Income Tax Appellate Tribunal - Ahmedabad
Ito, Ward-3(3)(3),, Ahmedabad vs Shri Mahendrabhai Shankarji Thakor,, ... on 31 January, 2020
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ - अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH 'D' BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS.MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./ ITA No.1175/Ahd/2018 नधा रण वष /Asstt. Year: 2014-15 ITO, Ward-3(3)(3) Vs. Shri Mahendrabhai Shankarji Thakor Ahmedabad. 10, Nano Thakor Vas Ambali, Ahmedabad 380 058.
PAN : AERPT 0259 H
अपीलाथ / (Appellant) तयथ
् / (Respondent)
Revenue by : Shri Laxam Singh Gurjar, Sr.DR
Assessee by : Shri Sakar Sharma, AR
सन
ु वाई क तार ख/Date of Hearing : 19/11/2019
घोषणा क तार ख /Date of Pronouncement: 31/01/2020
आदे श/O R D E R
PER Ms.MADHUMITA ROY, JUDICIAL MEMEBR:
Present appeal at the instance of the Revenue is directed against order dated 16.3.2018 passed by the Ld.Commissioner of Income-tax (Appeals)-3, Ahmedabad arising out of order dated 30.12.2016 passed by the Ld.Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the assessment year 2014-15.
2. The Revenue has raised four grounds of appeal, out of which only two grounds are required to be adjudicated by us. They read as under:
1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.1,60,09,128/- made by A.O. on account of disallowance ITA No.1175/Ahd/2018 2 claimed u/s 54B of the Act without considering the fact that the assessee is not eligible for the same.
2. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.77,86,500/- made by A.O. without appreciating the fact that the assessee has not objected before the Sub Registrar Authority and paid the stamp duty
3. We take first ground regarding deletion of addition of Rs.1,60,09,128/- made by the AO under section 54B of the Act.
4. Brief facts of the case in this regard are that during the year under consideration the assessee has sold ancestral agriculture land admeasuring 10117 sq.meters situated at village Ambli together with other co-owners for a consideration of Rs.5,35,00,000/- by registered sale deed dated 17.1.2014. The assessee was having 50% share in that property, which came to Rs.2,67,50,000/- on which capital gain is liable for taxation. The assessee has sought deduction in respect of cost of improvement of Rs.1,60,09,128/-. The Ld.AO sought explanation for this improvement cost from the assessee. The claim of the assessee was on two counts. Firstly, it was explained by the assessee that the expenditure incurred by the assessee was between 1982 to 1993 and the assessee being an agriculturist was not required to maintain books of accounts and other records and that too for a period of about 23 to 34 years. These expenditure was incurred towards filling of pits which developed during excavation of sand for manufacturing of bricks and digging bore-well and pits for storing rain water, and also construction of cattle sheds and storage houses. Since this expenditure was incurred three decades back, no details could be traceable or lost due to time eclipse. Secondly, assessee submitted that even otherwise also, the claim of the assessee was allowable as per the provisions of Section 54B of the Act, because the sale consideration received from the sale of agriculture property has been utilized for purchase of another agriculture land. The explanation of the assessee ITA No.1175/Ahd/2018 3 was not found tenable to the AO on the ground that there was no supporting evidence. He also dismissed the explanation that the claim of the assessee also covered under section 54B of the Act, firstly on the ground that neither the assessee made such claim in his return nor filed any valid revised return. Secondly, on the ground that transaction of purchase of the agriculture land has taken place before the sale of the sale property. According to the AO, as per the provisions of section 54B, the assessee requires to purchase the agriculture land after the date of transfer of agriculture land on which capital gain has arisen.
Therefore the assessee could not claim deduction under section 54B of the Act. He accordingly made the impugned addition. This addition was challenged before the Ld.First Appellate Authority. The Ld.CIT(A) after considering additional evidences produced the assessee, remand report submitted by the AO, and also considering various judgments on this issue, allowed the claim of the assessee. Aggrieved Revenue is now before the Tribunal.
5. Before us, Ld.DR supported the order of the AO, while Ld.counsel for the assessee reiterated submissions as were made before the lower authorities.
6. Heard parties. We have also carefully considered relevant documents available on record. For adjudicating this issue, it is imperative upon us to extract relevant decision of the impugned order of the Ld.CIT(A). It read as under:
"4.2 Decision: I have carefully considered the assessment Order, remand report of the AO and the submission, additional evidences and rejoinder of the appellant carefully. After considering all the facts and circumstances, the additional evidence submitted by the appellant is admitted as there was a reasonable cause for not producing the evidences before the A. O. and the same is considered necessary to go to the root of the controversy involved. Therefore, same are admitted for adjudication to provide natural justice to appellant and such admission is supported by following case laws:ITA No.1175/Ahd/2018 4
- Kamlaben S Bhatti 44 Taxman.com 459 (Guj.) Dharmamdev Finance Pvt Limited 43 taxman.com 395 (Guj.).
- ACIT VS Jogindersingh (ITA No. 2942/DELHI/2011) ITAT, Delhi
- Anmol Colour India Pvt. Ltd. Vs. ITO 31 SOT 18 (JP) 121 ITJ 269: ITAT, Jaipur.
- CIT Vs. Khanpur Cool Syndicate (1964) 53 ITR 225 (SC): As far as facts of the case are concerned, the appellant had sold agricultural land and incurred expenditure on account of cost of improvement on agriculture land which was not accepted by the AO. The appellant could not furnish evidences of improvement for land which happen three decades ago. Therefore, valuation made by the registered valuer of the appellant showing the value of said agriculture land on 01/04/1981 at Rs.10,11,600/- and improvement cost Rs..9,55,560/- in 1982 was not accepted by the AO. In response to such proposition, the appellant submitted alternative contention such as the deduction u/s.54B should be allowed. The deduction u/s.54B was also not allowed by the AO for following reasons:
a) The registration of purchase of new agricultural land dated 28.11.2013 happens to be before the sale of original agricultural land for which sale has been registered on 13.01.2014.
b) The claim u/s.54B is not made in the return of income, hence cannot be entertained in view of the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd Vs. Commissioner of Income Tax (2006) 284 ITR 323(SC).
However, appellant submitted that the rationale behind introduction of section 54B is very clear and the same to be considered. It is supremely based on concept of re-investment from the proceeds arising from sale of previous land. It is submitted that the appellant being farmer situated in the State of Gujarat was required to retain his name in revenue records as farmer in order to make him eligible to acquire new agricultural land and therefore, appellant first negotiated sale of land which had fallen in urban area due to expansion of Ahmedabad and was gradually becoming unfit for agricultural operations due to pollution, vehicular traffic & other considerations and then negotiated purchase of new agricultural land at Village Telav with an understanding that purchase consideration would be paid from the sale proceeds of Ambli land as and when received. Execution of purchase deed first helped appellant to retain his name in revenue records as farmer considering land revenue code applicable to the State of Gujarat. This fact is apparent from the following submission in the course of assessment proceedings (page 6 of assessment order):
"4.1 The reason for pre-execution of the purchase of agricultural land at Telav, was that the person shall be agriculturist whose name must appear on 7/12, 8A records of the Revenue Department as a farmer. Once the Ambli land deed is executed, the assessee ceased to be a farmer whereby he cannot purchase the agricultural land at Telav."
The appellant got registered purchase deed on 29th November, 2013 by giving post dated cheques before commencement of 'Kamurta" i.e. inauspicious period of one month commencing on 15th December and ending on 14th January, 2014. The buyers of Ambli land were to get funds post 'Kamurta' and therefore, sale deed was executed immediately after end of 'Kamurta' i.e. on 17th January, 2014 even though cheques cleared after execution of sale deed.
