Shri Chandrakant Lalluram Vora, Ahmedabad V. The Income tax Officer,Ward-13(3), Ahmedabad

CO 162/AHD/2010

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8851 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 05-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S PATEL
• Assessee Lawyers: K C MATHEWS
• Keywords: Cost of acquisition; Valuation report
• Section: 143(3)

Judgement Text

ITA NO 2031/A/2010 & CO NO. 162/A/2010 . A.Y. 2007- 08 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI D. K. TYAGI J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 2031/AHD/2010 & CO. 162/AHD/2010 (ASSESSMENT YEAR: 2007-08) THE INCOME TAX. OFFICER, WARD- 13(3), AHMEDABAD (APPELLANT) VS. SHRI CHANDRAKANT LALLURAM VORA, JIVRAJ PARK, AHMEDABCAD-380 051 (RESPONDENT) SHRI CHANDRAKANT LALLURAM VORA, JIVRAJ PARK, AHMEDABAD-380 051 (APPELLANT) VS. THE INCOME TAX. OFFICER, WARD-13(3), AHMEDABAD (RESPONDENT) PAN: AAXPV 2233 M APPELLANT BY : SHRI K.C. MATHEWS SR. D.R. RESPONDENT BY : SHRI G.S. PATEL A.R. ( )/ ORDER DATE OF HEARING : 29-07-2013 DATE OF PRONOUNCEMENT : 08 -08-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-XXI, AHMEDABAD DATED 11.03.2010 FOR ASSESSMENT YEAR 2007 -08 AND ASSESSEE HAS ALSO FILED CO. ITA NO 2031/A/2010 & CO NO. 162/A/2010 . A.Y. 2007- 08 2 2. THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUT HORITIES ARE AS UNDER: 3. ASSESSEE IS A RETIRED STATE GOVERNMENT EMPLOYEE. H E FILED HIS RETURN OF INCOME FOR A.Y. 2007-08 ON 25.07.2007 DECLARING INC OME OF RS. 1,90,370/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORD ER DATED 23.12.2009 AND THE TOTAL INCOME WAS DETERMINED AT RS. 16,58,93 0/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED TH E MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 11.03.2010 ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), THE RE VENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFEC TIVE GROUNDS. 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.14,68,571/- BEING LONG TERM CAPITAL GAIN AS AGAINST CAPITAL GAIN SHOW N AT RS.31,341/- SHOWN BY THE APPELLANT ON SALE OF RESIDENTIAL HOUSE FOR RS.31,00,000/- ON 11. 8.2006. 2. THE LEARNED CIT(A) HAS ALSO ERRED IN LAW AND ON FAC TS IN NOT RETAINING THE AMOUNT OF RS.2,93,324/- WHICH WAS OFFERED SUO MOTO BY THE ASS ESSEE DURING THE COURSE OF APPEALLATE PROCEEDINGS. . 4. ON PERUSING THE RETURN OF INCOME, ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SOLD THE PROPERTY AT PLOT NO. 5 MANGAL PARK SOCIETY, VADODRA FOR RS. 31 LAKHS AND HAD CONSIDERED THE VAL UATION OF IT AS ON 1.04.1991 AT RS. 10,76,100/- ON THE BASIS OF VALUAT ION REPORT. FROM THE COPY OF VALUATION REPORT DATED 11.11.2006 SUBMITTED BY THE ASSESSEE. ASSESSING OFFICER NOTICED THAT THE INDEXED COST OF THE PROPERTY IN THE YEAR OF SALE WORKED OUT TO RS. 28,06,676/- AND LONG TERM CAPITAL GAIN WORKS OUT TO RS. 2,93,324/-. HE ALSO NOTICED THAT COST OF LAND AS ON 1.04.1991 WAS TAKEN AT RS. 5,69,998/-. ASSESSEE FILED RAISED VALUATION REPORT DATED 14.03.2009 WHEREIN THE COST OF LAND WAS TAKEN AT RS . 2,99,999/- AND COST OF COMPOUND WALL AND LAND FILLING WAS TAKEN AT RS. 2,69,999/-. HE THUS ITA NO 2031/A/2010 & CO NO. 162/A/2010 . A.Y. 2007- 08 3 CONCLUDED THAT ASSESSEE HAD TRIED TO COVER THE DIFF ERENCE BETWEEN COSTS OF LAND MENTIONED IN VALUATION REPORT DATED 11.11.2 006 AND PURCHASE DEED OF THE PROPERTY. ASSESSING OFFICER AFTER CONSI DERING THE SUBMISSIONS MADE BY THE ASSESSEE CONCLUDED AS UNDER: SR. NO. ISSUES AS PER SUBMISSION DATED 18.12.2009 OF THE ASSESSEE CONCLUSION 1 I PURCHASED LAND AT THE COST OF RS. 75,000 ON 30.07.1988. THE LAND WAS WITH DEEPNESS AND FILLING WAS NECESSARY BEFORE THE FOUNDATION WORK CAN BE UNDERTAKEN. THERE WERE SOME UNAUTHORIZED OCCUPANTS WERE ALSO THERE. I SPEND ABOUT RS. 25,000/- FOR VACATING THE LAND. I ALSO SPEND RS. 6,000/- FOR STAMP & RS. 6,000/- FOR REGISTRATION FEE. I ALSO PAID AFTER CONSIDERING PURCHASE PRICE RS. 75,000/- AS SUBMITTED BY THE ASSESSEE, STAMP DUTY OF RS. 6,000/- AND REGISTRATION FEE OF RS. 5,856/- PAID IN THE YEAR 1988-89, ORIGINAL COST OF THE LAND IN THE YEAR 1988-89 COMES TO RS. 86,856/- AND INDEXED COST IN THE F Y 2006-07 COMES TO RS. 2,79,989/-. SO FAR AS EXPENSES FOR VACATING LAND ARE CONCERNED NO PROOF OF THE SAME HAS PRODUCED. IT IS MERELY AFTER THOUGHT TO COVER THE DIFFERENCE BETWEEN SALE PRICE AND INDEXED COST OF ACQUISITION. 2 THE AREA WAS UNDER DEVELOPMENT AND MUNICIPAL WATER SUPPLY WAS NOT EXTENDED TO THIS LAND AND AS SUCH I HAD TO SPEND FOR WATER BORE WHICH COST ME ABOUT RS. 35,000/-. IT IS A MERELY AFTERTHOUGHT TO INCREASE INDEXED COST OF ACQUISITION. THE WATER BORE IS NOWHERE MENTIONED IN THE VALUATION REPORT AS WELL AS IN THE SALE DEED. AS THE VALUATION OF ENTIRE PROPERTY INCLUDING ALL FACILITIES SUBMITTED BY THE ASSESSEE AND COST OF CONSTRUCTION IS ACCEPTED AS SUCH. 3 TO AVOID THE ENCROACHMENT THE LAND WAS FULLY COVERED WITH COMPOUND WALL AND TWO GATES WHERE - FITTED. THE AMOUNT SPEND BY ME WAS APPROXIMATELY RS. THESE EXPENSES INCLUDED IN VALUATION REPORT OF COST OF CONSTRUCTION FILED BY THE ASSESSEE. THIS IS MERELY REPETITION OF THE SAME, SEPARATE COMPOUND WALL IS NEITHER MENTIONED IN SALE DEED NOR MENTIONED IN VALUATION ITA NO 2031/A/2010 & CO NO. 162/A/2010 . A.Y. 2007- 08 4 2,70,000/- INCLUDING EXPENSES FOR FILLING OF LAND OF ABOUT 1841 SQ. FT. REPORT DTD.11/11/2006 . AFTER REQUIRING PURCHASE DEED FROM THE ASSESSEE, HE HAS PRODUCED REVIEWED VALUATION REPORT WHERE IN LAND AREA COST ADJUSTED ACCORDING TO PURCHASE DEED AND COMPOUND WALL AND LAND FILLING COST MENTIONED SEPARATELY. AS PER BOTH VALUATION REPORTS COST OF CONSTRUCTION AS ON 01/04/1991 IS RS.5, 06,165/-WHICH INCLUDES ALL TYPE OF CONSTRUCTION. FURTHER, NO DOCUMENTARY PROOF FURNISHED IN SUPPORT OF THE REVISED CLAIM. HENCE, ON THE BASIS OF VALUATION REPORT DTD.11/11/2006 AND SALE DEED OF THE PROPERTY, THE REPEATED CLAIM OF THE ASSESSEE IS REJECTED. 4 I SPEND APPROXIMATELY RS. 6,25,000/- FOR THE CONSTRUCTION OF THE SAID BUILDING FOR THE BUILT UP AREA OF 1,840.60 SQ. FT. THE CONSTRUCTION INCLUDES THE EXPENSES FOR OVERHEAD TANKS, UNDERGROUND TANK & ELECTRIC MOTOR ALSO. COST OF CONSTRUCTION ALREADY VALUED BY THE REGISTERED VALUER OF THE ASSESSEE. AS PER VALUATION REPORT FILED BY THE ASSESSEE COST OF CONSTRUCTION AS ON 01/04/1991 IS RS. 5,06,165/-AND THE SAME IS ACCEPTED AS SUCH. 5 WE STARTED TO LIVE IN THE HOUSE AT THE END OF 1990. AS PER SR. NO. 41 OF THE VALUATION REPORT FILED BY THE ASSESSEE YEAR OF COMMENCEMENT AND COMPLETION OF CONSTRUCTION IS 1991. AS THE VALUATION REPORT SHOWS COSTS AS ON 01/04/1991, THIS POINT DOES NOT HAVE ANY RELEVANCE. KEEPING IN VIEW OF THE ABOVE INDEXED COST OF ACQUIS ITION IN THE F.Y. 2006-07 IS CALCULATED AS UNDER:- INDEXED COST OF ACQUISITION OF THE LAND AS DISCUSSED IN SERIAL NO. 1 OF THE TABLE ABOV E RS. 2,79,989/- INDEXED COST OF CONSTRUCTION AS PER VALUATION REPORT AT RS. 5,06,165 /- IN THE YEAR 91-92 BY THE REGISTERED VALUER OF THE ASS ESSEE RS. 13,20,099/- III TOTAL INDEXED COST OF THE PROPE RTY DURING THE F.Y. 2006-07 RS. 16,00,088/- CAPITAL GAIN IS CALCULATED AS UNDER:- SALE CONSIDERATION OF THE PROPER TY RS. 31,00,000/ LESS: TOTAL INDEXED COST OF TH E PROPERTY AS CALCULATED ABOVE RS. 16,00,088/- TOTAL LONG TERM CAPITAL GAIN RS. 14,99,912/- ITA NO 2031/A/2010 & CO NO. 162/A/2010 . A.Y. 2007- 08 5 HENCE , TOTAL LONG TERM CAPITAL GAIN IS ASSESSED AT RS. 14,99,912/- AGAINST RS. 31,341/- AS SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME. THEREFORE, TOTAL ADDITION OF RS. 14,68,571/- IS MADE TO TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD LONG TE RM CAPITAL GAIN 5. HE ACCORDINGLY WORKED OUT TOTAL CAPITAL GAIN AT RS. 14,99,912/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESS EE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DELETED THE ORDER OF ASSESSI NG OFFICER BY HOLDING AS UNDER: (6 ) I AGREE WITH THE ABOVE CASE LAWS QUOTED BY THE L D. A.R. IN HIS WRITTEN SUBMISSIONS, HENCE, THE ADDITION OF RS. 14,68,571/- UNDER THE HEAD LONG TER M CAPITAL GAIN IS DELETED. 6. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NO W IN APPEAL BEFORE US. 7. BEFORE US, AT THE OUTSET THE LEARNED D.R. SUBMITTED THAT THE CIT(A) HAS PASSED A VERY CRYPTIC ORDER AND HAS NOT GIVEN ANY F INDINGS. HE THEREFORE SUBMITTED THAT THE ORDER MAY BE RESTORED TO THE FIL E OF CIT(A) FOR DECIDING THE ISSUE AFRESH. THE LEARNED A.R. ON THE OTHER HAND SUBMITTED THAT THE SUBMISSIONS MADE BY THE ASSESSEE, BEFORE C IT(A) WERE CONSIDERED BY HIM BEFORE PASSING THE ORDER. HE THU S SUPPORTED THE ORDER OF CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. FROM THE ORDER OF CIT(A) WE FIND THAT HE HAS PASSED A VERY CRYPTIC ORDER AND HAS RELIED ON THE CASE LAWS SUBMITTED BY THE AS SESSEE FOR DELETING THE ADDITION. WE FURTHER FIND THAT HE HAS NOT GIVEN AN Y FINDING WITH RESPECT TO THE VARIOUS OBSERVATIONS OF ASSESSING OFFICER AN D THE CONTENTIONS MADE BY ASSESSEE. WE THEREFORE FEEL THAT THE MATTER NEEDS TO BE DECIDED ITA NO 2031/A/2010 & CO NO. 162/A/2010 . A.Y. 2007- 08 6 AFRESH. WE THEREFORE REMIT THE ISSUE TO THE FILE O F CIT(A) AND DIRECT HIM TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE SU BMISSIONS OF THE ASSESSEE AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. THUS THIS GROUND OF REVENUE IS ALLOWED FO R STATISTICAL PURPOSES. 9. CO OF THE ASSESSEE IS BASICALLY IN SUPPORT OF THE O RDER OF CIT(A). SINCE THE APPEAL OF THE REVENUE IS REMITTED TO THE FILE O F CIT(A). THE PRESENT CO DOES NOT SURVIVE AND THEREFORE THE SAME IS DISMI SSED. 10. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND CO OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 08 -08 - 2013. SD/- SD/- (D.K.TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD