TaxTMI 
TaxTMI 
2022 (6) TMI 1067
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....assessee by adopting cost of indexation at Rs.200 per sq.mtr instead of Rs.825 per sq.mtr claimed by the assessee." 3. The appeal filed by assessee for Assessment Year 2013-14, is barred by limitation by 1457 days. The assessee has moved a petition requesting the Bench to condone the delay. The assessee has filed an affidavit explaining the reasons of delay, which is reproduced below: "1) The assessee begs to prefer this application for condonation of delay in relation to appeal filed against the order of the Commissioner of Income Tax (Appeals) which is received by the assessee on 05.04.2017. There is a delay of 1457 days in filing the appeal before Honnorable Tribunal against the order passed by CIT(A)-I, Surat. 2) The assessee's brother namely Shri Dharmendra Bhaichand Patel, who is the co-owner of the land sold; filed the appeal bearing ITA No.55/SRT/2018 before the Honorable Tribunal on the same issue. The assessee was under the honest belief that his appeal was also filed. 3) However, at the time of conducting the appeal of assessee's brother Shri Dharmendra Bhaichand Patel, it was found by assessee's AR CA Mehul Shah that the appeal in the case ....
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.... facts, vide ITA No.55/SRT/2018 on 20.05.2021. Thereafter, the appeal was immediately filed by the assessee on 31.05.2021. However, the decision in case of assessee`s brother, Shri Dharmendra Bhaichand Patel, in ITA No.55/SRT/2018 was pronounced by the Tribunal on 30.06.2021, therefore, we note that there was no information before the assessee that his co-owner has won the case, therefore, we do not find merit in the arguments of ld DR to the effect that assessee`s co-owner has won the case therefore assessee has filed the appeal to take the advantage of assessee`s co-owner case. 7. To condone the delay, we have to examine whether sufficient ground had been made out by the assessee entitling him to condonation of delay. We note that the words 'sufficient cause' should receive a liberal construction so as to advance substantial justice where no negligence nor inaction nor want of bona fides is imputable to the assessee. [Bharat Auto Center v. CIT 282 ITR 366]. The mistake of the lawyer or accountant may be a good reason for condoning delay. 8. In considering the condonation petition, it is to be remembered that statutes conferring a right of appeal must be construed in further....
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....g the affidavit sworn to by the director of the assessee-company. 5. It is a well-settled law that in exercising discretion under section 5 of the Limitation Act the courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause", the principle of advancing substantial justice is of prime importance. (VideVedabai alias Vaijaya-natabai Baburao Patil v. Shanta-ram Baburao Patil [2002] 253 ITR 798 (SC.)) 6. A Division Bench of this court in which one of us was a party (P. D. Dinakaran J.) in Sreenivas Charitable Trust v. Deputy CIT [2006] 280 ITR 357 has also held that no hard and fast rule can be laid down in the matter of condonation of delay a....
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....ost of indexation taken by him. In response, the assessee has filed valuation report dated 24.03.2013 of Shri P.K Desai, approved valuer. The approved valuer has taken the fair market value of the land in question as on 1.4.1981 at Rs. 825/- per sq. mtr. which was found on higher side, as compared to the sale instances obtained from Sub-Registrar in the same/nearby area i.e. @ Rs.2.85 to 6.45 per sq. mtr. In view of the huge variance found in the fair market value shown by the assessee and obtained by the Department, the matter has been referred to the Valuation Officer to determine the correct value as on 1.4.1981 vide reference dated 03.10.2015. In response to the above reference, the Valuation Officer, has submitted valuation report vide No.6(49)/VOS/15-16 dated 15.03.2016 in which he has valued the fair market value of the entire land as on 01.04.21981 at Rs.5,08,750/- i.e. @ Rs.114.30 per sq. mtr. Instead of the declared value by the approved valuer at Rs.36,72,000/- @ Rs.825/- per sq.mtr.). The assessing officer, after considering the assessee`s submission, worked out the long term capital gain, on the basis of the report of the Valuation Officer, as under:- Area of land ....
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....sing officer also has erred in making addition of Rs.1,20,95,753/- on account of cost of indexation claimed by the assessee by adopting cost of indexation at Rs.19,45,130/- instead of Rs.1,40,40,883/- claimed by the assessee. During the year, the assessee has sold an immovable property along with two other co-owners for sale consideration of Rs.4,00,00,000/- on 2.11.2012 and the assessee had received Rs.1,79,50000/- being 44.87% share. The Stamp Valuation Authority, had valued the property at Rs.5,29,72,000/-. The assessee submitted before the A.O. that the property was referred to the DVO by ITO, Ward-2(3)(3), Surat in the case of Prafulchand B. Patel, one of the co-owners of the land and the DVO has calculated the value of the property at Rs.4,77,32,590/-. The AO adopted the value as per the DVO's report and recalculated the long term capital gain (LTCG) at Rs.1,55,65,753/- and made addition. 10. In the return of income filed, the assessee had shown his share in the sales consideration at Rs.1,79,50,000/- and after deducting the cost of indexation and deduction u/s 54B of the Act, the net long term capital gain (LTCG) was shown at Rs. nil. We note that AO has taken f....
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.... the grounds relate to the solitary transaction for sale of property located at R.S.No.18/1+19/4, Block No. 59, TP No.13, FP No.36, Moje Bharthana - Vesu, Surat, which was sold on 02/11/2012 along with two other co-owners for the sale consideration of Rs.4,00,00,000/- wherein the assessee's share is of 44.875% i.e. 1,79,50,000/-. The first grievance of the assessee is that assessing officer has erred in making addition of Rs.34,70,000/- under section 50C of the Act on account of difference in the value adopted by the DVO and the sale consideration taken by the assessee in his return of income. The working of addition of Rs.34,70,000/- u/s 50C of the Act can be tabulated as below: Particulars Amount (In Rs) Share of value of deemed sale consideration of the assessee as per the valuation report of the DVO, Surat.(Rs.4,77,32,590/- * 44.875%) (A) 2,14,20,000/- Less: Sale Consideration as per computation of Income filed by the assessee (Rs.4,00,00,000/- * 44.875%) (B) 1,79,50,000/- Addition u/s 50C (A-B) 34,70,000/- It is the contention of the Ld.Counsel that assessee has entered into an agreement of sale for land not during A.Y. 2013-....
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.... draft or by use of electronic clearing system through a bank account (or through such other electronic mode as may be prescribed) on or before the date of agreement for transfer." 12. Thus, we note that both the conditions of the proviso of section 50C are satisfied because the seller have also received Rs 50,00,000/- at the time of Sale agreement dated 29.9.2010 through account payee cheques i.e through mode other than cash and hence as a matter of fact, the total sale consideration is always fixed at the time of receipt of advance and hence it is never possible by any law for the assessee to demand more sale consideration from the buyer subsequent to sale Agreement and receipt of substantial advance of Rs. 50,00,000/- just because the Jantri rate has increased and hence the assessee is abide by the law to carry his performance of contract by the terms of Sale Agreement and even as per the Indian Contract Act, 1872. Thus, by executing the Sale Deed, the assessee has only completed the contractual obligation imposed upon it by virtue of the Sale Agreement. Since the process of sale has been initiated from the date of Sale Agreement, the character of the transaction vis-a-....
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....perties, and this section was introduced in the light of widespread belief that sale transactions of land and building are often undervalued resulting in leakage of legitimate tax revenues. This Section provides for a presumption, a rebuttable presumption though-something with which I am not concerned for the time being, that the value, for the purpose of computing stamp duty, adopted by the stamp duty valuation authority represents fair indication of the market price of the property sold. Section 50C(1) provides that, "Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer". The trouble, however, is that while the sale consideration is fixed at the point of time when agreement....
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.... The scope of section 50C was extended w.e.f. A.Y. 2010-11 to the transaction which were executed through agreement to sell or power of attorney by inserting the word "assessable" alongwith words "the value so adopted or assessed". Hence, section 50C is now also applicable in case of such transfers. The present provisions of section 50C do not provide any relief where the seller has entered into an agreement to sell the asset much before the actual date of transfer of the immovable property and the sale consideration has been fixed in such agreement. A later similar provision inserted by way of section 43CA does take care of such a situation. 6.2 It is therefore proposed to insert the following provisions in section 50C: (4)Where the date of an agreement fixing the value of consideration for the transfer of the asset and the date of registration of the transfer of the asset are not same, the value referred to in sub- section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement. (5)The provisions of sub-section (4) shall....
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....ent, whereas similar provision exists in section 43CA of the Act i.e. when an immovable property is sold as a stock-in-trade. It is proposed to amend the provisions of section 50C so as to provide that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of computing the full value of consideration. It is further proposed to provide that this provision shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, on or before the date of the agreement for the transfer of such immovable property. 30 These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply in relation to assessment year 2017-18 and subsequent years. [7] While the Government has thus recognized the genuine and intended hardship in the cases in which the date of agreement to sell is prior to the date of sale....
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....ended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced. In view of these discussions, as also for the detailed reasons set out earlier, we cannot subscribe to the view that it could have been an "intended consequence" to punish the assessees for non-deduction of tax at source by declining the deduction in respect of related payments, even when the corresponding income is duly brought to tax. That will be going much beyond the obvious intention of the section. Accordingly, we hold that the insertion of second proviso to Section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1st April, 2005, being the date from which sub clause (ia) of section 40(a) was inserted by the Finance (No. 2) Act, 2004." [8]Their Lordships were pleased to hold that this reasoning and rationale of this decision "merits acceptance". The same principle, when applied in the present context, leads to the conclusion that the present amendment, being an amendment to remov....
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.... s. 43B which, as stated above, was inserted w.e.f. 1st April, 1984. It is also relevant to note that the first proviso which came into force w.e.f. 1st April, 1988 was not on the statute book when the assessments were made in the case of Allied Motors (P) Ltd. Etc. (supra). However, the assessee contended that even though the first proviso came to be inserted w.e.f. 1st April, 1988, it was entitled to the benefit of that proviso because it operated retrospectively from 1st April, 1984, when s. 43B stood inserted. This is how the question of retrospectivity arose in Allied Motors (P) Ltd. Etc. (supra). This Court, in Allied Motors (P) Ltd. Etc. (supra) held that when a proviso is inserted to remedy unintended consequences and to make the section workable, a proviso which supplies an obvious omission in the section and which proviso is required to be read into the section to give the section a reasonable interpretation, it could be read retrospective in operation, particularly to give effect to the section as a whole. Accordingly, this Court, in Allied Motors (P) Ltd. Etc. (supra), held that the first proviso was curative in nature, hence, retrospective in operation w.e.f. 1st April....
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....1st April 2003. This is precisely what the learned counsel has prayed for. In his detailed written submissions, he has made out of a strong case for the amendment to Section 50C being treated as retrospective and with effect from 1st April 2003. The plea of the assessee is indeed well taken and deserves acceptance. What follows is this. The matter will now go back to the Assessing Officer. In case he finds that a registered agreement to sell, as claimed by the assessee, was actually executed on 29.6.2005 and the partial sale consideration was received through banking channels, the Assessing Officer, so far as computation of capital gains is concerned, will adopt stamp duty valuation, as on 29.6.2005, of the property sold as it existed at that point of time. In case the assessee is not content with this value being adopted under section 50C, he will be at liberty to seek the matter being referred to the DVO for valuation, again as on 29.6.2005, of the said property. As a corollary thereto, the subsequent developments in respect of the property sold (e.g. the conversion of use of land) are to be ignored. It is on this basis that the capital gains will be recomputed. With these direct....
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.... the appeal is allowed in the terms indicated above." 13. We note that said decision of Dharmshibhai Sonani (supra) has been subsequently relied by the Coordinate Bench of Surat in the case of Ramubhai S.Ahir, in ITA No.2160/Ahd/2016, order dated 10.05.2019. Therefore, taking into account the facts and circumstances, as narrated above, we remit this issue back to the file of assessing officer. If the assessing officer finds that a registered agreement to sale, as claimed by the assessee was actually executed on 29.09.2010 and the partial sale consideration was received through banking channels, the assessing officer should adopt stamp duty valuation as on 29.09.2010 to compute capital gains. 14. So far Ground No.2 raised by the assessee is concerned, the working of addition of Rs.1,20,95,753/- on account of disallowance of cost of indexation claimed by the assesse is tabulated as under: Particulars Amount in Rs Indexed Cost of acquisition as considered by the AO: 19,45,130/- Total Value as on 01.04.1981 (as per DVO's valuation) Rs 5,08,750/- Total Indexed Cost of (Rs. 5,08,750*852/100)=Rs 43,34,550/- (assessee's share 44.875% Rs. 19,45,....
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....1 on the basis of sale deeds of some nearby properties registered for such price in the year 1981 and thus arrived at the figure. In our opinion, the same cannot be the proper mode of arriving at the fair market value' of the property in question as on 01.04.1981, for the purpose of determining capital gains under the Act. Tribunal was not justified in arriving at the fair market value of the property in question as on 1.04.1981 without taking into consideration the material on record, including the valuation report filed by the assessee." We note that in the present case also, the Govt Registered Valuation report is simply brushed aside by DVO as well as AO without pointing out any cogent defects in the same. 16. The Ld. Counsel submitted before us that the provisions of Section 55 of the income Act, 1961 gives an option to the assessee to substitute the fair market value as on 01.04.1981 for cost of acquisition. Now section 2(22B) of the Income tax Act,1961 defines "Fair Market Value", in relation to a capital asset as "the price that the capital asset would ordinarily fetch on sale in the open market on the relevant date" In the present case, the D....
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....eport that the sale instances are not available for the relevant period and for the near about period very less as compared to market price and, therefore, he has not relied on the same. The method adopted by him is the fair market value of the land as on date reduced by 10% ( correction factor 0.909%) for each year worked out reversely till 01.04.1981, which amounts to Rs. 227.6 per sq. meter. The relevant findings of the Tribunal are reproduced herewith: " Methodology for computation of price of Agriculture land as on 01.04.1981: In land acquisition processing of escalation about 10% per annum is allowed for arriving at future value. Hence by adopting current rate and apply this method in reverse by calculating a decrease 10%(.09089 correction factor) per year rate applicable for the year 01.04.1981 can be worked out. During 2006 according to sale deed Rs. 2500 comes to one Sq Meter and applying above method Rs. 226.70 per Sq. Mtr as on 01.04.1981 Form the above it is obvious that the Valuation Officer has only relied upon the instances of sale price prevalent in the neighborhood in the near about dates of 01.04.1981. No other factors were cons....
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....n valuation as made by the Registered Valuer Shri B. H. Patel of the assessee terming it as additional evidence, which were in facts technical opinion of the government qualified Registered Valuer, based as well as comparable sale instances available and after applying there methods." 21.The findings given by the Tribunal in the context of the above stated ground of appeal is as under: "9. We have heard the rival submissions and perused the relevant material on record. We find that the observation of the CIT (A) that B.H. Patel valuation report is additional evidence under Rule 46A is not correct as the same was provided by the assessee to DVO of Department at the time of valuation being carried out by the DVO on which he had made his comments for not accepting same. Therefore, we are of the considered opinion that these were not additional evidence under Rule 46A, hence, the ld. CIT (A) ought to have given weightage of Registered Valuer report of B. H. Patel. We find that there are three methods of valuation of land first one relates to sale instances multiplied by 11.94 factors, which is based on Hon`ble Supreme Court and Hon`ble High Court judgements. Second me....