Which date to be considered under section 50C Stamp value?
Fact and Issue of the case
Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-3, Ahmedabad dated 16.1.2018 passed for the Asstt.Year 2012-13.
Assessee has as many as nine grounds of appeal. In ground no.1 to 4, the assessee has challenged determination of long term capital gain from sale of land at Rs.3,86,58,478/- by taking jantri value at Rs.618/- instead of Rs.140/-. Brief facts of the case are that the assessee has filed his return of income on 29.3.2014 declaring total income at Rs.7,18,775/-, which was processed under section 143(1) of the Income Tax Act, 1961. The return of the assessee was selected for scrutiny assessment, and notice under section 143(2) was issued and served upon the assessee. As per the information received by the Department, the assessee has sold an immovable property admeasuring 23270 sq.meters of land at Village Rethal, Nr. Sanand in Survey Block No.973, Khata No.618, Dist: Ahmedabad for a consideration of Rs.3,88,60,900/-, while as per the registered sale deed, the sale consideration has been shown at Rs.46,54,000/-. Thus, according to the AO, the assessee has shown sale value less by Rs.3,42,06,900/- with an intent to evade taxes. The ld.AO thus worked out net capital gain of Rs.3,86,58,478/- after indexation and other expenses. A show cause notice was issued to the assessee as to why net capital gain worked out by the AO of Rs.3,86,58,478/- should not be added to the income of the assessee.
It was explained by the assessee that Government of Gujarat has changed jantri rate of the land from time to time; that the assessee had agreed to sell the land on 30.12.2010 at Rs.140/- per sq.meter; that the assessee executed the sale deed at the rate of Rs.200/-, which was more than the Government rate, at which rate nearby land owners of Rethal village executed their sale deed. This rate has been accepted by the collector of stamp. It was further explained by the assessee there are two jantri rates were prevailing on 18.4.2011 i.e. rate of Rs.1670/- per meter which was subsequently revised to Rs.618/-. The AO should take actual sale consideration received by the assessee as per the agreement to sell i.e. at Rs.140/- per sq.meter, and the assessee has executed the sale deed at Rs.200/- per square meter as per the requirement of stamp valuation authority, and not on the basis actual sale consideration received by the assessee, therefore, capital gain should be calculated at the rate of Rs.140/-. The ld.AO did not accept this contention of the assessee, and held that since assessee himself was not sure about the correct amount of capital gain, jantri rate received by the Department has to be accepted. He accordingly made an addition of Rs.3,86,58,478/- and after giving deduction of Rs.14,567/-, net assessed income worked out at Rs.3,86,81,425/-. Dissatisfied with action of the AO, assessee challenged the addition on account of calculation of capital gain and denial of expenses before the ld.first appellate authority. However, the assessee could not get any relief from the ld.CIT(A). Aggrieved assessee is now before the Tribunal.
Observation of the Tribunal
The Court has duly considered rival contentions and gone through the record carefully. The case of the assessee is that he has entered into an agreement to sell the land admeasuring 23270 sq.meters comprising in survey no.973 of Village Rethal, Ta. Sanand, Dist. Ahmedabad with Infinity Infra Projects P.Ltd. This agreement was executed on 30.12.2010 and consideration was settled at Rs.46,54,000/-. On 31.12.2010 the value of the land for the purpose of stamp duty was fixed at Rs.140/- per sq.meter by the stamp valuation authority. The assessee has agreed to sell at the rate of Rs.200/- per sq.meter. According to the assessee, he received Rs.5.00 lakhs as token consideration and Rs.41,54,000/- on 26.4.2011. The sale deed was registered on 23.11.2011 bearing no.7606. The State of Gujarat for the purpose of charging stamp duty has re-determined the value of the property in this year, and new rates were notified on 18.4.2011. Since the assessee presented the sale deed on 24.5.2011 for registration before the sub-Registrar, Sanand, but was not registered on account of insufficiency of stamps put on it. The purchaser has paid stamp duty at Rs.200/- per sq.meter whereas according to the stamp duty valuation officer rates have been revised to Rs.1670/- per sq.meter. This rate was erroneously fixed, and it was revised subsequently by reducing it Rs.618/- per sq.meter. In other words, on the date when sale deed was presented for registration i.e. 24.5.2011, jantri rate for the purpose of payment of stamp duty was Rs.618/- per sq.meter.
After going through the record, we find that disallowance of expenditure in respect of land leveling, fencing and banakhat expenses totaling to Rs.37,55,750/- a meager amount of Rs.34,567/-has been allowed by the Revenue, without any realistic consideration. Even before making such disallowance no explanation was called for by the Revenue, and the assessee was not given any opportunity to furnish the details of the expenses. It is not the case of the Revenue that the expenses incurred by the assessee were not related to the land or the expenses incurred for any other purposes, as he has not called for any details from the assessee. It seems that the disallowance has been made simply on the basis of some surmises that the assessee fabricated the expenses to reduce the tax effect, such assumption of the AO is not tenable. We, therefore, in the interest of justice and fair play remit the issue of disallowance back to the file of the AO for re-adjudication and to decide the issue on the basis of details furnished/to be furnished by the assessee.
As far as charging of interest under section 234A/VB/C/D as raised in ground no.8 is concerned, the same being consequential and mandatory, stands disposed of accordingly.
Ground no.9 regarding initiation of penalty under section 271(1)(c) of the Act, the same is premature at this stage, and stands dismissed accordingly.
In the result, the appeal of the assessee is partly allowed for statistical purpose.
The tribunal allowed the petition and ruled in favour of the assessee
Read the full order from belowWhich-date-to-be-considered-under-section-50C-Stamp-value