ITA No.1175/Ahd/2018 5The funds from the sale of original agricultural land have been utilized as can be seen from the date-wise investment into new agricultural land which is as under:
Date of Cheque Name of the Actual Amount Date of Cheque Name of the Actual Amount Paid Cheque as No buyer who date of reed Cheque as No seller date per sale paid the credit per to whom of debit deed of amount to of cheques purchase "A' paid of Ambli land the appellant in the deed of purchase cheque bank a/c Telav land consideratio in the n bank a/c TDS u/s Chaturbhai 89167 30/09/13 131101 Januben 31/10/1 100000 194IA Ambalal Patel 3 TDS u/s Jay Chaturbhai 89167 30/09/13 131102 Rafiyuddin 31/10/1 100000 194IA Patel 3 TDS u/s Hinal Chaturbhai 89170 30/09/13 131103 Husnaben 31/10/1 100000 194IA Patel 3 20/11/13 298049 Jay Chaturbhai 21/11/13 3300000 25/11/13 131107 Januben 27/11/1 3300000 Patel 3 20/11/13 337918 Chaturbhai 21/11/13 3400000 25/11/13 168421 Rafiyuddin 27/11/1 3400000 Ambalal Patel 3 20/11/13 358830 Hinal Chaturbhai 21/11/13 3300000 25/11/13 168406 Husnaben 27/11/1 3300000 Patel 3 19/1?/13 421666 Chaturbhai 26/12/13 5427530 29/11/13 131108 Januben 31/12/1 5566666 Ambalal Patel 3 19/12/13 421685 Jay Chaturbhai 26/12/13 5527530 29/11/13 168422 Rafiyuddin 31/12/1 5566668 Patel 3 19/12/13 Hinal Chaturbhai 26/12/13 5527430 29/11/13 168407 Husnaben 31/12/1 5566666 Patel 3 Total 26749994 Total 27000000 The substance of the matter is important in this case and the fact proved above shows that the appellant has utilized sales consideration of old land for purchase of new agricultural land. Since appellant had prima facie complied with requirements of section 54B, deduction u/s.54B is available on account of investment in new land i.e. Rs.2,70,00,0007- being more than the sale consideration received i.e. Rs.2,67,50,0007-against old agricultural land and in such a scenario there remains no need to furnish any evidence in respect of cost of improvement claimed in the return of income which is otherwise not in possession of appellant due to lapse of time. With regard to compliance of provisions of section 54B, appellant apart from the agricultural operations on Ambli land [which the Assessing Officer has otherwise not disputed in assessment order] also furnished following explanation which has been quoted at page No.Sof assessment order and is reproduced below:
"4.1........However, despite the date of land purchase deed precedes the land sale deed, the funds received on sale of land have invariably been used for purchase of land. Thus, there are conflict If legal provisions between the Revenue Code in Gujarat which make it mandatory to be a farmer on the date of purchase of agricultural land whereas Income-tax Act stipulates the purchase of agricultural land after sale of agricultural land. In such a situation of legal complexity, the vital factor of fund flow wherein the sale proceeds received have been used .for purchase of purchase consideration can be seen beyond doubt. Thus, it is the respectful submission of the assessee that, the intent of the legislation ITA No.1175/Ahd/2018 6 needs to be taken into consideration objectively and harmoniously. In this regard Hon'ble Supreme Court in the case of Directorate of Enforcement vs Dipak Mahajan AIR 1994 (SC) 1775 has held that, it is permissible for the Courts to take into account the ostensible purpose or object and real legislative intent. A bare mechanical of the words devoid of concept of purpose will render the legislative intent inane. Further, the Hon'ble Apex Court has held that the Courts can by ascertaining legislative intent, place such construction on a statute as would advance its purpose and object. Where the words of statute are plain and unambiguous, effect must be given to them. The legislature may be safely presumed to have intended what the words plainly say. The plain words cam be departed from when reading then as they are leads to patent injustice, anomaly or absurdity or invalidation or a law [Bhaiji vs Sub-Divisional Officer (2003) 1 SCC 692, 700]. Also, the Hon'ble Gujarat High Court has held that, departure from the words or the rule is legitimate only in such cases where literal construction may result in depriving certain existing works of all meaning or to avoid any part of the statute becoming meaningless or otiose. The Hon'ble Supreme Court in the case of CIT vs S Tejasingh 35 ITR 408, has laid down a cardinal principal that the course will have to reject the construction which will defeat the plain intention of legislature, even though, there may be some inexactitude in the language used. It is a well settled doctrine of interpretation of statute that a purposive construction of an enactment is one which gives effect to the legislative purpose by-
(a) Following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose, or
(b) Applying a strained meaning where the literal meaning is not in accordance with the legislative purpose.
The Hon'ble Supreme Court has also laid down the cardinal principal in the case of Harshad Shantilal Mehta vs Custodian 231 ITR 871, 886 that; the Courts must look to the object which the statute seeks to achieve while interpreting any of the provisions of the Act. A purposive approach of interpreting the Act is necessary. If two views are possible, one effectuates the purpose of intendment of provisions and the other frustrates it, the former must be preferred. Every effort should be made to have a purposive construction with a view to effectuate the purpose and the object of the statutory provision [Priyavrat Mehta vs Amrendu Banerjee AIR 1997 (Pat) 114-120 (FB)]. Similarly, it is also a well settled principle of law that, statutes must be interpreted to advance the cause of statute and not to defeat it. Similarly, in the case of Goodyear India Ltd vs State of Haryana 188 ITR 402, 440, the Hon'ble Supreme Court has said that, the rule of reasonable construction must be applied while construing a statute. Literal construction should be avoided, if it defeats the manifest object and purpose of the Act. Therefore, in the well known words of Judge learned Hand, one cannot make a fortress out of dictionary; and should remember that, statute have some purpose and object to accomplish whose sympathetic and imaginative discovery is the surest guide to their meaning. The Hon'ble Kolkata High Court in the case of Raj Bahadur Estates Pvt Ltd vs CCIT 337 ITR 425 has held that, it is well established that a statutory provision should be interpreted reasonably and not in manner that makes the provision absurd and unworkable."
ITA No.1175/Ahd/2018 7In view of above facts and explanation, it was not correct on the part of AO to reject the claim u/s.546, was submitted by the appellant. The fund flow analysis in chart above compounded with explanation by the appellant, clearly show the case for the appellant as the conditions for deduction u/s.54B, in my opinion, have been fulfilled. In other words, following points emerge from the discussion above:
a) As per fund-flow analysis indicated in chart above, the funds arising from the sale of original agricultural land have been utilized to purchase the new agricultural land. Once has to see the substance of the matter and real character of the transaction as have been held in various case laws.
b) The customs and traditions contained in the explanation by the appellant, is reality prevailing in rural economy which cannot be ignored in the decision making.
c) Appellant's contention that the AO has not adversely commented on the fulfillment of conditions to avail benefit u/s.54B, is found to be correct. It is noticed that the AO has more emphasized on the ratio in the case of Goetz (India) Ltd. vs. CIT 284 ITR 323 (SC) to deny the benefit on technical ground.
Having held that the appellant has complied with the conditions to avail the benefit u/s.54B, now I come to the technical aspect raised by the AO while denying the benefit u/s.54B. The appellant submitted that heavy reliance on the decision in the case of Goetz (India) Ltd. vs. CIT 284 ITR 323 (SC) by the Assessing Officer was misplaced and without appreciating the applicable position of law for the year under consideration and without taking into account settled position of law explained by the Courts time to time. It was emphasized that the Assessing Officer ought to have appreciated that assessment year involved before the Hon'ble Supreme Court was 1995-96 when language appearing in section 143(3) was ".....determine the sum payable by him". In the relevant assessment year the Assessing Officer was not empowered to assess income below the returned income because in such a scenario if income was assessed below the returned income the assessee could have forced him to grant refund for the taxes voluntarily paid by assessee in the return of income including self assessment tax for which no authority was granted by the Statute to the Assessing Officer. However, said language came to be substituted by the Finance (No.2) Act, 1998 w.e.f. 1st Oct, 1998 with the words "...determine the sum payable by him or refund of any amount due to him." Thus, Statute itself by express statutory provisions authorised/ enabled Assessing Officer to grant refund in scrutiny assessments if assessable income is becomes lower than the income disclosed in return of income by assessee if such assessable income is computed in accordance with the provisions of the Act and results into refund of taxes already paid at the time of furnishing of return of income. Due to amendment in the provision, the ratio of the said decision is not applicable on the facts of the appellant relevant assessment year being subsequent to amendment under the Act referred hereinabove and, therefore, cannot be pressed into operation against the appellant. Even otherwise also Hon'ble Court in the said judgement has held that there is no bar on the appellate authorities to entertain claim of the assessee in the course of appellate proceedings^ which the Assessing Officer denied on account of non filing of revised return. The ' appellant placed reliance on following case laws:
(a) SNC Lalvin Acres Inc vs. ACIT 15 SOT 1 (Delhi) ITA No.1175/Ahd/2018 8 (b) Chicago Pneumatic India Ltd vs. DCIT 15 SOT 252 (Mumbai) and
(c) Labh Construction & Industries Ltd. vs. ACIT in ITA No. 2486-2488/Ahd/2003 (Ahmedabad Bench A) I have carefully gone through the case laws (supra) and feel that the appellate • authorities have full power to entertain the claim which is valid in law and which was not even made before the AO as per ratio laid down by Hon'ble Bombay High Court's decision in the case of Pruthvi Brokers and Shareholders 349 ITR 336.
The head note of the above judgement is reproduced hereunder for the sake of clarity: -
"Section 251, read with section 254, of the Income-tax Act, 1961 - Commissioner (Appeals) - Powers of - Assessment year 2004-05 - Whether an assessee is entitled to raise before appellate authorities additional grounds in terms of additional claims not made in return filed by it - Held, yes - Assessee-company claimed deduction under section 43B in respect of payment of SEBI fees of Rs. 20 lakhs paid - Subsequently assessee, in course of assessment proceedings before Assessing Officer, made a fresh claim for deduction ofRs. 40 lakhs stating that it had made another payment of SEBI fees of Rs. 40 lakhs on 9-5-2003 which pertained to provisions made for financial year 2001-02 and should be allowed on payment basis - Both appellate authorities had themselves considered additional claim and allowed it - Both orders expressly directed Assessing Officer to allow deduction of Rs. 40 lakhs under section 43B - Whether since error in not claiming deduction in return of income was inadvertent and without any malafide intention as there was nothing on record that militated against said finding, impugned additional claim of assessee was to be allowed - Held, yes [In favour of assessee]"
The facts of the case of the appellant are similar to the one decided by the hon'ble High Court of Bombay. Reliance is also placed on the decision of jurisdictional High Court in the case of Shree Rama Multi Tech Ltd [2013] 35 taxmann.com 513 (Gujarat) wherein the similar issue was involved and the claim made before the CIT(A) was entertained. Similar view has also been taken by the jurisdictional Gujarat High Court in its unreported decision in CIT v. Arvind Mills Ltd. [TAX APPEAL/1407/2011-ORDER DATED 05/07/2012]. The attention of the court was also invited to the decision of the Supreme Court in Goetze (India) Ltd. v. CIT (284 ITR 323). It has been held by the hon'ble High Court that the decision of hon'ble Supreme Court was not a bar on the power of the first Appellate Authority to allow a legitimate claim of the assessee even if he had not filed a revised return for making that claim.
The fact remains that the appellant had made submission to get his claim admitted u/s.54B before the AO itself. The issue was raised again during remand proceedings. In view of the foregoing discussion, it is held that the revised claim filed by the appellant before AO to get deduction u/s.54B is bonafide and admissible. As it has already been held that the conditions to get deduction u/s.54B have been fulfilled by the appellant, the claim is also allowable on procedural aspect as much as it is made during original assessment proceedings and repeated during remand proceedings. Therefore, the deduction u/s.54B cannot be "solely denied as the same has not been ITA No.1175/Ahd/2018 9 claimed through revised return of income for impugned assessment year. The ground No.1 & 2 of appeal are allowed."
7. The claim of the assessee was that if the improvement cost was not allowable, alternatively, it should be allowed under section 54B of the Act, because the assessee has invested entire sale consideration on purchase of new agriculture land. This claim of the assessee was dismissed by the AO because registration of new agriculture land dated 2.11.2013 happened to be before the sale of original agriculture land for which sale deed has been registered on 13.1.2014, and even no such claim was made by the assessee by filing revised return. A perusal of the order extracted (supra), we find that the claim of the assessee was allowed by the Ld.CIT(A) on the ground that conditions for allowing such deduction under section 54B of the Act have been fulfilled by the assessee. Besides, that assessee made such claim even during the remand proceedings as well as a revised claim was made by the assessee before the AO. The Ld.CIT(A) observed that simply because the assessee has not filed a valid revised return, that would not be a ground for rejection of such claim. In order to understand legitimacy of the investment, the Ld.CIT(A) analysised fund flow statement filed by the assessee, which has been noticed by the Ld.CIT(A) at page no.19 of the impugned order. On date wise analysis of the same, the Ld.CIT(A) has come to the conclusion that assessee has utilised sales consideration of old land for purchase of new agriculture land, and prima facie complied with requirements of section 54B, and therefore, purchase price i.e. investment in new land of Rs.2,70,00,000 being more than the sale consideration received of Rs.2,67,50,000/-, there would not be any necessity to furnish evidence to prove cost of improvement. The Ld.CIT(A) observed that there was no bar on the appellate authorities to entertain claim of the assessee in the course of appellate proceedings, which the AO denied on account of non-filing of revised return. While holding so, the Ld.CIT(A) relied upon various ITA No.1175/Ahd/2018 10 authoritative judgments as mentioned in his above finding. We find that Ld.CIT(A) has considered the issue from factual as well as legal angle and arrived at a just conclusion, which cannot be said to be incorrect or unjustified. In view of the above, our interference is not called for on this issue. It is upheld. Ground no.1 of Revenue is thus dismissed.
8. Next ground is regarding deletion of addition of Rs.77,86,500/- made by the AO by invoking provisions of section 56(2)(vii)(b) of the Act.
9. Brief facts of the case are that the assessee is an agriculturist filed return of income on 30.03.2016 declaring total income at Rs.8,04,770/- which was revised on the same date for Rs.14,64,220/-. Thereafter, the case of the assessee was selected for scrutiny assessment by issuance of notice under section 143(2) of the Act. On the basis of AIR information, it was noticed by the AO that the assessee has purchased an agriculture land at village Telav, Sanand, Dist.Ahmedabad for a consideration of Rs.2,70,00,000/-. As per the jantri rate, the value of the said property was of Rs.3,47,86,500/- on which the assessee has paid stamp duty of Rs.17,15,000/-. The Ld.AO assumed that differential amount of Rs.77,86,500/- i.e. the purchase consideration of Rs.2,70,00,000/- minus jantri rate of the property of Rs.3,47,86,500/- would be chargeable to tax under the head 'income from other sources' under section 56(2)(vii)(b) of the Act. The Ld.AO issued a show cause notice dated 6.12.2016 to the assessee. In response to that, it was explained by the assessee that subsequently it was brought to the notice of the assessee that there was some encumbrance in the said property, and therefore in order to remove such encumbrance and get clear title, the assessee agreed to make an additional payment of Rs.70.00 lakhs to one Smt.Subhnaben before 2022, for that an understanding to this effect was arrived between the ITA No.1175/Ahd/2018 11 parties. In support of this, the assessee filed an notarized documents dated 12.9.2013 and December, 2013 by which an amount of Rs.70,00,000/- agreed to be paid to Subhanben Hajibhai by the assessee as compensation in the light of MOU entered on 5.1.2006. However, the Ld.AO did not accept this explanation of the assessee, and observed that since assessee has not furnished any details about the claim of the said Subhnaben on the said property, the claim of the assessee cannot be entertained, and therefore he made an addition of Rs.77,86,500/- being the difference between the value adopted by the stamp valuation authority, and purchase consideration shown by the assessee by invoking provisions of section 56(2)(vii)(b). Against this addition, the assessee went in appeal before the Ld.first appellate authority. It was submitted by the assessee before the Ld.CIT(A) that no comparable instance was brought to the notice of the assessee to support the claim that jantri rate adopted by the AO was fair market value of the land purchased. The Ld.AO ought to have referred the matter to the DVO for determining fair market value of the property, if the purchase value shown by the assessee was not acceptable to the AO. The assessee has also furnished three comparable instances belonged to nearby area to demonstrate that the value shown by the assessee close to the market rate. The Ld.CIT(A) has noticed those comparable instances submitted by the assessee in his order on page no.28 and found that the rate for the transaction in that area subsequent to the assessee's transaction should have been at higher rate, and therefore, there was no possibility of payment in cash in excess of the alleged purchase consideration. The Ld.CIT(A) has also recorded a finding that despite objection from the assessee about the valuation of the property, which was supported by the comparable cases, the Ld.AO did not refer the matter to DVO and did not even dispute such comparable instances. The Ld.CIT(A) accordingly deleted ITA No.1175/Ahd/2018 12 addition of Rs.77,86,500/- made under section 56(2)(vii)(b) of the Act. Against this deletion, the Revenue is before the Tribunal.
10. Before us, both the parties supported the respective orders of Revenue authorities. The Ld.counsel for the assessee further submitted that documents furnished by the assessee were disregarded by the AO without appreciating and referring the matter to the DVO to ascertain FMV on the date of sale. The Ld. AO proceeded in mechanical manner and without making any inquiry or verification.
11. Heard both the parties. We have also carefully considered the relevant documents available on record. We find that the Ld.CIT(A) has considered the issue on two counts. Firstly, after considering comparable instance furnished by the assessee and also remand report submitted by the AO, the Ld.CIT(A) found that the rate for the transactions in the area registered subsequent to that of the assesee's transaction should have been at higher rates as per normal circumstances, and therefore, there is no possibility of payment in cash in excess of purchase price shown by the assessee. It was also recorded by the Ld.CIT(A) that comparable cases furnished by the assessee has not been disputed by the AO in his remand report, and therefore, no case has been made out by the AO on this count. Secondly, it has been observed by the Ld.CIT(A) that when the assessee disputed the value of the property as per the stamp valuation authority, which was considered by the assessee as purchase consideration, then the Ld.AO ought to have referred the matter to the DVO for determination of fair market value as contemplated under section 50C(2) of the Act. We find that the Ld.CIT(A) has made detailed analysis of the matter and based on the evidence furnished by the assessee and also remand report submitted by the assessee, arrived at a just conclusion that the impugned addition was not justifiable in the eyes of law. There is no other material before us to ITA No.1175/Ahd/2018 13 better the case of the Revenue and to take a different view than the view taken by the Ld.CIT(A). Therefore, we find no infirmity in the order of the Ld.CIT(A) on this issue. It is upheld.
12. In the result, appeal of the Revenue is dismissed. Order pronounced in the Court on 31st January, 2020 at Ahmedabad.
Sd/- Sd/- (AMARJIT SINGH) (Ms.MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER