Smt. Kaushalyaben Joravarsinh Raol, L/R of late Shri Joravarsinh Ajitsinh Raol,, GONDAL v. The Income Tax Officer, Ward -1(2),, RAJKOT-GUJARAT

ITA 128/RJT/2012 | 2000-2001
Pronouncement Date: 26-07-2013 | Result: Dismissed

Appeal Details

RSA Number 12824914 RSA 2012
Assessee PAN ABAPR2587C
Bench Rajkot
Appeal Number ITA 128/RJT/2012
Duration Of Justice 1 year(s) 3 month(s) 15 day(s)
Appellant Smt. Kaushalyaben Joravarsinh Raol, L/R of late Shri Joravarsinh Ajitsinh Raol,, GONDAL
Respondent The Income Tax Officer, Ward -1(2),, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 26-07-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 26-07-2013
Date Of Final Hearing 11-07-2013
Next Hearing Date 11-07-2013
Assessment Year 2000-2001
Appeal Filed On 11-04-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA JM AND SHRI D K SRIVASTAVA AM ITA NO. 128 /RJ T/201 2 ASSESSMENT YEAR : 200 0 - 2001 SMT. KAUSHALYABEN JORAVARSINH RAOL L/R. OF LATE SHRI JORAWARSINH A RAOL 18 - YOGI KRUPA SOCIE TY OPP. SWAMINARAYAN TEMPLE GONDAL PAN: ABAPR 2587 C V. ITO WARD - 1 ( 2 ) RAJKOT DATE OF HEARING : 1 1 .0 7 .2013 DATE OF PRONOUNCEMENT : 26 .0 7 .2013 ASSESSEE BY : SHRI R D LALCHANDANI ADVOCATE REVENUE BY : SHRI AVINASH KUMAR DR ORDER D. K. S RIVASTAVA : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER PASSED BY THE CIT(A) - II RAJKOT ON 12.03.2012. NOTICE U/S. 147/148 WAS ISSUED BY THE ASSESSING OFFICER ON 09.03.2007 ON THE BASIS OF REASONS RECORDED BY HIM ON 01.03.2007 . THE ASSESS EE HAS FILED A COPY OF REASONS RECORDED BY THE ASSESSING OFFICER FOR ISSUING NOTICE U/S 147/148 WHICH READ AS UNDER: - THE ITO (INV.) RAJKOT VIDE HIS LETTER DATED 21.09.2006 INTIMATED THE RESULT OF INQUIRES CARRIED OUT BY HIM IN THE CASE OF THE ASSESSEE. IT IS REPORTED THAT THE ASSESSEE HAD ENTERED INTO SATAKHAT WITH SHRI RATILAL NATHALAL RATHOD FOR SALE OF PLOTS OF LAND FOR RS.54.96 LAKHS. IT IS FURTHER REPORTED THAT THE SATAKHAT WAS SUBSEQUENTLY CANCELLED AND THE PLOTS WERE SOLD TO VARIOUS PERSONS F OR A CONSIDERATION OF RS.11 88 873/ - VALUE OF WHICH IS SUBSTANTIALLY LOWER THAN THE VALUE SHOW IN SATAKHAT. MOREOVER THE IOT (INV.) ALSO FORWARDED COPY OF VALUATION REPORT OF THE THE AVO VALUATION CELL RAJKOT IN RESPECT OF THE PLOTS OF LAND IN QUESTIO N. ON VERIFICATION OF THE SAME IT IS SEEN THAT THE SALE CONSIDERATION OF PLOTS OF LAND SHOWN BY THE ASSESSEE IS LOWER THAN THE FAIR MARKET VALUE ESTIMATED BY THE AVO AS UNDER: - PLOT NO. NAME OF THE PURCHASER DATE OF SALE MARKET VALUE ESTIMATED BY THE AVO IN RS. SALE CONSIDERATION IN RS. DIFFERENCE 1 ASHWINBHAI MOHANBHAI DOBARIYA 31 - 03 - 2000 391700 183816 207884 2 HARSHABHAI BHAVANBHAI KORAT 01 - 03 - 2000 504700 236880 267820 3 NILESHBHAI MAVJIBHAI SARDHARA 13 - 03 - 2000 147000 68226 78774 4 NILESHBHAI MAVJIB HAI 13 - 03 - 2000 187600 87540 100060 2 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL SARDHARA 5 DINESHBHAI KESHABHAI SANGANI 31 - 03 - 2000 155600 72114 83486 6 DINESHBHAI DAMJIBHAI TANK 31 - 03 - 2000 155600 72114 83486 7 DINESHBHAI DAMJIBHAI TANK 31 - 03 - 2000 155600 72114 83486 8 TIDABHAI AJITBHAI KHUNT 13 - 03 - 2000 140000 64908 75092 