2013 (6) TMI 463 - AT - Income Tax

Addition u/s 50C - CIT(A s) applied the rate as per the Stamp Duty u/s 69B - Held that - No addition u/s.50C can be made in the hands of purchaser. The A.O. had analyzed the circumstance evidences and estimated the price @ 800/sq.mtr. which was reduced by the CIT(A) 400 sq. mtr. on the basis of show cause notice issued by the A.O. CIT(A) also relied upon the Consumer Price Index and Wholesale Price Index between 1981 and 2005 which was increased five times, but no comparable case has been considered by the ld. CIT(A). The lower authorities had not brought on record any material to show that the appellant had received over and above the sale consideration shown. Thus respectfully following the decision in case of DCIT vs. Shri Virjibhai Kalyanbhai & Smt. Pinkyben B. Chokhawala vs.ITO (2012 (10) TMI 791 - ITAT AHMEDABAD) in absence of any evidence of extra money appeal of the assessee allowed. Rectification application allowed by CIT(A) - CIT(A)-V, Surat had confirmed the addition of Rs.400/- per sq.mtr. against the addition of Rs.800/- per sq.mtr. by the A.O - Held that - CIT(A) was wrong as there is no apparent mistake in the order of the CIT(A) order dated 30.11.2009. The issue is debatable and the Revenue as well as assessee had filed the appeal before the ITAT and doctrine of merger is applied in assessee s case filed on 22.01.2010 and Revenue s appeal filed on 23.02.2010. Therefore, CIT(A) was not justified in rectifying the order of the CIT(A) u/s.154. Thus, Revenue s appeal is allowed.

Summary

Issues:
- Dispute over valuation of land for tax assessment
- Application of Section 69B of the Income Tax Act
- Jurisdiction of the CIT(A) to rectify orders under Section 154

Analysis:

1. Valuation Dispute:
The case involved three appeals, two filed by the Revenue and one by the assessee, regarding the valuation of land purchased by the assessee in an industrial area. The Assessing Officer (A.O.) estimated the fair market value higher than the purchase price based on jantri prices and market rates. The CIT(A) partially upheld the A.O.'s decision, reducing the valuation to Rs. 400/sq.mtr. The ITAT, however, noted that no evidence was presented to show that the appellant paid more than the recorded sale consideration. Relying on previous decisions and absence of proof of extra payment, the ITAT reversed the CIT(A)'s order and allowed the assessee's appeal.

2. Application of Section 69B:
The Revenue challenged the valuation reduction made by the CIT(A) in the assessee's favor. The arguments presented were similar to those in the assessee's appeal. The ITAT dismissed the Revenue's appeal based on the findings in the assessee's appeal, upholding the decision to reduce the valuation to Rs. 400/sq.mtr.

3. Jurisdiction of CIT(A) under Section 154:
In the third appeal by the Revenue, the CIT(A) had rectified the order under Section 154, deleting the addition made by the A.O. under Section 69B. The Revenue contended that the rectification was improper as the issue was debatable. The ITAT agreed, stating that there was no apparent mistake and the matter was subject to appeal before the ITAT. The ITAT allowed the Revenue's appeal, clarifying that detailed findings were provided in the assessee's appeal.

In conclusion, the ITAT allowed the assessee's appeal, dismissed the Revenue's appeal in one case, and allowed the Revenue's appeal in another case. The judgment highlighted the importance of providing evidence to support valuation disputes, the limitations on the application of tax provisions, and the boundaries of the CIT(A)'s jurisdiction to rectify orders under Section 154 of the Income Tax Act.