लेखा सद य एवं ी कुल भारत, या%यक सद य के सम& BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 2227/Ahd/2011 %नधा)रण वष)/Assessment Year: 2008-2009

ITO, Ward-3(2) Shri Bhartbhai Kalyanbhai Malvia Surat. Vs Flat NO.203, Centre Point Anand, Mahal Road Adajan, Surat.

PAN : ACZPM 1630 P

अपीलाथ,/ (Appellant) -.यथ,/ (Respondent)

Revenue by : Shri M.K. Singh, SR.DR Assessee(s) by : None

सन ु वाई क तार ख/ Dateof Hearing : 26/03/2015 घोषणा क तार ख / Date of Pronouncement: 10/04/2015

आदे श/O R D E R

PER N.S. SAINI, ACCOUNTANT MEMBER: This is an appeal filed by

the Revenue against the order of the Commissioner of Income-Tax-II, Surat dated 28.6.2011.

2. The sole ground of appeal of the Revenue reads under:

"1. On the facts and circumstance of the case and in law, the ld.CIT(A) has grossly erred in deleting the addition of Rs.65,98,214/- being the 1/3rd share of the appellant in the long term capital gain on sale of ancestral agricultural land by adopting the value of the land as determined by the Valuation Officer under section 50C(2) of the I.T.Act instead of accepting the jantri rate prescribed for the area specially in view of the urbanization of the said area undertaken by the State Authorities."

ITA No.2227/Ahd/2011 2 3. Brief facts of the case are that the AO observed that the assessee has sold land measuring 7386 sq.meters for Rs.45 lakhs on 27.8.2007. The sale deed was registered with sub-Registrar, Surat 4, who valued the property at Rs.2,32,65,900/- and the assessee paid stamp duty of Rs.11,40,500/- on the said value. Therefore, the AO issued show cause notice to the assessee as to why sale consideration for determination of capital gain under section 48 of the Act should not be taken as Rs.2,32,65,900/-. Since the assessment was getting time barred, the AO completed the assessment taking the sale consideration of land at Rs.2,32,65,900/-, and accordingly made addition of 1/3rd of the capital determined after deducting Rs.11,40,500/- being interest cost of the land worked out the capital gain at Rs.65,98,214/- and added to the income of the assessee.

4. On appeal, the CIT(A) observed that since the reference under section 50C(2) of the Act was made to the valuation officer at the instance of the assessee, the fair market value of the above property determined by the valuation officer becomes full value of the sale consideration for the purposes of computation of capital gain under section 48 of the Act. Accordingly, directed the AO to take the fair market value of the property as on 7.9.2007 determined by the valuation officer, as full value of sale consideration for computing the capital gain from the sale of the property in question, and to compute the capital gains in the hands of the assessee on the said basis, and accordingly, allowed the appeal of the assessee.

5. Being aggrieved by the said order of the CIT(A), the Revenue is in appeal before us by taking the above ground of appeal.

6. The DR supported the order of the AO.

ITA No.2227/Ahd/2011 3 7. The AR of the assessee has filed adjournment petition stating therein that Shri Dennis Choksi, who is authorized representative in the present appeal is extensively busy in attending the time barred income tax matters to be completed before 31/3/2015, and hence appeal should be adjourned to a later date after 7/4/2015. As the Bench found the reason for adjournment of hearing not being plausible one, adjournment petition was rejected, and appeal of the assessee was heard ex parte qua the assessee-respondent, after considering the material on record and the submissions of the DR.

8. After considering the submissions of the DR, we find that in the present case, the assessee sold a plot of land for consideration of Rs.45 lakhs and the stamp duty was charged on the value of Rs.2,32,65,900/- . The assessee objected before the AO that the stamp duty valuation of sub-Registrar, Surat of the property was much higher than the market value, and therefore, the same should not be considered, as the full value of consideration under section 48 of the Act for computing the capital gain in the hands of the assessee. Being satisfied, the AO referred the matter to the valuation officer on 28.12.2010, but as the assessment was getting time barred, he completed the assessment by taking the sale consideration as the value determined by the sub- Registrar at Rs.2,32,65,900/-. The assessee carried the matter in appeal before the CIT(A) who directed the AO to take the sale consideration as determined by the DVO, and accordingly, compute the capital gain.

9. DR contended before us that the CIT(A) was not justified in directing the AO to take the value as determined by the DVO for computing the capital gains in the instant case.

10. We find that section 50C(2) provides that where the assessee claimed before the AO that the value adopted or assessed by the stamp valuation authority under subsection (1) exceeds the fair market value ITA No.2227/Ahd/2011 4

of the property, on the date of transfer, the AO may refer the valuation of the capital asset to the valuation officer, in such a situation, the lower of value determined by the departmental valuation officer and stamp duty valuation officer shall be considered as consideration accruing to the assessee. Since it has not been disputed by the DR that the value of the property determined by the DVO was lower than the value determined by the stamp duty valuation officer, therefore, we find that there is no infirmity in the order of the CIT(A) in directing the AO to adopt the value determined by the departmental valuation officer, as sale consideration of the property for computing the capital gains in the hands of the assessee. Therefore, we dismiss this ground of appeal of the Revenue.

11. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the Court on Friday, the 10th April, 2015 at Ahmedabad.

Sd/- Sd/-

(KUL BHARAT) ( N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Ahmedabad; Dated 10 /04/2015