10. BHADABHAI AJITBHAI KHUNT 13 - 03 - 2000 136200 64908 71292 11 DINESHBHAI KESUBHAI SANGABI 13 - 03 - 2000 139600 64908 74692 12 SAVJIBHAI DHARAMSIBHAI BHIMANI 13 - 03 - 2000 124000 57847 66153 13 RAJESHBHAI UKABHAI TIMBADIYA 01 - 03 - 2000 153900 72498 81402 2391500 1117873 1273627 THUS AS AGAINST THE MARKET VALUE OF RS.23 91 500/ - THE ASSESSEE HAS SHOWN SALE CONSIDERATION AT RS.11 17 873/ - RESULTING INTO CONCEALMENT OF INCOME OF RS.12 73 627/ - . IT IS FURTHER SEEN THAT THE ASSESSEE H AS NOT FILED HIS RETURN OF INCOME. IN VIEW OF THE ABOVE I HAVE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I. T. ACT. ISSUE NOTICE U/S.148 OF THE I.T. ACT. 2. THE ASSESSEE OBJECTED TO THE INITIATION OF PROCEEDINGS U/S 147/148 BY HIS LETTER DATED 14.09.2007 FILED BEFORE THE AO . A COPY OF THE SAID LETTER HAS BEEN FILED BY THE ASSESSEE AND IS AVAILABLE AT PP. 9 - 12 OF THE PAPER - BOOK FILED BY THE ASSESSEE BEFORE THIS TRIBUNAL. IT WAS SUBM ITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT HER LATE HUSBAND HAD ALREADY FILED THE RETURN OF INCOME ON 28.09.2001 VIDE RECEIPT NOS.03477 AND 03478 FOR ASSESS MENT YEARS 2000 - 01 AND 2001 - 02 RESPECTIVELY AND THEREFORE THE OBSERVATIONS OF THE ASSES SING OFFICER IN THE REASONS RECORDED THAT THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME WAS FACTUALLY INCORRECT. IT WAS FURTHER SUBMITTED THAT INITIATION OF PROCEEDINGS U/S 147/148 ON THE BASIS OF SATAKHAT OR ON THE BASIS OF VALUATION ADOPTED BY THE DE PARTMENTAL VALUER WAS NOT JUSTIFIED. IN SUPPORT OF HER SUBMISSIONS THE ASSESSEE RELIED UPON THE JUDGMENTS IN CIT V. SHIVKAMI CO. P. LTD. 159 ITR 71 (SC); CIT V. SMT NITIBEN CHAMANLAL PAREKH 209 ITR 527 (GUJ.) ; AND BRITANNIA INDUSTRIES LIMITED V. DCIT 2 38 ITR 57 (CALCUTTA). SHE ALSO MADE DETAILED SUBMISSIONS BEFORE THE AO A GAINST THE CORRECTNESS OF THE VALUATION ADOPTED BY THE DEPARTMENTAL VALUER. THE OBJECTIONS 3 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL FILED BY THE ASSESSEE REGARDING INITIATION OF PROCEEDINGS U/S 147/148 WERE DISPOSED OF BY ASS ESSING OFFICER BY HIS LETTER DATED 03.12.2007 ADDRESSED TO THE ASSESSEE WHICH READS AS UNDER: - YOU HAVE RAISED QUESTION ON REOPENING OF CASE U/S147 OF THE IT ACT 1961 AND YOU HAVE REFERRED VARIOUS JUDICIAL PRONUNCIATION. I HAVE GONE THROUGH ALL THE DEC ISION OF THE VARIOUS JUDICIAL AUTHORITY CITED BY YOU. ALL ARE IRRELEVANT TO THE FACTS OF THE PRESENT CASE. YOUR CASE HAS NOT BEEN REOPENED ON THE BASIS THAT NO RETURN HAD BEEN FILED BY THE ASSESSEE NOR ON THE REPORT OF THE ASSISTANT VALUATION OFFICER. THE MAIN REASON FOR REOPENING OF THE CASE WAS SATAKHAT WHICH WAS MADE BETWEEN LATE SHRI JORAVASINH A. RAOL AND SHRI RATHILAL N. RATHOD FOR SALE OF BELOW MENTIONED PLOTS OF LAND FOR CONSIDERATION 6051000/ - . THE FACT IS THAT LATE SHRI JOPRAVARSINH A. RAOL HAD EXECUTED SATAKHAT WITH SHRI RATILAL RATHOD ON 15 - 12 - 1999 FOR SALE OF LAND ADMEASURING 195 SQ. MT. AT RMC TP SCHEME NO. 6 ANTIM KHAND NO. 199 PAIKI AND REVENUE SURVEY NO.248 FOR CONSIDERATION OF RS.6051000/ - AND CASH PAYMENT OF RS 555000/ - WAS MADE ON 15 - 12 - 1999 AND BALANCE AMOUNT AGREED TO BE PAID IN MONTHLY INSTALLMENT OF RS.1100000/ - . HOWEVER THE SAME STAKHAT WAS CANCELLED ON 28 - 12 - 1999 FOR REASON AS STATED BY SHRI RATHILAL N. PATEL THAT HE COULD NOT ARRANGED FOR THE MONEY TO BE PAID AS PER THE SCHE DULED AGREEMENT STATED IN SATAKHAT. THEREAFTER THE SAME LAND WAS SOLD AFTER PLOTTING THE LAND TO 12 DIFFERENT PERSONS IN THE MONTH OF MARCH 2000 FOR TOTAL CONSIDERATION AT RS.1117873/ - . THE LAND WAS FIRST SOLD TO SHRI RATHILAL RATHOD ON 15 - 12 - 1999 FOR SALE CONSIDERATION OF RS.6051000/ - EXECUTING SATAKHAT AND WHEN THE SAME HAD BEEN CANCELLED THE LAND WAS SOLD TO 12 PERSONAL AFTER PLOTTING THE LAND IN THE MONTH OF MARCH 2000 FOR CONSIDERATION OF RS.1117873/ - . NOW THAT QUESTION IS HOW DID THE PRICE FAL L RAPIDLY IN JUST 3 MONTHS OF TIME WHEN ALL THE CONDITIONS AND CIRCUMSTANCES STATED BY YOU IN YOUR ABOVE REFERRED LETTER PREVAILED AT THAT TIME. IT IS NEXT TO IMPOSSIBLE THAT EVEN IN WORST CONDITION AND CIRCUMSTANCES PRICES OF LAND COULD NOT FALL THIS MUCH LOW WHEN PRICES OF LAND 4 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL HAS BEEN RAISING. TO ARRIVE AT THE CORRECT AND HONEST PRICE THE CASE REFERRED TO ASSISTANT VALUATION OFFICER FOR VALUATION OF LAND. HE HAS SUBMITTED HIS REPORT AND ESTIMATED THE PRICE OF PLOTS OF LAND AS UNDER AFTER CONSIDERING AL L THE FACTS AND MATERIAL AS HE THINKS DEEMED FIT AND ALSO YOUR OBJECTIONS. PLOT NO. DATE OF SALE MARKET VALUE ESTIMATED BY THE AVO IN RS. SALE CONSIDERATION IN RS. DIFFERENCE 1 31 - 03 - 2000 391700 183816 207884 2 01 - 03 - 2000 504700 236880 267820 3 13 - 03 - 2 000 147000 68226 78774 4 13 - 03 - 2000 187600 87540 100060 5 31 - 03 - 2000 155600 72114 83486 6 31 - 03 - 2000 155600 72114 83486 7 31 - 03 - 2000 155600 72114 83486 9 13 - 03 - 2000 140000 64908 75092 10 13 - 03 - 2000 136200 64908 71292 11 13 - 03 - 2000 139600 64908 74692 12 13 - 03 - 2000 124000 57847 66153 13 01 - 03 - 2000 153900 72498 81402 2391500 1117873 1273627 YOU ARE THEREFORE REQUESTED TO SHOW CAUSE AS TO WHY FAIR MARKET VALUE OF THE SAID PLOTS OF LAND SHOULD NOT BE TAKEN AT RS.2391500/ - AND DIFFERENCE OF RS. 1273627/ - SHOULD NOT BE TREATED YOUR CONCEALED INCOME AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. YOUR REPLY SHOULD REACH TO THIS OFFICE WITHIN SEVEN DAYS OF THE RECEIPT OF THIS LETTER FAILING WHICH IT WOULD BE PRESUMED THAT YOU HAVE NOTHING TO S AY IN THIS MATTER AND THE ASSESSMENT WOULD BE FINALIZED FROM THE MATERIAL AVAILABLE ON THE RECORD AND AS PER THE PROVISIONS OF THE IT ACT 1961. 3. AFTER HEARING THE ASSESSEE THE ASSESSING OFFICER ADOPTED THE FAIR MARKET VALUE AT RS.23 91 500/ - BEING TH E FAIR MARKET VALUE DETERMINED BY THE DEPARTMENTAL VALUER AS AGAINST SALE CONSIDERATION OF RS.11 17 873/ - DECLARED BY THE ASSESSEE. AGGRIEVED BY THE ORDER PASSED BY THE ASSESSING OFFICER THE ASSESSEE APPEALED BEFORE THE LD CIT(A) WITHOUT SUCCESS. 