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TMI Blog2023 (6) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... s no under valuation - Appeal of the Revenue are dismissed. - ITA No. 196/SRT/2022 - - - Dated:- 16-6-2023 - Shri Pawan Singh, Jm And Dr. A. L. Saini, Am For the Appellant : Shri Vinod Kumar, Sr. DR For the Respondent : Shri Sapnesh Sheth, CA ORDER PER DR. A. L. SAINI, AM: Captioned appeal filed by the Revenue, pertaining to Assessment Year (AY) 2016-17, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), [in short the ld. CIT(A) ], National Faceless Appeal Centre (In short NFAC ), Delhi, dated 28. 04. 2022, which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ), dated 24. 12. 2018. 2. The grounds of appeal raised by the Revenue are as follows: (i) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in deleting the addition of Rs. 1,48,61,956/- made u/s 56(2)(vii)(b) of the Act without appreciating the fact that, the assessing officer has made addition since the assessee declared less purchase value than the value adopted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,21,82,025/- (Rs. 5,37,79,500 less Rs. 3,15,97,475/-), on which provision of section 56(2)(vii)(b) of the I. T. Act clearly attracts. Therefore, a show cause notice dated 18. 12. 2018 was issued to the assessee. The relevant portion of the show cause notice is reproduced as under: Please refer to the ongoing assessment proceedings with this office for A. Y. 2016-17. 2. As per information available with this office it is seen that you had purchased an immovable property bearing Moje Navagam, Block No. 36/A and original plot No. 16, Khata No. 584 T. P. S. No. 45, Surat for consideration of Rs. 3,15,97,475/- through registered deed No. 17871/2015 dated 17. 10. 2015. 3. On perusal of information available on record and collected by this office it is noticed that the market value ascertained by the Stamp Valuation Authority of the above mentioned property is Rs. 5,37,79,500/- against the actual purchase consideration of Rs. 3,15,97,475/- Therefore, there is a difference of Rs. 2,21,82,025/- (Rs. 5,37,79,500/- less Rs. 3,15,97,475/-) between the purchase consideration shown and market value adopted/assessed by Stamp Valuation Authority for the purpose of payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land at block no. 36/A, Navagam, Kamrej, Dist. Surat. From the above, it is clear that new sarat land at block no. 36/A, Navagam , Kamrej, Dist. Surat, was purchased with a condition of payment obligation of premium to the state Government by the purchaser and hence we have made less payment of the seller of land to the extent of premium payable by us to the State Government. Thus, total amount incurred by us against purchase of said land at block no. 36/A, Navagam, Kamrej, Dist. Surat is Rs. 49524975 and not Rs. 31597475 as specified by you in your show cause notice dated 18/12/18. We further state that status of land at block no. 36/A, Navagam, Kamrej, Dist. Surat at the purchase of land was the Town Planning Scheme No. 45 (Navagam Vav) was already surrender of land area @ 40% for common TP Scheme development and final plot area comes to 7171 Sq. Meter. Thus, on the date of purchase of land at block no. 36/A as per document no. 17871 dated 27/10/15, total area of land we can develop and use comes to 7171 Sq. Meter and balance area of land of 4780 Sq. Meter is to be taken away by the local Urban authority for common infrastructure development of TP scheme no. 45. Market and jantr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessing officer has gone through the reply of the assessee and stated that assessee`s contention is rejected for the following reasons: i) The Stamp Duty Collector has determined the value of Rs. 5,37,79,500/-, which is determined on the sale consideration value amounting to Rs. 3,15,97,475/- bearing sale deed No. 17871/2015 dated 17. 10. 2015. ii) The assessee has applied to convert the alleged land into N. A. Land to the Collector of Surat on 13. 01. 2016. iii) The assessee has paid premium on 21. 11. 2016, which pertain to F. Y. 2016-17. This case pertains to F. Y. 2015-16 only. Therefore, the plea of the assessee not acceptable that the value of land is Rs. 4,95,24,975/-. 6. Therefore, assessing officer held that assessee has purchased agriculture land at Rs. 3,15,97,475/- as against the fair market value, as determined by the Stamp Value Authority worth Rs. 5,37,79,500/-, hence there is a difference of Rs. 2,21,82,025/-( Rs. 5,37,79,500- Rs. 3,15,97,475). Here in the case the assessee purchased immovable property for consideration which is less than the value of the property determined by Stamp Valuation Authority by Rs. 2,21,82,025/-, the same is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Block No. 36/A, TP Scheme No. 45 (NavaGam Vav), open plot No. 16 and final plot no. 16 for consideration of Rs. 3,15,97,475/- through registered deed no. 17871/2015 dated 17. 10. 2015. The market value ascertained by the stamp valuation authority of the above mentioned property is Rs. 5,37,79,500/-. Therefore, there is a difference of Rs. 2,21,82,025/-. As per provisions of section 56(2)(vii)(b) of the I. T. Act for which Assessing officer issued a show cause notice and in response to the same, assessee submitted his reply time to time and the said reply is reproduced in para 3, 4. 1 of the assessment order. However, assessing officer failed to properly consider the reply of assessee and as per his observations in para 4. 2 to 4. 4 of his order, proceeded to make addition of Rs. 1,48,61,957/- ( 67% of Rs. 2,21,82,025) u/s 56(2)(vii)(b) of the Act. The ld Counsel submitted that during the course of assessment proceedings it was clearly explained that assessee purchased said property along with his brother Shri Sharad K. Dhameliya (assessee's share being 67%) with an obligation to pay premium to State Government for converting Navi Sarat land into Juni Sarat (refer page no 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/-. Thus, there was a difference of Rs. 2,21,82,025/-. The AO has added 67% (being assessee's share) of the above difference of Rs. 2,21,82,025/- amounting to Rs. 1,48,61,957/- to the assessee's income u/s 56(2)(vii)(b) of the Act. The ld CIT(A), after going through the detailed reasoning and explanation given by assessee, observed that above addition was incorrectly made by the assessing officer. The ld CIT(A) observed that out of the total plot land area of 11951 sq. mtr. mentioned in the Sale Deed, the actual plot area comes to 7171 sq. meter, since 40% had to be deducted on account of implementation of TP Scheme as per the Surat Urban Development Authority orders. Furthermore, the assessee had also paid an amount of Rs. 1,79,27,500/- as a premium to the State Government for the said property. Both these issues were specifically mentioned in the Sale Deed. All relevant details had already been filed before the assessing officer as is evident from the assessment order. Taking these factors into account, the actual stamp duty value of the property comes to Rs. 4,48,18,750/- only and not Rs. 5,37,79,500/- as assumed by the assessing officer. Against this, the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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