Vijay Kumar Ghelani, New Delhi vs Assessee

Vijay Kumar Ghelani Vs ITO Partner of M/s. Saurashtra Engg. Ward- 29(1), Works, Drum Shape Building, 4023, Naya Bazar I.P.Estate New Delhi New Delhi (APPELLANT) (RESPONDENT) PAN No. AAGPG5572K Assessee by : Sh. Mohit Parekh C.A. Revenue by : Sh. Syed Nasir Ali, C.I.T.DR Date of Hearing : 04.06.2015 Date of Pronouncement : 08 .06.2015

ORDER Per N.K.SAINI, AM :

This is an appeal by the assessee against the order dated 29.06.2012 of CIT(A)- XXV, New Delhi.

2. Following grounds have been raised in this appeal :-

"That the Ld. CIT(A)-XXV, New Delhi was not correct both on the facts and in the circumstances in confirming the short term capital gain at Rs. 47,46,000/- determined and assessed by the A.O. as against Rs. 19,90,000/- as declared and worked out for taxation by the Appellant.

2. That on the facts and circumstances of the case the authorities below have grievously erred in not invoking the provision of section 50C(2) of the IT Act 2 ITA No. 4615/Del/2012

in spite of the fact that the Appellant has disputed/objected to the valuation adopted or assessed by the Stamp Valuation Authority for the purpose of registration of the sale deed and, consequently, the sales consideration taken by Authorities below at Rs. 1,07,56,000/- is excessive and wrong and against the said provisions of law.

3. The Appellant has disputed the value so adopted or assessed by the Stamp Valuation Authority under sub-section (1) of Section 50C of the I.T.Act before the AO as well as CIT(A), New Delhi.

4. That the Appellant craves leave to add, to amend, to alter, and/or withdraw any of the ground(s) of appeal either before or at the time of hearing of the appeal."

3. Facts of the case in brief are that the assessee filed the

return of income on 30.9.2009 declaring an income of Rs.

1,45,600/- which was processed u/s 143(1) of the I.T.Act, 1961

(hereinafter referred to as the Act). Later on the case was

selected for scrutiny, the AO received an information that the

assessee sold a property amount to Rs. 46,10,000/- on

1.11.2011. The A.O. also received an information from the Sub-

Registrar-IV, Ghaziabad that a sale deed was made on

31.10.2008 for plot no. 1087, Nitikhand-I, Indira Puram,

Ghaziabad for Rs. 80 Lac where as the prevailing circle rate of 3 ITA No. 4615/Del/2012

the property in the area at that time was at Rs. 1,07,56,000/-.

The A.O. adopted the sale value of the property in question at

Rs. 1,07,56,000/- and worked out the short capital gain at Rs.

47,46,000/- as under :-

"Short-term capital gain is computed as under :

V alue of the property under consideration as per Rs. 1,07,56,000/- Prevailing circle rate as assessed by the District Offi cer and on which stamp dul y for Sale-proceed paid. Less: Expense i ncurred towards de velopment Of land & Brokerage Paid Rs. 15,00,000 Rs. 92, 56,000

Less :

- Cost of propert y pur chased on 01.12.2005 Rs. 40,00,000

- St amp dut y & other incidental expenses. R s. 4,30,000

- Brokerage paid Rs. 80,000 Rs. 45,10,000/-

NET SHORT TERM CAPITAL GAIN Rs. 47,46 ,000"

4. Being aggrieved the assessee carried the matter to the Ld. CIT(A) who confirmed the addition made by the AO by observing in para 3.4 of the impugned order as under :-

"3.4 It is apparent from the order of the AO that the AO has followed the deeming provisions of section 50C(1) which is apparently justified and the assessee also has not brought any susbstantial materials to controvert the finding of the A.O. After considering all the facts and circumstances of the case, I am of the view that there is no merit in the submission of the assessee and accordingly, the assessment/addition made by the AO under deeming provision of section 50C(1) is confirmed."

4 ITA No. 4615/Del/2012 Now the assessee is in appeal

5. The Ld. Counsel for the assessee submitted that the Ld. CIT(A) without considering the submissions of the assessee confirmed the addition made by the AO and the order passed by him is a non-speaking order. In his rival submissions, the Ld. DR strongly supported the order of the authorities below and stated that since the sale value shown by the assessee was less than the circle rate. Therefore, the A.O. was justified in invoking the provisions of Section 50C(1) of the Act and making the addition on account of short term capital gain.

6. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the Ld. CIT(A) in para 3.1 of the impugned order has stated the facts and in para 3.3 reproduced the provisions contained in Section 50C of the Act, however, he had not discussed the submissions furnished by the assessee and confirmed the additions by simply stating that the AO had followed the deeming provisions of Section 50C(1) of the Act. No other cogent reason has been given while confirming the said addition by the ld. C.I.T.(A).

5 ITA No. 4615/Del/2012 In our opinion, the order passed by the ld. CIT(A) is a non- speaking order in the eyes of law, particularly when he has not discussed the submissions of the assessee and also not stated how and why those submissions were rejected.

7. We therefore, considering the totality of the facts deem it appropriate to remand this issue back to the file of the Ld. CIT(A) to be adjudicated afresh inaccordance with the law after providing due and reasonable opportunity of being heard to the assessee.

8. In the result, appeal of the assessee is allowed for statistical purposes.

(Order Pronounced in the Court on 08/06/2015)

Sd/- Sd/-

(George George K) (N. K. Saini) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 08 /06/2015 *Binita* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5.DR: ITAT ASSISTANT REGISTRAR 6 ITA No. 4615/Del/2012

Date Initial 1. Draft dictated on 4/06/2015 2. Draft placed before author 5/06/2015

3. Draft proposed & placed before the second member

4. Draft discussed/approved by Second Member.

5. Approved Draft comes to the Sr.PS/PS

6. Kept for pronouncement on

7. File sent to the Bench Clerk

8. Date on which file goes to the AR

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

10. Date of dispatch of Order.