4. AGG RIEVED BY THE ORDER PASSED BY THE LD CIT(A) THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. THE FIRST THREE GROUNDS OF APPEAL RELATE TO VALIDITY OF PROCEEDINGS INITIATED BY THE ASSESSING OFFICER U/S 147/148 OF THE INCOME - TAX ACT. THEY READ AS UNDER: - 5 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE REOPENING OF THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE REOPENING OF THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT IS NEIT HER JUSTIFIED ON FACTS NOR JUSTIFIED IN LAW. 2. WITHOUT PREJUDICE TO GROUND NO.1 REOPENING OF THE ASSESSMENT ON THE GROUND THAT THE APPELLANT HAD NOT FILED THE RETURN OF INCOME [THE APPELLANT HAD FILED THE RETURN OF INCOME ON 28.09.2001 9VIDE A RECEIPT N O.02376] BAD IN LAW. 3. WITHOUT PREJUDICE TO GROUND NO.1 AND 2 THE APPELLANT BY LETTER DATED 14.09.2001 RAISED OBJECTIONS TO REOPENING OF THE ASSESSMENT U/S 147 AS PER THE DECISION OF SUPREME COURT IN THE CASE OF G.K.N. DRIVE SHAFTS (INDIA) LTD. V/S. IN COME TAX OFFICER 259 ITR 0019. THESE OBJECTIONS WERE NOT DISPOSED OFF BY SPEAKING ORDER. THE ASSESSMENT IS THEREFORE BAD IN LAW. 5. THE LD CIT(A) HAS UPHELD THE VALIDITY OF PROCEEDINGS INITIATED BY THE ASSESSING OFFICER U/S 147/148 OF THE INCOME - TAX ACT WITH THE FOLLOWING OBSERVATIONS: - 4.4 I HAVE ALSO CAREFULLY PERUSED THE WRITTEN SUBMISSIONS MADE BEFORE ME VIDE LETTER DATED 17.11.2011 AND THE DOCUMENTS AS AVAILABLE IN THE CASE - RECORDS FURNISHED BY ASSESSING OFFICER FOR ASCERTAINING THE CONTENTIONS AS RAISED BY THE APPELLANT. SO FAR AS THE FIRST GROUND OF THE APPEAL IS CONCERNED THE SAME IS REJECTED AS THE APPELLANT AT NO POINT OF TIME POINTED OUT ANY DEFICIENCY IN REASONS SO RECORDED AND THE ISSUANCE OF NOTICE U/S.148 OF THE ACT WITH REGARD TO TIME LI MIT OR OTHERWISE. THE REASONS RECORDED BY THE A.O. DID NOT MENTION THE FACT ABOUT THE FILING OF RETURN OF INCOME BY THE APPELLANT CORRECTLY BUT MERELY MADE A PASSING REFERENCE THAT ..IT IS FURTHER SEEN THAT THE ASSESSEE HAS NOT FILED HIS RETURN OF INCOME . AFTER ARRIVING AT THE CONCLUSION THAT THE APPELLANT HAD CONCEALED THE INCOME OF RS.12 73 627/ - BEING THE DIFFERENCE OF FAIR MARKET VALUE OF RS.23 91 500/ - AND DECLARED SALE CONSIDERATION. THOUGH THERE IS FACTUAL MISTAKE IN MENTIONING ABOUT NON - FILING 6 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL OF RETURN OF INCOME STILL THE SAME CANNOT PRELUDE THE ASSESSING OFFICER FOR DERIVING THE BELIEF BASED ON THE INFORMATION IN HIS POSSESSION THAT THE APPELLANT HAS CONCEALED THE INCOME AND INCOME CHARGEABLE TO THAT EXTENT ESCAPED TO THAT EXTENT. CONSIDERING T HE ENTIRETY OF FACTS AS AVAILABLE ON RECORDS THIS GROUND OF APPEAL IS REJECTED AND IT IS HELD THAT THE ASSESSING OFFICER HAS VALIDLY REOPENED THE ASSESSMENT U/S.147 OF THE ACT. THIS IS SO IN VIEW OF THE SUPREME COURTS JUDGMENT IN THE CASE OF GKN DRIVESHA FTS (INDIA) PVT. LTD. REPORTED IN (2002) 125 TAXMAN 963 (S.C.) WHEREIN THE PROCEDURE FOR PROVIDING THE REASONS RECORDED TO THE APPELLANT AND THE DISPOSAL THEREOF. 