ACIT, Circle -(1), Hyderabad V. Smt. Amina Khatoon, Hyderabad

CO 17/HYD/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8932 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 14-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Gift; Opportunity of being heard; Question of law; Cost of acquisition; Fair market value; Valuation report; Condonation of delay
• Section: 143(3); 50C; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1599/HYD/2012 ASSESSMENT YEAR : 2008-09 ASST. COMMISSIONER OF INCOME-TAX, HYDERABAD ... APPELLANT VS. SMT. AMINA KHATOON, HYDERABAD PAN: AHZPK1747J ... RESPONDENT C.O. NO. 17/HYD/13 (IN ITA NO. 1599/HYD/2012 ASSESSMENT YEAR : 2008-09 SMT. AMINA KHATOON, HYDERABAD PAN: AHZPK1747J ... CROSS OBJECTOR VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 6(1), HYDERABAD. ... RESPONDENT REVENUE BY: SHRI P. SOMA SEKHAR REDDY ASSESSEE BY: SHRI MOHD AFZAL DATE OF HEARING: 27/08/2013 DATE OF PRONOUNCEMENT: 05/09/2013 ORDER PER CHANDRA POOJARI, A.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A)-IV, HYDERABAD ON 31/08/ 2012, FOR ASSESSMENT YEARS 2008-09. 2 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= 2. THE ASSESSEE ALSO FILED C.O. AGAINST THE SAID ORDER OF THE CIT(A). THE ASSESSEE HAS FILED THE CO BEFORE US WITH A DELAY OF 71 DAYS. THE ASSESSEE FILED APPLICATION FO R CONDONATION OF DELAY AND FILED AN AFFIDAVIT ALSO CO NFIRMING THE REASONS MENTIONED IN THE CONDONATION PETITION. AFTE R CONSIDERING THE SUBMISSIONS OF THE PARTIES AND REAS ONS MENTIONED IN THE CONDONATION PETITION BY THE ASSESS EE, WE ARE OF THE VIEW THAT THE ASSESSEE IS PREVENTED BY S UFFICIENT REASON TO FILE THE CO WITHIN THE STIPULATED PERIOD. THEREFORE WE CONDONE THE DELAY AND ADMIT THE CO FOR ADJUDICAT ION. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED HER RETURN OF INCOME FOR THE AY 2008-09 ON 31 /03/2009, DECLARING THE TAXABLE INCOME AT RS. 1,36,36,694/-. FROM THE INFORMATION AVAILABLE ON RECORD, THE ASSESSING OFFI CER NOTICED THAT THE FAIR MARKET VALUES OF THE TWO PROPERTIES S OLD BY THE ASSESSEE WERE MORE THAN THE CONSIDERATION RECORDED IN THE REGISTERED SALE DEEDS. THE MARKET VALUE OF THE PROP ERTIES WAS AT RS. 12,56,80,000/- WHEREAS THE CONSIDERATION AS PER THE REGISTERED SALE DEEDS WAS RS. 11,38,00,000/- ONLY. THE ASSESSING OFFICER OPINED THAT AS PER SECTION 50C OF THE ACT, FOR THE PURPOSE OF DETERMINING THE LONG TERM CAPITA L GAINS, THE FAIR MARKET VALUE OF THE PROPERTIES AS CONSIDER ED BY THE REGISTRATION AUTHORITIES IS REQUIRED TO BE ADOPTED. HOWEVER, THE ASSESSEE HAD ADOPTED THE ACTUAL CONSIDERATION R ECORDED IN THE REGISTERED SALE DEEDS ONLY FOR DETERMINING THE LONG TERM CAPITAL GAINS. THUS, THE ASSESSING OFFICER HELD THA T THERE WAS AN ESCAPEMENT OF INCOME AND ACCORDINGLY, HE REOPENE D THE ASSESSMENT U/S 147 OF THE ACT. SUBSEQUENTLY, AN ORD ER U/S 143(3) R.W.S. 147 WAS PASSED, BY WAY OF WHICH ORDER , THE 3 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS. 11,17,39,494/-. 4. AS REGARDS THE FAIR MARKET VALUE OF THE PROPERTIES AS ON 01/04/1981 FOR COMPUTING THE CAPITAL GAINS, THE ASS ESSEE HAD CLAIMED THE SAME AT RS. 1800/- PER SQ. YARD, AS AGA INST THE MARKET VALUE OF RS. 150/- GATHERED FROM THE SRO FOR 01/04/1981. IN SUPPORT OF THE CLAIMED RATE OF RS. 1 800/- PER SQ. YARD, THE ASSESSEE SUBMITTED A COPY OF THE VALU ATION REPORT OF THE GOVERNMENT REGISTERED VALUER, WHEREI N HE HAD STATED THAT THE RATE PER SQ. YARD IN THE VICINITY O F THE PROPERTY SOLD BY THE ASSESSEE WAS AROUND RS. 2000/- TO RS. 2 000/-. ACCORDINGLY, HE HAD CONSIDERED THE RATE OF RS. 2000 /- AS REASONABLE, AS THE SITE WAS LOCATED AT RTC X ROADS, HYDERABAD. HOWEVER, THE ASSESSEE COULD NOT SUBMIT A NY COMPARATIVE INSTANCES OF SALES IN THE NEIGHBOURHOOD OF THE ASSESSEES PROPERTY TO SUPPORT THE RATE OF RS. 1800 /- PER SQ. YARD ADOPTED THEREIN. THE ASSESSING OFFICER FOUND T HAT THE REGISTERED VALUER HAD SIMPLY STATED IN THE VALUATIO N REPORT THAT THE PREVAILING MARKET RATES AS ON 1981 TRANSAC TED WAS AROUND RS. 2000/- TO RS. 2200/- PER SQ. YARD. HE, T HEREFORE, CONCLUDED THAT THE SO CALLED VALUATION REPORT REL IED ON LOCAL ENQUIRIES AND THE OPINION OF THE VALUER ONLY, AND T HEREFORE, WAS TO BE TREATED AS A SELF SERVING DOCUMENT OBTAIN ED AS ON AFTERTHOUGHT DURING THE ASSESSMENT PROCEEDINGS. HE, THEREFORE, CONCLUDED THAT THE ASSESSEE NEITHER FURN ISHED ANY EVIDENCE IN SUPPORT OF HIS VALUATION, NOR FURNISHED ANY COMPARABLE CASES FOR ESTIMATING THE FAIR MARKET VAL UE AS ON 01/04/1981. THEREFORE, THE ASSESSING OFFICER FOLLOW ING THE DECISION OF THE ITAT, VISAKHAPATNAM BENCH IN CASE O F SIVA PARVATHI VS. ITO, 129 TTJ 463, ADOPTED THE FAIR MAR KET VALUE 4 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= AS PER THE FAIR MARKET VALUE DETERMINED BY THE SRO AT RS. 150/- PER SQ. YARD AS ON 01/04/1981. 5. ON APPEAL, BEFORE THE CIT(A) THE AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEES PROPERTY IS SITUATED AT CHIKKADAPALLY, RTC X ROADS, HYDERABAD AND COMPRISES OF LAND ADMEASURING 3870 SQ. YARDS. HE CONTENDED THAT IN EARLY 1980, RTC X ROADS, ALONG WITH ABIDS, WAS CONSIDERED TO BE THE HEART OF THE HYDERABAD CITY AND PLACES LIKE BAN JARA HILLS, JUBILEE HILLS ETC. DID NOT HAVE ANY PROMINENCE. THE REFORE, HE CLAIMED THAT THE MARKET VALUE OF A PROMINENT PLACE LIKE RTC X ROADS COULD NOT HAVE BEEN RS. 150/- PER SQ. YARD AS INFORMED BY THE SRO. THE AR ADDED THAT THE ENTIRE PROPERTY W AS RECEIVED BY THE ASSESSEE AS A GIFT FROM HER FATHER VIDE THE GIFT DEED DT. 12/06/1979 AND, THEREFORE, THE ASSESSEE HA D AN OPTION OF ADOPTING THE MARKET VALUE AS ON 01/04/198 1. IT WAS REITERATED THAT THE ASSESSEE ADOPTED THE RATE AT RS . 1800/- PER SQ. YARD ONLY, WHEREAS THE MARKET VALUE AS PER THE VALUATION CERTIFICATE OF THE APPROVED VALUER, MR. R AVINDER RAO, DATED 29/08/2011 WAS RS. 2000/- PER SQ. YARD. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) EXAMINED AND ANALYSED THE ISSUE ELABORATELY WITH THE DECISIONS RELIED UPON BY THE ASSESSING OFFICER AS W ELL AS THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO RECO MPUTE THE LONG TERM CAPITAL GAINS BY ADOPTING THE FAIR MARKET VALUE OF LAND AS ON 01/04/1981 AT RS. 1200/- PER SQ. YARD AN D MODIFY THE COMPUTATION OF INCOME OF THE ASSESSEE FOR THE Y EAR ACCORDINGLY. SOME OF THE OBSERVATIONS BEFORE COMING TO THE SAID CONCLUSION BY THE CIT(A) ARE AS FOLLOWS: 5 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= 6.9 AS REGARDS THE OBSERVATION OF THE ASSESSING OFFICER THAT THE ASSESSEE COULD NOT CITE ANY COMPARABLE INSTANCE, IT IS CLEAR THAT EVEN THE ASSESSING OFFICER HAS NOT CITED ANY INSTANCE OF SALE/PURCHASE AT THE RATE SHOWN IN THE BASIC VALUE REGISTER IN THE VICINITY OF THE APPELLANTS PROPERT Y. RATHER, HE HAS STRAIGHT AWAY APPLIED THE RATES AS PER THE BASIC VALUE REGISTER, WHICH AS PER THE HONBLE ITAT CANNOT BE TAKEN AS THE BASIS FOR DETERMINING THE FAIR MARKET VALUE. 6.10 AS AGAINST THIS, THE ASSESSEE HAD SUPPORTED ITS COMPUTATION OF LONG TERM CAPITAL GAINS BY WAY OF A REPORT FROM THE REGISTERED VALUER, SHOWING THE RATE OF RS. 1800/- PER SQ.YARD. EVEN THOUGH THE REGISTERED VALUE HAD NOT CITED ANY COMPARABLE INSTANCE IN THE SAID VALUATION REPORT, HE HAD GIVEN THE SAID VALUATION ON THE BASIS OF LOCAL ENQUIRY AND AFTER FORMING AN OPINION ABOUT THE VALUE OF THE PROPERTY OF THE ASSESSEE. WHILE THE VALUATION SO DONE MAY NOT BE ACCEPTED FULLY IN VIEW OF THE ABSENCE OF ANY DIRECT EVIDENCE AND ON THE GROUND OF SUBJECTIVITY, IT CANNOT BE DENIED THAT THE PROPERTY OF THE PRESENT ASSESSEE WAS LOCATED AT BAKARAM, CHIKKADPALLY, RTC X ROADS. IT CANNOT BE DENIED THAT THE SAID AREA WAS A DEVELOPED LOCALITY IN THE 1980S ITSELF. BESIDES, IT WAS INDEED A LARGE PROPERTY COMPRISING OF 3870 SQ. YARDS OF LAND, WHICH SHOWED THE COMMERCIAL POTENTIAL THEREOF. THE ASSESSEES PROPERTY, THEREFORE, WAS INDEED SUPERIOR TO THE PROPERTY INVOLVED IN THE CASE OF ASHVEN DATLA VS. ITO (SUPRA), WHEREIN THE VALUE OF A PROPERTY IN FAR OFF KUKATPALLY, AS ON 01/04/1981, HAS BEEN HELD TO BE RS. 750/- PER SQ.YARD, AND HENCE IT WILL BE REASONABLE TO CONCLUDE THAT ITS MARKET VALUE WOULD HAVE BEEN MORE AS ON 01/04/1981. 6.11 IT IS FURTHER SEEN THAT IN THE CASE OF K. PRATAP REDDY (SUPRA) THE HONBLE JURISDICTIONAL ITAT HAVE APPROVED OF THE VALUE OF LAND LOCATED AT SD ROAD, SECUNDERABAD TO BE RS. 1200/- PER SQ. YARD AS ON 01/04/1981. FURTHER, IN THE CASE OF G. VIJAY & ORS (SUPRA), THE FAIR MARKET VALUE OF THE PROPERTY IN ABIDS AREA WAS UPHELD AT RS. 1380/- PER SQ. YARD BY THE HONBLE ITAT. EVEN THOUGH IT 6 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= CANNOT BE DENIED THAT THE ABIDS AREA WAS INDEED MUCH MORE DEVELOPED THAN RTC X ROADS, THE LATTER IS CLOSER TO ABIDS, AS COMPARED TO SD ROAD. LOOKING TO THESE INSTANCES AND CONSIDERING THE LOCATION OF THE PROPERTY SOLD BY THE ASSESSEE, ITS SIZE, POTENTIAL AND FUTURE PROSPECTS, I AM OF THE VIEW IT WOULD BE FAIR AND REASONABLE TO ESTIMATE THE FAIR MARKET VALUE OF THE IMPUGNED LAND AT RS. 1200 PER SQ.YARD. 7. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US AND ALSO THE ASSESSEE FILED C.O. B EFORE US. 8. THE REVENUE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS: 2. THE LEARNED CIT(A) ERRED IN ADOPTING FMV OF OPEN LAND @ 1200/- PER SQ.YARD AS AGAINST SUB- REGISTRAR VALUE OF RS. 150 PER SQ. YARD OBLVIOUS OF THE FACT THAT THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE IN SUPPORT OF VALUATION REPORT OF GOVERNMENT REGISTERED VALUER. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE RATIONALE OF DECISION OF ITAT, VISAKHAPATNAM IN THE CASE OF M. SIVA PARVATHI VS. ITO (2010) 129 TTJ (VISAKHA) 463 IN ARRIVING AT FMV AS ON 01/04/1981, THE FACTS OF WHICH ARE SIMILAR TO THE PRESENT CASE. 9. THE ASSESSEE HAS RAISED THE FOLLOWING OBJECTIONS IN HER CO: 1. THE IMPUGNED ORDER OF THE LEARNED CIT(A), IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE ASSESSEE, IS AGAINST LAW, WEIGHT OF EVIDENCE AND PROBABILITIES OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN ADOPTING THE FMV AS ON 01/04/1981 AT RS. 1200/- PER SQ. YARD INSTEAD OF RS. 2000/- PER SQ. YARD AS DETERMINED BY THE REGISTERED VALUER IN TERMS OF THE PROVISIONS OF SECTION 55(2)(6)(II). HE OUGHT TO HAVE ACCEPTED THE RATE PER SQ. YARD AT RS. 2000/- DERIVED BY THE GOVERNMENT APPROVED VALUER ON SCIENTIFIC BASIS. 7 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= 3. FOR THE ABOVE GROUNDS AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE RESPONDENT PRAYS THAT THE CROSS OBJECTIONS BE ALLOWED. 10. BEFORE US, THE LEARNED DR SUBMITTED THAT THE CIT(A) PLACED RELIANCE ON THE VALUATION REPORT OF GOVERNME NT REGISTERED VALUER AND THE SAME IS NOT BASED ON THE MATERIAL OR ANY COMPARABLE CASES BROUGHT ON RECORD. HE SUBMI TTED THAT AT THE TIME OF ASSESSMENT THE ASSESSING OFFICE R REQUIRED THE SRO TO FURNISH THE RATE AT WHICH THE PROPERTY I S REGISTERED AS ON 01/04/1981 AND HE SUBMITTED HIS REPORT WHEREI N HE HAS ADOPTED THE FMV AS ON 01/04/1981 AT RS. 150/- PER S Q.YARD, WHICH WAS ADOPTED BY THE ASSESSING OFFICER WHEREAS THE ASSESSEE HAS FOLLOWED THE APPROVED REGISTERED VALUE RS REPORT WHICH IS AT RS. 1800/- PER SQ. YARD AS THE VALUER S TATED IN HIS REPORT THAT THE RATE PER SQ. YARD IN THE VICINITY O F THE PROPERTY SOLD BY THE ASSESSEE WAS AROUND RS. 2000/- TO RS. 2 000/-. THE DR CONTENDED THAT THE CIT(A) ARBITRARILY ADOPTE D THE VALUE OF FMV AT RS. 1200/- AS AGAINST RS. 150/- PER SQ. YARD ADOPTED BY THE ASSESSING OFFICER AS ON 01/04/1981. 11. THE DR FURTHER SUBMITTED THAT THE CROSS OBJECTIONS FILED BY THE ASSESSEE DO NOT HAVE ANY MERIT AS THE ASSESS EE HERSELF HAS ADOPTED THE FMV AT RS. 1800/- PER SQ. Y ARD AND NOW CONTENDING TO ADOPT THE FMV PER SQ. YARD AT RS. 2,000/- AS ON 01/04/1981, WHICH IS NOT PROPER. 12. THE LEARNED DR RELYING ON THE DECISION OF THE ITAT, VISAKHAPATNAM IN CASE OF M. SIVA PARVATHI VS. ITO ( SUPRA), SUBMITTED THAT THE FMV ADOPTED BY THE ASSESSING OFF ICER AT RS. 150/- AS ON 01/04/1981 IS REASONABLE AND PROPER . 8 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= 13. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE SRO VALUE ADOPTED BY THE ASSESSI NG OFFICER AS ON 01/04/1981 COULD BE TAKEN ONLY FOR RE GISTRATION PURPOSES TO DETERMINE STAMP VALUE FOR REGISTRATION. IN THIS REGARD, REFERENCE WAS MADE TO THE DECISIONS IN THE CASES OF SAGAR CEMENT VS. STATE OF ANDHRA PRADESH (ALT) 677, PONNAVOLU SASIDHAR VS SUB REGISTRAR, HAYATHNAGAR (A IR 1982)(A.P 198)(SCC 595-1996 (3) SCC 124). HE MENTIO NED THAT THE HON'BLE HYDERABAD ITAT IN THE CASE OF K. P RASAD REDDY IN ITA NO. 465/H/03 HAVE ALSO FOLLOWED THIS V IEW. THE AR FURTHER SUBMITTED THAT THE TRIBUNAL IN THE CASE OF ASHVEN DATLA VS. ITO HAVE ADOPTED THE RATE OF RS. 750/- PE R SQ. YARD, AS AGAINST RS. 8/- INDICATED BY THE SRO FOR A LAND SITUATED AT KUKATPALLY HYDERABAD WHICH IS THE APPROXIMATELY 18 KMS. FROM RTC X ROADS. HE ARGUED THAT GOING BY THE SAME YARDSTICK, FOR THE SRO VALUE AT RTC X ROADS OF RS. 150/- PER SQ. YARD, THE CORRESPONDING MARKET VALUE SHOULD BE AT LEAST 20 TIMES MORE I.E. AROUND RS. 3000/-. 14. THE REPRESENTATIVE OF THE ASSESSEE ALSO ARGUED THA T IN VIEW OF THE DECISION OF THE TRIBUNAL MUMBAI BENCH IN THE CASE OF ITO VS. SRI PRATAP M. INDULKAR (ITA NO. 1142/MUM /20 10), THE FAIR MARKET VALUE AS ON 1.4.1981 AS PER REGISTE RED VALUER'S REPORT SHOULD BE ADOPTED AS THE COST OF AC QUISITION AND FURTHER INDEXED COST SHOULD BE ALLOWED IN COMPU TATION OF LONG TERM CAPITAL GAINS. 15. WITH REGARD TO THE ASSESSING OFFICER'S RELIANCE ON THE DECISION IN THE CASE OF M. SIVA PARVATHI VS. ITO (S UPRA), THE REPRESENTATIVE AVERRED THAT THE SAID CASE IS DIFFER ENT ON FACTS 9 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= AS NO VALUATION REPORT OF THE APPROVED VALUER WAS P RODUCED THEREIN AND THE ASSESSEE HAD ONLY ESTIMATED THE MAR KET VALUE, WITHOUT ANY SUPPORTING VALUATION REPORT. HE MAINTAINED THAT THE DECISION IN THE CASE OF RAJYALAXMI TRADING CO. VS. CIT, 125 ITR 581, ON WHICH RELIANCE PLACED BY THE A SSESSING OFFICER IS ALSO NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE, AS THE SAID CASE INVOLVED DISSOLUTION OF A FI RM. 16. FINALLY THE REPRESENTATIVE OF THE ASSESSEE SUBMITTE D THAT IN THE CASE OF O. VIJAY & ORS., FOR A PROPERTY SITUATED AT ABIDS, WHICH IS LESS THAN 2 KM AWAY FROM THE ASSESS EE'S PROPERTY, THE TRIBUNAL HYDERABAD BENCH HAVE UPHELD THE RATE OF RS. 1380/ - PER SQ. YARD AND THEREFORE, THE VALU E OF RS. 1800/- PER SQ. YARD SHOULD BE CONSIDERED AS THE FAI R MARKET VALUE IN THE ASSESSEE'S CASE. 17. THE LEARNED AR OF THE ASSESSEE RELIED UPON THE FOLL OWING DECISIONS IN SUPPORT OF THE CASE OF THE ASSESSEE: 1. ASHVEN DATLA VS. ITO, ITA NO. 107/HYD/2010, ORDER DATED 29/10/2010, WHEREIN SPECIFICALLY RELIED ON PARA 9, WHICH READS AS FOLLOWS: '9. COMING TO THE OTHER ISSUES, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) TO THE EXTENT OF HIS FINDING THAT THE GUIDELINE VALUE OF THE SUB-REGISTRAR OF REGISTRATION DEPARTMENT OF THE STATE GOVERNMENT, WHICH WAS FIXED IN THE YEAR 1976, CANNOT BE ADOPTED AS THE FAIR MARKET VALUE AS ON 1.4.1981. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SAGAR CEMENTS LTD. (SUPRA), P. SASHIDHAR (SUPRA) AND VASIREDDY BHARAT RAO (SUPRA, HAS CLEARLY LAID DOWN THAT VALUE FIXED IN THE BASE VALUE REGISTER IS ONLY A GUIDELINE. THIS BENCH OF THE TRIBUNAL HAS BEEN CONSISTENTLY HOLDING THAT THE GUIDELINE 10 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= VALUE OF THE SUB-REGISTRAR'S OFFICE CANNOT BE ADOPTED UNLESS IT IS SCIENTIFICALLY ARRIVED AT. THE FACTS OF THE CASE AS WELL AS THE INSTANCES OF SALE IN THE ADJOINING AREA CLEARLY DEMONSTRATE THAT THE GUIDELINE VALUE OF THE SUB-REGISTRAR'S OFFICE HAS NOT BEEN SCIENTIFICALLY ARRIVED AT. THE VALUE ARRIVED AT WAS FOR THE YEAR 1976 AND THIS WAS SOUGHT TO BE ADOPTED AS THE VALUE AS ON 1.4.1981 BY THE AO. THIS, TO OUR MIND, IS NOT CORRECT. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MRO AND LAO V. SRI SRI SRI JAGANNADHASWAMYVARI TEMPLE, PALAKONDA (APPEAL NO. 1654 OF 1988 DATED 26.3.1992), HELD THAT 'WHEN THE RATES IN THE BASIC VALUE REGISTER HAVE BEEN FIXED ON AREA-WISE, WITHOUT ANY SCIENTIFIC DATA, THE VALUES MENTIONED IN THE BASIC VALUE REGISTER CANNOT BE TREATED AS COMPARABLE VALUES OF MARKET VALUE AT THE RELEVANT TIME'. THUS, ON THE FACTS OF THE CASE, ADOPTION OF THE GUIDELINE VALUE OF 1976 OF THE REGISTRATION DEPARTMENT BY THE AO IS BAD IN LAW. THIS GROUND OF THE REVENUE IS, THEREFORE, DISMISSED.' 2. PYARE MOHAN MATHUR, HUF VS. ITO, ITA NO. 471/AGRA/2009, ORDER DATED 21/04/2011. 3. PRATAP M. INDULKAR VS. ITO, ITA NO. 1142/MUM/201 0, ORDER DATED 9 TH MARCH, 2011. 18. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE BOM BAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RAMAN KUMAR SURI, IT APPEAL NO. 6962 OF 2010, JUDGMENT DA TED 27 TH NOVEMBER, 2012 HAS BEEN HELD THAT WITH RESPECT TO THE DETERMINATION OF THE FAIR MARKET VALUE AS ON 1 ST APRIL, 1981 THE VALUATION DONE BY A REGISTERED VALUER OF THE IN COME TAX DEPARTMENT WOULD CERTAINLY TAKE PRECEDENCE OVER NAB HIS GUIDE TO HOUSE TAX. THE COURT HAD CONCLUDED THAT TH E 11 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= DETERMINATION OF FAIR MARKET VALUE AS ON 1 ST APRIL, 1981 IS A QUESTION OF FACT AND THE TRIBUNALS DECISION THAT T HE FAIR MARKET VALUE AS ESTIMATED BY THE REGISTERED VALUER ON 1 ST APRIL, 1981 IS ACCEPTABLE. IT ALSO HELD THAT THE FI NDING OF THE TRIBUNAL IS NEITHER PERVERSE NOR ARBITRARILY DONE S O AS TO RAISE A SUBSTANTIAL QUESTION OF LAW. 19. MOREOVER, WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCH OF JURISD ICTIONAL TRIBUNAL, WHERE THE AM WAS ONE OF THE PARTY, IN C ASE OF ASHWIN JOSHI IN ITA NOS. 1428 & 1269/HYD/2012 VIDE ORDER DATED 31/07/2013, WHEREIN THE BENCH HELD AS FOLLOW S: 19. THOUGH THE VALUATION DONE BY THE REGISTERED VALUER IS WITH REGARD TO A SPECIFIC PROPERTY AND IS CLAIMED BY THE LEARNED COUNSEL FOR THE ASSESSEE AS MOST APPROPRIATE AND CORRECT VALUATION WHICH IS TO BE ADOPTED IN DETERMINING THE COST OF ACQUISITION WHILE WORKING OUT THE CAPITAL GAIN, WE HAVE ALSO TO TAKE INTO ACCOUNT THE ARGUMENT OPPOSING THE ADOPTION OF THE SAME ON