2018 (3) TMI 38 - AT - Income Tax

Calculation of LTCG - Adoption of correct value as per sale deed- Held that - AO has not brought any other material that the assessee has in fact or actually has received the more or excess sale consideration than sale price mentioned in the sale deed. He has only relied upon the value of Stamp authority which has been taken the same for stamp Duty purpose. The AO has not tried to get the actual price if in case of any doubt. Hence,addition made by the AO is liable to be deleted. - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of the order under sections 144/148.
2. Validity of action taken under section 147.
3. Adequacy of opportunity of being heard.
4. Addition on account of Long Term Capital Gain (LTCG).
5. Denial of deduction under section 54B.
6. Charging of interest under sections 234A, 234B, and 234C.
7. Condonation of delay in filing the appeal.

Detailed Analysis:

1. Validity of the Order under Sections 144/148:
The assessee challenged the reopening of the assessment under section 148 on the grounds of improper service of notice and jurisdictional issues. The Tribunal observed that the notice under section 148 was served on the assessee's son at the last known address. The Tribunal concluded that the service of notice on the adult son of the assessee was proper as per section 282 of the I.T. Act and the Code of Civil Procedure, 1908. Consequently, the ground of appeal was dismissed.

2. Validity of Action Taken under Section 147:
The Tribunal upheld the action taken under section 147, reiterating that the service of notice was proper and in accordance with the law. The assessee's arguments against the jurisdiction and procedural aspects were not substantiated by any contrary material. Therefore, this ground of appeal was also dismissed.

3. Adequacy of Opportunity of Being Heard:
The assessee contended that the ex-parte assessment order was passed without providing adequate and reasonable opportunity of being heard. The Tribunal found no contrary evidence to the findings of the CIT(A) and upheld the assessment order, dismissing this ground of appeal.

4. Addition on Account of Long Term Capital Gain (LTCG):
The assessee disputed the addition of ?34,06,490 on account of LTCG, arguing that the actual sale consideration should be considered instead of the value adopted by the Stamp Authority. The Tribunal observed that the AO had adopted the Stamp Authority's value for calculating LTCG, which was higher than the actual sale consideration. The Tribunal, referencing various judicial precedents, held that the AO had not provided any evidence that the assessee received more than the sale consideration mentioned in the sale deed. Consequently, the addition made by the AO was deleted, and this ground of appeal was allowed.

5. Denial of Deduction under Section 54B:
The assessee claimed deduction under section 54B for the purchase of new agricultural land in the names of her sons. The Tribunal noted that the assessee, an illiterate widow, purchased the land in her sons' names based on legal advice to avoid future legal complexities. Citing the decision of the Hon'ble Rajasthan High Court in the case of Mahadev Balai vs ITO, the Tribunal held that the deduction under section 54B is allowable even if the investment is made in the name of the assessee's legal heirs. Therefore, the deduction under section 54B was allowed, and this ground of appeal was upheld.

6. Charging of Interest under Sections 234A, 234B, and 234C:
The Tribunal noted that the charging of interest under sections 234A, 234B, and 234C is mandatory and consequential in nature. Therefore, this ground of appeal was not specifically adjudicated and was treated as consequential.

7. Condonation of Delay in Filing the Appeal:
The assessee filed the appeal late by 1101 days, citing reasons such as illiteracy, widowhood, and health issues. The Tribunal, taking into consideration the facts and circumstances, found sufficient cause for the delay and condoned it, allowing the appeal to be heard on merits.

Conclusion:
The appeal was partly allowed, with the Tribunal deleting the addition on account of LTCG and allowing the deduction under section 54B. The grounds challenging the validity of the order under sections 144/148, the action under section 147, and the adequacy of the opportunity of being heard were dismissed. The charging of interest under sections 234A, 234B, and 234C was treated as consequential.