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TMI Blog2016 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... n the other hand the actual sale consideration is ₹ 72,00,000/- . The assessee’s share in the land is 13.5417% and hence full value of consideration will work out to ₹ 23,98,500/- which for the purposes of Section 48 of the Act shall be adopted as full value of consideration of sale of land as per provisions of Section 50C of the Act for computing long term capital gains chargeable to tax. - I.T.A. No. 1180/Mum/2013 - - - Dated:- 28-7-2016 - Shri Saktijit Dey, Judicial Member And Shri Ramit Kochar, Accountant Member Assessee by Shri Deepak Tralshawala Revenue by : Shri B.S. Bist, Sr. D.R. ORDER Per Ramit Kochar, Accountant Member This appeal, filed by the assessee, being ITA No. 1180/Mum/2013, is directed against the appellate order dated 3rd December, 2012 passed by learned Commissioner of Income Tax (Appeals)- 2, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2009-10, the appellate proceedings before the learned CIT(A) arising from the assessment order dated 23rd December, 2011 passed by the learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income Tax Act,1961 (Hereinafter called the Act ). 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271 (1) (c) of IT Act, 1961. 3. The brief facts of the case are that the assessee has received income from salary, income from house property, income from business and profession and income from other sources. During the course of assessment proceedings u/s 143(3) read with Section 143(2) of the Act, it was observed by the A.O. that the assessee has claimed exemption of claim of profit on sale of agricultural land. The assessee was asked to produce the documents to explain exemption of claim of profit on sale of agricultural land. A letter to DVO was sent by the A.O. on 17th November, 2011 to determine the fair market value of the property located at Village Kunenama, Pune , as the fair market value as revealed as per stamp duty valuation authority was ₹ 1,77,12,000/- for the total part of the asset. The assessee has claimed the part amount received by his mother Mrs Annet Bulchandani. A letter dated 14th December, 2011 was also sent to Talathi, Village Kunenama, Pune to verify the details and whether the said property fulfills the conditions of agricultural land. The assessee submitted before the A.O. , a letter from Advocate Ashwin Gupta who had given the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the assessee with respect to nature and source of the income. 4. Aggrieved by the assessment order dated 23-12-2011 passed by the A.O. u/s 143(3) of the Act , the assessee filed first appeal before the learned CIT(A). 5. Before the learned CIT(A), the assessee submitted that the assessee has purchased the agricultural land on 15th December, 1987 for an amount of ₹ 7,000/- along with three others, the details of which are as under:- Land co-owners Percentage of holding. Annette Bulchandani 13.5417% Sameer Bulchandani 13.5417% Ms. Janeen D. Cambatta 41.67% Ms. Nitee Merchant 31.25% The assessee submitted that the land was sold on 2nd December, 2009 at a total sale price of ₹ 72 lacs and the assessee s share was 13.54% i.e. ₹ 9,75,000/- ( held in the name of mother Mrs. Annette Bulchandani). The assessee submitted that he was minor when the said land was acquired in 1987 and the mother acted on his behalf as a natural guardian for the purchase of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated under two kms from municipal limit of Lonavala municipality as stated by DVO but it is situated around 8 kms from Lonavala village which is certified by Talati. The land was marked as forest land with low commercial value whereas the valuation officer stated that the said land is not agricultural land, which is not correct and the agricultural land can be marked as forest land under the Maharashtra Private Forests(Acquisition) Act, 1975. The sales instances relied upon by the valuation officer were not marked as forest land with low commercial value, therefore, are not comparable. The assessee also submitted that sales instances relied upon by the DVO was never submitted to the assessee despite request made by the assessee. The assessee submitted that the DVO did not visited the site before giving valuation report. The assessee also submitted that there are several defects in the land like it is forest land, no access etc and hence the best method is the price fixed between willing buyer and willing seller. Thus, the assessee contended before the learned CIT(A) that the land is agricultural land and no capital gains is attracted as per the Act The ld. CIT(A) observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stamp duty value as determined by stamp duty valuation authorities of the property was ₹ 1,77,12,000/-. The assessee s share is 13.5417% in the said property. The DVO has valued the property at ₹ 2,09,28,000/- while the actual sale consideration received for the property was only ₹ 72,00,000/- . The assessee submitted that if the stamp duty value of the property being land or building or both is higher than actual sale consideration but lower than the value as determined by DVO, then value adopted for stamp duty purposes as determined by stamp duty valuation authorities is to be accepted and not the value of the property as determined by DVO as provided u/s 50C(3) of the Act. He drew our attention to the paper book page 2 which is a certificate issued by Village Kamgar Talathi of village Kunenama, Taluka Mawal, Dist Pune whereby it is certified that the assessee s land is situated out of the limits of the Municipality of the town Lonavala and is at distance of 8 Kms from town Lonavala. He further drew our attention to paper book page 13 which is deed of conveyance executed by the assessee for sale of the afore-stated land whereby he submitted that the land is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r different source of income to tax which is not permissible. It is submitted that the agricultural income earned from the said land was duly declared in the return of income filed with the Revenue. The valuation made by the DVO cannot be accepted as it is on higher side and the land was forest land having low commercial value and the DVO did not considered these factors affecting valuation of land. The learned counsel submitted that the valuation of stamp duty authority should be accepted. The ld counsel submitted that in any case as per provisions of Section 50C(3) of the Act, valuation as adopted by stamp duty valuation authorities for stamp duty purposes be accepted in cases where the valuation as per DVO is higher than the value as adopted by stamp duty valuation authorities for stamp duty purposes. It was submitted that the ld. CIT(A) enhanced the assessment and assessed the value as per DVO report which is erroneous as per provisions of Section 50C(3) of the Act. The ld. Counsel drew our attention to paper book page 73 whereby the DVO s report with respect to the said property is placed and submitted that it is a forest land with low commercial value and the same was not con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituated at Survey No. 119, Hissa no. 4, Village Kunenama,Taluka Maval, District Pune,Maharashtra which was acquired by the assessee in the year 1987 of which the assessee is owner to the tune of 13.5417% . The said land was acquired by the assessee when the assessee was a minor for a consideration of ₹ 7000/- which was stated to be paid by the assessee and is reflected in the Balance Sheet of the assessee filed with the Revenue . The said land was shown in the name of mother of the assessee in the purchase as well sale deed of the said land due to the reason stated to be that when the assessee acquired the land in the year 1987, he was minor and the mother acted as natural guardian to execute the purchase deal of the acquisition of the said land and hence the land was stated to be purchased in the name of mother of the assessee despite the payment of ₹ 7000/- being paid by the assessee . The said land was declared and notified in the year 2008 under the category of reserved and private forest under Maharashtra Private Forests (Acquisition) Act 1975 . After being notified as forest land, only trees are grown to increase green cover and protect the environment. No commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exempting provisions of law. Once the assessee establishes its claims for grant of exemption in its favour, then the exemptions provisions are to be liberally construed to give full effect to the exempting provision as mandated by law. The assessee in the instant case failed to bring on record cogent evidences to establish that land under question was an agricultural land at the time of its sale by the assessee on which actual agricultural operations were carried on by the assessee on the date of its transfer. Hence, we hold that the land sold by the assessee was forest land and not an agricultural land and hence the same is capital asset as defined u/s 2(14) of the Act and hence is exigible to capital gain tax. Our view is consistent with the judgment of Hon ble Kerala High Court in the case of Kalpetta Estates Limited v. CIT reported in (1990) 185 ITR 318(Ker.HC). The A.O. brought income arising from sale of the said land to tax as cash credit u/s 68 of the Act on the grounds that the assessee is not able to satisfactorily explain the nature and source of the income , while the ld. CIT(A) brought to tax the gains arising on transfer of land as long term capital gains u/s 45 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or stamp duty purposes shall be adopted. The reliance of the assessee on decision of Hon ble Punjab and High Court in the case of CIT v. Chandni Bhochar(supra) is also misconceived as in the instant case we are concerned with the computation of capital gains arising from sale of land in the hands of the seller and not with the computation of purchase cost in the hands of purchaser of land which was before the Hon ble Court in the case of Chandni Bhochar(Supra) and secondly Section 50C of the Act is deeming provision which for the purposes of computing full value of consideration in the case of transfer of land or building or both has stipulated that full value of consideration shall be deemed to be the value as adopted by the stamp duty valuation authorities for stamp duty purposes in case the actual sale consideration is lower than the value adopted by stamp duty authorities for stamp duty purposes . In case the assessee disputes the value as adopted by the stamp duty valuation authorities for stamp duty purposes, the AO is bound to refer the matter to DVO for determining the fair market value of the property and in case DVO valued the fair market value of the property at a value ..... X X X X Extracts X X X X X X X X Extracts X X X X
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