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2015 (11) TMI 935 - ITAT AHMEDABAD

2015 (11) TMI 935 - ITAT AHMEDABAD - TMI - Additions of unaccounted investment u/s.69B - unaccounted and undisclosed capital gains - CIT(A) deleted the addition - Held that:- There is no dispute about the factual position that the Assessing Officer revised purchase and sale prices of assessee’s lands in respect to his transactions executed in the relevant previous year by treating SUDA auction prices of developed land and State Government’s revised jantri prices applicable from 01.04.2008. There .....

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Similar position appears in case of 34 sale instances including four transactions from January to March 2008 stating prices less than ₹ 1100/- per sq. mtr. The Revenue fails to rebut correctness thereof. Therefore, we infer in these facts that neither the assessee understated his purchase price nor sale rate of the respective lands situated in the Vesu locality at Surat.

The Revenue’s endeavor seeks reliance upon auction prices of SUDA’s developed plots. Apples are sought to be .....

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have been rendered infructuous. Decided against revenue - ITA. No. 1508, 1509, 1510/Ahd/2011 - Dated:- 6-11-2015 - Shri S. S. Godara, Judicial Member And Shri Manish Borad, Accountant Member For the Petitioner : Shri S. N. Soparkar, A. R For the Respondent : Shri Raj Deep Singh, Sr. D. R ORDER Per S. S. Godara, Judicial Member These three Revenue s appeals for assessment year 2008- 09, arise from orders of the CIT(A) - II, Surat, dated 14.03.2011 in case of Shri Haresh J. Mehta and 15.03.2011 in .....

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ramed on 27.12.2010. 3. This appeal pertains to the assessee/individual Shri Haresh Jagmohandas Mehta. He purchased agricultural land measuring 4500 sq.mtrs. comprised in TP 2, RS No. 106/3, Final Plot No.160 at Vesu, Surat on 12.03.2008 @ ₹ 473/- per sq. mtr. The total cost of this chunk came to be ₹ 11,16,000/-. Its jantri price was ₹ 105/- per sq.mtr. We come to the latter ground and find that the very assessee sold his half share of land at TP No.6, RS No.247/1/2 in the sam .....

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Development Authority auction prices ranging between ₹ 5000/- per sq. mtr. To ₹ 13,200/- per sq.mtr. in financial year 2005-06. We further notice that ld. Assessing Officer took cognizance of the fact that the State Government had revised jantri price of the developed land to that @ ₹ 12000/- per sq.mtr. from 01.04.2008 and agricultural one @ ₹ 6000/-. The assessee objected to this action by inter alia pleading that its undeveloped lands (both agricultural and non agricul .....

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the view that the State Government had revised jantri prices decades back. He observed that the revised jantri prices w.e.f. 01.04.2008 hereinabove could be suitable adjusted for ascertaining correct value of assessee s properties subject matter of sale and purchase in question. He proceeded accordingly by giving 25% rebate in their revised jantri prices and computed purchased price of the land to be ₹ 1,06,15,500/- (Rs.4500/- @ 75% of the revised jantri prices of ₹ 6000/- multiplied .....

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the impugned additions as under: 4.1 I have duly considered the discussion made in the assessment order and the submission of the appellant. The additions made in the assessment order can be summarized as under: (i) Addition on account of unaccounted investment u/s.69B of the Act. (a) Land purchased at Vesu. : ₹ 94,99,500/- (b) Land purchased at Dumas : ₹ 36,60,675/- (ii) Addition on account of undisclosed capital gain on sale of land at Vesu. : ₹ 98,86,250/-. 4.2 Grounds of a .....

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e four grounds of appeal are taken together for discussion and disposal, The appellant has primarily raised three issues in the above grounds of appeal, viz. - (i) Whether new jantri rates made effective from 01-04-2008 can be applied retrospectively by the assessing officer to the purchase of land effected on 11-07-2007, [there is mistake in the order, as correct date of purchase is 12-03- 2008 and not 11-07-2007] and 10-09-2007 respectively. (ii) Whether, in addition to the new jantri rates, A .....

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2008, and though the appellant has purchased the land in Vesu area on 12-03-2008 (correct date taken), the difference in both dates is only of 19 days (correct difference between the two dates taken). He has, therefore, after allowing deduction of 25% in the new jantri rate effective 01-04-2008, adopted the rate of ₹ 4,500/- per sq. mtr. as the rate per sq. mtr. for purchase of land by the appellant in Vesu on 12-03-2008 [correct date taken), as against ₹ 473 per sq. mtr. as per the .....

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r sq. mtr. to determine the purchase cost of the land in Dumas area. The Assessing Officer for making the above additions, has also taken into consideration the auction price of the land in the Vesu area during the period 05-04-2005 to 20-12-2006, which is ranging from ₹ 500//- per sq. mtr. to ₹ 7711/- per sq. mtr. for the residential plots of land, ₹ 7,500/- to ₹ 11,425/- for school and play ground plots and ₹ 6,555/- to ₹ 13,200/- for commercial plots. The l .....

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cerned, I do not find any merit in this argument as the Assessing Officer has not adopted the jantri rate of 01-04-2008 for making the addition, though he has taken the same as basis for arriving at the probable market rate during the period of purchase of the plots of land by the appellant. The issue which, therefore, requires attention is as to whether the above instances of sale taken by the Assessing Officer can be taken as comparable Instances for determining the purchase cost of the land: .....

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r. And the date of purchase of these plots of land are from December 2004 to March 2008. The agricultural land in the Vesu area was purchased by the appellant at the rate of ₹ 473/- per sq. mtr. In the same area, a plot of land of the size of 2400 sq. mtr. Was purchased on 22-03-2008 @ ₹ 130/- per sq. mtr. Further, in the above 16 instances of purchase of plots of land in the Vesu area in the Financial Years 2005-06, 2006-07 and 2007-08, furnished by the appellant, the maximum sellin .....

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Assessing Officer has incorrectly taken the auction rates for purchase of plots for residential, commercial and school and play ground as indicators for determining the purchase price of the plots of land at Vesu and Dumas, in the case of the appellant. The plots of land purchased by the appellant in Vesu and Dumas are agricultural land can be applied. I, therefore, hold that instances of auction sale of plots cited by the Assessing Officer have no relevance to the agricultural, land purchased b .....

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t of the appellant. In the light of these facts, the decision of the jurisdictional Ahmedabad Bench of the ITAT in the case of Shankarlal Nebhumal HUF (Supra) and ITAT, Jaipur s decision in the case of Swami Complex Pvt. Ltd. (Supra), referred in the appellant s submission dated 04-03-2011 reproduced above, become relevant. 4.5 In view of the discussion made above, and the decisions referred to therein, I delete the additions of ₹ 94,99,500/- and ₹ 36,50,6757- u/s, 69B of the Act, an .....

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e Court has upheld the finding of the Tribunal that the assessing authority could net have referred the matter to the Departmental Valuation Officer without the books of accounts being rejected. The appellant's submission, therefore, is that reference to valuation officer has been made without rejecting the books of accounts arid the same is, therefore, invalid. The above submission of the appellant/ at this stage has no relevance, as there is no discussion in the assessment order that the A .....

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ppellant has 50% share, that is 1170 sq, mtr. The sale price of the above land as documented is ₹ 1100/- per sq. mtr. The appellant has also objected to the above addition on the ground that while reference has been made by the Assessing Officer to the DVO u/s. 55A of the Act, for the valuation of the above land, he has made the addition, without waiting for his report alternately, the reference to the DVO itself is not valid. The above land was sold by the appellant as a joint owner on 10 .....

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,87,500/-. This mistake is found apparent from record. The total sale consideration of the non agricultural land of 2340 sq. mtr. at Vesu sold during the year, in which the appellant has half share, is, therefore, taken at ₹ 25,87,500/- and the appellant's share at ₹ 6,43,750/-. Similarly, the rate of the above land comes to ₹ 1100/- per sq. mtr. and not ₹ 616/- per sq. mtr., as mentioned in para 5 of the order, and the date of sale of the above plot of land is also t .....

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stand good in the eyes of law, as the existing; price of land in Vesu area was ₹ 2500/- to ₹ 3000/-per sq. mtr., and SUDA in the F.Y. 2005-06 had auctioned land in Vesu, between ₹ 5000/- per sq. mtr. to ₹ 13200/- per sq. mtr., which is very high compared to jantri price registered in the Government record. He, therefore, show caused the appellant as to why the sale price may not be estimated at ₹ 12000/- per sq. mtr., which was the jantri price indicated b\ the Gove .....

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unaccounted sale proceeds at ₹ 98,86,250/-. I find that there is an apparent mistake in the computation of above amount, as the Assessing Officer has wrongly subtracted 6,43,750/-, instead of ₹ 12,87,500/-. The addition made on the above account is, therefore, excess by ₹ 6,43,750/-, i.e. instead of making addition of ₹ 85,98,750/-, the Assessing Officer has made addition, of ₹ 98,86,250/-. 4.8 The issue involved in the above addition are, therefore, as under: (i) W .....

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on 10-01-2008. 4.9 The appellant's submission on this ground of appeal can be summarized as under: (i) The jantri rate prevailing :»n the dale of sale of the above land was ₹ 105/- Per sq. mtr., whereas the land has been sold by the, appellant @ 1100/- per sq. mtr. The Assessing Officer has taken the new jantri rate for developed land as at 01-04- 2008, as the base rate to determine the total sale consideration of the land, which issue is covered by the order dated 23-04-2.010 o .....

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s less than the sale rate of ₹ 1100/- per sq. mtr., that is as per the sale deed of the land sold by the appellant. The appellant has also enclosed a copy of 'index' obtained from the office of the sub registrar of the above 34 sale instances, vide Annexure 8 to the written submission dated 04-03-2011. (iii) The Assessing Officer has made reference u/s. 55A of the Act, for valuation of the above property to the DVO, without rejecting his books of accounts, the same is, therefore; e .....

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land told by the assessee. AS report from Govt. valuer is pending without any prejudice to the report of the valuer,, based on the sale instances at auction held by SUDA. and jantri price made effective from 01-4-2008 becomes parameter to determine the reasonable sale price. If the rates finalized by the valuation authorities subsequent to the completion of the assessment proceedings are found to be lower than the price adopted by I.T. department, then the price indicated by valuation authoritie .....

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corded that a 'reference is being made' whereas at the other point he has recorded 'report from Govt. valuer is pending'. In any case, the Assessing Officer has himself recorded the reasons for taking jantri rate as base rate for determining the sale value of land, as under, Recourse to jantri prices and market rate and auction rate of SUDA were only taken to indicate that whet ever the sale / investment on land made by the assessee at Vesu area, Surat is below the existing marke .....

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lay ground plots and commercial plots, whereas, the instances of sale furnished by the appellant are found more relevant for determining the sale consideration of land sold by the appellant, as the same relate to non agricultural land sold during the same period in the Vesu area. In so far as adopting the jantri rate of developed land in Vesu area as at 01-04-2008, vide Annexure-2 to the order Is concerned, the same, In the light of decision of the jurisdictional Ahmedabad Bench of the ITAT in t .....

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ing on the issue raised, by the appellant that no reference u/s. 55A of the Act, can be made without rejecting the books of accounts, because in the case decided by the Supreme Court and relied upon by the appellant, the assessment had been made after estimate made by the valuation officer had been received. Since in the case of the appellant, the Assessing Officer has not relied upon any valuation report for determining the sale value of the land sold, the same is not subject matter of the pres .....

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rrel that these jantri prices are not retrospectively applicable. Nor there is any case made out at Revenue s behest disputing that assessee s purchase price @ ₹ 473/- is almost 4.5 times more than the jantri rate and sale price is almost 10 times thereto (supra). It has come on record that the assessee has produced 16 sale instances from December 2004 to March 2008 wherein open agricultural plots in Vesu area itself had been sold in the range of ₹ 46 to 202/- per sq. mtr. Similar po .....

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