The ACIT, (OSD)Circle-8,, Ahmedabad v. M/s. Shilankit Arcade (P) Ltd.,, Ahmedabad

ITA 1128/AHD/2008 | 2005-2006
Pronouncement Date: 13-08-2010 | Result: Dismissed

Appeal Details

RSA Number 112820514 RSA 2008
Assessee PAN ABCFS5012K
Bench Ahmedabad
Appeal Number ITA 1128/AHD/2008
Duration Of Justice 2 year(s) 4 month(s) 12 day(s)
Appellant The ACIT, (OSD)Circle-8,, Ahmedabad
Respondent M/s. Shilankit Arcade (P) Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 13-08-2010
Date Of Final Hearing 02-08-2010
Next Hearing Date 02-08-2010
Assessment Year 2005-2006
Appeal Filed On 31-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI T K SHARMA JUDICIAL MEMBER AND SHRI N S SAINI ACCOUNTANT MEMBER ITA NO.1128/AHD/2008 (ASSESSMENT YEAR:-2005-06) THE ASSISTANT COMMISSIONER OF INCOME- TAX (OSD) CIRCLE-8 AHMEDABAD V/S SHILANKIT ARCADE (P) LTD. T-8 RAJNI SMRUTI SOCIETY NR. ATIRA POLYTECHNIC AHMEDABAD PA NO. ABCFS 5012 K [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI K M MAHESH SR. DR RESPONDENT BY:- SHRI S N DIVATIA AR O R D E R PER T K SHARMA (JM): THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 24-01-2008 OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XIV AHMEDABAD [THE CIT(A)] FOR ASSESSM ENT YEAR (AY) 2005-06. THE ONLY EFFECTIVE GROUND RAISED BY THE RE VENUE READS AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.69 53 000/- MADE AS UNEXPLAINED INVESTMENT U/S 69 OF THE I.T. A CT. 2 BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE AND CONSTRUCTION. THE ASSESSEE PURCHASED A PROPERTY ADM EASURING 2429 SQ. MTRS. AT RS.1 00 50 000/-. THE ASSESSEE FILED T HE VALUATION REPORT SHOWING THE VALUE AT RS.97 16 000/-. THE AO REFERRED THE MATTER TO DISTRICT VALUATION OFFICER WHO VALUED IT AT RS.1 70 03 000/- AND THE AO MADE AN ADDITION OF RS.69 93 000/- BEIN G THE DIFFERENCE ITA NO.1128/AHD/2008 FOR AY 2005-06 SILANKIT ARCADE P LTD. 2 AMOUNT BETWEEN THE MARKET VALUE SHOWN AND THE MARKE T VALUE ESTIMATED BY THE DEPARTMENTAL VALUER. 3 AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE CIT(A). THE LEARNED CIT(A) DELETED THE SAID ADDITIO N WITH THE FOLLOWING OBSERVATIONS:- 2.2 THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS HAS SUBMITTED THAT THE VALUE DISCLOSED BY THE TRANSFERO R IS MUCH ABOVE THE JANTRI PRICE AND THERE IS NO QUESTION OF ENHANCING THE VALUE OF THE PROPERTY. THE DVO HAS REFERRED SALE INSTANCE OF REGISTERED VA LUER OF A BUNGLOW WHICH IS CONSTRUCTED ON 202.34 SQ. MTRS. ON LAND HA VING CONSTRUCTED AREA OF 314 SQ. MTRS. VALUE OF THIS SURVEY NO. 695/1 IS RS.12 50 000/- WHILE OTHER TWO INSTANCES GIVES VALUE OF OPEN LAND WHICH COMES TO RS.965/- AND RS.892/- RESPECTIVELY. THE DVO HAS STATED IN HIS RE PORT THAT THE SALE INSTANCES AS PER REGISTER DEED AND JANTRI DO NOT RE PRESENT MARKET VALUE. AGREEMENT OF SALE (BANAKHAT) SIGNED COUPLE OF MONTH S/YEAR AHEAD OF ACTUAL REGISTRATION OF INSTRUMENT OF TRANSFER CANNO T BE CONSIDERED TO BE THE REAL PRICE. THE PROPERTY WAS TRANSFERRED FOR RS.1 3 5 00 000/- ON 01-09- 2005 IN SUBSEQUENT YEAR AND THIS DOCUMENT WAS ALSO ACCEPTED BY THE 'STAMP VALUATION AUTHORITY'. IT WAS FURTHER SUBMITT ED BY THE APPELLANT THAT EXPLANATION AND NOTES ON CLAUSES OF SEC.50C PUBLISH ED IN THE BUDGET ISSUE IT IS MENTIONED THAT 'COMPUTATION OF CAPITA L GAINS IN REAL ESTATE TRANSACTIONS.' SEC. 50 C DEALS WITH SPECIAL PROVISI ON FOR DETERMINING THE VALUE OF CONSIDERATION IN CASES OF TRANSFER OF IMMO VABLE PROPERTY. THE VALUE OF BANAKHAT HAS TO BE HONOURED BECAUSE THIS A GREEMENT IS ENFORCEABLE BY LAW. DETAILED JUDGMENT ON THIS ISSUE WAS GIVEN BY THE HON. SUPREME COURT IN THE CASE OF K.P. VARGHESE VS. 1TO REPORTED IN 131 ITR P. 597-605. THE APPELLANT FURTHER RELIED ON THE REC ENT JUDGMENT OF HON. GUJARAT HIGH COURT IN THE CASE OF CIT VS. STAR BUIL DERS 294 ITR 338 WHEREIN IT WAS HELD THAT ADDITION COULD NOT BE MADE ON