TMI Blog2022 (11) TMI 1296X X X X Extracts X X X X X X X X Extracts X X X X ..... dless to direct that before passing the order the Assessing Officer shall grant opportunity of hearing to assessee. In the result, the grounds raised by assessee are allowed. - ITA No.52/SRT/2021 - - - Dated:- 25-11-2022 - Shri Pawan Singh, Judicial Member For the Assessee : Shri Manish J Shah, Advocate For the Revenue : Shri Vinod Kumar, Sr-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. Commissioner of Income-Tax (Appeals)-3, Surat [for short to as Ld. CIT(A) ] dated 23.07.2018 for assessment year (AY) 2011-12, which in turn arises out an assessment order passed by Assessing Officer under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 ( the Act ) vide order dated 29.12.2016. The assessee has raised the following grounds of appeal:- 1. The learned CIT(A)-III, Surat s order is contradictory to law and facts of the case and therefore, the addition made by the Assessing Officer as well as confirmed by CIT(A) to the extent of Rs.19,08,873/- may please be deleted. 2.The learned CIT(A)-III, Surat did not consider that the AO cannot challenge an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me on 08.07.2016 for the assessment year 2011-12. The assessee also disclosed that he had sold ancestral property and invested necessary amount in NHAI Bonds for claiming exemption under section 54EC. On further perusal of record, the Assessing Officer found that assessee along with his three co-owners had sold a property situated at Ward No.11, 409 having area admeasuring 47.6584 square meter for a total consideration of Rs.15 lakh vide registered sale executed on 26.08.2010. The assessee was having 25% share and received Rs.3.75 lakh. As per stamp duty paid by assessee and his co-owners, the stamp duty value was determined for the purpose of stamp duty was at Rs.23,36,735/-. The Assessing Officer noted that there was a difference of Rs.8,36,735/- between actual sale consideration of Rs.15 lakhs and the stamp duty valuation by Stamp Valuation Authority at Rs.23,36,735/-. Accordingly share of assessee of differential value was worked out at Rs.2,09,184/- under section 50C of the Act. 3. During the same financial year, the assessee also sold another property situated at Nondh No.1220 of Ward No.11, Nanavat Main Road, Surat, for a total consideration of Rs.32.50 lakh vide register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at for sale consideration of Rs.16.25 lakh. The value of properties are valued as per market rate, the jantri value was higher than market value and purchaser paid excess stamp duty to avoid litigation with Stamp Value Authority. Thereafter assessee has filed return of income and offered capital gains. The assessee also requested to refer the matter to DVO and stated that when there is difference between stated consideration and the consideration as per Stamp Authority, whenever the assessee disclosed the value as per Stamp Authority, the Assessing Officer is bound to make a reference to the Valuation Officer though word used in sec is may it stands to reasons that Assessing Officer under no circumstances can adopt any value other than the value adopted by Stamp Authorities and the word may has to be read and understood as shall and it is mandatory for Assessing Officer to refer the value to Valuation Officer. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer accordingly computed the capital gains` of both the properties in the following manner: A. 409,Ward 11, Surat (i) Fair Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that according to Assessing Officer, the value declared by assessee on 01.04.1981 is more than its fair market value. Thus, the said reference is bad in law in view of decision of Hon'ble jurisdictional High Court in the case of CIT vs. Gaurangiben S. Shodhan Indl. [2014] 224 Taxman 253 (Guj), which was followed by Co-ordinate Bench of this Tribunal in the case of Ranchodbhai C. Patel vs. Income Tax Officer, ward-6(3), Surat [2021] 186 ITD 523 (Surat-Trib.) [27.11.2020]. The Ld. AR for the assessee further submits that in view of the binding decision of Hon'ble jurisdictional High Court, Ahmedabad Tribunal in the case of Jitendra K Sewani vs. ITO in ITA No.2252/AHD/2017 dated 19.10.2022, which was followed by this Tribunal in so many cases held that estimation of value of assets as on 01.04.1981 is required to be ignored and cost of acquisition is declared by assessee in its computation is required to be accepted, if the transfer of asset took place prior to 01.07.2012. 7. The Ld. AR for the assessee submits that so far as property / assets situated at Nondh No. 1220 of Ward No.11, Nanavat Main Road, Surat is concerned, the difference in sale value as estimated by DVO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already invested Rs.5 lakhs against the long term capital gains which is already accepted by Assessing Officer in its order rectified vide order dated 21.01.2022. The Ld. AR for the assessee further submits that if the contention raised by assessee is accepted i.e. reference qua the sale transaction prior to 01.07.2012 for valuation of property by DVO and there is alternative no tax payable by the assessee as the total income will turned down below basic exemption limit of Rs.250 lakhs. To support of such submission, Ld. AR for the assessee relied on the following case law: Ranchodbhai C. Patel vs. ITO Ward-6(3) Surat [2021] 186 ITD 523 (Surat-Trib.)[27.11.2020] Jitendra K. Sewani vs. ITO [ITA No.2252/Ahd/2017 dated 19.10.2022] Geetika Sachdev vs. ITO [ITA No.6638/Del/2018 dated 02.12.2019 [2019 TaxPub(DT)8098 (Del-Trib) Krishna Enterprises vs. ACIT-12(1), Mumbai [2017] 183 TTJ 677 (Mum-Trib) [23.11.2016] 9. On the other hand, Ld. Sr. DR for the Revenue supported the order of lower authorities. The Ld. Sr-DR for the Revenue submits that assessee has not raised such contention before the lower authorities, therefore, proper direction may be given to the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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