Jamiyatram Shivlal Galiawala, Surat vs Department Of Income Tax

1

ITA.No. 2508 /Ahd/2011 Assessment year 2007-2008

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD " D " BENCH, AHMEDABAD

(BEFORE SHRI N.S.SAINI ACCOUNTANTMEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER.)

ITA No.2508/Ahd/2011 (Assessment Year: 2007 -2008)

Deputy Commissioner of Income Tax, Circle-2, Room No.10, Aayakar Bhavan, Majura Gate, Surat-395 001. ..................Appellant

Vs.

Shri Jamiyatram Shivlal Galiawala, 3/2212 Pipardi Sheri, Salabatpura, Majura Gate, Surat-395001. .................Respondent

(PAN :AKEPG 6158L)

Appellant by : Smt. Sonia Kumar, Sr.D.R.

Respondent by: Shri M.R. Shah,A.R.

Date of hearing : 06-05-2015

Date of pronouncement : 08-05-2015

O R D E R

Per Shri N.S. Saini, Accountant Member.

This appeal is filed by the Revenue against the order of Commissioner of Income Tax (Appeals)-II, Surat dated 20-07-2011.

2 ITA.No. 2508 /Ahd/2011 Assessment year 2007-2008

2. The sole ground of appeal taken in this appeal by the Revenue is that the CIT (A) has erred in directing the Assessing Officer to take the acquisition cost of the property as on 1-4-1981 at Rs.14,32,000/- against Rs.9 lakhs shown in the return of income and after indexation deleting the addition of Rs.27,61,180/-. The addition on account of extra capital gain without considering the fact that the assessee himself has taken the acquisition cost of Rs.9 lakh in the return of income.

3. Brief facts of the case are that the assessee was an owner of a piece of land together with Shri Deepakkumar J. Galiawala and Smt. Taraben Jamiyatram wherein they all had 1/3 rd share. The said land was sold during the year under consideration and the sale value shown in the Sale Deed was Rs.1,33,67,970/- and the value determined by the Stamp Valuation Authority for the said land was Rs.2,52,50,610/-. The assessee had got the value as on 1-4-1081 determined by the Registered Valuer at Rs.1500/- per sq.mtr. The assessee adopted the value of the land as on 1-4-1981 at Rs.1,42,96,000/- which was Rs.1446/- per sq. mtr.and was nearer to the rate of Rs.1500/- per sq. mtr. adopted by the Registered Valuer. The indexed cost of this property was worked out to Rs.2,22,96,240/-. The assessee had taken the sale consideration as 1/3 rd of Rs.2,52,50,610/- and the indexed cost of acquisition as 1/3 rd of Rs.2,22,96,240/- and the same worked out to Rs.84,16,870/- and Rs.74,32,080/- respectively and the assessee had shown the long term capital gain at Rs.9,84,790/-.

4. However, the Assessing Officer though adopted the assessee's sale consideration at Rs.84,16,870/- but took the cost of acquisition at Rs.27 lakh and 1/3 rd thereof which worked out to Rs.9 lakh and on the indexation of the same by taking the cost inflation index as 519 and worked out the indexed cost at Rs.46,71,000/- and thereby determined the capital gain at Rs.37,45,970/- in place of Rs.9,84,790/- shown by the assessee. Thus, he 3 ITA.No. 2508 /Ahd/2011 Assessment year 2007-2008

made addition for the difference amount of Rs.27,61,180/- to the income of the assessee.

5. On appeal, the Commissioner of Income Tax (Appeals) deleted the addition by observing as under:-

"4.2. The second ground of appeal taken by the appellant is against the merits of addition. The appellant has in this regard placed reliance on my order dated 27-12-2010 in the case of Shri Deepak j. Galiawala (Appeal No.CAS/II/338/09-10) in A.Y. 2007-08, as also various submissions made during the course of appellate proceedings in the above case. Sh. Deepak J.Galiawala is one of the three co-owners of the property sold during the year, capital gain from which has been declared in the return of income. The third co-owner being Smt. Taraben J. Galiawala, the issue involved in the second ground of appeal is, therefore, identical to the issue involved in the appeal of Shri Deepak J. Galiawala, which has been disposed of by me vide order dt. 27-10-2010. In the said order, with respect to rejection by the Assessing Officer of the value of the property taken as at 01-04-1981 by the aforesaid assessee, as per the Govt. Approved Vauer's report, I have given my finding, as under:-

"Upon verification of the original sale deed dt.27-12-1962, it is seen that the above property at survey No.19A-19B was purchased by Shri Navnchandra Shivlal, Parsuram Shivlal and Shri Jamiyatram Shivlal. The appellant's submission is that the property sold during the previous year relevant to asstt. Year, is 1/3 rd undivided property of ShriJamiyatram Shivlal, Smt. Taraben Shivlal and Shri Deepakkumar Jamiyatram. The appellant has also enclosed a copy of 'haqnu patrak (Gamno Namuno No.6) and valuation report dt. 17-12-2008 which also show that he above persons had shares in the property sold, viz. The open 4 ITA.No. 2508 /Ahd/2011 Assessment year 2007-2008

plot admeasuring at 297066 sq.mtr.at Dumas Road, Opp. SVNIT College, Umra, Surat in R.S. No.19A-19B. The area in 19A is 2815 sq.mtr. and in 19B it is 15566 sq.mtr. and the total area sold is 297066 sq.mtr. The valuation of land as on 01-04-1981 taken by the Valuation Officer is at the rate of 1500/- per sq.mtr. and the total value of the land has been worked out at Rs.44,55,990/-, and the appellant's share @ 1/3 rd at Rs.14,85,330/-. In so far as the appellant's 1/3 rd share in the sale proceeds is concerned, the same has not been disputed by the Assessing Officer. But, what he has disputed is that the valuation as on 1-4-1981 taken in the original return cannot be changed, accordingly indexation of the property also for capital gain purpose has to be as per the figures shown in the original return.

...Upon due consideration of the appellant's reply, I find that the revised return has been filed within the limitation period and, therefore, is a valid return. The Assessing Officer has also not given any reason as to why the valuation adopted as on 01-04- 1981 by the registered valuer is not acceptable. I, therefore, direct the Assessing Officer to take the value of the property as on 1-4-1981, which option has been exercised by the appellant, at the value taken by the registered valuer and to also take the indexation of the value of the property as on 01-04-1981, as determined in the registered valuer's report and to re-compute the capital gains on the property as well as appellant's share in the property as per the registered valuer's report."

4.3 In view that the appellant is 1/3 rd owner in the above property sold during the year from which capital given has been declared, I hold that the above decision given in the case of Shri Deepak J. Galiawala is also applicable in the case of the appellant and, accordingly, direct 5 ITA.No. 2508 /Ahd/2011 Assessment year 2007-2008

the Assessing Officer to take the value of the property as per the option exercised by the appellant, that s as at 01.04.1981, at the same value determined in the registered valuer's report for the purpose of computation of capital gain. The second ground of appeal is, therefore, allowed."

6. Both the parties before us agreed with this fact of the Tribunal in the case of Shri Deepakkumar J. Galiawala in ITA No.127/Ahd/2011 & C.O. NO.138/Ahd/2011 vide order dated 12-12-2014 passed in A.Y. 2007-08 confirmed the order of the CIT (A) and dismissed the appeal of the assessee. Therefore, the issue now stands covered in favour of the assessee and against the Revenue by the said order of the Tribunal. We find that the Tribunal in the case of Shri Deepakkumar J. Galiawala (supra) held as under:-

"4.1. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the Ld. CIT(A) has given a direction in para-3.2 of his order as under:-

"3.2. Upon due consideration of the appellant's reply, I find that the revised return has been filed within the limitation period and, therefore, is a valid return. The Assessing Officer has also not given any reason as to why the valuation adopted as on 01-04- 1981 by the registered valuer is not acceptable. I, therefore, direct the Assessing Officer to take the value of the property as on 1-4-1981, which option has been exercised by the appellant, at the value taken by the registered valuer and to also take the indexation of the value of the property as on 1-4-1981, as determined in the registered valuer's report and to re-compute the capital gains on the property as well as appellant's share in the property as per the registered valuer's report. Part (a) & (b) 6 ITA.No. 2508 /Ahd/2011 Assessment year 2007-2008

of the second ground of appeal is, therefore, allowed as per the above directions. Part (c) of the second ground of appeal is against rejection of claim u/s. 54 of the Act. The appellant, in this regard has relied upon the decision in the case of Cello Plasts vs. DCIT Mumbai ITAT (2010 ITOL 60) and has stated that since he scheme of REC bonds came into existence for the first time on 22.01.2007, he could not have invested in the said scheme before the scheme came into existence, hence he is eligible for deduction u/s. 54 of the Act. I have duly considered the submission of the appellant. However, I find that there is no dispute that the period of 6 months for the investment of the capital gain from the immovable property expired on 23.12.2006, and till then the above bonds had not been issued. Therefore, the appellant knowingly deferred the investment of capital gain after the expiry of the above period and there is no question of getting any benefit under exemption of the above section. I, therefore, uphold the assessment order on this point and dismiss this part of ground of appeal. The ground of appeal No.2 is, therefore, partly allowed.

4.2. We do not find any infirmity in the finding of the Ld. CIT (A) as the A.O. has not given any valid reason not to adopt the valuation given by the Government Approved Valuer. Therefore, grounds raised in the appeal by the Revenue are devoid of any merit, same are rejected."

7. In view of the above facts and circumstances of the case we dismiss the ground of appeal of the Revenue.

7 ITA.No. 2508 /Ahd/2011 Assessment year 2007-2008

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

Order pronounced on 08 -05 -2015.

Sd/- Sd/- (KUL BHARAT) (N. S. SAINI) Judicial Member Accountant Member

Ahmedabad, the 8th day of May, 2015

Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order etc

Assistant/Deputy Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

Patki

1. Date of dictation . 7-5-2015. (dictation-pad pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ..7-5-2015

3. Other Member...7-5-2015

4. Date on which the approved draft comes to the Sr.P.S./P.S 7-5-2015.

5. Date on which the fair order is placed before the Dictating Member for Pronouncement 7-5-2015

6. Date on which the fair order comes back to the Sr.P.S./P.S 8-5-2015.

7. Date on which the file goes to the Bench Clerk 8-5-2015

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................