THE BASIS OF VALUATION OFFICER'S REPORT. REFERENCE COULD BE MADE FOR THE VALUATION OFFICER FOR THE PURPOSE OF SEC.55(A) 131 133(6) & 142(2). THE APPELLANT FURTHER SUBMITTED THAT IT WAS AOS DUTY TO PROVE TH AT THE APPELLANT HAS PAID MORE THAN WHAT WAS STATED IN THE INSTRUMENT OF PURC HASE DEED. THE AO HAS BLINDLY FOLLOWED THE REPORT OF D.V.O. WITHOUT B RINGING! ANY EVIDENCE ON RECORD TO PROVE UNDER HAND CONSIDERATION PAID BY TH E APPELLANT. FURTHER THE PROPERTY WAS SOLD IN THE SUBSEQUENT YEAR TO DIS HMAN PHARMACEUTICALS & CHEMICALS! FOR RS.1 35 00 000/- WHICH WAS A CHAN CE PRICE RECEIVED BY THE APPELLANT AS THE PROPERTY IS NEAR TO THE DIRECT OR'S RESIDENCE AND CORPORATE HOUSE IS INTENDED TO BE CONSTRUCTED ON TH E LAND. THE APPELLANT THEREFORE CONTENDED THAT THE ADDITION MADE MAY TH EREFORE BE DELETED. ITA NO.1128/AHD/2008 FOR AY 2005-06 SILANKIT ARCADE P LTD. 3 2. I HAVE CONSIDERED THE FADS OF THE CASE AND THE SUBMISSION OF THE APPELLANT ALONG THE CASE LAWS AS RELIED UPON. I AM INCLINED TO AGREE WITH THE VIEWS OF THE APPELLANT. THE .AND IN QUESTION HA S BEEN PURCHASED AT RS.1 00 50 000/- AND SOLD SUBSEQUENTLY SOLD FOR RS. 1 35 00 000/-. THE VALUE OF LAND PURCHASED IS MORE THAN THE JANTRI PRI CE AND THE VALUE ADOPTED BY THE DEPTT. VALUER IS BASED ON THE PROPERTY WHIC H CONTAINED PARTLY BUILT UP PROPERTY WHEREAS IN APPELLANT'S CASE IT IS ONL Y LAND. HENCE THE VALUATION MADE BY THE DEPTT. VALUER IS NOT REASONAB LE. THE VALUATION OFFICER HAS IN FACT NOT GIVEN ANY COMPARABLE CASE . FURTHER IT IS SEEN THAT SEC 50C IS ONLY FOR TAKING THE MARKET PRICE FOR TH E PURPOSE OF CAPITAL GAIN. UNLESS THERE IS ANY INDEPENDENT EVIDENCE BROUGHT OU T BY THE AO THAT SOME MORE MONEY HAS BEEN PAID IN ADDITION TO THE VA LUE SHOWN IN THE REGD. DEED THE ADDITION CANNOT BE MADE. AS PER T HE DECISIONS OF HON. SUPREME COURT IN THE CASE OF K.P. VARGHESE VS. ITO REPORTED IN 131 ITR P. 597-605 & HON'BLE GUJARAT COURT IN THE CASE OF C IT VS. STAR BUILDERS 294 ITR 338. THE ADDITION MADE BY THE AO ON THIS CO UNT WAS NOT JUSTIFIED AND HENCE THE AO IS ACCORDINGLY DIRECTED TO DELETE THE SAID ADDITION. 4 AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) THE REVENUE IS IN APPEAL. AT THE TIME OF HEARING BEFORE US SHRI K M MAHESH LEARNED DR APPEARED AND RELYING ON THE REASONING GI VEN BY THE AO IN THE ASSESSMENT ORDER CONTENDED THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MADE U/S 69 OF THE ACT. 5 ON THE OTHER HAND THE LEARNED COUNSEL FOR THE AS SESSEE VEHEMENTLY SUPPORTED THE ORDER OF THE CIT(A). 6 HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WHILE DELETING THE ADDITION OF RS.69 53 000/- MADE BY THE AO U/S 69 OF THE ACT TH E LEARNED CIT(A) OBSERVED THAT SECTION 50C IS ONLY FOR TAKING THE MA RKET PRICE FOR THE PURPOSE OF CAPITAL GAIN. THE ITAT MUMBAI BENCH IN T HE CASE OF INDERLOK HOTEL P LTD. REPORTED IN 122 TTJ 145 HELD THAT SECTION 50C CANNOT BE APPLIED FOR DETERMINING THE INCOME UNDER OTHER HEADS. IT IS APPLICABLE ONLY FOR THE PURPOSE OF DETERMINING T HE SALE CONSIDERATION FOR COMPUTATION OF CAPITAL GAIN ONLY. THE SAID DECISION IS SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEE S CASE. IN THIS ITA NO.1128/AHD/2008 FOR AY 2005-06 SILANKIT ARCADE P LTD. 4 VIEW OF THE MATTER WE CONCLUDE THAT THE CIT(A) HAS GIVEN COGENT REASONS FOR DELETING THE ADDITION OF RS.69 53 000/- MADE BY THE AO U/S 69 OF THE ACT. WE ARE THEREFORE INCLINED TO U PHOLD THE ORDER OF THE CIT(A). 7 IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 13-08-2010 SD/- SD/- (N S SAINI) ACCOUNTANT MEMBER (T K SHARMA) JUDICIAL MEMBER DATE : 13-08-2010 COPY OF THE ORDER FORWARDED TO: 1. SHILANKIT ARCADE (P) LTD. T-8 RAJNI SMRUTI SOC IETY NR. ATIRA POLYTECHNIC AHMEDABAD 2. THE ACIT (OSD) CIRCLE-8 AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XIV AHMEDABAD 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD