TaxTMI 
TaxTMI 
2023 (3) TMI 149
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....reated as a "lead case". In this appeal, the assessee has raised following grounds of appeal: "1. On the facts and in the circumstances of the case as well in law, the learned CIT(Appeals) erred in upholding the order of the ITO, Ward 3(3)(2), Surat (for sake of brevity "The AO") invoking the provisions of Section 50C of the Act for the alleged deemed Capital Gain, without appreciating the crucial and relevant evidences furnished to establish the maximum possible fair market value prevailing on the date of transfer of the land in question and hence, not justified. 2. On the facts and in the circumstances of the case as well in law, the learned CIT(Appeals) erred in holding that the value estimated by the DVO at Rs. 3,54,72,000/- as the fair market value on the date of transfer of the land in question and hence, not justified. 3. On the facts and in the circumstances of the case and in law, both the lower authorities have grievously failed to consider in the right, lawful and proper perspectives, the detailed submissions, with the explanations duly substantiated by the authentic, credible and cogent evidences for the claim of the maximum possible fair market value on the date ....
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....ssee further stated that he is a senior citizen and having no business activity and no substantial source of income except interest income from savings bank account, agricultural income, for the year under appeal, the assessee earned capital gain on sale of immovable property. The assessee is native of Saurashtra, North Gujarat and has to frequently visit at native place for settlement of ancestral agricultural land. Further, due to dispute on the division of ancestral property amongst the family members, the assessee was under mental pressure and facing ill health. Certificate of Doctor, who treated the assessee during the relevant period, is also filed. The assessee deposited appeal fees on 23/03/2018 and handed over the necessary paper for filing appeal before the Tribunal on 23/04/2018. 3. The learned Authorised Representative (ld. AR) of the assessee submits that the ld. CIT(A) while adjudicating the appeal of assessee, granted partial relief to assessee and directed the Assessing Officer to recompute the capital gain by substituting the value estimated by Departmental Valuation Officer (DVO) in place of Jantri value as per Section 50C(2). The Assessing Officer failed to foll....
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....rtmental Representative (ld. Sr. DR) for the revenue has not seriously opposed the contention of ld. AR of the assessee. 5. We have considered the submissions of both the parties and perused the contents of application for condonation of delay. We find that the assessee has sought condonation of delay basically on two counts i.e. (i) the assessee was pursuing his remedy bonafidely before the Assessing Officer by filing rectification order, against the order giving effect in pursuance of order of ld. CIT(A) and (ii) the assessee is a senior citizen and was under mental tension due to division of ancestral property amongst family members and due to such mental tension, the assessee was suffering ill health. To support second contention, the assessee has furnished medical certificate of Doctor Binodbhai Patel. We find that after passing the impugned order by ld. CIT(A), the Assessing Officer passed the order giving effect along with demand notice under Section 156 of the Act. The assessee filed application for rectification of such demand notice and was seeking rectification in the order giving effect dated 25/10/2017. We further find that in application for rectification, the assess....
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.... appeal. 6. Brief facts of the case are that the assessee is an individual, filed his return of income for the A.Y. 2012-13 on 30/03/2013 declaring income of Rs. 6,86,470/-. The assessee also shown agricultural income of Rs. 43,210/- for the rate purposes. The case was selected for scrutiny. During the assessment, the Assessing Officer noted that the assessee has shown long term capital gain and claimed deduction under Section 54B of the Act against such capital gain. On further perusal of record, The Assessing Officer noted that the assessee along with his co-owner had sold immovable property/agricultural land situated at Nana Varachha, Block No. 656, Surat and shown sale consideration of Rs. 1.80 crore. The document of sale was registered with Sub-Registrar, Katargam, vide document No. 2212 of 2012 dated 10.02.2012. The assessee was having 1/3rd share in the property, therefore, the assessee offered capital gain by considering his share at Rs. 60.00 lacs for the purpose of capital gain. The Assessing Officer find that the total stamp duty on such sale transaction was paid at Rs. 23,06,000/-. Such stamp duty was found disproportionate to the sale consideration shown on the sale d....
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....d. CIT(A). Before the ld. CIT(A), the assessee filed very detailed written submissions. The submissions of assessee are recorded in para 6 of order of ld. CIT(A). The assessee in its submission, submitted that the assessee along with his co-owner, sold the land at the sale consideration of Rs. 1.80 crore. The assessee was having 1/3rd share and entitled to Rs. 60 lacs. The assessee has shown long term capital gain at Rs. 6,86,465/-. The Assessing Officer made addition by invoking provisions of Section 50C. Similar addition was made in case of co-owner Laljibhai Kalubhai Miyani. In case of co-owner, a remand report was called for from the Assessing Officer with the direction to refer the matter to DVO to estimate fair market value on the date of sale of property. During the remand proceedings, the Assessing Officer referred the matter to the DVO to determine the fair market value in view of objection raised by assessee as per provisions of Section 50C(2)(b) of the Act. The assessee also furnished copy of purchase deed dated 13/09/2004 showing the consideration at Rs. 5,17,500/-. On the basis of such sale deed, the assessee contended that character of agricultural land is "Navi Shara....
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....onsideration to the State Government. Thus, the assessee explained that only sale consideration of land in question was Rs. 1.80 crore (sale consideration shown at the sale deed), however, the actual sale consideration was Rs. 3.41 Crore, being Rs.1.80 crore shown on sale deed, which is received by all three owners plus Rs. 1.61 crore, land premium paid to Government. The land premium was paid by purchaser to the State Government for converting the Navi Sharat land into Juni Sharat which was a precondition of the purchaser for purchasing the said land. The assessee further stated that if the land premium is considered as part of sale consideration, the total sale value is Rs. 3.41 crores and the value DVO determined the market value of land at Rs. 3.54 crores, the difference is less than 10% and no addition would survive in view of the third Proviso to section 50C(1). 9. On the basis of such fact, the assessee contended that the difference in fair market value determined by the DVO (after giving effect to the cost of land premium paid for conversion of land from Navi Sharat to Juni Sharat), the difference in sale consideration is below 10% actually 6.66%. It was explained that Jan....
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.... market value on the date of sale of property. During the remand proceedings, the Assessing Officer referred the matter to the DVO to determine the fair market value in view of objection raised by assessee as per provisions of Section 50C(2)(b) of the Act. The ld AR for the assessee submits that the assessee acquired this asset vide purchase deed dated 13/09/2004 on a sale consideration at Rs. 5,17,500/-. The nature of land is clearly shown as "Navi Sharat". The land of Navi Sharat can only be used for agricultural purposes by the Ganotiya (occupier) of the land as per the land record of State Government and cannot be transferred or sold to any other person for any other purpose, except for agricultural purposes. And in case the land owner desires to transfer or sale the agricultural land of Navi Sharat to any person being interested buyer in the open market for the use of said land for the purpose of other than agricultural purposes, has to be transferred after getting permission of Deputy Collector on payment of levy of tax/land premium at the rate of 40% of Jantri value declared for residential zone. The ld AR for the assesse submits that assessee and his two brothers were not i....
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....strued as the market value but as the price bargained for by the parties to the sale. The dictionary meaning of the word 'full' is "whole or entire, or complete". The word 'full' has been used in this section in contrast to 'a part of the price'. The words 'full price' means 'the whole price'. Clause (2) of section 12B of 1922 Act itself clearly suggests that if no deductions are made as mentioned in sub-clause (ii) thereof, then that amount represents the full value of the consideration or the full price. When deductions are made as specified in sub-clauses (i) and (ii), then that amount does not represent the full value. The expression 'full value' means the whole price without any deduction whatsoever and it cannot refer to the adequacy or inadequacy of the price bargained for. Nor has it any necessary reference to the market value of the capital asset which is the subject-matter of the transfer. 14. On the basis of afforesaid ratio, the ld AR for the assessee submits that undisputedly the "full value of consideration" in the case in hand bargained by the parties was Rs. 3.41 Crore (1,80 Crore shown on sale deed +1.61 Crore paid a....
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....lue at Rs. 4.70 Crore. The assessee was owner of 1/3 share thus as per assessee, he has received Rs. 60.00 lacks. The assessing officer invoked the provisions of section 50C and worked out share of assessee at Rs. 156,81,667/- being 1/3 of Rs. 470,45,000/-. The assessee has already considered Rs. 60.00 lacs for the purpose of calculation of capital gain, therefore, differential amount of Rs. 96,81,667/- (1,56,81,667- 60,00,000) was added by assessing officer to the income of assessee. During the first appellate stage, the matter of valuation was sent to DVO to estimation of value of asset. The DVO estimated the value of asset at Rs. 3,54,72,700/-. The ld CIT(A) directed the assessing officer to consider the value of asset estimated/ determined by DVO for working of capital gain. The assessee claimed that they have sold asset at Rs. 3.41 Crore and explained that Rs. 1.80 Crore was received as shown in sale deed and Rs. 1.61 Crore as a cost of premium paid for conversion of land from Navi Sharat to Juni Sharat. The ld SR DR for the revenue submits that the provisions of section 50C are very clear, which prescribed that where the consideration received or accruing as a result of the t....
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....d that where the assessing officer after rejecting the valuation of property submitted by assessee referred matter to DVO to obtain fair market value, valuation done by DVO was binding on the assessing officer. The ld AR for the assessee finally submits that if the assessing officer is directed to consider the amount of Rs. 1.61 Crore as a part of sale consideration, as agreed by the parties to the sale transaction, then the sale consideration of Rs. 3.41 Crore (1.80+ 1.61), is within the tolerance range of 10% with the value determined by DVO at Rs. 3.54 Crore, no addition would survive. On the direction of the bench the ld AR for the assessee filed confirmation of purchaser of impugned land namely Batukbhai son of Nanjibhai Dudhat R/o A-2, Shubham Residency, Nana Varachha, Surat in the form of his affidavit. In the affidavit the purchaser confirmed that he had paid land premium of Rs. 1.61 Crore under mutual understanding on behalf of seller of the land, being integral part of sale consideration. 21. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. We have also deliberated on various case laws relied by....
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....nment. The land premium was paid by purchaser to the State Government for converting the Navi Sharat land into 'Juni Sharat' which was a precondition of the purchaser for purchasing the said land. 22. The submissions of the assessee was sent to the assessing officer for seeking his remand report. The assessing officer in the remand report furnished the copy of report of DVO, which was obtained in the case of one of the co-owner. We find that neither the ld CIT(A) nor assessing officer investigated about the claim of assessee that purchaser agreed to pay the premium of land conversion charges. The assessee furnished the complete address of the purchaser as contained in the sale deed. No adverse material was brought on record against the claim of assessee. The assessing officer with the remand report furnished report of DVO. The DVO estimated the value of entire asset at Rs. 3.54 Crore. We find that on receipt of report of DVO, the ld CIT(A) directed the assessing officer to re-compute capital gain on the basis of valuation of DVO. 23. Before us, the ld AR for the assessee vehemently submitted that the payment of premium for conversion charges for converting the user/ nature of lan....
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....uacy or inadequacy of the price bargained for. Nor has it any necessary reference to the market value of the capital asset which is the subject-matter of the transfer. On the basis of such submissions, the ld AR for the assessee claimed that actual difference in the sale consideration and the value determined by DVO is only 6.66%. During hearing of the appeal, we raised a question, if there was any written contract about the payment of such premium by the purchaser. The ld. AR fairly submitted that in fact there is no written contract about such payment by the purchaser. However, fact is that the parties orally agreed that the purchaser would initially bear such cost, though such premium is payable by owner. The ld. AR for the assessee, further answered that the oral contract is lawful and there is no bar under law against oral agreement. 25. Before, adverting to the fact of the case in hand, we may refer the validity of the oral contract viz-a viz transfer of immovable property. The Delhi High Court, in the case of Nanak Builders and Investors Pvt. Ltd. vs. Vinod Kumar Alag AIR 1991 Delhi 315 (*), held that even an oral agreement can be a valid and enforceable contract. It was he....
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....in writing or may be oral. Thus, in view of the legal position there is no bar under law in making oral agreement/ contract, if it fulfil the condition of section 10 of Indian Contract Act. 30. Now again adverting to the facts of the case in hand, the assessee right from the beginning is claiming that the assessee and his co-owner agreed that the purchaser shall bear the levy of charges for conversion of land use from Navi sharat to Juni sharat and the payment of Rs. 1.61 Crore was paid by the purchaser on behalf of assessee as the assessee and his brothers were not having such means. No investigation of facts about the payment of said premium paid by purchaser, in a consequence acquisition of asset, was carried out by the assessing officer or by ld CIT(A). Considering the confirmation filed by the purchaser that land premium of Rs. 1.61 Crore paid by the purchaser was integral part of the sale consideration it was paid by the purchaser, in furtherance of oral contract. No doubt such premium was paid by purchaser directly to the state revenue authorities. In making such payment apart from showing in sale deed, there was no financial loss to the State Government on payment of stamp....