ITO,Ward 2(3), v. Sushma Gupta,

ITA 1130/DEL/2007 | 2003-2004
Pronouncement Date: 27-08-2010 | Result: Allowed

Appeal Details

RSA Number 113020114 RSA 2007
Bench Delhi
Appeal Number ITA 1130/DEL/2007
Duration Of Justice 3 year(s) 5 month(s) 22 day(s)
Appellant ITO,Ward 2(3),
Respondent Sushma Gupta,
Appeal Type Income Tax Appeal
Pronouncement Date 27-08-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted C
Tribunal Order Date 27-08-2010
Date Of Final Hearing 07-07-2010
Next Hearing Date 07-07-2010
Assessment Year 2003-2004
Appeal Filed On 07-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.1130/DEL/2007 ASSESSMENT YEAR : 2003-04 INCOME TAX OFFICER WARD 2 (3) MEERUT. VS. SMT. SUSHMA GUPTA PROP. M/S CEE KEY GARMENTS 202 MOHANPURI MEERUT. PAN : AARPG-1154-A C.O. NO.103/DEL/2008 (ITA NO.1130/DEL/2007) ASSESSMENT YEARS : 2003-04 SMT. SUSHMA GUPTA PROP. M/S CEE KEY GARMENTS 202 MOHANPURI MEERUT. PAN : AARPG-1154-A INCOME TAX OFFICER WARD 2 (3) MEERUT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI O.P. SAPRA ADVOCATE REVENUE BY : SHRI SANJAY AWASTHI SR. DR ORDER PER I.P. BANSAL JUDICIAL MEMBER THE APPEAL IS FILED BY THE REVENUE AND THE CROSS O BJECTIONS (CO) BY THE ASSESSEE. BOTH ARE DIRECTED AGAINST THE ORDER OF T HE CIT (A) DATED 11 TH DECEMBER 2006 FOR ASSESSMENT YEAR 2003-04. THE GR OUNDS OF APPEAL AND GROUNDS OF CROSS OBJECTION READ AS UNDER:- GROUNDS OF APPEAL 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DETAILED IN ANNEXURE A THE LD. COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 2 ERRED IN LAW IN DELETING THE ADDITION OF RS.15 50 0 00/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF PLOT IN THE CASE OF THE ASSESSEE BY IGNORING THE FACTS THAT ALL THE TRANSACTIONS OF PURCHASE & SALE OF IMMOVABLE PROPERTY WERE CARRIED OUT DIRECTLY THROUG H HER BANK ACCOUNT & THE ASSESSEE HERSELF ALSO DECLARED PROFIT /GAIN ON SUCH SALE PROCEEDS. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASI DE THAT OF THE ASSESSING OFFICER RESTORED. GROUNDS OF CROSS OBJECTIONS 1. THAT THE IMPUGNED ASSESSMENT ORDER DATED 21.11.0 5 AS PASSED UNDER SECTION 143 (3) OF IT ACT 1961 IS ARB ITRARY UNJUST AND ILLEGAL IN AS MUCH AS NO NOTICE U/S 143(2) WAS ACTU ALLY SERVED ON THE ASSESSEE BY 30.11.04 I.E. WITHIN ONE YEAR FRO M THE END OF THE MONTH IN WHICH RETURN WAS FILED (RETURN FILED ON 24 .11.2003). THE LEARNED A.O. FACTUALLY INCORRECT IN HIS OBSERVA TIONS MADE IN HIS ORDER THAT NOTICE U/S 143(2) DT. 24.11.2004 WAS SER VED UPON THE ASSESSEE BY AFFIXTURE ON 30.11.2004 AN AFFIDAVIT TO THIS EFFECT OF THE ASSESSEE IS ENCLOSED AS ANNEXURE-I . THE IMPUGNED ASSESSMENT ORDER DESERVES TO BE CANCELLED. 2. THAT WITHOUT PREJUDICE TO GROUND NO.1 AS ABOVE THE ASSESSEE HAS PURCHASE AND SALE PLOT IN QUESTION AS BUSINESS ASSETS AND HAS DECLARED THE PROFIT ON SALE OF PLOT AT RS.50 000/- AS HER BUSINESS INCOME. THEREFORE THERE WAS NO SHORT TERM CAPITAL GAIN AS WAS ASSESSED BY THE LD. A.O. 3. THAT WITHOUT PREJUDICE TO ABOVE GROUNDS SECTION 50C OF THE INCOME TAX ACT WAS NOT APPLICABLE TO THE ASSESSEE C ASE. THE ASSESSEE DENIES HER LIABILITIES TO BE ASSESSED ON A NY SHORT TERM CAPITAL GAIN. 2. IN THE CROSS OBJECTION THE FIRST OBJECTION OF TH E ASSESSEE IS REGARDING NON- SERVICE OF NOTICE U/S 143 (2). TO SUPPORT THE ASS ESSEE HAS FILED AN AFFIDAVIT THE CONTENTS OF WHICH ARE AS UNDER:- AFFIDAVIT OF SUSHMA GUPTA W/O SH. PRADEEP KUMAR GU PTA AGED ABOUT 44 YEARS R/O 202 NEW MOHANPURI MEERUT. IT IS SOLEMNLY AFFIRMED & STATED ON OATH AS UNDER:- ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 3 1. THAT I HAVE BEEN CARRYING ON BUSINESS IN THE MAN UFACTURE & SALE OF READYMADE GARMENTS UNDER THE NAME & STYLE OF M/S CEE KAY GARMENTS AT 202 NEW MOHANPURI MEERUT AS SOLE PROP RIETOR OF THE FIRM. 2. THAT IN THE ASSTT. ORDER DT. 21.11.2005 U/S 143 (3) FOR ASSTT. YEAR 2003-04 AS PASSED BY ITO WARD 2 (3) MEERUT THE FOL LOWING OBSERVATIONS ARE FACTUALLY INCORRECT:- A NOTICE U/S 143 (2) DT. 24.11.2004 WAS ISSUED & S ERVED UPON THE ASSESSEE BY AFFIXTURE ON 30.11.2004. NO SUCH NOTI CE WAS EVER SERVED ON ME OR ANY OTHER PERSON AUTHORIZED TO RECEIVE SUC H NOTICE. ON INSPECTION OF THE FILE IT HAS BEEN FOUND BY MY COUN SEL THAT ON THE COPY OF THE NOTICE DT. 24.11.2004 U/S 143(3) IT HAS BEEN FOUND ADDRESSED TO SMT. SUSHMA GUPTA W/O SH. KISHAN LAL GUPTA C/O CEE KAY GARMENTS SHASTRI NAGAR MEERUT AND HAS THE FOLLOWI NG NOTING :- SERVED BY ME THROUGH AFFIXTURE SIGN ILLEGIBLE 30.11.2004 ITI MERE SAMNE CHIPAKAYA GAYA HEI . (HINDI) SIGN ILLEGIBLE 30.1 1.2004 . PHOTOCOPY OF THE ABOVE NOTICE IS ATTACHED AS ANNEXU RE A TO THIS AFFIDAVIT. FROM THE SAID NOTICE IT IS VERY CLEAR THAT MY PROPE R ADDRESS HAS NOT BEEN GIVEN. MOREOVER I AM WIFE OF SH. P.K. GUPTA AND NO T KISHAN LAL GUPTA. 3) A COPY OF LETTER U/S 139 (9) DT. 18.10.2004 ATTA CHED AS ANNEXURE B ISSUED BY ITO W-2(3) MEERUT GIVES MY CORRECT AD DRESS I.E. 202 NEW MOHANPURI MEERUT AND SAME ADDRESS IS GIVEN IN MY P AN NO. PHOTOCOPY ATTACHED AS ANNEXURE C 4) THAT NO NOTICE OF HEARING DT. 24.11.2004 U/S 143 (2) FOR A.Y. 2003- 04 WAS EVER RECEIVED BY SPEED POST ON ME OR ANY OTH ER PERSON AUTHORIZED TO RECEIVE SUCH NOTICE. THAT IN THE ORDER SHEET DT. 24.11.2004 THE A.O. HAD MADE THE FOLLOWING ENTRY:- ITI PLEASE DO SERVE A COPY ON THE ASSESSEE EVEN BY AFFIXTURE & SEND A COPY THROUGH POST AS N.S. HAS SAID THAT ASSESSEE IS NOT TRACEABLE. THAT IT WAS DUE TO NON-SERVICE OF THE NOTICE U/S 14 3(2) DT. 24.11.2004 FIXING THE CASE FOR 08.12.2004 THAT NO ONE COULD AP PEAR BEFORE THE A.O. AS ALSO MENTIONED IN THE ASSTT. ORDER. 5) THAT FOR WANT OF ACTUAL SERVICE OF NOTICE U/S 14 3(2) BY 30.11.2004 THE ASSTT. ORDER DT. 21.11.2005 AS PASSED U/S 143(3 ) FOR ASSTT. YEAR 03- 04 IN MY CASE IS ILLEGAL AS LEGALLY ADVISED TO ME. ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 4 THAT THE FACTS MENTIONED IN PARA NO.1 TO 5 ARE TRUE & CORRECT NO PART OF IT IS FALSE AND NOTHING HAS BEEN CONCEALED. SO HELP ME GOD. VERIFIED AT MEERUT ON THIS 18 TH DAY OF JULY 2008. SD/- DEPONENT 3. AT THE TIME OF HEARING LD. AR RELIED UPON THE A FFIDAVIT FILED BY THE ASSESSEE TO CONTEND THAT NO NOTICE WHATSOEVER WAS S ERVED ON THE ASSESSEE U/S 143(2). 4. AS AGAINST THAT IT IS THE CASE OF THE REVENUE T HAT THE NOTICE WAS SERVED BY AFFIXTURE AND IT IS A PROPER SERVICE THEREFORE AS SESSMENT HAS TO BE HELD TO BE VALID. 5. IT MAY BE MENTIONED HERE THAT THIS GROUND WAS NO T TAKEN BEFORE THE LD. CIT (A). IT WAS PLEADED BY LD. AR THAT THIS BEING A LEGAL GROUND CAN BE TAKEN AT ANY STAGE OF THE APPELLATE PROCEEDINGS AND THE FACT S ARE BORNE ON RECORD AND THE ASSESSEE HAS SUBMITTED THE AFFIDAVIT. IN THIS VIEW OF THE SITUATION AFTER HEARING BOTH THE PARTIES WE ADMIT THIS GROUND BEING LEGAL GROUND AS FACTS ARE AVAILABLE ON RECORD. THEREFORE WE PROCEED TO DECIDE THE LEG AL OBJECTION TAKEN BY THE ASSESSEE WITH REGARD TO VALIDITY OR OTHERWISE OF TH E ASSESSMENT PROCEEDINGS. 6. LD. DR HAS ALSO BROUGHT ASSESSMENT RECORD A COP Y OF WHICH WAS FURNISHED BEFORE US. IT IS OBSERVED FROM THE ASSES SMENT RECORD THAT THE RETURN WAS FILED BY THE ASSESSEE STATING THE ADDRESS AS FO LLOWS:- SUSHMA GUPTA FATHERS NAME: KISHAN LAL GUPTA ADDRESS: CEE KAY GARMENTS SHASTRI NAGAR MEERUT. 7. IN ALL THE DOCUMENTS ATTACHED WITH THE RETURN TH E SAME ADDRESS WAS MENTIONED. THE ASSESSING OFFICER HAS ISSUED NOTICE DATED 24.11.2004 AT THE SAME ADDRESS WHICH WAS SENT BY SPEED POST. THE SAI D NOTICE WAS FOR APPEARANCE ON 8 TH DECEMBER 2004. VIDE ORDER SHEET ENTRY DATED 24.1 1.2004 IT ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 5 HAS BEEN STATED BY THE ASSESSING OFFICER THAT THE C ASE HAS BEEN SELECTED FOR SCRUTINY AND ISSUE NOTICE U/S 143 (2). 8. THE CASE WAS FIXED ON 08.12.2004. BELOW THAT TH ERE IS A NOTING ON 24.11.2004 PLEASE DO SERVE A COPY ON THE ASSESSE E EVEN BY AFFIXTURE & SEND A COPY THROUGH POST AS NS HAS SAID THAT THE ASSESSEE IS NOT TRACEABLE. 9. ACCORDINGLY NOTICE DATED 24.11.2004 WAS SENT BY SPEED POST NO.EE700130931IN AND THE NOTICE BEARS THE REPORT OF NOTICE SERVER THAT IT IS SERVED BY AFFIXTURE. THE DATE OF SERVICE BY AFFIXT URE IS 29.11.2004. THE NOTICE SENT TO THE ASSESSEE BEARS THE ADDRESS AS FOLLOWS:- SUSHMA GUPTA W/O SHRI KISHAN LAL GUPTA C/O CEE KAY GARMENTS SHASTRI NAGAR MEERUT. 10. THE AFFIDAVIT FILED BY THE ASSESSEE APPEARS TO BE INCORRECT WHEREBY IT IS STATED THAT SHE WAS CARRYING ON BUSINESS ONLY AT 20 2 NEW MOHANPURI MEERUT. THE ASSESSEE HERSELF IN THE RETURN FILED BY HER H AS GIVEN HER ADDRESS AS SUCH. 11. THE SAID NOTICE WAS RECEIVED BACK AND IS PLACED ON THE FILE. 12. FROM THE FACTS AS EXISTED ON RECORD WE HAVE FO UND THAT THE NOTICE WAS SENT TO THE ASSESSEE ON THE ADDRESS GIVEN BY HER IN HER INCOME-TAX RETURN AND THE ENCLOSED DOCUMENTS FILED WITH THAT RETURN. THE NOTICE IS ISSUED AND SERVED WITHIN TIME PRESCRIBED U/S 143(2) AS IT WAS ISSUED ON 24.11.2004. IT WAS SENT BY SPEED POST WITHIN TIME AND KNOWING THAT THE ASSESSE E IS NOT TRACEABLE AT THE ADDRESS GIVEN IN THE RETURN OF INCOME THE ASSESSIN G OFFICER HAS ORDERED THAT NOTICE BE SERVED BY AFFIXTURE WHICH IS ALSO SERVED ON 29.11.2004. THEREFORE TIMELY STEPS WERE TAKEN BY THE ASSESSING OFFICER TO SERVE THE NOTICE ON ASSESSEE. THE ASSESSING OFFICER IS EXPECTED ONLY T O SERVE NOTICE ON THE ADDRESS GIVEN IN THE RETURN OF INCOME AS THE ASSESSMENT PRO CEEDINGS IF INITIATED ARE TO BE INITIATED ONLY AT THE ADDRESS GIVEN IN THE RETUR N OF INCOME UNLESS IT IS SHOWN ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 6 THAT ANY APPLICATION FOR CHANGE OF ADDRESS LATER ON WAS FILED. THERE IS NO SUCH APPLICATION FILED BY THE ASSESSEE INTIMATING THAT T HERE WAS ANY CHANGE OF ADDRESS AT THE RELEVANT TIME. 13. THE SECOND OBJECTION OF THE ASSESSEE IS THAT SH E IS NOT WIFE OF SHRI KISHAN LAL GUPTA AS MENTIONED ON THE NOTICE BUT FROM THE RETURN OF INCOME IT IS FOUND THAT THE ASSESSEE HAS GIVEN THE NAME OF SHRI KISHAN LAL GUPTA BEING THE NAME OF HER FATHER. THUS IT IS ONLY A CLERICAL MISTAKE AS WHAT WAS MENTIONED ON THE NOTICE WAS TAKEN FROM THE RETURN FILED BY THE ASSES SEE HERSELF INSTEAD OF WRITING DAUGHTER OF IT WAS WRITTEN AS WIFE OF. BUT THA T DOES NOT VITIATE THE NOTICE AND IT CANNOT BE CONSIDERED TO BE A DEFECT WHICH VITIATE THE WHOLE PROCEEDINGS. 14. ANOTHER OBJECTION OF THE ASSESSEE AS STATED IN THE AFFIDAVIT IS THAT IN THE LETTER DATED 18.10.2004 ISSUED U/S 139 (9) THE COR RECT ADDRESS OF THE ASSESSEE WAS STATED. BUT AS POINTED OUT EARLIER THE ASSES SMENT PROCEEDINGS ARE TO BE INITIATED AT THE ADDRESS MENTIONED IN THE RETURN OF INCOME AND NO MATERIAL WHATSOEVER IS BROUGHT ON RECORD TO SHOW THAT CHANGE IN ADDRESS IF ANY WAS INTIMATED BY THE ASSESSEE TO THE ASSESSING OFFICER. THEREFORE THIS CONTENTION IS ALSO TO BE REJECTED. THEREFORE THE GROUND TAKEN B Y THE ASSESSEE REGARDING NON- SERVICE OF NOTICE IS TO BE DECIDED AGAINST THE ASSE SSEE AND ACCORDINGLY REJECTED. 15. GROUND NO.2 OF THE CROSS OBJECTIONS AND THE GRO UND TAKEN IN DEPARTMENTAL APPEAL RAISE COMMON ISSUE I.E. WITH R EGARD TO AN ADDITION OF RS.15 50 000/-. THROUGH GROUND NO.2 OF CROSS OBJEC TIONS THE CLAIM OF THE ASSESSEE IS THAT THE SURPLUS OF RS.50 000/- ON ACCO UNT OF DIFFERENCE IN PURCHASE AND SALE PRICE WAS TO BE ASSESSED AS BUSINESS INCO ME IN PLACE OF SHORT-TERM CAPITAL GAIN ASSESSED BY THE ASSESSING OFFICER AND IN THIRD GROUND IT IS THE CASE OF THE ASSESSE THAT SECTION 50-C IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE AND THE ASSESSE DENIES HER LIABILITY TO BE ASSESSED TO ANY SHORT-TERM CAPITAL GAIN. 16. IN DEPARTMENTAL APPEAL IT IS THE CASE OF THE RE VENUE THAT LD. CIT (A) WAS WRONG IN DELETING THE ADDITION OF RS.15 50 000/-. ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 7 17. THE BRIEF FACTS RAISING THE CONTROVERSY ARE THA T THE ASSESSEE HAD MADE AN AGREEMENT TO PURCHASE THE AGRICULTURAL LAND FOR RS. 14.50 LAC THROUGH HER POWER OF ATTORNEY HOLDER SHRI K.S. GUPTA FATHER-IN-LAW O F THE ASSESSEE WITH SHRI AAS MOHAMMAD AND OTHERS ON 12 TH SEPTEMBER 2002 ON AGREEMENT BASIS. THE PAYMENT OF RS.10 LAC WAS MADE ON 3 RD SEPTEMBER 2002 VIDE CHEQUE NO.425578 OF OBC NAI SARAK NEW DELHI AND THE REMAINING AMOUN T OF RS.4 50 000/- WAS PAID IN CASH. THE SAID LAND WAS SUBSEQUENTLY SOLD BY SHRI K.S. GUPTA AS POWER OF ATTORNEY HOLDER TO ANAND BOARDS PVT. LTD. 60 S AKET MEERUT THROUGH ITS DIRECTOR SHRI NIKHIL GUPTA FOR RS.15 00 000/- LAC ON 11 TH NOVEMBER 2002 ON WHICH AN INCOME OF RS.50 000/- WAS SHOWN BY THE ASS ESSEE. 18. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SAME. IT WAS CLAIMED BY THE ASSESSEE THAT IT IS AN AGRICULTURAL LAND AND IN SUPPORT COPY OF VOTERS LIST WAS FILED AND IT WAS CLAIMED THAT POPU LATION OF VILLAGE WAS LESS THAN 10000 HENCE IT WAS SUBMITTED THAT SECTION 50-C CA NNOT BE APPLIED AS THE SAME IS APPLICABLE IN THE CASE OF CAPITAL ASSET. THE L AND BEING AGRICULTURAL LAND IS NOT A CAPITAL ASSET THEREFORE SECTION 50-C WAS NOT AT TRACTED. THE ASSESSING OFFICER DID NOT ACCEPT SUCH CONTENTION OF THE ASSESSEE ON T HE GROUND THAT THE LAND WAS SITUATED WITHIN 8 KMS OF LOCAL LIMITS OF MUNICIPALI TY OF MEERUT AND THEREFORE WAS TO BE CONSIDERED AS URBAN LAND WITHIN THE MEANING OF SECTION 2(15) (III) OF IT ACT 1961 AND THUS IT WAS A CAPITAL ASSET. 19. IT IS FURTHER MENTIONED BY THE ASSESSING OFFICE R THAT THE ASSESSEE HAD TAKEN POSSESSION OF THE LAND AND HAD MADE FULL PAYM ENT OF RS.14 50 000/- AND THUS BECOME OWNER OF THE LAND ON 12 TH SEPTEMBER 2002. THE ASSESSING OFFICER REFERRED TO SECTION 2(47) (V) AND HELD THAT THE ASS ESSEE BECAME THE OWNER OF THE SAID PROPERTY AND IT IS FURTHER OBSERVED THAT LAND WAS SOLD FOR A CONSIDERATION OF RS.15 LAC. ON THE SALE DEED THE CONSIDERATION MENT IONED WAS RS.31 LAC. THEREFORE ACCORDING TO ASSESSING OFFICER SECTION 5 0-C WAS APPLICABLE. THE ASSESSING OFFICER REFERRED TO SECTION 50-C AND THU S DIFFERENCE BETWEEN THE VALUE CONSIDERED FOR STAMP PURPOSES MINUS THE PURCH ASE PRICE WAS TAKEN AS ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 8 INCOME EARNED BY WAY OF SHORT-TERM CAPITAL GAIN. A CCORDINGLY AN ADDITION OF RS.16 50 000/- WAS MADE. 20. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). IT WAS SUBMITTED THAT SECTION 50-C HAS NO APPLICATION. IT WAS SUBMITTED THAT NOWHERE IN THE SALE DEED THE NAME OF THE ASSESSEE WAS APPEARIN G AND THEREFORE THE ASSESSEE WAS NEVER THE OWNER OF THE SAID LAND AND S HE DID NOT TRANSFER ANY CAPITAL ASSET HENCE SECTION 50-C WAS NOT APPLICAB LE. IN THE ALTERNATIVE IT WAS SUBMITTED THAT THE VALUE TAKEN BY THE ASSESSING OFF ICER ON THE BASIS OF STAMP VALUATION IS ON VERY VERY HIGH SIDE AND THE VALUE O F LAND IS MUCH LOWER THAN THE VALUE ADOPTED BY THE ASSESSING OFFICER AND THE ASSE SSING OFFICER SHOULD HAVE REFERRED THE VALUATION OF CAPITAL ASSET TO THE VALU ATION OFFICER. 21. THE ASSESSEE ALSO HAD SUBMITTED KHASRA-GIRDAVAR I OF THE SAID LAND AND MUTATION DETAILS OF VARIOUS OWNERS AND TRANSFER THE REOF IN WHICH THE NAME OF THE ASSESSEE WAS NOT INCLUDED AND THUS IT WAS CONTEND ED THAT SECTION 50-C HAD NO APPLICATION. 22. THE LD. CIT (A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER THE RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED IN PA RA 3.2.2 IN THE ORDER OF THE CIT (A). 23. IN THE REMAND REPORT IT IS MENTIONED THAT THE CLAIM OF THE ASSESSEE THAT SHE DID NOT HAVE ANY PLOT CANNOT BE ACCEPTED AS TH E AGREEMENT OF PURCHASE WAS EXECUTED THROUGH HER FATHER-IN-LAW NAMED SHRI K.S. GUPTA AS HER POWER OF ATTORNEY HOLDER AND THE SAID FACT IS PROVED BY THE FACT THAT THE ASSESSEE HAD MADE THE PAYMENT OF RS.10 LAC BY CHEQUE NO.4225578 DATED 3 RD SEPTEMBER 2002 AND BALANCE PAYMENT WAS MADE IN CASH. THE PLO T WAS SOLD BY THE ASSESSEE FOR AN AMOUNT OF RS.15 LAC AGAIN THROUGH H ER FATHER-IN-LAW AS HER POWER OF ATTORNEY AND PAYMENT WAS RECEIVED BY CHEQU E ON 11 TH NOVEMBER 2002 AND SUCH FACT HAS ALREADY BEEN SUBMITTED BY THE ASS ESSEE VIDE HER LETTER DATED 28 TH JANUARY 2005 IN PARA .OF HER WRITTEN SUBMISSIONS . THE ASSESSEE HERSELF HAS SHOWN A PROFIT ON SALE OF PLOT AT RS.50 000/- A ND THEREFORE THE ASSESSEE ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 9 WAS REQUIRED TO EXPLAIN THE NATURE OF SUCH PROFIT. IN RESPONSE THE ASSESSEE HAD SUBMITTED THAT THE AGRICULTURAL LAND WAS SOLD AND D IFFERENCE OF PURCHASE AND SALE WAS SHOWN AS PROFIT. AS THE LAND SOLD BY THE ASSESS EE WAS AN URBAN LAND THE PROVISIONS OF SECTION 50-C WERE APPLICABLE AND IN THIS MANNER THE ASSESSING OFFICER SUPPORTED HIS CASE OF ASSESSING THE DIFFERE NCE OF SALE PRICE STATED BY THE ASSESSEE AND THE VALUATION DONE ON THE BASIS OF STA MP DUTY. 24. AFTER REFERRING TO THESE SUBMISSIONS AND REMAND REPORT THE CIT (A) HAS OBSERVED THAT THE SECTION 50-C IS ATTRACTED ONLY WH EN THE CONSIDERATION RECEIVED OR ACCRUED AS A RESULT OF TRANSFER BY AN ASSESSEE O F A CAPITAL ASSET. HE OBSERVED THAT IMPORTANT POINT WAS THAT WHETHER THE ASSESSEE WAS DIRECTLY INVOLVED WITH THE TRANSFER OF THE CAPITAL ASSET EITHER AS OWNER OR IN DIRECTLY AS HOLDER OF ATTORNEY ETC. LD. CIT (A) OBSERVED THAT THE ASSESSEE IS NO T AT ALL RELATED DIRECTLY AS OWNER OR LETTER OF ATTORNEY HOLDER TO THE TRANSFER OF LAND AS CLEARLY EVIDENT FROM THE SALE DEED AS WELL AS THE LAND RECORDS. THE SAL E OF LAND WAS EFFECTED BY SHRI K.S. GUPTA AS POWER OF ATTORNEY HOLDER FROM SHRI AA S MOHAMMED AND OTHERS TO SHRI NIKHIL SHARMA WHO PURCHASED THE LAND. THE REC EIPT OF RS.15 LAC AS SALE CONSIDERATION ON 11 TH NOVEMBER 2002 APPEAR TO BE CLEARLY ON BEHALF OF S HRI K.S. GUPTA WHO FIRST OBTAINED THE LETTER OF ATTORNEY FRO M THE OWNERS OF THE LAND AND THEN SUBSEQUENTLY SOLD IT TO SHRI NIKHIL SHARMA. TH E PAYMENT MAY BE RELATED TO THE LAND DEAL AND THE PROFIT MAY BE ACCRUED OUT OF THE TRANSACTION OF A CAPITAL ASSET BUT TO ATTRACT THE PROVISIONS OF SECTION 50- C THE TRANSFER OF CAPITAL ASSET HAS TO BE DIRECTLY BY THE PERSON CONCERNED EITHER A S OWNER OR BY MEANS OF LETTER OF ATTORNEY AND AS THE ASSESSEE IS NOT DIRECTLY OWN ER OF THE SAID PLOT PROVISIONS OF SECTION 50-C WERE NOT APPLICABLE. THE APPLICABI LITY OF SECTION 50-C CAN BE EXAMINED IN THE CASE OF SHRI K.S. GUPTA AND IN THI S MANNER THE ADDITION MADE IN THE HANDS OF THE ASSESSEE HAS BEEN DELETED. THE DEPARTMENT IS AGGRIEVED HENCE IN APPEAL. 25. AFTER NARRATING THE FACTS IT WAS SUBMITTED BY LD. DR THAT THERE IS A TOTAL FALLACY IN THE CLAIM OF THE ASSESSEE AS THE ASSESSE E HERSELF HAS PAID THE PURCHASE CONSIDERATION AND THE TRANSACTION WAS ENTE RED INTO BY THE FATHER-IN-LAW ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 10 OF THE ASSESSEE BEING IN THE CAPACITY OF ATTORNEY H OLDER OF THE ASSESSEE. THE SALE CONSIDERATION WAS ALSO SHOWN TO HAVE BEEN RECE IVED BY THE ASSESSEE AND THE PROFIT WAS SHOWN BY THE ASSESSEE. HE CONTENDED THAT THE ASSESSING OFFICER HAS MADE REFERENCE TO SECTION 2(47) (V) WHICH REFER ENCE HAS ALTOGETHER BEEN IGNORED BY THE CIT (A). HE SUBMITTED THAT WHERE SUB STANTIAL PAYMENT HAS BEEN MADE AND THE POSSESSION HAS BEEN OBTAINED THEN IT HAS TO BE CONSTRUED AS TRANSFER FOR THE PURPOSE OF CAPITAL GAIN. HE SUB MITTED THAT IT IS NOT NECESSARY THAT THE NAME OF THE ASSESSEE AS PURCHASER SHOULD A PPEAR IN THE LAND RECORDS AS FOR THE PURPOSES OF INCOME-TAX THE ASSESSEE HAD BEC OME OWNER WHEN THE POSSESSION WAS GIVEN IN PURSUANCE OF ATTORNEY EXECU TED BETWEEN AAS MOHAMMED AND SHRI K.S. GUPTA THROUGH WHICH THE PURC HASE WAS CONSIDERED TO BE COMPLETED. THUS HE SUBMITTED THAT LD. CIT (A) WOULD BE WRONG IN HOLDING THAT NO ADDITION COULD NOT BE MADE IN THE HANDS OF THE ASSESSEE AND SECTION 50- C COULD NOT BE APPLIED. HE SUBMITTED THAT SECTION 50-C NOWHERE STATES THAT THE ASSESSEE SHOULD DIRECTLY BE THE OWNER OF THE PROPER TY WHICH IS SOLD. HE CONTENDED THAT FOR ALL PRACTICAL PURPOSES THE ASSES SEE HAD RELATED HERSELF WITH THE SAID TRANSACTION AS THE INVESTMENT WAS MADE BY HER. THE SALE CONSIDERATION WAS SHOWN IN HER ACCOUNTS AND SURPLUS WAS DECLARED AS INCOME. THUS HE SUBMITTED THAT ORDER OF THE CIT (A) ON THIS ISSUE S HOULD BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 26. ON THE OTHER HAND IT WAS SUBMITTED BY LD. AR T HAT SECTION 50-C IS NOT APPLICABLE AND FOR THAT PURPOSE HE RELIED UPON TH E ORDER OF THE CIT (A). HE REFERRED TO DECISION OF HONBLE PUNJAB & HARYANA HI GH COURT IN THE CASE OF CIT VS. CHANDNI BHACHAR 323 ITR 510 TO CONTEND THAT PUR CHASE PRICE ASSESSED FOR THE PURPOSE OF PAYING STAMP DUTY CANNOT BE TAKEN AS SALE CONSIDERATION IN THE ABSENCE OF POSITIVE EVIDENCE. HE SUBMITTED THAT TH E SAID CASE LAW HAS APPLICATION WITH ALL FOURS IN THE PRESENT CASE. HE NCE NON-APPLICABILITY OF SECTION 50-C TO THE PRESENT CASE SHOULD BE UPHELD. HE ALSO RELIED UPON THE DECISION OF AHMEDABAD BENCH REPORTED AS (2010) 5 TAXMANN.COM 15 IN THE CASE OF KAUSHIK SURESH BHAI RESHAMWALA VS. ITO AND THUS IT WAS SU BMITTED BY LD. AR THAT APPLICABILITY OF SECTION 50-C SHOULD BE HELD INVALI D AS HAS BEEN HELD BY CIT (A). ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 11 HE FURTHER SUBMITTED THAT AS THE NAME OF THE ASSESS EE DOES NOT APPEAR IN THE REVENUE RECORD AND THE TRANSACTION HAS BEEN CONDUCT ED BY ASSESSEE THROUGH HER POWER OF ATTORNEY AND THE SAID ASSET FORMED PAR T OF THE BUSINESS TRANSACTION THE INCOME ARISING OUT OF THAT SHOULD BE CONSIDERED AS BUSINESS INCOME AND THEREFORE IT COULD NOT BE ASSESSED AS SHORT-TERM C APITAL GAIN. THEREFORE HE PLEADED THAT THE APPEAL FILED BY THE REVENUE SHOULD BE DISMISSED AND THAT FILED BY THE ASSESSEE SHOULD BE ALLOWED. 27. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. LD. CIT (A) HAS DELETED THE ADDITION OF RS.15 50 000/- ON THE GROUND THAT THE SAID TRANSACTION WAS IN THE NATURE OF PURCHASE AND TRANSFER OF CAPITAL ASSET BY SHRI K.S. GUPTA AND NO T BY THE ASSESSEE. WE FIND NO SUBSTANCE IN SUCH FINDING GIVEN BY LD. CIT (A). TH E TRANSACTION WAS OWNED BY THE ASSESSEE WHICH WAS ENTERED INTO BY HER THROUGH HER POWER OF ATTORNEY HOLDER. THE PAYMENTS WERE MADE BY THE ASSESSEE AND THE RESULTANT PROFIT WAS ALSO DECLARED BY HER IN HER RETURN OF INCOME. THE QUESTIONS WHICH WERE TO BE DECIDED BY LD. CIT (A) WERE WHETHER THE SAID INCOME WHICH HAS BEEN SHOWN BY THE ASSESSEE OF A SUM OF RS.50 000/- WAS ASSESSABLE AS BUSINESS INCOME OR IT WAS LIABLE FOR TAX UNDER THE HEAD CAPITAL GAIN. SECONDLY WHETHER THE PROVISIONS OF SECTION 50-C WERE APPLICABLE OR NOT? LD. CIT (A ) HAS ALSO HELD THAT PROVISIONS OF SECTION 50-C ARE NOT APPLICABLE ON THE ASSESSEE AS THE NAME OF THE ASSESSEE DID NOT APPEAR IN THE REVENUE RECORD. 28. NOW WE ARE TO EXAMINE WHETHER SUCH FINDINGS OF LD. CIT (A) ARE IN ACCORDANCE WITH THE LAW. THE ASSESSING OFFICER WH ILE HOLDING THAT THE ASSESSEE IS LIABLE FOR CAPITAL GAIN HAS RELIED UPON THE PRO VISIONS OF SECTION 2 (47) (V) WHICH DEFINES THE TERM TRANSFER. SECTION 2 (47) (V) RE ADS AS UNDER:- (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A O F THE TRANSFER OF PROPERTY ACT 1882 (4 OF 1882); ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 12 29. NOW IN THE PRESENT CASE BY ENTERING INTO THE TRANSACTION OF PURCHASE OF AGRICULTURAL LAND THROUGH HER POWER OF ATTORNEY SH RI K.S. GUPTA THE ASSESSEE HAD PURCHASED THE AGRICULTURAL LAND THE POSSESSION OF WHICH WAS TAKEN WITHOUT OBTAINING A TITLE DEED FROM THE REVENUE DEPARTMENT. FOR THE PURPOSES OF INCOME- TAX THE SAID TRANSFER WAS COMPLETE AND THE ASSESSEE BECAME THE OWNER OF THE SAID LAND AS THE FULL PAYMENT WAS MADE AND POSSESSI ON WAS OBTAINED. THEREFORE THE FACT THAT THE NAME OF THE ASSESSEE W AS NOT MENTIONED IN THE REVENUE RECORD HAS LITTLE RELEVANCE IN VIEW OF SECT ION 2 (47)(V) AS THE ASSESSEE HAD BECOME OWNER OF THE SAID AGRICULTURAL LAND FOR THE PURPOSES OF INCOME-TAX ACT PARTICULARLY IN VIEW OF THE FACT THAT AN AGREE MENT OF PURCHASE WAS MADE BY THE POWER OF ATTORNEY OF THE ASSESSEE AND THE CONSI DERATION FOR PURCHASE WENT OUT OF THE COFFERS OF THE ASSESSEE. LATER ON THE SAID LAND WAS ALSO SOLD BY THE POWER OF ATTORNEY HOLDER OF THE ASSESSEE FROM WHERE THE PROFIT ARISING OUT OF THAT TRANSACTION OF RS.50 000/- WAS DECLARED AS BUSINESS INCOME. THEREFORE FOR ALL PRACTICAL PURPOSES THE ASSESSEE HAS TREATED HERSELF AS THE OWNER OF THE SAID PROPERTY WHICH WAS PURCHASED AND SOLD BY HER AND TH E RESULTANT SURPLUS WAS DECLARED AS INCOME. LD. CIT (A) HAS NOWHERE DISCUS SED THE APPLICABILITY OR OTHERWISE OF SECTION 2 (47) (V) WHICH HAS BEEN DISC USSED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 30. THE APPLICABILITY OF SECTION 50-C HAS BEEN DISC ARDED BY LD. CIT (A) ON THE GROUND THAT THE ASSESSEE IS NOT DIRECTLY INVOLVED E ITHER AS OWNER OR BY MEANS OF LETTER OF ATTORNEY. HERE ALSO LD. CIT (A) HAS WRON GLY HELD THAT SECTION 50-C IS NOT APPLICABLE. SECTION 50-C READS AS UNDER:- 50C: (1) WHERE THE CONSIDERATION RECEIVED OR ACCRU ING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTE4D O R ASSESSED (OR ASSESSABLE) BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE STAMP VALUATION AU THORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER THE VALUE SO ADOPTED OR ASSESSED (OR ASSESSABLE) SHALL FOR THE PURPOSES OF SECTION 48 BE DEEMED TO BE THE FULL VA LUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 13 (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1) WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE ST AMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS T HE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRAN SFER; (B) THE VALUE SO ADOPTED OR ASSESSED (OR ASSESSABLE ) BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT B EEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY COURT OR THE HIGH COURT THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE THE PROVISIONS OF SUB-SECTIONS (2) (3) (4) (5) AND ( 6) OF SECTION 16A CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTION (6) A ND (7) OF SECTION 23A SUB-SECTION (5) OF SECTION 24 SECTION 34AA S ECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT 1957 (27 OF 1957) SHALL WITH NECESSARY MODIFICATIONS APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION 1 -FOR THE PURPOSES OF THIS SECTION VALUATION OFFIC ER SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SEC TION 2 OF THE WEALTH-TAX ACT 1957 (27 OF 1957). EXPLANATION 2 - FOR THE PURPOSES OF THIS SECTION THE EXPRESSION ASSESSABLE MEANS THE PRICE WHICH THE STAMP VALUAT ION AUTHORITY WOULD HAVE NOTWITHSTANDING ANYTHING TO THE CONTRAR Y CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE ADOPTED OR ASSESSED IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY). (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2) WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB-SECTION (1) THE VALUE SO ADOPTE D OR ASSESSED (OR ASSESSABLE) BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER. 31. AS IT CAN BE SEEN FROM THE ABOVE PROVISION IT SIMPLY DESCRIBES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS L ESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFE R THE VALUE ADOPTED OR ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 14 ASSESSED OR ASSESSABLE SHALL FOR THE PURPOSE OF SE CTION 48 BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACC RUING AS A RESULT OF TRANSFER. IF A CAPITAL ASSET IS TRANSFERRED ON WHICH THE CAPITAL G AIN IS LIABLE TO BE ASSESSED THEN ACCORDING TO SECTION 50-C (1) THE VALUE ADOP TED OR ASSESSED FOR THE PURPOSE OF STAMP VALUATION SHALL BE DEEMED TO BE TH E FULL VALUE OF THE CONSIDERATION RECEIVED. IT NOWHERE STATES THAT THE ASSESSEE SHOULD BE DIRECTLY OWNER. MOREOVER THE TRANSACTION HAS BEEN OWNED BY THE ASSESSEE AND IT HAS BEEN SO RETURNED BY HER IN THE INCOME-TAX RETURN. THEREFORE NOW THE ASSESSEE CANNOT PLEAD THAT SHE WAS NOT THE OWNER AND SHE DID NOT TRANSFER THE SAID LAND AND THEREFORE NO CAPITAL GAIN WAS ASSESSABLE IN H ER HAND. IF THE ASSET TRANSFERRED IS A CAPITAL ASSET THEN SHE IS LIABLE FOR CAPITAL GAIN WHICH IS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE A CT. HOWEVER IF THE ASSESSEE CLAIMS THAT THE VALUE ADOPTED FOR STAMP VALUATION E XCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER OR THE V ALUE SO ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY IS DISPUTED IN ANY AP PEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BY OTHER AUTHORITY COURT O R THE HIGH COURT ETC. THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CA PITAL ASSET TO THE VALUATION OFFICER. THEREFORE IF THE ASSESSEE CLAIMS THAT TH E VALUE ADOPTED FOR STAMP VALUATION PURPOSES IS IN EXCESS OF FAIR MARKET VALU E OF THE PROPERTY THEN HE MAY REQUEST TO THE ASSESSING OFFICER FOR THE VALUATION OF THE SAID LAND FROM THE VALUATION OFFICER AND THE PROCEDURE LAID DOWN IN SE CTION 50-C IS REQUIRED TO BE ADOPTED. IN OUR CONSIDERED OPINION THE CASE OF TH E ASSESSEE FALLS WITHIN THE PURVIEW OF SECTION 50-C AS THE CONSIDERATION RECEIV ED BY THE ASSESSEE AS A RESULT OF TRANSFER OF THE SAID LAND IS LESS THAN TH E VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY. 32. LD. AR OF THE ASSESSEE HAS AGITATED THE APPLICA BILITY OF SECTION 50-C FIRSTLY ON THE BASIS OF DECISION OF HONBLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF CIT VS. CHANDNI BHOCHAR 323 ITR 510 (P&H) AND SECO NDLY ON THE BASIS OF DECISION OF AHMEDABAD BENCH OF ITAT IN THE CASE OF KAUSHIK SURESH BHAI RESHAMWALA VS. ITO (SUPRA) ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 15 33. FIRST WE EXAMINE THE APPLICABILITY OF THE DECIS ION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. CHANDNI B HOCHAR (SUPRA) ON THE FACTS OF THE ASSESSEES CASE. THE SAID CASE RELATES TO A SSESSMENT OF PURCHASER OF THE PROPERTY. THE PURCHASE PRICE IN THE PROPERTY WAS D ECLARED IN THE SALE DEED AT RS.17 06 700/-. THE ASSESSING OFFICER ADOPTED THE P URCHASE PRICE OF PROPERTY AT RS.30 32 000/- WHICH WAS ASSESSED FOR THE PURPOSES PAYING STAMP DUTY AND IT WAS HELD BY THE ASSESSING OFFICER THAT THE ASSESSEE MUST HAVE PAID RS.13 25 300/- OVER AND ABOVE THE PURCHASE PRICE DI SCLOSED IN THE SALE DEED AND THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE PURC HASER BEING AN INCOME FROM UNDISCLOSED SOURCES. LD. CIT (A) DELETED THE ADDIT ION HOLDING THAT SECTION 50-C WAS A DEEMING PROVISION FOR THE PURPOSE OF BRINGING TO TAX THE DIFFERENCE AS CAPITAL GAIN AND IN THE ABSENCE OF ANY LEGALLY ACCE PTABLE EVIDENCE THE VALUATION DONE FOR THE PURPOSE OF SECTION 50-C WOULD NOT REPR ESENT THE ACTUAL CONSIDERATION PASSED ON TO THE SELLER. THE TRIBUNA L ALSO UPHELD THE ORDER OF LD. CIT (A) WHICH HAS BEEN CONFIRMED BY HONBLE HIGH CO URT. THERE CANNOT BE ANY QUARREL WITH THE PROPOSITION THAT SECTION 50-C IS A DEEMING SECTION. SECTION 50- C ENABLE THE DEPARTMENT TO ASSESS THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY BEING DEEMED SALE CONSIDERATION IN A CASE WHER E SUCH VALUATION IS LARGER THAN THE ACTUAL CONSIDERATION STATED IN THE SALE DE ED AND THAT IS FOR THE PURPOSE OF COMPUTING CAPITAL GAINS IN THE HANDS OF THE SELL ER. THE DEEMING FICTION STATED IN SECTION 50-C CANNOT BE EXTENDED TO THE HANDS OF THE PURCHASER TO WHOM THE LEGAL FICTION HAS NOT BEEN EXTENDED. THE ADDITION IN THE HANDS OF THE PURCHASER CAN BE MADE ONLY IN THE CIRCUMSTANCES IF THERE IS A NY INDEPENDENT EVIDENCE TO ARRIVE AT THE CONCLUSION THAT THE CONSIDERATION WHI CH HAS BEEN PASSED BETWEEN THE SELLER AND THE PURCHASER WAS MORE THAN WHAT WAS STATED IN THE SALE DEED AND IT HAS BEEN SO HELD BY HONBLE PUNJAB & HARYANA HIG H COURT. THE FACTS IN THE CASE OF THE ASSESSEE ARE DIFFERENT AS THE CAPITAL G AIN HAS BEEN COMPUTED BY THE ASSESSING OFFICER BY APPLYING SECTION 50-C IN THE H ANDS OF THE SELLER FOR THE PURPOSE OF COMPUTING CAPITAL GAIN WHICH IS VERY MUC H IN ACCORDANCE AND WITHIN THE FOUR CORNERS OF SECTION 50-C. THEREFORE ON TH E BASIS OF DECISION OF HONBLE ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 16 PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. CHANDNI BHOCHAR (SUPRA) THE ASSESSEE CANNOT CLAIM THAT SECTION 50-C IS NOT APPLICABLE TO HER CASE. 34. NOW COMING TO THE DECISION OF AHMEDABAD BENCH IN THE CASE OF KAUSHIK SURESH BHAI RESHAMWALA VS. ITO (SUPRA) THE FACTS O F THAT CASE REVEAL THAT THE STAMP VALUE FOR THE PURPOSE OF PROPERTY ON THE DATE OF SALE WAS @ RS.400 SQ. METRE. THE ASSESSEE DISCLOSED THE VALUE @ 483 PER SQ. METRE AND THE ASSESSING OFFICER ESTIMATED THE VALUE OF LAND @ RS. 700 PER SQ. METRE. THE VALUE ADOPTED BY THE ASSESSING OFFICER WAS FURTHER ENHANCED BY THE CIT (A) TO RS.5000/- PER SQ. METRES AND ALL THESES FACTS CAN B E FOUND IN PARA 4 AND 5 OF THE SAID ORDER. THEREFORE THE SAID CASE WAS NOT A CAS E WHERE THE VALUE WAS ADOPTED BY THE ASSESSEE WAS LOWER THAN THE VALUE AS SESSED BY STAMP VALUATION AUTHORITY. THE SAID CASE ALSO CANNOT BE RELIED UPO N BY THE ASSESSEE TO CONTEND THAT SECTION 50-C IS NOT APPLICABLE TO HER CASE AS IN THAT CASE THE VALUE STATED IN THE SALE DEED WAS NOT LESS THAN THE VALUE ADOPTED B Y THE STAMP VALUATION AUTHORITY AND THE VALUE RECORDED IN THE TITLE DEED. 35. KEEPING IN VIEW THE ABOVE DISCUSSION WE HOLD T HAT SECTION 50-C IS APPLICABLE TO THE ASSESSEES CASE. 36. ANOTHER CONTENTION OF THE ASSESSEE IS THAT THE GAIN ARISING OUT OF THE SAID TRANSACTION SHOULD BE ASSESSED AS BUSINESS INCOME. WE FIND NO SUBSTANCE IN SUCH CONTENTION AS IT HAS NEVER BEEN SHOWN THAT THE SALE AND PURCHASE OF THE PROPERTY CARRIED ON BY THE ASSESSEE WAS IN THE NATU RE OF BUSINESS. THEREFORE WE HOLD THAT THE SAID TRANSACTION IS LIABLE FOR CAPITA L GAIN. 37. WE HAVE HELD THAT SECTION 50-C IS APPLICABLE TO THE SUBJECT TRANSACTION AND IT HAS TO BE ASSESSED UNDER THE HEAD CAPITAL G AIN. HOWEVER KEEPING IN VIEW THAT ASSESSEE HAS AGITATED SUCH ADDITION WE A RE OF THE OPINION THAT THE ASSESSEE MAY BE PROVIDED WITH THE OPPORTUNITY TO SH OW THAT THE VALUE ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY EXCEEDED THE FAIR MARKET VALUE OF THE ITA NO.1130/DEL/2007 C.O. NO.103/DEL/08 17 PROPERTY AS ON THE DATE OF THE TRANSFER. THEREFORE TO PROVIDE WITH SUCH AN OPPORTUNITY WE RESTORE THIS ISSUE TO THE FILE OF AS SESSING OFFICER AND IF THE ASSESSEE RAISE OBJECTION TO THIS EXTENT THEN REFE R THE ISSUE TO THE VALUATION OFFICER AND AFTER ADOPTING SUCH PROCEDURE HE WILL A SSESS HIS CAPITAL GAIN IN ACCORDANCE WITH THE LAW. WE HOLD ACCORDINGLY. 38.. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION FILED BY THE ASSES SEE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.20 10. SD/- SD/- [B.C. MEENA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 27.08.2010. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES