TMI Blog2013 (9) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... icer was working on the wrong location of the land sold and the learned Commissioner of Income-tax (Appeals) passed the impugned order on the basis of report submitted by the Revenue authority as well as the Sub-Registrar and he rightly held that the land sold was located at village Dhandari Khurd and the applicable collecteral rate on that land was Rs. 1,300 per sq. yd. and the assessee sold the land at much higher price than the collector or circle rate. Therefore, we are constrained to hold that the findings of the learned Commissioner of Income-tax (Appeals) in the impugned order are based on the reports of the Revenue authorities and there is no reason before us to interfere with the same - Decided against Revenue. - - - - - Dated:- 18-5-2012 - Order The order of the Bench was delivered by Chandra Mohan Garg (Judicial Member).-This appeal has been preferred by the Revenue against the order dated December 20, 2010 for the assessment year 2007-08 of the Commissioner of Income-tax (Appeals)-XXX, New Delhi, by which he allowed the appeal of the assessee deleting the addition made by the Assessing Officer, vide his order dated December 31, 2009, on account of enhancing the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority. 10.3 Though the stamp valuation authority, vide 133(6) notice dated December 4, 2009, was specifically asked to furnish the reasons for disagreement with the report of the Valuation Officer along with supporting documents and evidences, the submissions of the stamp valuation authority is devoid of any reasoning and is not supported by evidence such as location maps and other documents establishing the actual location of the property. Therefore, it is held that the value adopted the stamp valuation authority cannot be taken as Rs. 1300 per sq.yd., as this value does not pertain to the land which was the subject-matter of sale. 11. Now, the question is how to arrive at value adopted or assessed by the stamp valuation authority for the actual land, which was sold. To arrive at value adopted or assessed by the stamp valuation authority, following facts have been kept in mind : 11.1 From the actual location of the land which was subject-matter of sale, it is evident that land is located on Delhi Ludhiana Highway (N.H.1/G.T. Road). This is established by the report of the valuation officer and annexures to the valuation report. The stamp valuation rates as prescribed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . yd. and this sale deed is registered with Rs. 2,794 per sq. yds. And Vasika No. 12687 dated November 1, 2006 at that time rate was also Rs.1,300 per sq. yds and this sale deed is registered with Rs. 3,360 per sq. yd. So both these sale deeds are registered at much higher than the collateral rates. Moreover, area Patwari directed or report of Kh. No.279/ 3 Area Village Dhandari Khurd Abadi Prem Nagar, as per his report this land is on the west side of Delhi Ludhiana. The above land is on a road of approx. 30 to 35 ft width is on the west side of Delhi Road, fair market value of abovesaid land is Rs. 2,800, Rs. 2,900 per sq.yd. in the year 2006-07. Here I bring to your notice that this land is located on Dhandari Khurd so rate of Dhandari Kalan cannot be applied, so these sale deeds registered in area Dhandari Khurd are genuine. 6.1 Thus, once the Sub-Registrar cum Tehsildar have clarified that the circle rate is Rs. 1,300 per sq. yard, the valuation report stating the circle rate at Rs. 5,500 per sq. yrd is not acceptable since the best person to determine the circle rate under authority of law is SubRegistrar and not the valuation officer. It is not a case of determination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by Smt. Anjali Dua at the time of registration of vasika. The area of Dhandari Kalan was with Sub-Registrar, Ludhiana (West) and at present is with SubRegistrar Ludhiana (Central) so the rate of Dhandari Kalan cannot be imposed on the vasikas which had been registered at Rs. 2,794 and Rs. 3,360 per sq. yard, respectively, which is much higher than the collector rate of Rs. 1,300 existing at that time. So no penalty can be imposed on the vasikas as far as registration and collector rate is concerned.' 6.3 In light of the aforesaid, it is held that the learned Assistant Commissioner of Income-tax has erred in adopting the circle rate at Rs. 5,500 per sq. yard for determining the full value of the consideration when the actual consideration of Rs. 3,123.46 per sq. yard is higher than the circle rate of Rs. 1,300 per sq. yard. 7. Further, addition made is otherwise not tenable since for the purpose of the section 50C of the Act in the instant year 2007-08, the consideration which can be adopted is the value adopted or assessed by stamp valuation authority for the payment of stamp authority and only if the value adopted or assessed by the stamp valuation authority for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 71 (SC) would come into operation and govern the determination of full value of consideration' (emphasis supplied) 8. In light of the aforesaid, it is held that addition made of Rs.65,05,425 by enhancing sale consideration under section 50C of the Act is not based on misappreciation of the facts and statutory provisions of law and is thus deleted." The Departmental representative supported the assessment order and submitted that from the factual physical location of the land sold was located at Delhi, Ludhiana Highway (NH-1/G.T. Road) as per report of the Valuation Officer and annexure to the report and stamp valuation rates as prescribed by the Stamp Valuation Authority for the land situated within 300 ft. from G.T. Road was Rs. 5,500 per sq. yd. He also submitted that the land in question was situated on the G.T. Road within 300 ft. from the main G.T. Road. Therefore, the Assessing Officer had rightly taken the stamp value rate as Rs. 5,500 per sq. yd. The land sold was Rs. 2,737.35 sq. yd., therefore, value adopted or assessed by the Assessing Officer was rightly taken to be Rs. 1,50,55,425. The learned Departmental representative supported the addition and concluded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87 