THE GROUND THAT THE REGISTERED VALUER WOULD BE INFLUENCED BY VESTED INTEREST HAVING BEEN CHOSEN BY THE ASSESSEE FOR THE PURPOSE OF VALUING THE PROPERTY. THEREFORE, THE FAIR MARKET VALUE HAS TO BE BASED ON COMPARABLE SALE INSTANCES. IN THE CASE OF DCIT VS. CHATURBHUJ VALLABHDAS HUF, MUMBAI BENCH 130 ITD 230 IT HAS BEEN CONCLUDED THAT : REFERENCE TO VALUATION OFFICER UNDER S. 55A CAN BE MADE BY A.O. IGNORING THE REPORT OF REGISTERED VALUER REGARDLESS OF THE FACT THAT THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1 ST APRIL, 1981 AS SHOWN BY THE ASSESSEE WAS MORE THAN ITS REAL FAIR MARKET VALUE; VALUATION REPORT OF THE DVO IS A RELEVANT AND ADMISSIBLE EVIDENCE ON THE MATTER IN ISSUE IRRESPECTIVE OF ILLEGALITY OF REFERENCE MADE BY THE A.O. 12 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= 20. IN THE CASE OF DCIT (INTERNATIONAL TAXATION) VS. HARBIR SINGH (2012) 34 CCH 167 (DEL.) (TRIBU.) IT HAS BEEN HELD BY THE DELHI BENCH OF THE TRIBUNAL THAT IN RESPECT OF COST OF ACQUISITION AS ON 1.4.1981 OF THE LAND SITUATED AT E-25, NEW DEFENCE COLONY, NEW DELHI, THE ASSESSEE ADOPTED COST OF ACQUISITION AS PER REPORT OF REGISTERED VALUER WHILE THE A.O. DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE OR 66 PERCENT INCREASE IN RATES FOR DETERMINING COST OF ACQUISITION OVER AND ABOVE THE AVERAGE AUCTION RATES OF LAND IN THE SAFDARJUNG ENCLAVE AREA. BOTH THE ASSESSEE AND REVENUE ARE AGGRIEVED WITH THE FINDINGS OF THE LEARNED CIT(A). THE LEARNED AR FAIRLY ADMITTED THAT THERE WAS NO BASIS FOR INCREASING THE AVERAGE AUCTION RATES PREVAILING IN SAFDARJUNG ENCLAVE 66 PERCENT WHILE THE LEARNED DR VEHEMENTLY ARGUED THAT REPORT OF REGISTERED VALUER BEING WITHOUT ANY BASIS NOR HAVING CONSIDERED COMPARATIVE INSTANCES OF COST OF LAND AS ON 1.4.1981 IN DEFENCE COLONY OR ADJOINING AREAS, COULD NOT BE RELIED UPON. IN THE LIGHT OF THESE SUBMISSIONS ON BEHALF OF BOTH THE PARTIES, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, ESPECIALLY WHEN THE REPORT OF REGISTERED VALUER DOES NOT DISCLOSE THE BASIS FOR CHOOSING AVERAGE LAND AUCTION RATES IN SAFDARJUNG ENCLAVE AREA NOR THE BASIS OF INCREASE OF SUCH RATES BY 66 PERCENT AND NOR EVEN ANY REASONS FOR NOT IDENTIFYING COMPARATIVE INSTANCES OF COST OF SIMILARLY SITUATE PROPERTIES IN DEFENCE COLONY AREA WHILE THE IMPUGNED ORDER DOES NOT DISCLOSE THE BASIS OF INCREASE BY 40 PERCENT OVER THE AVERAGE AUCTION RATES IN SAFDARJUNG ENCLAVE AREA, NOT MUCH RELIANCE CAN BE PLACED ON THE VALUATION REPORT PREPARED BY THE REGISTERED VALUER AND PARTLY RELIED UPON BY THE LEARNED CIT(A). THE DETERMINATION OF COST OF ACQUISITION OF A PROPERTY IS A TECHNICAL ASPECT AND WITHOUT HAVING COMPLETE FACTS AND DETAILS OF PROPERTY, ITS LOCATION, AND IT S SURROUNDINGS AND COMPARATIVE INSTANCES OF SIMILARLY SITUATE PROPERTIES, COST OF ACQUISITION A S ON 1.4.1981 CANNOT BE DETERMINED IN A PRECISE MANNER. THE LEARNED CIT(A) HAVING NOT ADVERTED TO ALL THESE ASPECTS NOW RAISED, APPARENTLY THE IMPUGNED ORDER SUFFERS FROM LACK OF REASONING AND 13 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= IS NOT A SPEAKING ORDER. IN VIEW OF THE FOREGOING, THE MATTER IS RESTORED TO THE FILE OF THE A.O. FOR DECIDING THE MATTER AFRESH IN ACCORDANCE WITH LAW, AFTER HAVING A REPORT OF DISTRICT VALUATION OFFICER ON THE COST OF ACQUISITION AS ON 1.4.1981 OF THE SAID PROPERTY AND OF COURSE AFTER ALLOWING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. 21. THEREFORE, IN OUR OPINION, THE ASSESSING OFFICER SHOULD CONSIDER THE FOLLOWING : 1. THE REGISTERED VALUER REPORT AS SUBMITTED BY THE ASSESSEE. 2. REFERENCE TO THE DVO HAS TO BE MADE BY THE ASSESSING OFFICER AND THE REPORT OF THE DVO ON THE COST OF ACQUISITION AS ON 01/04/1981 OF THE PROPERTY HAS TO BE CONSIDERED. 3. INHERENT QUALITY OF THE PROPERTY NAMELY SIZE, LOCATION, ROAD FRONTAGE, CORNER PLOT, IF ANY, ETC. TO BE EXAMINED. 4. ANY COMPARABLE PROPERTY IN THE SAME LOCALITY SHOULD BE TAKEN FOR CONSIDERATION. 22. THEREAFTER, THE ASSESSING OFFICER SHALL AFTER EXAMINING THOROUGHLY THE NATURE OF THE PROPERTY AND THE PECULIAR CIRCUMSTANCES AS WELL AS THE VALUES GIVEN BY THE DIFFERENT PERSONS NAMELY DVO AND THE REGISTERED VALUER SHALL DECIDE THE ISSUE DE NOVO. IT IS NEEDLESS TO SAY THAT A REASONABLE OPPORTUNITY OF BEING HEARD SHOULD BE GIVEN TO THE ASSESSEE. 20. IN THE PRESENT CASE, VALUATION REPORT FURNISHED BY THE REGISTERED VALUER IS NOT BASED ON ANY COMPARABLE CA SES, BUT, HE RESTED HIS CONCLUSION ON THE BASIS OF LOCAL ENQU IRY MADE BY HIM. BEING SO, WE ARE NOT IN A POSITION TO SOLELY RELY ON THE REPORT OF REGISTERED VALUER AND MOREOVER, SINCE THE ISSUE UNDER CONSIDERATION IS MATERIALLY IDENTICAL TO THAT OF THE CASE DECIDED BY THE COORDINATE BENCH IN CASE OF ASHWIN J OSHI 14 ITA NO. 1599/HYD/12 & CO NO. 17/H/13 SMT. AMINA KHATOON ================================= (SUPRA), RESPECTFULLY FOLLOWING THE SAME, WE SET AS IDE THE ORDER OF THE CIT(A) AND REMIT THE ISSUE TO THE FIL E OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SA ME DE NOVO FOLLOWING THE DECISION OF THE COORDINATE BENCH IN C ASE OF ASHWIN JOSHI (SUPRA) AFTER PROVIDING REASONABLE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE GROUN DS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES . 21. AS THE ORDER OF THE CIT(A) HAS BEEN SET ASIDE AND REMITTED THE MATTER TO THE FILE OF THE ASSESSING OF FICER FOR FRESH ADJUDICATION WHILE DECIDING THE REVENUES APP EAL BY US, THE CO FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AN D THEREFORE, THE SAME IS DISMISSED AS INFRUCTUOUS. 22. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CO FILED BY THE ASSESS EE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH SEPTEMBER, 2013 (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 5 TH SEPTEMBER, 2013 KV COPY TO:- 1. ACIT, CIRCLE 6(1), 7 TH FLOOR, D BLOCK, IT TOWERS, MASAB TANK, HYDERABAD. 2. SMT. AMINA KHATOON, D.NO. 8-2-494/501, ROAD NO. BANJARA HILLS, HYDERABAD. 3. THE CIT (A)-IV, HYDERABAD 4. THE CIT-III, HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D.