2020 (9) TMI 412

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ve adopted 150% of the normal DLC rate and the sale consideration disclosed by the assessee is more than the normal DLC value." 3. It was contention of the ld AR of the assessee that additional ground being raised hereinabove is legal ground and the facts necessary to adjudicate on this ground are already on records. The assessee submits that the additional ground go to the very basis of assuming jurisdiction for passing the order u/s 263 of the Act. Consequently, as per the ratio laid down by the Hon'ble Apex Court and other courts in following cases the additional ground is admissible. a) National Thermal Power Co Ltd Vs CIT (1998) 229 ITR 0383. Hon'ble Apex Court has held that Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having bearing on the tax liability of the assessee b) Zakir Hussain vs CIT & Anr. (2006) 202 CTR (Raj) 40 Held that Tribunal has wide powers to permit raising of additional ground at any stage of proceedings in deciding the appeal and, therefore, Tribunal was not justified in refusing to allow the assessee to raise the additional ground whi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....m the para 3.2 of the assessment order. In response to such query the assessee filed the reply dated 26-12-2017. The AO after considering the assessee's reply took a judicial decision and since the sale consideration was much more than the normal DLC rates, she didn't apply the provisions of section 50C of the Act. In the assessment order the AO disallowed the deduction of Rs. 91,83,373/- claimed u/s 54B of the Act. The assessment of the assessee was completed by the AO vide her order dated 29.12.2017 wherein she assessed the income of assessee Rs. 1,11,87,540/- as against returned income of Rs. 20,04,170/-. The assessee filed appeal before ld. CIT(A)-1, Jaipur which is pending. 9. The ld. Principal Commissioner of Income Tax -1, Jaipur issued a notice u/s 263 of I.T. Act, the assessee filed detailed reply vide letter dated 05-02-2020 and 17-02-2020. However, the ld. Principal CIT held that the order dated 29-12-2017 for A.Y 2015-16 is erroneous and prejudicial to the interests of the revenue on the ground that the AO was required to invoke provisions of Section 50C of the Act as the land was sold for Rs. 4,92,00,000/- and the DLC rate was Rs. 7,38,00,000/- and since the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....than 10,000. Further the land was not situated in the municipality area. 14. Our attention was invited to the following documents submitted before the ld. Pr.CIT/AO to substantiate this claim: i) Copy of Sale deed ii) Copy of Jamabandi to prove that the land so sold was agriculture land. iii) Copy of Girdawari iv) Printout of Census 2011 abstract data from the web site http://censusindia.gov.in/ v) Certificate of Patwari regarding outside municipal limit. 15. The ld AR has further contended that the assessee himself has offered the gain on sales of this land as long term capital gain because of mistake or misconception of the assessee and his AR. The assessee was under bona-fide belief that since the land was situated at the main Delhi highway, therefore the same is taxable land. In terms of CBDT Circular No. 14 of 1955 dated 11th April, 1955, it was argued that the departmental officials must not taken advantage of ignorance of an assessee as to his rights and it is one of their duties to assist a taxpayer in very reasonable way. For this purpose, reliance was placed on the following judicial pronouncements: a) Decision o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... agricultural land which was jointly owned by him with three other co-owners. The assessee has offered capital gain on its sale. During the course of scrutiny assessment, the A.O. examined capital gain earned by him. However, he declined the assessee's claim of deduction U/s 54B of the Act which was appealed by the assessee before the ld. CIT(A) and which is still pending before him. In the meanwhile, the ld. CIT, Administration invoked his power U/s 263 of the Act and held that the A.O. had not made any proper enquiry and had not applied provisions of Section 50C of the Act with regard to computation of capital gain earned on sale of agricultural land. From the record, we found that the assessee had sold the agriculture land and at the time of sales of land, the statute of the same was agriculture. However, in the sale deed which was executed on 05/12/2014 it has been clearly mentioned that the nature of land is agriculture land. Further from the copy of Jamabandi of agriculture land as placed on record, this fact is also clear that the land use was got converted by the buyer of the land only after sale deed got registered by the assessee. Therefore, at the point of sale, the stat....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssessee objected the value adopted by stamp duty authorities. The assessee sold the agriculture land without any conversion, change in land use or any short of commercial activities. It was explained to AO that since the agriculture land was sold to the company, therefore by virtue of letter No. F7(39) JAN/2013/Part-1/2845-3385 dated 14.07.2014 issued by Director General, Registrar & Stamps Deptt. Kar Bhawan, Ajmer the duty was collected from buyer of land, by assessing the value of land 1.5 time to the normal rate. However, in the case of the assessee the value assessed by the stamp duty authority 1.5 times of the declared value in sale deed as against the normal rate i.e, DLC rate as mentioned in the circular. The copy of DLC chart applicable as on the date of transaction was submitted along with application submitted under rule 46A of the Act. The total area of land is 2.09 hectare i.e. 8.26 Bigha and highest rate per bigha prevailing at the time of sale was Rs. 44,35,410/- and accordingly the DLC rate of the land comes Rs. 3,66,36,487/-against which the land was sold for Rs. 4,92,00,000/-, therefore there remains no doubt that the land was not sold below to prevailing market ra....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....to collect evidence to show the exchange of additional money for consideration was other than apparent sale consideration. Accordingly, it was considered to insert a deeming provision by way of Section 50C for substituting apparent sale consideration by valuation done by SVA subject to certain conditions., calculating capital gains under Section 48. For the purpose of levy of stamp duty, local committee prescribes circle rate or DLC rate. The DLC rates are considered as indicative of fair market value of the property. The real spirit behind the insertion of deeming section 50C to apply a common value for all the property situated in that particular area. Sometimes the State Governments prescribes certain formula based on DLC rates to levy more stamp duty. In the case of the assessee the land was sold to a company and according to the circular F7(39) JAN/2013/Part-1/2845-3385 dated 14.07.2014 the valuation of the agricultural land would be 1.5 time of normal value in case the purchaser is a company, firm or institution. The multiplication by 1.5 time of normal rate 'has been prescribed by State Govt. for the purpose of levy of more stamp duty from Company/Firms/or Institution who bu....