were executed for the land measuring 1592 sq. yd and 1145.35 sq. yds. out of Kh. No. 279/ 3, Kh. No. 24/27 page No. 18 Jama Bandi Year 2001-02 situated at village Dhandari Khurd, Tehsildar and Distt. Ludhiana. These sale deeds were executed for the sale consideration of Rs. 53,50,000 and Rs. 32,00,000 totally amounting to Rs. 85,50,000 which was received by the assessee from the purchasers of the land. The main basis of the addition made by the Assessing Officer under the head of "capital gains" of Rs. 65,05,425 was made under section 50C(1) of the Act adopting the value of the land at Rs.5,500 per sq. yd. From the bare reading of the assessment order and the submissions of the authorised representative recorded therein, we also noted that the submissions of the assessee were based on the reliance of the judgment of the Income-tax Appellate Tribunal, Amritsar Bench in the case of Punjab Poly Jute Corporation v. Asst. CIT [2009] 313 ITR (AT) 178 (Asr), wherein it was held that where the full value of consideration declared by the assessee in the sale deed was accepted by the stamp valuation authority then the value adopted by the stamp valuation authority need not to be substitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rate applicable for such land is Rs. 5,500 per sq. yd. (iii) It is submitted that, Sub-registrar cum Tehsildar, i.e., the stamp valuation authority have repeatedly clarified that, location of the land was at village Dhandari Khurd and not, Dhandari Kalan, the conclusion is wholly untenable and, not sustainable. (iv) It is submitted that since the stamp valuation authority has been established under the Stamp Act then and the statutory provision contained in section 50C of the Act refers to the stamp valuation authority, in such circumstances it is neither legally nor factually desirable or otherwise permissible to draw interpretation on the basis of the report of the valuation officer in preference to the report of the stamp value authority. Reliance in the context is also placed on the judgment of the apex court in the case of Surana Steels P. Ltd. v. Deputy CIT reported as [1999] 237 ITR 777 (SC). (v) The fact that, land is located at Dhandari Khurd and not at Dhandari Kalan is otherwise evident from the purchase deed of the appellant, copy of which is also placed on record. (vi) Even otherwise, it is submitted that since stamp valuation authority had adopted valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (pages 153 to 155 of paper book-II) and on the basis of the said representation, the learned Sub-Registrar, Ludhiana in an order dated September 8, 2010 has clarified his letter dated May 14, 2010." From the impugned order, at the outset we observe that the learned Commissioner of Income-tax (Appeals) held that the land sold was located at Village Dhandari Khurd and not at Village Dhandari Kalan. Thus, the circle rate applicable was Rs. 1300 per sq. yd. and not at Rs. 5,500 per sq. yd. with a finding that the DVO should have made correct verification regarding location of the land in the field with the appellant or her representative and then only should have given the proper report. We have perused the paper book carefully and observed that as per report of Sub-Registrar, Ludhiana East available at page 45 of the paper book and its translation in English is also available at page 46 of the paper book shows that the land sold was situated at Dhandari Khurd not at Dhandari Kalan. At this point, we also see from the report of the Valuation Officer (available from pages 39 to 44 of the paper book) that the valuation made by the Valuation Officer was related to the land situated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the vasikas which had been registered at Rs. 2,794 and Rs. 3,360 per sq. yd. respectively which is much higher than the collector rate of Rs. 1,300 existing at that time. So no penalty can be imposed on the vasikas as far as registration and collector rate are concerned." Sd/Tehsildar cum Sub-Registrar Ludhiana (East). A bare reading of above letter clarifies the location of sold land at village Dhandhari Khurd and effective circle or collector rate at Rs. 1,300 per sq. yd. and at the end it is also mentioned that rates of Dhandari Kalan village cannot be taken to impose penalty as because the sale deeds had been executed on much higher prices than the effective circle rate, i.e., Rs. 1,300 per sq. yd. Relying on the facts revealed from above letter the learned Commissioner of Income-tax (Appeals) held that the addition was made on erroneous ground and was not sustainable. In the case of Navneet Kumar Thakkar v. ITO reported as [2008] 298 ITR (AT) 42 (Jodhpur), it was held that a deeming provision has been enshrined in section 50C of the Act by virtue of which a legal fiction has been created for assuming the value adopted or assessed by any authority of the State Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. P. Varghese v. ITO [1981] 131 ITR 597 (SC). In the case of Shivakami Co. P. Ltd. the hon'ble apex court held that in the case of capital gains if there is an allegation against the assessee of under statement of consideration then the burden of proof lies on the Department that the actual consideration was higher than that declared by the assessee. In the case of K. P. Varghese [1981] 131 ITR 597 (SC), the hon'ble apex court held that subsection (2) of section 52 of the Act can be invoked only where the consideration for transfer of the capital asset has been under stated by the assessee or in other words the full value of consideration in respect of the transfer is shown at lesser figure then that actually received by the assessee and the burden of proving such under statement or concealment lies on the Revenue. The sub-section has no application in the case of honest and bona fide transaction where the consideration received by the assessee has been correctly declared or disclosed. In the present case, the learned Commissioner of Income-tax (Appeals) called a specific report from the Tehsildar-cum-Sub-Registrar, Ludhiana, regarding location and applicable circle or collec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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