Nigam R.Desai, Vapi V. The Income tax Officer,Vapi Ward-2, Vapi

CO 238/AHD/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1661 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 19-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MONIL SHAH
• Assessee Lawyers: ALBINUS TIRKEY
• Keywords: Cost of acquisition; Fair market value; Valuation report
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA NO: 2188/AHD/2012 & C.O. NO. 238/AHD/12 (ASSESSMENT YEAR: 2008-09) INCOME-TAX OFFICER, VAPI WARD-2,VAPI V/S NIGAM R. DESAI NEHRU STREET, VAPI (APPELLANT) (RESPONDENT) NIGAM R. DESAI NEHRU STREET, VAPI V/S INCOME-TAX OFFICER, VAPI WARD-2,VAPI (APPELLANT) (RESPONDENT) PAN: AIMPD0632R APPELLANT BY : SHRI ALBINUS TIRKEY, SR. D .R. RESPONDENT BY : MONIL SHAH ( )/ ORDER DATE OF HEARING : 08-12-2015 DATE OF PRONOUNCEMENT : 11-12-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL OF REVENUE AND C.O OF ASSESSEE ARE AGAI NST THE ORDER OF CIT(A), VALSAD, GUJARAT DATED 20.07.2012 FOR A.Y. 2 008-09. ITA NO. 2188/A/12 & C.O. NO. 238/A/12 . A.Y. 2008-0 9 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL WHO IN RESPONSE TO NOTICE U/S. 148 FILED HIS RETURN OF INCOME ON 25.04.2011 DECLARING TOTAL INCOME AT R S. 7,69,590/-. THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) R.W.S. 147 OF THE ACT BY ORDER DATED 14.10.2011 AND THE TOTAL INCOME WAS DETERMINED AT R S. 16,44,200/-. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE PREFERRED A PPEAL BEFORE LD. CIT(A) WHO VIDE ORDER DATED 20.07.2012 GRANTED PARTIAL REL IEF TO ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NO W IN APPEAL BEFORE US AND ASSESSEE HAS FILED C.O. THE GROUNDS RAISED BY R EVENUE READS AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) HAS IN GRANTING RELIEF TO THE ASSESSEE IN INCREASING FAIR MARKET VA LUE FOR THE YEAR 1981, WITHOUT CONSIDERING THE FACTS AND OF THE CASE IN ITS ENTIRE TY. 2. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. C IT(A) BE SET ASIDE AND THAT THE ORDER OF THE A.O BE RESTORED. 4. ON THE OTHER HAND THE GROUNDS RAISED BY THE ASSESSE E IN THE C.O READS AS UNDER:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED ASSESSING OFFICER HAS ERRED IN REOPENING CA SE OF ASSESSEE U/S 147. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN CONFIRMING ADDITION OF RS. 3,93,106/- OUT OF TOTAL ADDITION OF RS.8,74,592 /-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. ITA NO. 2188/A/12 & C.O. NO. 238/A/12 . A.Y. 2008-0 9 3 4. WE FIRST TAKE UP REVENUES APPEAL IN ITA NO. 2188/A HD/2012 5. ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF I NCOME WHICH INCLUDED CAPITAL GAINS ON SALE OF LAND OF RS. 7,69,585/-. TH E CAPITAL GAINS WAS CALCULATED BY THE ASSESSEE AFTER CONSIDERING THE CO ST OF ACQUISITION OF THE LAND AT RS. 103 PER SQ. MTR WHICH WAS CLAIMED TO BE THE MARKET VALUE OF THE LAND IN THE YEAR 1981-82. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF BABUBHAI DESAI HUF FOR A .Y. 2008-09, IT WAS NOTICED BY THE A.O THAT SHRI DESAI HAD SOLD THE LAN D WHICH WAS OWNED BY 13 CO-OWNERS AND ASSESSEE WAS ONE OF THEM. TO VERIF Y THE FAIR MARKET VALUE OF LAND IN CASE OF BABUBHAI DESAI HUF, LETTE R WAS ISSUED TO SUB- REGISTRAR, DAMAN TO PROVIDE THE FAIR MARKET VALUE/J ANTRI RATE PREVAILING IN THE AREA IN THE YEAR 1981 AND IN ITS RESPONSE, SUB- REGISTRAR INFORMED THAT THE RATE OF LAND RANGED BETWEEN RS. 33 TO 53 PER SQ . MTR. A.O ALSO NOTICED THAT IN CASE OF BABUBHAI DESAI (HUF), A CO- OWNER OF THE LAND, THE A.O HAD CONSIDERED THE COST OF ACQUISITION @ RS. 43 /- PER SQ. MTR AND WHICH WAS ACCEPTED BY BABUBHAI DESAI (HUF) AND ALSO BY SHRI NITESH BABUBHAI DESAI ANOTHER CO-OWNER. HE THEREFORE ADOPT ED THE COST OF ACQUISITION OF PROPERTY @ RS. 43/- PER SQ. MTR AS A GAINST THE RATE OF RS. 103 PER SQ. MTR. THAT WAS CONSIDERED BY ASSESSEE AN D REWORKED THE CAPITAL GAIN AND THE EXCESS AMOUNT OF RS. 8,74,592/ - AS WORKED OUT BY HIM WAS ADDED AS UNDISCLOSED LONG TERM CAPITAL GAIN S. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE LD . CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- ITA NO. 2188/A/12 & C.O. NO. 238/A/12 . A.Y. 2008-0 9 4 6.6 DECISION :-I HAVE CAREFULLY CONSIDERED THE FACT OF THE CASE. I HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION MAD E BY THE LAR. THE ISSUE HERE NEEDS ADJUDICATION IS WHAT SHOULD BE THE FAIR MARKE T VALUE OF HE INHERITED AGRICULTURAL LAND AS ON 01.04.1981 ? THE AO ADOPTED FMV AT RS.43/-( 33 + 55/2) PER SQ. MTRS. WHEREAS THE LAR MADE A CASE FOR THE FMV T O BE RS. 103/- PER SQ. MTRS. THE FINDINGS OF THE AO WAS BASED ON THE INFORMATION COLLECTED FROM SUB-REGISTRAR, DAMAN VIDE LETTER DATED 15.09.2010. IN THE SAID LET TER, THE SUB-REGISTRAR STATED THAT THE SALES STATISTICS RATE WAS BETWEEN RS. 33/- TO R S. 55/- PER SQ. MTR. FOR LAND IN THE YEAR 1981. THE AO AVERAGED OUT AND APPLIED RS. 43/- AS FMV AS ON 01.04.1981. ON THE OTHER HAND, THE APPELLANT'S ASCERTAIN FOR ADOPT ING FMV AT RS. 103/-. THE LAR SUPPORTED HIS ARGUMENTS BY SUBMITTING INDEPENDENT V ALUER'S REPORT , WHEREIN, THE FMV WAS DETERMINED AT RS. 1O8/- PER SQ. MTR. IN 198 1. FURTHER, THE LAR SUBMITTED A SALE AGREEMENT IN THE YEAR 1988 AND THE PROPERTY SU RVEY NO. 65/3-D SITUATED AT INDUSTRIAL ZONE AT RIGANWADA, WITHIN THE VILLAGE PA NCHAYAT JURISDICTION OF DABHEL, TALUKA OF DAMAN. THE FMV DETERMINED BY THE SUB-REGI STRAR IN THIS SALE DEED WAS RS. 99/- PER SQ. MTR. IN THE SUBMISSION MADE BY THE LAR ABOVE, VARIOUS ALTERNATIVE HAVE BEEN CONSIDERED TO IMPRESS FOR THE RATE SOUGHT BY THE APPELLANT. I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE. THE RATE CERTIFIED BY THE SUB- REGISTRAR WIDELY VARIES. AS RIGHTLY OBSERVED BY THE AO, THE CERTIFICATES SUBMITTED BY THE LAR WAS NOT PERTAINING TO THE APPELLANT BUT FOR A THIRD PARTY CALLED DHANPALBHAI J. RANKA. THERE WAS NO CONSISTENCY IN THE REPORT OF THE SUB-REGISTRAR. WHEREAS, THE CERTIFICATE OBTAINED BY DHANPALBHAI J. RANKA FOR TH E YEAR 2007 & 2008 WHERE THE RATE INDICATED WAS RS. 165/- PER SQ. MTR. BUT THE C ERTIFICATE OBTAINED BY THE AO IN THE YEAR 2010 FROM THE SAME SUB-REGISTRAR INDICATING PR EVAILING RATE AT RS. 33/- TO 55/- IN 1981. HOWEVER, THE LAR SUBMITTED OTHER ALTERNATI VE I.E. A SALE DEED OF 1988 AND VALUATION REPORT FROM AN INDEPENDENT VALUER. THE RA TE PER SQ. MTRS. INDICATED IN THE SALES DEED IN THE YEAR 1988 WAS RS. 99/- AND THE RA TE AS PER VALUER'S REPORT WAS RS.IOS/- FOR THE YEAR 1981. THE LAR ALSO OFFERED AN OTHER ALTERNATIVE THAT THE AVERAGE OF THE VALUE OF RS. 43/- ADOPTED BY THE ASSESSING O FFICER AND THAT OF RS. 165/- ADOPTED BY THE APPELLANT WHICH COMES TO RS. 104/- ( RS. 43/ - + RS.165/2) AND IS CLOSER TO THE VALUE OF RS. IO8/- DETERMINED BY THE APPROVED VALUE R PAREKH & ASSOCIATES MAY BE ITA NO. 2188/A/12 & C.O. NO. 238/A/12 . A.Y. 2008-0 9 5 ADOPTED. FROM THE PERUSAL OF VARIOUS ALTERNATIVE PU T FORTH BY THE LAR, IT IS CERTAIN THAT IF THE RATE IN 1988 WAS RS. 99/- PER SQ. MTR. IN THAT CASE THE RATE IN 1981 CANNOT BE RS. I6S/- PER SQ. MTR. AS REPORTED BY THE SUB-RE GISTRAR TO DHANPALBHAI J. RANKA. THEREFORE, AFTER CONSIDERING ALL THE ALTERNATIVES A GAINST THE FINDING OF THE AO, I AM OF THE OPINION THAT THERE IS A MERIT IN REWORKING OF F MV OF THE LAND IN 1981. THE AO HEAVILY RELIED ON THE CERTIFICATE FROM THE SUB-REGI STRAR TO ADOPT THE AVERAGE RATE AT RS. 43/- PER SQ. MTR. ON THE OTHER HAND, THE LAR OF FERED MANY ALTERNATIVES TO AUGMENT HIS CASE. DETERMINATION OF THE FAIR MARKET VALUE, IN THE PRESENT CIRCUMSTANCES, SUFFER FROM SUBJECTIVITY . HOWEVER, IN THE INTEREST OF JUSTICE AND CONSIDERING THE EVIDENCES ON RECORD, IN MY OPINION, A MIDDLE PATH HAS TO BE FOUND FOR COMPUTING FMV OF THE LAND IN QUESTION IN 1981. THE RATE ADOPTED BY THE AO AT RS. 43/- WHEREAS, THE LAR'S CLAIM AFTER AGGREGATING ALL 3 POSSIBLE OPTION WAS RS. IO8/- PER SQ. MTR. THEREFORE, IN MY CONSIDERED VIEW, THE FMV IN 1981 WORKED OUT IS THE AVERAGE OF(RS. 43/- + 108/-)/2 = RS. 75.50 PER SQ. MTR.( SAY RS. 76/-). THIS RATE IS VERY CLOSE TO THE ACTUAL RATE RS.99/- OFFICIALLY AV AILABLE ON RECORDS FOR THE YEAR 1988. IN OTHER WORDS, BACKWARD CALCULATION OF RATE FROM 1 988 TO 1981, THERE IS A DIFFERENCE OF RS.23/- FOR A PERIOD OF 7 YEARS. CONSIDERING THE EXISTING ECONOMIC SITUATION AT THAT TIME I.E. BETWEEN 1981 TO1988, AN INCREASE OF RS. 2 3/- IS JUSTIFIABLE. IN THESE CIRCUMSTANCES, I DIRECT THE AO TO ADOPT THE FMV FOR THE YEAR 1981 AT RS.76/- PER SQ. MTR. ACCORDINGLY, THIS GROUND OF APPEAL IS PARTLY A LLOWED. 6. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND LD. CIT(A) AND SUBMITTED THAT LD. CIT(A) AFTER CONSIDERING THE SUB MISSIONS GRANTED PARTIAL RELIEF TO THE ASSESSEE AND NO INTERFERENCE TO HIS ORDER IS CALLED FOR. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS THE DETERMINATION FAIR MARKET VALUE OF INHERITED LAND AS ON 01.04.1981. WE FIND THAT A.O H AD ADOPTED THE FAIR MARKET VALUE AT RS. 43/- PER SQ. MTR AS AGAINST RS. 103 PER SQ. MTR ITA NO. 2188/A/12 & C.O. NO. 238/A/12 . A.Y. 2008-0 9 6 CONSIDERED BY ASSESSEE. ON THE OTHER HAND, LD. CIT( A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FOR THE REASONS STATED IN HIS ORDER, HAS ADOPTED THE FAIR MARKET VALUE OF LAND FOR THE Y EAR 1981 AT RS. 76/- PER SQ. MTR. WE FIND THAT LD. CIT(A), AFTER CONSIDERING THE CONTENTIONS OF BOTH THE PARTIES NOTED THAT THE DETERMINATION OF FAIR MA RKET VALUE SUFFERS FROM SUBJECTIVITY AND THEREAFTER FOR THE REASONS STATED IN HIS ORDER, CONSIDERED THE FAIR MARKET VALUE OF LAND IN 1981 AT RS. 76/- P ER SQ. MTR WHICH ACCORDING TO HIM WAS ALSO CLOSE TO THE ACTUAL OFFIC IAL RATE FOR THE YEAR 1988. BEFORE US, REVENUE HAS NOT POINTED OUT ANY FA LLACY OR ERROR IN THE FINDINGS OF LD. CIT(A). IN VIEW OF THE AFORESAID FA CTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUND OF REVENUE IS DISMISSED. 8. AS FAR AS C.O IS CONCERNED, LD. A.R. DID NOT SERIOU SLY PRESS THE GROUNDS RAISED IN C.O THEREFORE THE SAME IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF REVENUE AND C.O OF ASS ESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11- 12 - 2015. SD/- SD/- (S.S. GODARA) (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.