TMI Blog2013 (7) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... has given a clear finding that the MOU and no other document can be a basis for the conclusion reached by the A.O. and on the basis of these documents, a presumption cannot be raised abut receiving the cash by the assessee. No specific evidence is referred to by the A.O. about the allegation that assessee has been paid any amount in excess of the price of Rs.7.36 crores as per the documents. It is also noted that this price has been accepted by the stamp duty authority and it is not disputed by the authority. Hence, there is no infirmity in the order of CIT(A) on this issue. Determination of value of property - at Rs.800/- per sq. yard or Rs 250/- per sq. yard - While adopting the value as on 01.04.1981 @ Rs.250/- per sq. yard as against Rs.800/- per sq. yard the basis of the A.O. was that as per this report of the registered valuer, various sales instances considered by him which are for smaller plots but for a larger plot like that of the assessee, the value will be much less per sq. yard - Held that:- The registered valuer has given various sale instances form 25.03.1980 to 30.08.1982 and the lowest value as per these sales instances is Rs.211.57 per sq. yard and the highes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITD 273 ITO Vs Uppala Venkat Rao (Hyd.) ii) 70 TTJ 919 G N Ghorpade (HUF) Vs DCIT (ITAT Pune) iii) Tax Appeal No.10 of 2010 dated 28.06.2011Shri Rama Multitech Ltd. (Guj.) 2.2 As against this, Ld. D.R. supported the orders of authorities below. He placed reliance on the following judicial pronouncements: i) 281 ITR 19 (Guj.) CIT Vs. Manoharsinhji P Jadeja ii) 222 ITR 799 (Ktk) Emrald Valley Estates Ltd. Vs CIT iii) 106 ITD 153 (Ahd.) Vijaysinh R Rathod Vs ITO, Vapi 2.3 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgements cited by both the sides. We find that the mode of purchasing the land in question by the assessee is indicated at page 3 of the sale deed and the same is reproduced in the letter of the assessee dated 19.06.2009 to CIT(A) copy of which is available on pages 1-16 of the paper book and the relevant portion is available on page 5 of the paper book. The relevant portion is reproduced below for the sake of ready reference:- "AND WHEREAS the Vendor was tenant in his separate and individual capacity, of Inami Land of inamdar, Shah Alam Roza Trust. The said Land is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right, the ownership right sold by the assessee is also having nil cost of acquisition. Hence, this argument of the assessee that there will be no capital gain because there is no cost of acquisition, has no merit. 2.6 In view of the above decision, as per which the assessee's case is covered against the assessee by the provisions of Section 55(2)(a) of the Income tax Act, 1961, various decisions cited by both the sides have no application in the present case since the facts in those cases are different where the issue was not covered by the provisions of Section 55(2)(a) of the Income tax Act, 1961. Still, we feel that at least we should examine the applicability of the judgement of Hon'ble Gujarat High Court cited by both the sides. One of the judgements cited by the Ld. A.R. is the judgement of Hon'ble Gujarat High Court rendered in the case of CIT Vs Shri Rama Multitech Ltd. (supra). This judgement is with regard to assessment by way of total income declared by the assessee in the return of income and since we have held above that the assessee's income under the head capital gains is liable to be taxed in view of the provisions of Section 55(2)(a), this judgement of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure Ltd. 2. Banakhat (unsigned) between Shri Govindbhai Ambalal Patel and Smt. Chetnaben Mukeshbhai Patel as promoter of Savvy Homes Co.Op. Housing Society (Proposed) showing rate of Rs.9500 per sq. yd. and the total value of 15488 sq. yds. at Rs. 14,71,36,000/-. 3. Duly notarized banakhathh dated 17.1.2007 between Shri Govind Ambalal Patel and Smt. Chetnaben Mukeshbhai Patel as promoter of Savvy Homes Co.Op. Housing Society (Proposed). Here the rate shown is Rs.5685/- per sq. mt. and valule of 12950 sq. mts, (equivalent to 15488 sq. yds.) is shown at Rs.7,36,20,750. 4. Sale deed dated 3.2.2007 between Shri Govind Ambalal Patel and Savvy Homes Co.op. Housing Society Ltd. with Smt. Chetnaben Mukeshbhai Patel as the confirming party." The Assessing officer has discussed the contents of the above documents which are summarized as under:- (i) The first document being MOU dated 23/09/2006 between the appellant and the Savvy Infrastructure Ltd. and it is stated that as per this document, the appellant has sold the land bearing No.186 at Vasana admeasuring 15488 sq. yds. to Savvy Infrastructure Ltd., according to which the sale price decided was of Rs.14,71,36,000/- and token ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed written submissions claiming that no capital gain was taxable in respect of the said land as it had no cost. It was claimed that the land was received by appellant as of old tenure upon coming into force of Devastan Inam Abolition Act. The appellant had also given revised return with this claim. However, this revised return has not been accepted by the A.O. stating that the proceedings were getting time barred. It is further stated that the appellant had himself shown capital gain in the return of income. It is also stated that the asset is not self generated asset. 4.4 In the return of income, the appellant had claimed that for the purpose of deduction of cost, the fair market value as on 1-4-1981 be . adopted and for that purpose the appellant had claimed Rs.800/- per sq. yd as fair market value of the property as on 1-4-1981. in support of this, the appellant had furnished a certificate from the Registered Valuer. This has not been accepted by the Assessing Officer and he has adopted the value of Rs.250/- per sq. yd. as the value of the land as on 1-4-1981. He has stated that the rates taken by the valuer were for smaller plot and that the appellant's plot was large and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other par i.e. Savvy Infrastructure Co. Ltd. He submitted that this agreement is not for sale of land in question but for contributing of said land to the partnership firm as the capital contribution and therefore, the same cannot be the basis for adopting the sale vale of the land in question. 3.5 He also drawn our attention to the copy of the agreement to sell of the land in question which is dated 17.01.2007 as per English version available on pages 47-78 of the paper book and it was pointed out that the price was fixed after negotiation @ Rs.5685/- per sq. mtr. for the land area of 12950 sq. mtrs and the total value was worked out at Rs.7,36,20,250/- and hence, nothing more than this can be considered as the sale value of the land in question. 3.6 He also submitted that the search was carried out on 14.02.2007 and the sale deed in question was executed on 03.02.2007 which means that the search was carried out only 11 days after the date of sale deed and still, no cash was found nor any unaccounted asset was found in the course of search and this also supports the case of the assessee that the actual sale value is as declared in the sale deed. 3.7 He also submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e given price of /Rs.1471.36 lacs or whether it is for the purpose of transferring the land in question to a new partnership firm to be formed jointly by the assessee along with his three partners of one part and the other part M/s. Savvy Infrastructures Co. Ltd. Again on page 8 of the same MOU it is stated that a token amount given towards sale price by the party on other part to the first part is to be treated as given to the new partnership firm by the other part. This has increased the confusion as to whether this MOU is for formation of a new partnership firm or it is for sale of land simplicitor. Although only one name is given as party of one part i.e. the assessee Shri Govindbhai A Patel but on page 37 of the paper book, it is stated that "we the party of the one part is exclusively owning, holding, possessing and enjoying and this land is free from all encumbrances...." In para 2 of this MOU, it is also agreed that the tenure of this MOU will be 18 months and during this period, installment of equal amount has to be paid at every month. There is nothing brought on record by the revenue to show that any such monthly installment was paid by the party of 2nd part i.e. Shri Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3.10 The basis of the revenue for adopting the amount of Rs.1471.36 lacs as total sales consideration of the land in question was this MOU only and except this MOU, no other evidence even circumstantial evidence has been found even in the course of search carried out only 11 days after the date of sale deed to corroborate this allegation that the assessee has received sales consideration in cash of Rs.735.15 lacs. If this much huge cash was received by the assessee, something must be found in the course of search either unaccounted cash or unaccounted investment or any other paper etc., which may have indicated such a huge cash transaction. This is also not the case of the A.O. that jantri price of this land in question at the relevant point of time was more than the value declared by the assessee in the sale deed. Hence, we find that neither the value as per jantri rates is more than the sale value declared in the sale deed nor any other evidence was found suggesting receipt of money by the assessee in cash apart from this MOU. We have already discussed that this MOU cannot be said to be a sales simiplicitor because various clauses of this MOU are suggesting that this MOU was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Apart from this, at the time of search, cash of only Rs.1,50,000/- was found from the appellant's premises which was also explained from the withdrawals from bank account and further no evidence about any other unaccounted assets or receipt of cash was found during the course of search from the appellant's premises. It is also noticed that no specific evidence is referred to by the A.O. that the appellant was paid any amount in excess of the prices of Rs.7.36 crores as per the documents. The appellant has also specifically pointed out that the price as per the documents is also accepted for stamp duty purpose and it is not disputed by that authority. Considering these facts, I am of the view that the A.O. has no basis for adopting the sale value of the land at Rs.14.71 crores as against the value of Rs.7.36 crores as per the document in the form of sale deed dated 3-2-2007. The A.O. is, therefore, directed to consider the sale consideration at Rs.7.36 crores as against the amount of Rs.14.71 crores adopted by him." 3.12 From the above para of the order of Ld. CIT(A), it is seen that he has given a clear finding that the MOU and no other document can be a basis for the conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding is given by the Tribunal in para 10.1 of its order that when the value declared by the assessee as on 01.04.1981 is supported by valuation report of a registered valuer and the A.O. has taken different valuation without obtaining valuation report from the DVO, such value taken by the registered valuer cannot be substituted by the A.O. merely on the basis of general inquiries without obtaining a report from DVO. Similarly, in the case of Pramila M Desai (supra) also, it is held by the tribunal that the report of the registered valuer being a technical person, cannot be substituted without obtaining DVO's report or any other report of a technical person. Hence, this issue is squarely covered in favour of the assessee by these two Tribunal decisions. Moreover, we find that while adopting the value as on 01.04.1981 @ Rs.250/- per sq. yard as against Rs.800/- per sq. yard as adopted by the registered valuer, the basis of the A.O. was this much only that as per this report of the registered valuer, various sales instances considered by him which are for smaller plots but for a larger plot like that of the assessee, the value will be much less per sq. yard. Copy of the valuation rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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