The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) recently remanded the matter to CIT(A) due to non-consideration of valuation and Jantri value for determining the nature of sold land.
The assessee-Patel Ambalal Haridas (HUF) filed return of income for Assessment year 2013-14 declaring total income at Rs. 6,20,150/-. The case was reopened under Section 147 of the Income Tax Act and notice under Section 148 of the IT Act was issued and served upon the assessee.
The assessee vide letter 6 requested to treat the original as return filed in response to notice under Section 148 of the Income Tax Act and sought copy of reasons recorded. The assessee raised the objection for the reopening of the assessment for Assessment year 2013-14. The objection was disposed of by the Assessing Officer. The Assessing Officer observed that the assessee (Individual) sold a land bearing the Survey No. 104/106-1/106-3 situated at Chhatral, Kalol in a consideration of Rs. 54,00,000/- which was registered. The assessee submitted that this land was ancestral property and the capital gain earned on sale of this land was offered in income tax return of assessee (HUF).
The wrong furnishing of the PAN was only on account of the fact that the Karta was carrying a bonafide impression that his personal PAN details had to be furnished. A protective assessment on this issue was made the case of the assessee as the case of the assessee as the case of Ambalal Haridas Patel HUF was not under scrutiny assessment. The Assessing Officer made an addition of Rs. 33,95,918/- as Long Term Capital Gain by virtue of provision of Section 50C of the Income Tax Act.
Being aggrieved by the assessment order,the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The assessee’s counsel Aseem L Thakkar argued that there was a misunderstanding regarding the “Jantri Value” determined by the Assessing Officer. The land in question was originally agricultural land but was converted to non-agricultural land. The Jantri rate for non-agricultural land was notified before the conversion took place. The Revenue department also confirmed the land conversion. The counsel contended that according to the order, since the land was converted for industrial purposes, the Jantri rate should be three times the rate for agricultural land. However, this higher rate was applicable only after the conversion. Therefore, the Jantri value should be Rs. 39,15,000/- (900 per sq. yard) for the 4350 sq. yards of land sold by the assessee, which is much lower than the declared sales amount. The counsel argued that the provisions of Section 50C of the Income Tax Act was wrongly applied in the assessee’s case.
Furthermore, the counsel stated that the Assessing Officer did not consider this information and failed to take into account the Valuation Report from the certified A-One Valuer of the Government, which stated the value as Rs. 39,15,000/- instead of Rs. 87,65,918/-.
Counsel for the revenue i B.P. Makwana submitted that the remand report / observation made by the Assessing Officer has taken all the cognizance of the additional evidence put up by the assessee and thereafter, has confirmed the addition made by the Assessing Officer under Section 50C of the Income Tax Act.
The Single Bench of Judicial Member Suchitra Kamble observed that the Jantri value determined by the Government of Gujarat was Rs. 300 per sq. yard for agricultural land.
However, the valuer and CIT(A) mistakenly applied the Jantri value meant for non-agricultural land.
The valuation report and the Jantri rate were not properly verified, the Tribunal observed.
Thus, it was held that the case should be sent back to CIT(A) to consider these factors and provide the assessee an opportunity to be heard. In result, the appeal of the assessee is partly allowed for statistical purpose
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