Smt. Sangeetaben R.Desai L/h. Bhuriben M.Desai, Vapi V. The Income tax Officer,Vapi Ward-1, Vapi

CO 236/AHD/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1693 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 23-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: CO NOS TO AH; HARDI K VORA AR ITA NO
• Keywords: Capital asset; Fair market value; Valuation report; Tax effect
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 2114/AHD/2012 & CO NO.235/AHD/2012 / ASSESSMENT YEAR: 2008-09 INCOME TAX OFFICER, VAPI WARD-1, VAPI .. APPELLANT VS SH. ISHWARLAL GULABBHAI DESAI (HUF) NEHRU STREET, NEAR JAIN TEMPLE, VAPI .. RESPONDENT PAN : AAAHI 5358 B & CROSS-OBJECTOR CO NO.234/AHD/2012 : ASSESSMENT YEAR: 2008-09 (IN ITA NO.2113/AHD/2012) SH. DARMESH JASHWANTRAI DESAI JAIN STREET, NEAR JAIN TEMPLE, VAPI .. CROSS-OBJECTOR PAN : AIMPD 3945 M VS INCOME TAX OFFICER, WARD-1, VAPI .. RESPONDENT CO NO.236/AHD/2012 : ASSESSMENT YEAR: 2008-09 (IN ITA NO.2115/AHD/2012) SMT. SANGEETABEN R. DESAI L/H BHURIBEN M. DESAI, DESAI STREET, NEAR JAIN TEMPLE, VAPI .. CROSS-OBJECTOR PAN : AOFPD 2338 M VS INCOME TAX OFFICER, WARD-1, VAPI .. RESPONDENT REVENUE BY MS. SANYOGITA NAGPAL, SR DR ASSESSEE(S) BY SHRI HARDI K VORA, AR ITA NO. 2114 & CO NOS. 234 TO 236 AHD 2012 ITO VS. ISHWARLAL GULABBHAI DESAI+2 AY 2008-09 - 2 - / DATE OF HEARING 30/11/2015 /DATE OF PRONOUNCEMENT 04/12/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER: THE ONLY APPEAL BY THE REVENUE AND THREE CROSS- OBJECTIONS BY DIFFERENT ASSESSEES ARE PERTAINED TO SAME GROUP; THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIE NCE. ITA NO. 2114/AHD/2012 : AY 2008-09 2. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), VALSAD DA TED 20.07.2012 FOR ASSESSMENT YEAR 2008-09, ON FOLLOWIN G GROUNDS:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITI ON MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN OF RS.13,73,19 5/-. CO NO. 235/AHD/2012 : AY 2008-09 (BABUBHAI N. DESAI ) 3. THE GROUNDS OF CROSS-OBJECTIONS FILED BY THE ASS ESSEE READ AS UNDER:- 1 ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED ASSESSING OFFICE R HAS ERRED IN REOPENING CASE OF ASSESSES U/S 147. ITA NO. 2114 & CO NOS. 234 TO 236 AHD 2012 ITO VS. ISHWARLAL GULABBHAI DESAI+2 AY 2008-09 - 3 - 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING ADDITI ON OF RS.13,35,459/- OUT OF TOTAL ADDITION OF RS. 27,08,6 54/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. 3 IT IS PRAYED THAT ABOVE ADDITIONS/DISALLOWANCES BY ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER OF INCOME-TAX (APPEALS) MAY PLEASE BE DELETED. 4 APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE AN Y GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 4 THE BRIEF FACTS OF THE CASE ARE THAT, DURING THE YEAR UNDER CONSIDERATION, THE INHERITED AGRICULTURAL LAND BEAR ING S. NO. 65/3-D AT VILLAGE RINGANWADA, NANI DAMAN WAS SOLD, WHEREIN THE ASSESSEE'S SHARE IN TOTAL CONSIDERATION WAS RS. 68,74,700/-. AS AGAINST THE SAID SHARE IN THE CONSIDERATION OF RS.68,74,700 , THE ASSESSEE WORKED OUT NET LONG TERM CAPITAL GAIN RS.23,07,520/- AFTER CLAIMING INDEXED COST OF ACQUI SITION OF RS.45,07,180/- BY ADOPTING FAIR MARKET VALUE AS ON 01.04.1981 OF RS.108/- PER SQ. MTR. WHILE COMPLETING THE ASSES SMENT U/S. 143(3) OF THE ACT, THE ASSESSING OFFICER ADOPTED FA IR MARKET VALUE OF THE LAND OF RS.43/- PER SQ. MTR. AS ON 01. 04.1981 AND DETERMINED INDEXED COST OF RS.17,94,520/- AND WORKE D OUT LONG TERM CAPITAL GAIN AT RS.27,08,654/-. ITA NO. 2114 & CO NOS. 234 TO 236 AHD 2012 ITO VS. ISHWARLAL GULABBHAI DESAI+2 AY 2008-09 - 4 - 4.1 BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FI RST APPELLATE AUTHORITY, WHO HAVING CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, HAS DIRECTED THE ASSESSING OFFICER TO ADO PT FAIR MARKET VALUE FOR THE YEAR 1981 AT RS.76/- PER SQ. M TR, THEREBY PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. THIS HA S BEEN OPPOSED BY THE REVENUE INTER ALIA SUBMITTING THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN OF RS.13,73,195/-. ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE BY WAY OF CROSS OBJECTION OPPOSED THE REOPENING OF THE ASSESSMENT A ND SUBMITTED THAT THE CIT(A) HAS ERRED IN CONFIRMING T HE ADDITION OF RS.13,35,459/- OUT OF TOTAL ADDITION OF RS.27,08 ,654/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. LD. AUTHORIZED REPRESENTATIVE POINTED OUT THAT SIMILAR ISSUE AROSE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 VID E ITA NO.373/AHD/2012 AND 479/AHD/2012, WHEREIN VIDE PARAGRAPH 9, UNDER SIMILAR FACTS AND CIRCUMSTANCES, HELD AS UNDER:- 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS PAPER BOOK AND SUBMISSIONS MADE BY THE ASSESSEE AND SUBMISSIONS OF LD. DR. FROM THE PERUSAL OF RECORDS, THIS IS A FACT THAT THERE HAVE BEEN DIFFERENT RATES AVAILAB LE AS ON ITA NO. 2114 & CO NOS. 234 TO 236 AHD 2012 ITO VS. ISHWARLAL GULABBHAI DESAI+2 AY 2008-09 - 5 - 1.4.1981 IN RELATION TO ARRIVE AT THE COST OF ACQUI SITION OF THE PIECE OF LAND SOLD BY THE ASSESSEE. THESE RATES CAN BE SUMMED UP 1. RATE GIVEN BY SUB - REGISTRAR, DAMAN VIDE LETTER 15.09.2010 IN REPLY TO LETTER OF AO DT. 3.9.2010 BETWEEN RS.33 TO 53/- PER SQ. METER 2. RATE OBTAINED FROM SUB - REGISTRAR, DAMAN VIDE CERTIFICATE OF VALUATION DATED 22.1.2007 RS.165/ - PER SQ. METER 3. RATE GIVEN BY THE GOVT. APPROVED VALUER PAREKH & ASSOCIATES, AS PER VALUATION REPORT DATED 28.2.2008 RS.108/ - PER SQ. METER FROM THE ABOVE, IT SEEMS THAT ON ONE HAND THE REPOR T OF SUBREGISTRAR, DAMAN, IS RANGING FROM MINIMUM RS.33 PER SQ.METER TO A MAXIMUM OF RS.165/- PER SQ. METER WHEREAS THE REPORT OF REGISTERED VALUER WHO IS A PE RSON WITH TECHNICAL EXPERTISE FOR THE PURPOSE OF VALUATI ON HAS GIVEN THE RATE OF RS.108/- PER SQ.METER FOR THE PUR POSE OF VALUATION BY CONSIDERING MORE THAN ONE INSTANCES OF SALE/TRANSFER OF LAND AT RINGANWADA, NANI DAMAN. IN OTHER WORDS THE GOVT. APPROVED VALUER HAS TRIED TO ARRIVE AT QUITE CLOSE TO THE FAIR MARKET VALUE OF THE SAID LAND DUE TO HIS ADOPTION OF SCIENTIFIC AND TECHNICAL METHOD. WE FURTHER NOTICE THAT AO HAS RELIED PURELY ON THE AVE RAGE RATE GIVEN BY SUB-REGISTRAR, DAMAN EVEN WHEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS SUBMITTED THAT HE HAS ADOPTED THE RATE OF RS.165/- PER SQ.METER ON THE BASIS OF A CERTIFICATE OF VALUATION BY SUB- REGISTRAR, DAMAH. IN SUCH CIRCUMSTANCES, IT WAS REQ UIRED ON THE PART OF THE AO TO MAKE A REFERENCE TO THE VA LUATION OFFICER UNDER SECTION 55A OF THE ACT IN ORDER TO AS CERTAIN THE FAIR MARKET VALUE OF THE ASSET BECAUSE VALUATIO N OFFICER IS A PERSON OF TECHNICAL KNOWLEDGE FOR THE PURPOSE OF SUCH VALUATION. IN THE PRESENT CASE NO SUCH REFE RENCE WAS MADE BY THE AO TO APPROACH THE VALUATION OFFICE R. WE, THEREFORE, FIND IT APPROPRIATE TO GIVE COGNIZAN CE TO ITA NO. 2114 & CO NOS. 234 TO 236 AHD 2012 ITO VS. ISHWARLAL GULABBHAI DESAI+2 AY 2008-09 - 6 - VARIOUS RATES AS REFERRED TO ABOVE IN SUCH A WAY SO AS TO COVER THE RATES FOR THE PURPOSE OF VALUATION GIVEN BY SUB- REGISTRAR, DAMAN TO THE AO, RATES GIVEN BY SUB-REGI STRAR, DAMAN TO THE ASSESSEE AS WELL AS THE RATE GIVEN BY THE GOVT. APPROVED VALUER. WE, THEREFORE, DECIDE TO APP LY THE AVERAGE OF THREE RATES I.E. MINIMUM RATE GIVEN BY S UB REGISTRAR, DAMAN AT RS.33, MAXIMUM RATE GIVEN BY SU B- REGISTRAR, DAMAN AND THE RATE GIVEN BY THE GOVT. AP PROVED VALUER AT RS.108/-. THE AVERAGE RATE WILL WORK OUT AT RS.102/- PER SQ. METER (RS.33 + RS.165 + RS.108 = RS.306/3 = RS.102/-). IN THE CIRCUMSTANCES, WE DIRE CT THE AO TO ADOPT THE FAIR MARKET VALUE OF THE ASSET AS O N 1.4.1981 AT RS.102/- ONLY. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 4.2. THUS, THE TRIBUNAL HAS DIRECTED THE ASSESSING OFFICER TO ADOPT THE FAIR MARKET VALUE OF THE ASSET AS ON 1.4. 1981 AT RS.102/- ONLY. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF THE REVENUE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, THE ASSESSING OFFICER IS DIRECTED T O ADOPT THE FAIR MARKET VALUE OF THE ASSET AS ON 1.4.1981 AT RS .102/- PER SQ. METER AND RE-COMPUTE THE SAME ACCORDINGLY. 5. THUS THE APPEAL OF THE REVENUE IS DISMISSED AND CROSS- OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED A S INDICATED ABOVE. CO NO.234/AHD/2012 : AY-2008-09 (DHARMESH J. DESAI) CO NO. 236/AHD/2012 : AY-2008-09 (SANGEETABEN R. DE SAI) 6. WITH REGARD TO ABOVE REFERRED TWO CROSS-OBJECTIO NS, THE RESPECTIVE APPEALS FILED BY THE REVENUE WERE DISMIS SED ON ITA NO. 2114 & CO NOS. 234 TO 236 AHD 2012 ITO VS. ISHWARLAL GULABBHAI DESAI+2 AY 2008-09 - 7 - ACCOUNT OF LOW TAX EFFECT. HOWEVER, BY THIS CROSS- OBJECTIONS, THE ASSESSEE OPPOSED THE SUSTENANCE OF ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN. 6.1 ON SIMILAR FACTS AND CIRCUMSTANCES, WE HAVE DEC IDED THE SAME ISSUE IN THE CASE OF BABUBHAI NICHHABHAI DESAI IN ITA NO.2114/AHD/2012 (SUPRA), WHEREIN WE HAVE DIRECTED THE ASSESSING OFFICER TO ADOPT THE FAIR MARKET VALUE OF THE ASSET AS ON 1.4.1981 AT RS.102/-. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, THE ASSESSING OFFICER IS DIRECTED T O ADOPT THE FAIR MARKET VALUE OF THE ASSET AS ON 1.4.1981 AT RS .102/- PER SQ. METER AND RE-COMPUTE THE SAME ACCORDINGLY. THU S, BOTH THESE CROSS-OBJECTIONS OF THE ASSESSEES ARE PARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND ALL THE THREE CROSS-OBJECTIONS FILED BY THE ASSESSE E ARE PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE COURT ON 4TH OF DECEMBER, 2 015 AT AHMEDABAD. SD/- SD/- ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 04/12/2015 *BT ITA NO. 2114 & CO NOS. 234 TO 236 AHD 2012 ITO VS. ISHWARLAL GULABBHAI DESAI+2 AY 2008-09 - 8 - / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. && ' / CONCERNED CIT 4. ' ( ) / THE CIT(A), 5. ()* $++ , , / DR, ITAT, AHMEDABAD 6. *, / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) ! , / ITAT, AHMEDABAD