6. IN SUPPORT OF APPEAL THE LD . C OUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE EARLIER BY HIM BEFORE THE LD CIT(A). HIS SUBMISSIONS IN BRIEF WERE THAT THE ASSESSEE HAD ALREADY FILED HIS RETURN OF INCOME ON 28.09.2001 VIDE RECEIPT NO. 02376 IN WHICH TOTAL CAPITAL GAINS OF RS.93 393/ - WAS DECLARED AND THEREFORE THE OBSERVATIONS OF TH E ASSESSING OFFICER IN THE REASONS RECORDED BY HIM U/S 148 THAT THE RETURN WAS NOT FILED BY THE ASSESSEE WAS FACTUALLY INCORRECT. AS REGARDS THE O THER REASON RECORDED BY THE ASSESSING OFFICER WITH REGARD TO VALUATION OF PROPERTY ESTIMATED BY THE DEPARTMENT AL VALUER U/S 55A AT RS.23 91 500/ - HE SUBMITTED THAT THE REPORT OF THE VALUER WAS NOT SUFFICIENT FOR INITIATION OF PROCEEDINGS U/S 147/148. IN SUPPORT OF HIS SUBMISSIONS HE RELIED UPON ALL THE DECISIONS WHICH WERE RELIED UPON BY HIM BEFORE THE LD CIT(A) . IN ADDITION HE RELIED UPON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN 248 CTR 33. 7. IN REPLY THE LD DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER PASSED BY THE LD CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMI SSIONS. THE VALIDITY OF NOTICE ISSUED BY THE ASSESSING OFFICER U/S 147/148 IS REQUIRED TO BE SEEN WITH REFERENCE TO THE MAIN PROVISIONS OF SECTION 147 AND NOT WITH REFERENCE TO THE PROVISO TO SECTION 147 WHICH IS NOW FIRST PROVISO TO SECTION 147. IN TERMS OF MAIN PROVISIONS OF SECTION 147 THE ASSESSING OFFICER CAN INITIATE PROCEEDINGS U/S 147/148 IF HE HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. IN ACIT V. RAJESH JHAVERI STOCK 7 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL BROKERS P. LTD. 291 ITR 500 512 (SC) THE HONBLE SUPREME COURT HAS HELD THAT SECTION 147 CONFERS THE JURISDICTION ON THE ASSESSING OFFICER TO INITIATE PROCEE DINGS IF HE FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. IN THIS VIEW OF TH E MATTER OUR JURISDICTION IS NOW RESTRICTED TO EXAMINING AS TO WHETHER THE ASSESSING OFFICER HAS REASON TO FORM PRIMA FACIE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 9. PERUSAL OF THE REASONS RECORDED BY THE ASSESSING OFFICER SHOWS TH AT HE HAS ISSUED THE IMPUGNED NOTICE ON THE BASIS OF FAIR MARKET VALUE DETERMINED BY THE DEPARTMENTAL VALUER U/S 55A OF THE INCOME - TAX ACT. THE DEPARTMENTAL VALUER APART FROM BEING A STATUTORY AUTHORITY IS AN EXPERT IN THE MATTER OF VALUATION OF LAND AND BUILDING. REPORTS OF EXPERTS ARE RELEVANT EVIDENCE EVEN UNDER THE EVIDENCE ACT. THE VALUATION REPORT FURNISHED BY THE DEPARTMENTAL VALUER PROVIDES IN OUR CONSIDERED OPINION RELEVANT BASIS FOR THE ASSESSING OFFICER TO INITIATE PROCEEDINGS U/S 147/148 OF THE INCOME - TAX ACT. THE FAIR MARKET VALUE OF THE PROPERTY SOLD BY THE ASSESSEE WAS DETERMINED BY THE DEPARTMENTAL VALUER AT RS.23 91 500/ - AS AGAINST SALE CONSIDERATION OF RS.11 17 873/ - DECLARED BY THE ASSESSEE FOR THE PURPOSE OF COMPUTATION OF CAPITAL GA IN. THERE WAS APPARENTLY UNDERSTATEMENT OF SALE CONSIDERATION DECLARED BY THE ASSESSEE VIS - A - VIS THE FARE MARKET VALUE DETERMINED BY THE DEPARTMENTAL VALUER. THE VALUATION REPORT SUBMITTED BY THE DEPARTMENTAL VALUER PROVIDED REASONABLE BASIS TO THE ASSESSI NG OFFICER FOR FORMATION OF PRIMA - FACIE TO BELIEVE THAT INCOME CHARGEABLE UNDER TAX HAS ESCAPED ASSESSMENT. IN THIS VIEW OF THE MATTER THE ACTION OF THE ASSESSING OFFICER IN INITIATING THE PROCEEDINGS U/S 147/148 IS UPHELD. F IRST THREE GROUNDS OF APPEAL T AKEN BY THE ASSESSEE ARE DISMISSED. 10. G ROUND NO S .4 TO 6 ARE INTERLINKED AND READ AS UNDER: - 4. WITHOUT PREJUDICE TO ABOVE MENTIONED GROUNDS THE ADDITION OF RS.1273627/ - AS CONCEALED INCOME FROM BUSINESS IS NEITHER JUSTIFIED ON FACTS NOR JUSTIFIED I N LAW. 8 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING APPLICATION OF SECTION 55A OF THE INCOME TAX ACT. THE ASSESSING OFFICER HAS SUBSTITUTED THE FAIR MARKET VALUE FOR ACTUAL SALE PRICE AND THERE BY ADDITION RS.1273627/ - AS BUSINES S INCOME PROVISION OF SECTION 55A ARE APPLICABLE ONLY IN CASE OF CAPITAL GAINS COMPUTATION. 6. WITHOUT PREJUDICE TO ABOVE MENTIONED GROUND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE ASSESSING OFFICER WAS BOUND TO ADOPT FA IR MARKET VALUE AS DETERMINE U/S 55(A) OF THE ACT LEAVING NO CHOICE FOR UPWARD OR DOWNWARD REVISION BY ASSESSING OFFICER. 11. THE ASSESSING OFFICER HAS PROCEEDED TO COMPUTE CAPITAL GAINS ON SALE OF LAND ON THE BASIS OF FAIR MARKET VALUE DETERMINED BY TH E DEPARTMENTAL VALUER WITH THE FOLLOWING OBSERVATIONS: - 9. IN LIGHT OF THE DISCUSSION MADE HEREINABOVE IT IS QUITE CLEAR THAT THE ASSESSEE HAD SOLD THE LAND AFTER PLOTTING THE LAND TO 13 DIFFERENT PERSONS OUT OF WHICH SALE OF 12 PLOTS PERTAINS TO THIS YEAR UNDER CONSIDERATION AND SALE OF ONE PLOT PERTAINS TO F.Y. 2001 - 02 FOR TOTAL SALE CONSIDERATION OF RS.1348427/. WHEREAS THE FAIR MARKET VALUE OF THESE PLOTS OF LAND ARE AS UNDER AS ESTIMATED BY THE AVO OF THE DEPARTMENT AFTER CONSIDERING THE OBJECTIO NS OF LR AND VALUATION REPORT OF VALUER OF THE ASSESSEE. PLOT NO. DATE OF SALE MARKET VALUE ESTIMATED BY THE AVO IN RS. SALE CONSIDERATION IN RS. DIFFERENCE 1 31 - 03 - 2000 391700 183816 207884 2 01 - 03 - 2000 504700 236880 267820 3 13 - 03 - 2000 147000 6822 6 78774 4 13 - 03 - 2000 187600 87540 100060 5 31 - 03 - 2000 155600 72114 83486 6 31 - 03 - 2000 155600 72114 83486 7 31 - 03 - 2000 155600 72114 83486 9 13 - 03 - 2000 140000 64908 75092 10 13 - 03 - 2000 136200 64908 71292 11 13 - 03 - 2000 139600 64908 74692 12 13 - 03 - 2000 124000 57847 66153 13 01 - 03 - 2000 153900 72498 81402 8 07 - 04 - 2000 140200 65000 75200 FROM THE ABOVE FACTS I AM OF THE OPINION THAT THE ASSESSEE HAS SOLD PLOTS OF LAND LESS THAN THEIR FAIR MARKET VALUE AND THEREBY HAS CONCEALED HIS 9 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL INCOME. THE FAIR MAR KET VALUE OF THE 12 PLOTS OF LAND THE SALE OF WHICH PERTAINS TO THE YEAR UNDER CONSIDERATION IS AT RS.2391500/ - WHEREAS THE ASSESSEE HAS SHOWN INCOME OUT OF SALE OF THESE PLOTS OF LAND AT RS.1117873/ - . HENCE DIFFERENCE OF RS.1273627/ - IS HEREBY ADDED TO T HE TOTAL INCOME OF THE ASSESSEE TREATING IT AS CONCEALED INCOME OF THE ASSESSEE. AS THE ASSESSEE HAS SHOWN HIS INACCURATE PARTICULAR INCOME THIS DEFAULT OF THE ASSESSEE ATTRACT PENALTY PROCEEDINGS U/S.271(1)(C) OF THE IT ACT 1961. I THEREFORE PROPOSED TO LEVY PENALTY U/S.271(1)(C) OF THE IT ACT 1961. 12. ON APPEAL THE LD CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER WITH THE FOLLOWING OBSERVATIONS: - 5. SO FAR AS THE SECOND GROUND IS CONCERNED IT IS HELD THAT THE VALUE ADOPTED RS.160/ - PE R SQ.MTR. BY THE REGISTERED VALUER IS NO MORE COMPARABLE AND RELEVANT AS THE SAME WAS BASED ON THE RESOLUTION PASSED BY THE RAJKOT MUNICIPAL CORPORATION IN THE YEARS 1981 - 82 WHICH ARE AS OLD AS OF 20 YEARS OR SO. THEREAFTER THE RATES OF IMMOVABLE PROPERTI ES IN RAJKOT AND SURROUNDING LOCALITIES HAVE RESULTED IN SUBSTANTIAL RISE. THE RATES ADOPTED BY THE DEPARTMENTAL VALUATION OFFICER ARE BASED ON THE RELEVANT SALE INSTANCES OF THE PROPERTIES SOLD IN THE RELEVANT PERIOD AND LOCATED IN THE SIMILAR OR NEARBY L OCALITIES WHEREAS THE REGD. VALUER WAS NOT ABLE TO CITE ANY OTHER COMPARABLE INSTANCES BASED ON THE DOCUMENTS REGISTERED IN THE RELEVANT YEAR(S) FOR THE PROPERTIES LOCATED IN THE SAME OR NEARBY AREA EVEN AT THE STAGE OF VALUATION PROCEEDINGS. THEREFORE I T HAS TO BE HELD THAT THE VALUE ADOPTED BY THE DEPARTMENTAL VALUATION OFFICER IS NEARER TO THE REALISTIC VALUATION. THE PLEA THAT THE ASSESSING OFFICER DID NOT BRING ON ANY EVIDENCE THAT THE APPELLANT RECEIVED THE AMOUNTS IN ADDITION TO THE SALE CONSIDERAT ION AS MENTIONED IN THE REGISTERED TRANSFER DEEDS HAS ALSO NO RELEVANCE AS THIS IS NOT A SEARCH & SEIZURE CASE WHERE THE AUTHORIZED OFFICER COLLECTS THE EVIDENCES WHICH ARE EVALUATED BY THE ASSESSING OFFICER SUBSEQUENTLY. 5.1 FURTHER SECTION 2 (22B) OF T HE ACT DEFINES THE FAIR MARKET VALUE IN RELATION TO CAPITAL ASSET AS UNDER: - 10 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL (I) THE PRICE THAT THE CAPITAL ASSET WOULD ORDINARILY FETCH ON SALE IN THE OPEN MARKET ON THE RELEVANT DATE; AND (II) WHERE THE PRICE REFERRED TO IN SUB - CLAUSE (I) IS NOT ASCER TAINABLE SUCH RICE AS MAY BE DETERMINED IN ACCORDANCE WITH THE RULES MADE UNDER THIS ACT. THEREFORE FOR DETERMINING THE FAIR MARKET VALUE IN RELATION TO THE CAPITAL ASSETS IN QUESTION THERE IS NO PRE - REQUISITE THAT THERE SHOULD BE AN EVIDENCE IN POSSESS ION TO SHOW THAT THE DIFFERENCE OF SALE CONSIDERATION ACTUALLY RECEIVED AND THE SALE CONSIDERATION AS DETERMINED ON THE BASIS OF FAIR MARKET VALUE. 5.2 THE CITATIONS RELIED UPON BY THE APPELLANT HAVE ALSO BEEN CONSIDERED AND THEY ARE DEALT WITH AS UNDER: - (1) THE DECISION IN THE CASE OF CIT MADRAS VS. SHIVKAMI CO. PVT. LTD. RELIED ON BY THE APPELLANT IS DEALING WITH THE OLD PROVISIONS OF SECTION 52 OF THE I.T. ACT 1961 AND CORRESPONDING TO 136(2) OF THE I.T. ACT 1922. THE PROVISIONS OF SECTION 52 OF TH E I.T. ACT WERE OMITTED BY THE FINANCE ACT 1987 W.E.F. 1.4.1988 AND THEREFORE THE DECISION RELIED UPON BY THE APPELLANT IS NO MORE APPLICABLE TO THE FACT OF THE PRESENT CASE. (2) THE DECISION IN THE CASE OF C.I.T. VS. NITIBEN CHAMANLAL SHAH RELIED ON BY THE APPELLANT IS ALSO NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE FOR THE SAME REASONS AS MENTIONED ABOVE AS THE DECISION DEALT WITH THE OMITTED PROVISIONS OF SECTION 52 OF THE I.T. ACT. (3) THE THIRD DECISION IN THE CASE OF BRITANIA INDUSTRIES LTD. VS. DY. CIT & OTHERS IN ALSO NOT FOUND TO BE APPLICABLE TO THE PRESENT CASE AS THAT DECISION WAS APPLICABLE TO THOSE CASES WHERE THE ASSESSMENTS U/S.143(3) WERE FINALIZED BEFORE THE RECEIPT OF VALUATION REPORT BY THE CONCERNED A.O. AND THE A.O. SUBSEQUENTL Y RE - OPENED THE ASSESSMENT. 11 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL 5.3 FOR THE AFOREMENTIONED REASONS THIS GROUND OF APPEAL IS ALSO REJECTED AND THE VALUE ADOPTED BY THE DEPARTMENTAL VALUATION OFFICER IS HELD TO BE CORRECTLY ADOPTED BY THE ASSESSING OFFICER WHILE FINALIZING THE ASSESSMENT U/S 143(3) R.W.S.147 OF THE I.T. ACT. 13. IN SUPPORT OF APPEAL THE LD . C OUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE EARLIER BEFORE THE LD CIT(A). APART FROM RELYING UPON THE JUDGMENT REFERRED TO BY HIM BEFORE THE CIT(A) THE LD . C OUNSEL SUBMIT TED THAT THE ASSESSEE HAD ALSO FILED A COPY OF HIS OWN VALUER S REPORT AND ALSO SUBMITTED COMMENTS OF HIS VALU ER ON THE VALUATION DONE BY THE DEPARTMENTAL VALUER. ACCORDING TO HIM THE DEPARTMENTAL VALUER HAD PROCEEDED TO DETERMINE THE FAIR MARKET VALUE OF THE PROPERTY ON THE BASIS OF CERTAIN INSTANCES WHICH WERE NOT AT ALL COMPARABLE. HE FURTHER SUBMITTED THAT THE ASSESSEE WAS IN URGENT NEED OF FUND AND THEREFORE HAD TO SELL THE PROPERTY OUT OF URGENCY. 14. IN REPLY THE LD DEPARTMENTAL REPRESENTATIVE SU PPORTED THE ORDER PASSED BY THE LD CIT(A). 15. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE HAD EXECUTED SATAKHAT WITH SHRI RATILAL N RATHOD ON 15.12.1999 TO SELL THE PROPERTY FOR A SUM OF RS.60 51 000 / - OUT OF WHICH RS.5 55 000/ - WAS PAID ON 15.12.1999 AND THE REMAINING AMOUNT WAS AGREED TO BE PAID IN INSTALLMENTS. THE SAID SATAKHAT WAS HOWEVER CANCELLED BY SHRI RATILAL N RATHOD ON 28.12.1999 FOR WANT OF FUNDS. SAM E PROPERTY WAS SOLD THEREAFTER BY THE ASSESSEE TO 13 DIFFERENT PERSONS AFTER PLOTTING THE LAND FOR RS.11 82 873/ - WHICH WAS CONSIDERED TO BE LOW BY THE ASSESSING OFFICER. ON A REFERENCE TO THE VALUATION OFFICER THE FAIR MARKET VALUE OF THE SAID PROPERTY H AS BEEN DETERMINED BY THE DEPARTMENTAL VALUER AT RS.2 5 31 300/ - AS AGAINST SALE C ONSIDERATION OF RS.11 82 873/ - DECLARED BY THE ASSESSEE. ON THE FACTS OF THE CASE THE FARE MARKET VALUE DETERMINED BY THE DEPARTMENTAL VALUER CANNOT BE SAID TO BE UNREASONABL E. THE ASSESSING OFFICER AND THE LD CIT(A) HA VE GIVEN COGENT REASON S FOR ADOPTING THE FAIR MARKET VALUE DETERMINED BY THE DEPARTMENTAL 12 128 - RJT - 2012 SMT KAUSHALYABEN JORAVARSINH RAOL VALUER. IN THIS VIEW OF THE MATTER THE ORDER PASSED BY THE LD CIT(A) IS CONFIRMED. GROUND NOS. 4 - 6 ARE DISMISSED. 16. GROUND NO.7 TAKEN BY THE ASSESSEE READS AS UNDER: - 7. THE APPELLANT SUBMITS THAT THE REOPENING OF THE ASSESSMENT AS WELL AS ADDITION OF RS.1273627/ - IN THE TOTAL INCOME IS UNWARRANTED AND UNJUSTIFIED. 17. WE HAVE ALREADY UPHELD THE VALIDITY OF INITIAT ION OF PROCEEDINGS BY THE ASSESSING OFFICER U/S 147/148 AND ALSO THE ADDITIONS AMOUNTING TO RS.12 73 627/ - MADE BY THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER GROUND NO.7 IS ALSO DISMISSED. 18. APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED ON 26 . 0 7 . 201 3 SD/ - SD/ - (T. K. SHARMA) ( D. K. SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: 26 .07 .2013 B T COPY OF ORDER FORWARDED TO: - 1 . APPELLANT SMT. KAUSHALYABEN JORAVARSINH RAOL 18 - YOGI KRUPA SOCIETY OPP. SWAMINARAYAN TEMPLE GONDAL 2 . RESPONDENT - ITO WARD - 1 ( 2 ) RAJKOT 3 . CONCERNED CIT - I RAJKOT 4 . CIT (A) - II RAJKOT 5 . DR ITAT RAJKOT 6 . GUARD FILE. BY ORDER TRUE COPY PRIVATE SECRETARY ITAT RAJKOT