Sh. Jagir Singh, Distt. Amritsar. V. The Income tax Officer, Amritsar.

CO 34/ASR/2013

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2057 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 10-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P N ARORA
• Assessee Lawyers: DR TARUNDEEP KAUR
• Keywords: Gift; Bonafide belief; Cost of acquisition; Fair market value; Reassessment proceedings; Borrowed satisfaction
• Section: 143(3); 133(6); 147; 148; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS.339 & 340(ASR)/2013 ASSESSMENT YEAR:2005-06 & 2006-07 PAN: CQBPS8755F INCOME TAX OFFICER, VS. SH. JAGIR SINGH WARD 4(2), AMRITSAR. S/O SH. RAM SINGH, VPO KHAN KOT, AMRITSAR (APPELLANT) (RESPONDENT) C.O. NOS.34 & 35(ASR)/2013 (ARISING OUT OF ITA NOS.339 & 340(ASR)/2013) ASSESSMENT YEAR:2005-06 & 2006-07 PAN: CQBPS8755F SH. JAGIR SINGH VS. INCOME TAX OFFICER, S/O SH. RAM SINGH, WARD 4(2), AMRITSAR. VPO KHAN KOT, AMRITSAR (APPELLANT) (RESPONDENT) DEPARTMENT BY: DR. TARUNDEEP KAUR, DR RESPONDENT BY: SH. P.N.ARORA, ADVOCATE DATE OF HEARING:26/11/2015 DATE OF PRONOUNCEMENT:25/02/2016 ORDER PER A.D. JAIN, JM; THESE ARE THE DEPARTMENTS APPEALS FOR THE ASSESS MENT YEAR 2005- 06 & 2006-07, AGAINST THE ORDERS, EACH DATED 22.03. 2013, PASSED BY THE LD. CIT(A), AMRITSAR. THE ASSESSEE HAS ALSO FILED C ROSS OBJECTIONS. AS THE ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 2 ISSUES INVOLVED IN BOTH THE APPEALS ARE COMMON, THE SE APPEALS AND CROSS OBJECTIONS ARE BEING DECIDED TOGETHER BY TH IS CONSOLIDATED ORDER. 2. THE DEPARTMENT HAS RAISED THE FOLLOWING COMMON GROUNDS IN BOTH THE APPEALS: 1. WHETHER THE LD. CIT(APPEALS), IS CORRECT IN AC CEPTING THE ESTIMATED FAIR MARKET VALUE OF THE LAND IN QUESTIO N AT RS.6,50,000/- PER ACRE TREATING THE SAME AS COMMERC IAL LAND WITHOUT ANY BASIS FOR DETERMINING THE COMMERCIAL VA LUE AS ON 1.4.81, AS COMPARED TO THE RATE OF RS.40,000/- PER ACRE ADOPTED BY THE A.O., WHEN THERE WAS NO CONCEPT OF COMMERCIAL COMPLEXES, MULTI-COMPLEXES OR SHOPPING COMPLEXES EVEN IN URBAN AREAS NOT TO TALK OF THE V ILLAGE IN WHICH THE LAND IS SITUATED. 2. WHETHER THE LD. CIT(APPEALS), IS CORRECT IN ACCE PTING THE VALUE OF THE LAND IN QUESTION AT RS.6,50,000/- PER ACRE TREATING IT AS COMMERCIAL WITHOUT RECORDING HER OWN SATISFACTION REGARDING THE ACCEPTANCE OF THE VALUE SO REFERRED BY TEHSILDAR, AMRITSAR-1, RECEIVED ON 11.02.2013 BY THE ASSESSING OFFICER. 3. WHETHER THE LD. CIT(APPEALS), IS CORRECT IN REJE CTING THE RATE OF RS.40,000/- PER ACRE APPLIED BY THE AO AT THE TI ME OF ASSESSMENT WITHOUT ASSIGNING ANY REASONS. 3. IN THE CROSS OBJECTIONS, THE ASSESSEE HAS RAISED THE FOLLOWING COMMON GROUNDS: 1. THAT THE LD. CIT (APPEALS) WAS FULLY JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F LONG TERM CAPITAL GAIN. THE LD. CIT (APPEALS) IS CORRECT ON THE FACTS AS WELL AS ON THE LAW BY ADOPTING THE FAIR MA RKET VALUE OF THE LAND OF THE ASSESSEE AT RS. 6,50,000/- PER A CRE, FOR DETERMINING THE COST OF ITS ACQUISITION FOR THE PUR POSE OF COMPUTING THE CAPITAL GAIN. 2. THAT THE LD. CIT (APPEALS) HAS CONSIDERED ALL T HE FACTS AND MATERIAL AVAILABLE ON THE RECORD WHILE ACCEPTING TH E FAIR MARKET VALUE OF THE LAND AT RS. 6,50,000/- PER ACRE AS ON ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 3 01/04/1981.THE DEPARTMENT HAS FULLY ACCEPTED THE RE PORT OF THE TEHSILDAR ON THE BASIS OF WHICH THE REMAND R EPORT WAS SENT BY THE AO AND ON THAT VERY BASIS OF THE REMAND REPORT THE WORTHY CIT (APPEALS) HAS DELETED THE SAID ADDIT ION AND THE DEPARTMENT HAS GOT NO BASIS AND JUSTIFICATION A ND REASON FOR COMING IN APPEAL BEFORE THE TRIBUNAL. THUS THE DEPARTMENT HAS BLOWN HOT & COLD IN THE SAME BREATH ESPECIALLY WHEN THE REMAND REPORT HAS BEEN SENT BY THE AO TO THE LD. CIT (APPEALS) ON THE BASIS OF WHICH THE ADDITION HAS BEEN DELETED. THUS THE APPEAL OF THE DEPARTMENT MAY BE DISMISSED AND THE CIT(APPEALS) WAS FULLY JUSTIFIED IN DELETING THE ADDITION. 3. THAT THE LD. CIT (APPEALS) HAS GROSSLY ERRED IN COM ING TO THE CONCLUSION THAT THE ISSUE OF NOTICE UNDER SECTI ON 148 OF THE INCOME-TAX ACT, 1961, IS VALID. THAT THE LD. CI T (APPEALS) MISERABLY FAILED TO APPRECIATE THAT NOTIC E UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961, IS ILLEGAL , INVALID AND VOID AB-INITIO AS THE REASONS RECORDED ARE UN-D ATED AND WITHOUT THE SIGNATURES OF THE AO AND THERE WAS NO APPLICATION OF MIND BY THE AO WHILE ISSUING THE NOT ICE UNDER SECTION 148 OF THE ACT, AS THE CASE HAS BEEN RE- OPENED ON BORROWED SATISFACTION. SINCE THE REASONS RECORDED FOR RE-OPENING THE CASE UNDER SECTION 148 OF THE I.T. ACT, 1961, ARE UN-SIGNED AND THERE IS NO APPLI CATION OF MIND AND THERE IS NO SATISFACTION OF THE AO FOR RE- OPENING THE CASE, AS SUCH THE INITIATION OF PROCEEDINGS IS BAD IN LAW AND THE SAME DESERVES TO BE CANCELLED. AS SUCH THE ASSESSMENT COMPLETED ON THE BASIS OF SUCH ILLEGAL N OTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961, IS L IABLE TO BE CANCELLED AND AS SUCH THE ASSESSMENT PROCEEDINGS ARE LIABLE TO BE QUASHED. 4. ANY OTHER GROUND OF CROSS OF OBJECTION WHICH MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 4. THE BRIEF FACTS, AS CULLED OUT FROM ITA NO.339(ASR) /2013 ARE THAT INFORMATION WAS RECEIVED BY THE AO FROM ITO, WARD 5 (4), AMRITSAR THAT THE ASSESSEE HAD GIVEN GIFTS OF RS.52 LACS AND RS.1 6 LACS TO HIS SONS AND THAT HE HAD DEPOSITED RS.2,63,06,666/- IN SB A/C NO S. 650410100002678 & NO.65041010004042 WITH BOI, KASHM IR AVE., ASR. HENCE THE CASE WAS REOPENED U/S. 147 BY ISSUING NOT ICE U/S.148 ON ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 4 13.02.2009. EX-PARTE ASSESSMENT ORDER WAS PASSED ON 29.12.09 AS THE ASSESSEE FAILED TO COMPLY TO NOTICES UNDER SECTIONS 148 AND 142(1). THE ENTIRE DEPOSIT OF RS.2,63,06,666/-IN THE BANK WAS T REATED AS UNEXPLAINED INCOME. 4.1. A REVISION PETITION U/S.264 WAS FILED BY THE A SSESSEE BEFORE CIT-II, AMRITSAR ON 24.12.2010 STATING THEREIN, THAT THE AS SESSEE HAD ENTERED INTO AN AGREEMENT WITH IMPACT PROJECTS PVT. LTD. IN FINANCIAL YEAR 2003- 04 AND A MAJOR PORTION OF HIS AGRICULTURAL LAND WAS SOLD TO THE SAID COMPANY. 49 KANAL-16 MARLAS OF LAND WAS SOLD FOR RS . 1,99,20,000/- IN FINANCIAL YEAR 2004-05 AND 69 KANALS OF LAND WAS SO LD FOR RS.2,70,00,000/- IN THE FINANCIAL YEAR 2005-06. THU S, OUT OF 124 K, 19 M OF LAND, 118 K-15M OF LAND HAD BEEN SOLD FOR A SUM OF RS.4,75,20,000/-. THE ASSESSEE CLAIMED THAT HE HAD NOT FILED RETURN OF INCOME, AS HE WAS UNDER THE BONAFIDE BELIEF THAT THE SALE OF AGRICULT URAL LAND WAS NOT LIABLE TO INCOME TAX. IT WAS ALSO STATED THAT THE ENTIRE C REDIT IN THE BANK SHOULD HAVE BEEN TAXED AT A FLAT RATE OF 20%, AS AP PLICABLE TO LONG TERM CAPITAL GAINS. THE PETITION U/S.264 MADE BY THE ASSESSEE WAS ACCEPTED BY THE CIT-II, AMRITSAR AND THE AO WAS DIRECTED TO WORK OUT THE LONG TERM CAPITAL GAIN TAX AND PASS THE ASSESSMENT ORDER ACCORDINGLY. 4.2 IN THE REASSESSMENT PROCEEDINGS, PURSUANT TO CIT-II, AMRITSARS DIRECTIONS U/S.264, THE COUNSEL OF THE ASSESSEE FUR NISHED A CHART OF COMPUTATION OF INCOME, SHOWING RS.2,08,604/- AS INT EREST INCOME AND LTCG AT RS.4,13,850/-. FOR ARRIVING AT THE LTC GAIN , THE ASSESSEE HAD ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 5 TAKEN THE COST OF ACQUISITION AS ON 1.4.1981 AT RS. 6,50,000 PER ACRE ON THE BASIS OF CERTIFICATE OF RATE GIVEN ON 21.4.2011 BY S.GURASHARAN, EX.SARPANCH, KHANKOT, S.AJIT SINGH, SARPANCH, S.HAR PARKASH SINGH, S.MANJIT SINGH AND COUNTERSIGNED BY THE TEHSILDAR, AMRITSAR-I, AMRITSAR. THE AO HAD ALSO OBTAINED THE RATES OF THE LAND SITU ATED AT VILLAGE KHANKOT U/S. L33(6) FROM THE TEHSILDAR -I, AMRITSAR AT RS.40,000/- PER ACRE. THE INDEXED COST AS ON 1.4.1981 WAS TAKEN BY THE AO AT RS.40,000/- FOR THE LAND MEASURING 49 KANALS - 16 M ARLAS AND WORKED OUT THE LTC GAIN AT RS. 1,87,24,800/-. THE NET ASSE SSABLE LTC GAIN WAS TAKEN AT RS. 1,55,60,760/- AFTER GIVING EXEMPTION O F RS.31,64,040/- .AGGRIEVED WITH THE ORDER OF THE AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). 4.3. DURING THE APPELLATE PROCEEDINGS, THE ID. A .R. FOR THE ASSESSEE ATTENDED AND FURNISHED WRITTEN SUBMISSIONS AND SUPP LEMENTARY WRITTEN SUBMISSIONS FROM TIME TO TIME. IN ORDER TO ASCERTAI N THE TRUE FACTS AFTER CARRYING OUT FACTUAL VERIFICATION, THE AOS REMAND REPORT WAS ALSO OBTAINED, TO WHICH, A REBUTTAL WAS FILED BY THE ASS ESSEE. 5. IN THE PAPER BOOK DATED 9/11/12, THE COUNSEL SU BMITTED THE FOLLOWING DETAILS BEFORE THE LD. CIT(A): SL. PARTICULAR PAGE NO. 1 COPY OF REPLY FILED BEFORE ITO, WARD 4[2]AMITSAR ON 11.5.11 1-3 2. COPY OF QUESTIONNAIRE DT.23.5.11 ISSUED BY ITO W 4[2], ASR 4 ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 6 3. COPY OF REPLY IN RESPONSE TO ABOVE QUESTIONNAIRE FILED BEFORE ITO WARD 4[2]ASR 5-6 4. COPY OF REPLY FILED BEFORE ITO, WARD 4[2], AMRIT SAR 7 5. COPY OF REPLY FILED BEFORE ITO, W 4[2]=,ASR ALONG WITH COPY OF JAMABANDI 8-11 6. COPY OF CERTIFICATE OBTAINED FROM TEHSILDAR, SAR PANCH & EX- SARPANCH 12-15 7. COPY OF COMPUTATION OF INCOME 16-17 8. COPY OF REPLY DT. 1.12.11 FILED BEFORE ITO, W4[2 ]ASR 18-20 9. COPY OF REPLY FILED BEFORE ITO WARD 4[2],ASR AL ONGWITH COPY OF MAP SHOWING THE EXACT LOCATION OF LAND 21-23 10. COPY OF REPLY DT. 12.12.11 FILED BEFORE ITO WARD4[2]ASR 24 11. COPY OF REASONS RECORDED FOR REOPENING THE CASE 25 12. COPY OF NOTICE U/S.148 DT. 15.2.09 ISSUED BY IT O WE 4[2] ASR 26 13. COPY OF COMPUTATION OF INCOME OF THE ASSESSEE R ELATING TO ASSTT. YEAR 2005-06 27-28 14. DECISION OF ITAT, ASR BENCH, AMRITSAR IN THE CA SE OF SH.SANJEEV AGGARWAL, PP: SHREE SATYA GURU RUBBER MILLS V DCIT, CIR.IV, ASR IN ITA NO.547/ASR/201 L- ASSTT.YR.01-02 ORDER DT.1.11.12 29-37 15. STATEMENT OF FACTS 38-41 6. THE LD. CIT(A) OBSERVED AS UNDER: ON THE ISSUE OF COMPUTATION OF LONG TERM CAPITAL GA IN, THE ASSESSEE HAS STATED THAT THE RATE OF RS.6,50,000/- PER ACRE WAS GIVEN BY DIFFERENT OFFICERS AND BASED ON MARKE T RATE ON THE EXACT LOCATION OF LAND WHEREAS THE CERTIFICATE GIVEN TO THE AO IS OF ONE OFFICER!] ANOTHER PAPER BOOK WAS SUBMI TTED ON 30/11/2012 WHERE THE LEGALITY OF ACTION U/S.148 OF THE AO WAS AGAIN QUESTIONED. THE SUBMISSIONS STATED THAT INFORMATION COLLECTED AT THE BACK OF THE ASSESSEE C ANNOT BE UTILIZED AGAINST THE ASSESSEE IN THE COURSE OF ASSE SSMENT PROCEEDINGS AS NO CROSS EXAMINATION WAS ALLOWED. TO SUPPORT THE RATE APPLIED BY HIM, THE COUNSEL OF THE ASSESSEE HAD PRODUCED COPY OF PREVAILING CURRENT CI RCLE RATES AND JUSTIFIED HIMSELF BY SAYING THAT IF INDEXATION IS STARTED FROM BOTTOM BY ADOPTING THE CORRECT CIRCLE RATE, TH E INDEX RATE AS ON 1.4.81 WILL COME TO RS.7,04,225/ACRE AGAINST RS.6,50,000/- SHOWN BY THE APPELLANT. ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 7 IN RESPONSE TO THE TWO WRITTEN SUBMISSIONS OF THE A SSESSEE, THE AO THROUGH HIS REMAND REPORT DATED 6.3.2013 HAS COMMENTED AS UNDER: 6. IT IS SUBMITTED THAT IN THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEES COUNSEL HAS SUBMITTED T HAT FROM PERUSAL OF THE REASONS RECORDED, IT IS CRYSTA L CLEAR THAT THE CASE HAS BEEN REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM ITO 5[4], AMRITSAR. IT CL EARLY SHOWS THAT THERE WAS NO APPLICATION OF MIND BYTHE A O WHILE REOPENING THE CASE AND THE CASE HAS BEEN REOPENED ON THE BASIS OF BORROWED SATISFACTION OF T HE OTHER ASSESSING OFFICER. THUS, THERE IS NO APPLICAT ION OF MIND BY THE AO AND THE CASE HAS BEEN REOPENED ON TH E BASIS OF BORROWED SATISFACTION, THEPROCEEDINGS INIT IATED ARE NOTVALID AND ACCORDINGLY, THE ASSESSMENT IS LIA BLE TO BE CANCELLED. IN THIS CONNECTION, IT IS SUBMITTED THAT THE INFORM ATION IN THE CASE OF SHRI JAGIR SINGH, THE ASSESSEE, WAS PAS SED ON TO THE INCOME TAX OFFICER, WARD 4[2], AMRITSAR F OR THE ASSTT. YEARS 2005-06 AND 2006-07 BY THE ITO, WARD 5[4] , ASR VIDE HIS OFFICE LETTER NO. 11697 DT.29.1 .09. AS PER THE INFORMATION RECEIVED FROM THE INCOME TAX OFFICER, WARD 5[4], AMRITSAR, THE ASSESSEE HAD SOLD HIS AGRICULTURAL LAND WHICH FALLS WITHIN THE MUNICIPAL LIMIT. AFER THE RECEIPT OF INFORMATION FROM THE ITO, WARD 5[4], AMRITSAR, THE INFORMATION WAS CONSIDERED THOROUGHLY BY MY PREDECESSOR AND CONSULTED THE INCOME TX RECORD T O ASCERTAIN WHETHER THE ASSESSEE HAS FILED HIS INCOME TAX RETURN FOR THE ASSTT. YEAR UNDER CONSIDERATION OR N OT. IT IS ONLY AFTER ASCERTAINING THAT THE ASSESSEE HAS NO T FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND AFTER APPLICATION OF HER MIND, MY PREDECESSOR FORMED HER BELIEF THAT THE ASSESSEE HAS ESCAPED HIS INCOME FOR THE YEAR UNDER CONSIDERATION . ACCORDINGLY, THE PROCEEDINGS U/S.147 OF THE I.T.ACT,1961 WERE INITIATED BY HER AND NOTICE U/S.1 48 WAS ISSUED AFTER RECORDING REASONS FOR THE ASSTT. Y EAR UNDER CONSIDERATION. IN VIEW OF THESE FACTS, IT CAN NOT BE SAID THAT THERE WAS NO APPLICATION OF MIND BY THE A O WHILE REOPENING THE CASE AND THE CASE HAS BEEN REOPENED ON THE BASIS OF BORROWED SATISFACTION OF T HE OTHER ASSESSING OFFICER ONLY. ACCORDINGLY, THE ASST T. ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 8 PROCEEDINGS INITIATED U/S.147 OF THE IT ACT, 1961 A RE VALID AND THE ASSTT. IS NOT LIABLE TO BE CANCELLED. 7. FURTHER, IN HIS WRITTEN SUBMISSIONS FILED DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEES COU NSEL STATED THAT EVEN ON MERITS, THE CASE DESERVES TO BE ACCEPTED. THE ONLY QUESTION, WHICH IS INVOLVED, IS THAT THE INDEXED COST AS ON 1.4.81 HAS BEEN TAKEN AT RS.40,000 PER ACRE BY THE DEPTT. AGAINST THE COST T AKEN BY THE ASSESSEE AT RS. 6,50,000 PERACRE OF AGRICULT URAL LAND. IN THIS REGARD, IT MAY BE SUBMITTED THAT THE CERTIFICATE SUBMITTED BY US WAS ISSUED BY DIFFERENT OFFICERS AND IS BASED ON PREVAILING MARKET RATES AN D ALSO OF THE EXACT LOCATION OF LAND. THIS FACT HAS B EEN APPRECIATED BY THE AO. THUS, THE CERTIFICATE COLLEC TED BY THE AO DOES NOT HAVE ANY LEGAL VALUE IN VIEW OF THE FOLLOWING FACTS: 1. THAT THE CERTIFICATE PRESENTED BY THE ASSESSEE SIGNED BY FOUR DIFFERENT OFFICERS AND IS A GOOD CERTIFICATE. 2. THAT THE CERTIFICATE GIVEN BY ONE OFFICER TO THE AO DOES NOT HAVE ANY LEGAL VALUE BECAUSE THE ASSESSEE NEVER GOT ANY OPPORTUNITY TO REBUT THE SAME. THUS, THE POINT INVOLVED IS THAT WHY THE AO HAS IGNORED THE CERTIFICATE BY FOUR DIFFERENT OFFICERS WHICH WAS FILED BY THE ASSESSEE. THUS, THE MATERIAL COLLECTED BY THE AO DOES NOT HAV E ANY LEGAL SANCTITY AGAINST THE CERTIFICATE FURNISHE D BY THE ASSESSEE, WHICH IS SIGNED BY FOUR DIFFERENT OFF ICERS. A COPY OF CERTIFICATE FURNISHED BY THE ASSESSEE IS PLACED AT PAGE NO. 13 OF THE PAPER BOOK. THUS, VIEWED FROM ALL THE ANGLES AND THE VALUATION BASED ON INDEX AT RS.650000 MAY BE ACCEPTED. 8. IN VIEW OF THE ABOVE FACTS, A LETTER WAS WRITTEN TO THE TEHSILDAR, AMRITSAR-I, AMRITSAR BY THIS OFFICE VIDE THIS OFFICE LETTER DATED 19.12.2012 REQUESTING HIM TO GO THROUGH THE TWO LETTERS WHICH HAVE BEEN ISSUED BY T HEIR DEPTT. AND INTIMATE THIS OFFICE THE CORRECT FAIR MA RKET VALUE OF THE ABOVE SAID LAND AS ON 1.4.81 KEEPING I N VIEW THE SITUATION AND LOCATION OF THE LAND IN QUES TION. THE SAID LETTER IS REPRODUCED AS UNDER FOR YOUR KI ND PERUSAL: ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 9 AS PER YOUR OFFICE LETTER NO. 676 DT. 18.11.11 (CO PY ENCLOSED), IT WAS INTIMATED THAT THE FAIR MARKET VA LUE OF LAND PER ACRE AS ON 1.4.81 SITUATED AT VILLAGE KHAN KOT BEARING KHASRA NOS.48/21-22, 6/2-9-15/1-16/2- 17/1/24-25, 54/4- 5-7,54/14/1-17,55/1-2-9/1 54/ 6- 2-14/2-15, 55-9/2, 54/ 6/1 55/9/3-10 TOTALLING 118 KANALS 14 MARLS IS APPROXIMATELY RS.35,000 TO RS.40,000 PER ACRE. 3. THE ASSESSEE HAD SOLD THE ABOVE MENTIONED LAND O N DIFFERENT DATES DURING THE FINANCIAL YEAR 2004-05 & 2005-06 AND ON THE BASIS OF THE ABOVE FAIR MARKET VALUE AS ON 1/4/81, THE COST OF ACQUISITION OF THE ABOVE LAND WAS DETERMINED AND CONSEQUENTLY THE LONG TERM CAPITAL GAIN FOR THE ASSESSMENT YEAR 2005-06 & 2006 - 07 WAS WORKED OUT BY THE THEN INCOME TAX OFFICER, WARD [2], AMRITSAR VIDE HER ORDER U/S.L43[3] DATED 15.12.2011. 4. BEING AGGRIEVED WITH THE ABOVE AND ASSESSMENT ORDER, THE ASSESSEE FILED APPEALS FOR THE ASSESSMEN T YEARS 2005-06 AND 2006-07 BEFORE THE ID. COMMISSIONER OF INCOME TAX [APPEALS], AMRITSAR. DUR ING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE ID. COMMISSIONER OF INCOME TAX [APPEALS], THE ASSESSEE HAD FILED A COPY OF LETTER DATED 11.4.2011 (COPY ENCLOSED FOR YOUR PERUSAL) IN WHICH THE RATE OF RS. 6,50,000/- PER ACRE HAS BEEN DETERMINED. THIS COPY OF LETTER HAS BEEN ISSUED BY YOUR OFFICE AND SIGNED BY FOUR DIFFERENT OFFICERS FOR THE ABOVE MENTIONED LAND AND KHASRA NOS. DURING THE COURSE OF APPELLATE PROCEEDI NGS, THE ASSESSEE HAS SUBMITTED THAT THE MATERIAL COLLEC TED BY THE ASSESSING OFFICER DOES NOT HAVE ANY LEGAL SANCTITY AGAINST THE CERTIFICATE FURNISHED BY THE ASSESSEE, WHICH IS SIGNED BY FOUR DIFFERENT OFFICER S. 5. IN VIEW OF THE ABOVE FACTS, YOU ARE REQUESTED TO KINDLY GO THROUGH THE ABOVE SAID TWO LETTERS WHICH HAVE BEEN ISSUED BY YOUR DEPTT. AND INTIMATE THIS OFFICE THE CORRECT FAIR MARKET VALUE OF THE ABOVE SAID LAND AS ON 01.04.1981 KEEPING IN VIEW THE SITUATION AND LOCATI ON OF THE LAND IN QUESTION. 6. AS A REMAND REPORT IS TO BE SUBMITTED BY THIS OF FICE TO THE OFFICE OF THE ID. COMMISSIONER OF INCOME TAX (APPEALS), AMRITSAR, IT IS REQUESTED THAT THE FAIR MARKET ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 10 VALUE OF THE ABOVE SAID LAND AS ON 1.4.81 MAY KINDL Y BE INTIMATED TO THIS OFFICE. 9. IN RESPONSE TO THE ABOVE SAID LETTER OF THIS OFF ICE, TEHSILDAR, AMRITSAR-I, AMRITSAR HAS SUBMITTED HIS REPORT IN PU NJABI ALONGWITH REPORT OF THE CONCERNED PATWARI WHICH HAS BEEN RECEIVED IN THIS OFFICE ON 11.2.2013 VIDE RECEIPT N O.4942 CONTAINING 7 PAGES [PHOTOCOPY ENCLOSED FOR YOUR KIN D PERUSAL]. THE REPORT SUBMITTED BY TEHSILDAR, AMRITSAR-I, AMRI TSAR IS REPRODUCED IN ENGLISH AS UNDER: WITH REFERENCE TO ABOVE, IT IS SUBMITTED THAT RS.35,000/- - RS.40,000/- WAS THE RATE OF ORDINARY LAND AT THAT TIME WHEREAS KHASRA NO.48/21- 22/49/6/2, 49/9 15/1, 16/2,17/1, 24-25, 54/4/5- 7,14/1-17, 6/2-14/2-54/15-6/1,55/1-2, 9/1, 9/2, 9/3-10 ARE TREATED AS COMMERCIAL BEING SITUATED ON ROAD. THEREFORE, ESTIMATED VALUE AT THAT TIME WAS RS.6,50,000/-. THE DIFFERENCE IN BOTH THE REPORTS I S RELATED TO ENTRIES OF KHASRA NOS. 10. IN VIEW OF THE ABOVE DETAILED SUBMISSIONS, IT I S REQUESTED THAT THE APPEAL FILED BY THE ASSESSEE FOR THE ASSTT . YEAR UNDER CONSIDERATION MAY KINDLY BE DECIDED ON MERITS KEEPI NG IN VIEW BOTH THE REPORTS SUBMITTED BY TEHSILDAR, AMRIT SAR-I, AMRITSAR. 7. CHALLENGING THE IMPUGNED ORDER, THE LD. DR HAS C ONTENDED THAT THE LD. CIT(A) HAS ERRED IN ACCEPTING THE AMOUNT OF RS.6,50,000/- TO BE THE FAIR MARKET VALUE PER ACRE OF THE LAND SOLD BY THE ASSESSEE; THAT WHILE DOING SO, THE LD. CIT(A) HAS GONE WRONG IN TR EATING THE LAND IN QUESTION AS COMMERCIAL LAND; THAT FOR DOING SO, THE LD. CIT(A) HAS NOT GIVEN ANY BASIS; THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE A.O. HAD CORRECTLY TAKEN THE RATE OF RS.40,000/- PER ACR E AS THE COMMERCIAL VALUE OF THE LAND AS ON 01.04.1981, AT WHICH RELEVA NT TIME, EVEN IN URBAN AREAS, SHOPPING COMPLEXES, COMMERCIAL COMPLEX ES OR MULTI- ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 11 COMPLEXES HAD HITHERTO NOT COME INTO EXISTENCE; AN D THAT WHEREAS, THE LAND IN QUESTION WAS SITUATED IN A VILLAGE AND, THU S, IT WAS NOT URBAN LAND, WHICH COULD FETCH SUCH A FANTASTIC RATE; THAT REMARKABLY WHILE ACCEPTING THE VALUE OF THE LAND IN QUESTION TO BE RS.6,50,000/- PER ACRE, THE LD. CIT(A) FELL IN ERROR IN NOT EVEN RECORDIN G HER OWN SATISFACTION, SUCH VALUE HAVING BEEN REFERRED BY THE TEHSILDAR-1, AMRITSAR, AS RECEIVED BY THE AO ON 11.02.2013. 8. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT WHILE RIGHTLY ACCEPTING AND ADOPTING THE FAIR MARKET VAL UE OF THE LAND OF THE ASSESSEE AT RS.6,50,000/- PER ACRE FOR DETERMINING THE COST OF ITS ACQUISITION FOR THE PURPOSE OF COMPUTING LONG-TERM CAPITAL GAIN ON THE SALE THEREOF, THE LD. CIT(A) HAS DULY TAKEN INTO CO NSIDERATION ALL MATERIAL FACTS AND EVIDENCE AVAILABLE ON RECORD. IT HAS BEEN SUBMITTED THAT THE REPORT OF THE TEHSILDAR, AS ACCEPTED BY THE AO IN H IS REMAND REPORT, HAS CORRECTLY BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT(A) AND THE ADDITION WRONGLY MADE BY THE AO, BEING LEGALLY UNSUSTAINABLE , HAS RIGHTLY BEEN DELETED BY THE LD. CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD. TO ARRIVE AT THE LONG TERM CAPITA L GAIN ON THE SALE OF HIS AGRICULTURAL LAND, THE ASSESSEE TOOK THE COST OF AC QUISITION OF THE SAID LAND AS ON 01.04.1981 AT RS.6,50,000/- PER ACRE. TH IS VALUE WAS BASED ON A CERTIFICATE OF RATE, DATED 21.04.2011. THIS CE RTIFICATE WAS ISSUED BY ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 12 S. GURDARSHAN SINGH, EX-SARPANCH KHANKOT, S. AJIT S INGH, SARPANCH, S. HARPARKASH SINGH AND S. MANJIT SINGH. IT WAS COUNTE R-SIGNED BY THE TEHSILDAR, AMRITSAR-1. A COPY OF THIS CERTIFICATE ( ORIGINAL VERNACULAR PUNJABI) HAS BEEN APPENDED AT APB (AY 2005-06) 12- 15. THE ENGLISH TRANSLATION THEREOF IS AT APB (AY 2005-06) 12A-15A. IT WOULD BE APPROPRIATE TO REPRODUCE HEREUNDER, THE RELEVANT PO RTIONS THEREOF: RESPECTED SIR, ACCORDING TO THE VERIFICATION OF AJIT SINGH SARPANC GURDARSHAN SINDI FORMER SARPANCH, HARPARKASH SINGH SON OF SUKH JIT SINGH , AJIT SINGH SON OF RATTAN SINGH ARE ENQUIRED AT THE SPOT AND LAND BEARING KHASRA NO. 48 49 21-22 6/2, 9, 15/L-16/2-17/1, 24 25 55 54 55/9/2, 54/6/1, 55/9/3-10, 1-2, 9/1 6/2-14/2-15 24 PIECES MEASURING 130 -2 KANALS SITUATED IN THE A REA OF VILLAGE KHANKOT TEHSIL AMRITSR I, PRICE OF (MARKET PRICE) THE SAME RS 6,50,000/- PER ACRE ( SIX LAKH FIFTY THOUSA NDS ONLY) FOR THE YEAR 1980-81 IS VERIFIED. FOR TAKING NECESS ARY ACTION THIS IS PRESENTED TO HIGHER OFFICER SUKHJIT SINGH PATWARI 21.4.11 SD/-GURDARSHAN SINGH EX SARPANCH KHANKOT AJIT SINGH SARPANCH SD/- HARPARKASH SINGH ENGLISH SD/- MANJIT SINCH SON OF RATTAN SINGH REPORT OF THE PATWARI IS CORRECT A ND PRESENTED FOR FURTHER SD/- 21 4]2011 SD/-TEHSILDR AMRITSR I 25-4-11 ACCORDING TO VERIFICATION OF AJIT SINGH SARPANCH, GURDARSHAN SINGH FORMER SARPANCH, HARPARKASH SINGH SON OF SUKH JIT SINGH, MANJIT SINGH SON OF RATTAN SINGH ARE ENQUIRED AND I N CONNECTION WITH THE S A ME INSPECTION OF THE SPOT IS MADE BEARING KHASRA NO.48/21-22, 49//6/2,15/1,16/2, 17/1 , 24- 25, 54/4-5-7-14/1, 55//17-1-2-9/1, 54//6/2-14/2, I5 55/9/2, 54//6/1, 55//9/3,10, 130 KANALS 2 MARLAS 24 P'IECES SITUATED IN THE AREA OF KHANKOT ( TEHSIL AMRITSAR-I ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 13 MARKET PRICE OF THE SAME IS RS 650000/- PER ACRE (R UPEES SIX LAKHS FIFTY THOUSANDS ONLY) IN THE YEAR 1980-81 IS VERIFIED REPORT IS PRESENTED FOR FURTHER ACTION SD/-20.7.11 SD/- TEHSILDAR AMRITSAR I 25-7-2011 GURDARSHAN SINGH EX-SARPANCH KHANKOT ENGLISH AJIT S INGH SARPANCH GURMAKHI V HARPARKASH SINGH ENGLISH SON OF SUKHJIT SINGH SD/~ MANJIT SINGH SON OF RATTAN SINGH. 10. THE AO, HOWEVER, ON HIS PART, MADE INVESTIGATIO N AND OBTAINED, U/S 133(6), THE RATES OF THE LAND SITUATED AT VILLA GE KHANKOT, WHERE THE LAND UNDER CONSIDERATION WAS LOCATED. THE TEHSILDA R-1, AMRITSAR, GAVE THIS RATE TO BE RS.40,000/- PER ACRE, WHICH RATE WA S ACCEPTED BY THE AO, AS AGAINST THAT F RS.6,50,000/- PER ACRE CLAIMED BY THE ASSESSEE. 11 IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT( A), THE ASSESSEE PLACED RELIANCE ON THE AFORESAID CERTIFICATE ISSUED BY S. GURDARSHAN SINGH, EX-SARPANCH KHANKOT, S. AJIT SINGH, SARPANCH , S. HARPARKASH SINGH AND S. MANJIT SINGH. THE LD. CIT(A) HAS ACCEP TED THIS CERTIFICATE TO BE CORRECT AND HE HAS TAKEN THE RATE OF RS.6,50,000 /- PER ACRE, AS CLAIMED BY THE ASSESSEE, TO BE THE CORRECT RATE OF THE LAND AS ON 01.04.1981. THE QUESTION AS TO WHETHER THIS ACTION OF THE LD. CIT(A) IS JUSTIFIED OR NOT. 12. AS PER THE ASSESSMENT ORDER, THE AO CALLED FOR INFORMATION U/S 133(6) OF THE ACT FROM THE TEHSILDAR, AMRITSAR-1, R EGARDING THE RATES OF LAND SITUATED AT VILLAGE KHANKOT AS ON 1.4.1981. TH E TEHSILDAR, AMRITSAR- 1, SUBMITTED HIS REPORT TO THE AO. THE AO SCANNED THE COPY OF THE SAID VERNACULAR REPORT IN PUNJABI, WHICH FORMS PART OF THE ASSESSMENT ORDER. ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 14 A COPY THEREOF IS AT APB 69. THE ENGLISH TRANSLATIO N THEREOF, IS AT APB (AY 2005-06) 69A. THIS REPORT READS AS FOLLOWS: THIS IS TO CERTIFY THAT MARKET VALUE OF AGRICULTUR E LAND OF VILL. KHANKOT, TEH. & DISTT. AMRITSAR ON 01.04.1981 HAS B EEN BROUGHT TO BE AT THAT TIME IS RS.35,000/- TO RS.40, 000/- PER ACRE APPROXIMATELY. SO REPORT IS SUBMITTED FOR NEED FUL ACTION. SD/- 18.11.11 COPY OF ABOVE IS FORWARDED TO PATWARI VILL. KHAN KO T FOR NEEDFUL ACTION. SD/- 18.11.11 NO. OK 676 DATED: 18.11.11 AS PER THE REPORT OF PATWARI/KANGO VILL. KHANKOT, T EHSIL AMRITSAR-1, DISTT. AMRITSAR ON DATE 01.04.1981 AS B EEN BROUGHT TO BE AT THAT TIME IS RS.35,000/- TO RS.40, 000/- PER ACRE APPROXIMATELY. REPORT PATWARI/KANGO IN REAL PH ASE. RESPECTED SMT. SUNIL KUMARI INCOME TAX OFFICER, WAR D 4(1), AMRITSAR FOR FURTHER ACTION. SD/- TEHSILDAR AMRITSAR-1 13. THERE BEING A HUGE DIFFERENCE IN RATES GIVEN BY THE ASSESSEE AND THAT GIVEN BY THE TEHSILDAR, AMRITSAR-1, AS PER THE ASSESSMENT ORDER, A LETTER DATED 1.12.2011 WAS AGAIN WRITTEN TO THE TEH SILDAR, AMRITSAR-1 BY THE AO U/S 133(6) OF THE ACT. THE REPLY DATED 5.12. 2011 OF THE TEHSILDAR, AMRITSAR-1, STANDS REPRODUCED IN THE ASSESSMENT ORD ER. HE AGAIN CERTIFIED THE RATES OF THE LAND TO BE FROM RS.35,00 0/- TO RS.40,000/- PER ACRE. IT WAS IN RESPONSE TO THIS REPORT OF THE TEHS ILDAR, AMRITSAR-1, THAT THE ASSESSEE SUBMITTED THE AFORESAID CERTIFICATE DA TED 21.04.2011 CERTIFIED BY S. GURDARSHAN SINGH, EX-SARPANCH KHANK OT, S. AJIT SINGH, SARPANCH, S. HARPARKASH SINGH AND S. MANJIT SINGH A ND COUNTER-SIGNED BY TEHSILDAR, AMRITSAR-1. THE AO, HOWEVER, FOR THE REASONS BEST KNOWN TO HIM, DID NOT ACCEPT THE RATE OF RS.6,50,000/- PE R ACRE, AS CLAIMED BY ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 15 THE ASSESSEE, THOUGH THE CERTIFICATE PRODUCED BY TH E ASSESSEE WAS CERTIFIED BY FOUR DIFFERENT OFFICERS AND IT WAS AL SO COUNTER-SIGNED BY THE TEHSILDAR, AMRITSAR-1, WHO WAS THE VERY OFFICER, WH O HAD ISSUED THE CERTIFICATE IN RESPONSE TO THE QUERY RAISED BY THE AO U/S 133(6) OF THE ACT. 14. IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT (A) WHEN A REMAND REPORT WAS CALLED FOR FROM THE AO BY THE LD. CIT(A) , THE AO SUBMITTED THE REMAND REPORT DATED 22.02.2013, A COPY WHEREOF IS AT APB (AY 2005-06) PAGES 59 TO 73. THE RELEVANT PORTION OF THIS REMAND REPORT IS REPRODUCED AS UNDER FOR READY REFERENCE: 7. FURTHER, IN HIS WRITTEN SUBMISSIONS FILED DURIN G THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEES COU NSEL STATED THAT EVEN ON MERITS, THE CASE DESERVES TO BE ACCEP TED. THE ONLY QUESTION, WHICH IS INVOLVED, IS THAT THE INDEX ED COST AS ON 01-04-1981 HAS BEEN TAKEN' AT RS. 40,000/- PER ACRE BY THE DEPARTMENT AGAINST THE COST TAKEN BY THE ASSESSEE A T RS.6,50,000/- PER, ACRE OF AGRICULTURAL LAND. IN TH IS REGARD, IT MAY BE SUBMITTED THAT THE CERTIFICATE SUBMITTED BY US WAS ISSUED BY DIFFERENT OFFICERS AND IS BASED ON PREVAI LING MARKET RATES AND ALSO OF DIE EXACT LOCATION OF LAND. THIS FACT HAS NOT BEEN APPRECIATED BY THE AO. THUS, THE CERTIFICATE C OLLECTED BY THE AO DOES NOT HAVE ANY LEGAL VALUE IN VIEW OF THE FOLLOWING FACTS: A) THAT THE CERTIFICATE PRESENTED BY THE ASSESSEE SIGNED BY FOUR DIFFERENT OFFICERS AND IS A GOOD CERTIFICATE. B) THAT THE CERTIFICATE GIVEN BY ONE OFFICER TO TH E AO DOES NOT HAVE ANY LEGAL VALUE BECAUSE THE ASSESSEE NEVER GOT ANY OPPORTUNITY TO REBUT THE SAME. THUS, THE POINT INVOLVED IS THAT WHY THE AO HAS IGNORED THE CERTIFI CATE BY FOUR DIFFERENT OFFICERS WHICH WAS FILED BY THE ASSE SSEE. THUS THE MATERIAL COLLECTED BY THE AO DOES NOT HAV E ANY LEGAL SANCTITY AGAINST THE CERTIFICATE FURNISHED BY THE ASSESSEE, WHICH IS SIGNED BY FOUR DIFFERENT OFFICER S. A ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 16 COPY OF CERTIFICATE FURNISHED BY THE ASSESSEE IS PL ACED AT PAGE NO. 13 OF THE PAPER BOOK. THUS, VIEWED FROM AL L THE ANGLES AND THE VALUATION BASED ON INDEX AT RS. 6500 00/- MAY BE ACCEPTED. 8. IN VIEW OF THE ABOVE FACTS, A LETTER WAS WR ITTEN TO THE TEHSILDAR, AMRITSAR R I, AMRITSAR BY THIS OFFICE VIDE THIS OFFICE LETTER DATED 19-12-2012 REQUESTING HIM TO GO THROUG H THE TOW LETTERS WHICH HAVE BEEN ISSUED BY THEIR DEPARTMENT AND INTIMATE THIS OFFICE THE CORRECT FAIR MARKET VALUE OF THE ABOVE SAID LAND AS ON 01-04-1981 KEEPING IN VIEW THE SITU ATION AND LOCATION OF THE LAND IN QUESTION. THE SAID LETTER I S REPRODUCED AS UNDER FOR YOUR KIND PERUSAL:- AS PER YOUR OFFICE LETTER NO-676 DATED 18.11.2011 (COPY ENCLOSED), IT WAS INTIMATED THAT THE FAIR MARKET VA LUE OF LAND PER ACRE AS ON 01.04.1981 SITUATED AT VILLAGE KHANKOT BEARING KHASRA NOS. 48/21-22, 49/6/2-9-15/1-16/2- 17/1/24-25, 54/4-5-7, 54/14/1-17, 55/1-2-9/1, 54/6/ 2- 14/2-15, 55/9/2, 54/6/1, 55/9/3-10 TOTALING 118 KAN ALS 14 MARLAS, IS APPROXIMATELY RS. 35,000/- TO RS. 40, 000/- PER ACRE. 03. THE ASSESSEE HAD SOLD THE ABOVE MENTIONED LAND ON DIFFERENT DATES DURING THE I MANUAL YEAR 2004-05 & 2005-06 AND ON THE BASIS OF THE ABOVE FAIR MARKET VALUE AS ON ; - 1981. THE COST OF ACQUISITION OF THE ABOVE LAND WAS DETERMINED AND CONSEQUENTLY THE LONG I ERM CAPITAL (LAIN FOR THE ASSESSMENT YEARS 2005-06 & 2006-07 WAS WORKED OUT BY THE THEN INCOME TAX OFFICER, WARD 4 (2), AMRITSAR VIDE HER ORDER U/S 143(3) DATED 1 5.12.2011. 04. BEING AGGRIEVED WITH THE ABOVE SAID ASSESSMENT ORDER, THE ASSESSEE FILED APPEALS FOR THE ASSESSMEN T YEARS 2005-06 & 2006-07 BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), AMRITSAR. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. COMMISSIONER OF INCOME-TAX (/APPEALS), THE ASSESSEE HAD FILED A COPY OF LETTER DATED 21-04-201 1 (COPY ENCLOSED FOR YOUR PERUSAL) IN WHICH THE RATE OF RS. 6,50,000/- PER ACRE HAS BEEN DETERMINED. THIS COPY OF LETTER HAS BEEN ISSUED BY YOUR OFFICE AND SIGNED BY FOUR DIFFERENT OFFICERS FOR THE ABOVE MENTIONED LAND AND KHASRA NOS. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS, SUBMITTED ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 17 THAT THE MATERIAL COLLECTED BY THE ASSESSING OFFICE R DOES NOT HAVE ANY LEGAL SANCTITY AGAINST THE CERTIF ICATE FURNISHED BY THE ASSESSEE, WHICH IS SIGNED BY FOUR DIFFERENT OFFICERS. 05. IN VIEW OF THE ABOVE FACTS, YOU ARE REQUESTED TO KI NDLY GO THROUGH THE.ABOVE SAID TILERS WHICH HAVE BEEN ISSUED BY YOUR DEPARTMENT AND INTIMATE THIS OFFICE THE CORRECT FAIR MARKET VALUE OF THE ABOVE SAID LAND AS ON 01-04-1981 KEEPING IN VIEW THE SITUATION AND LOCATI ON OF THE LAND IN QUESTION. 06. AS A REMAND REPORT IS TO BE SUBMITTED BY THIS O FFICE TO THE OFFICE OF THE LD.COMMISSIONER OF INCOME FAX (APPEALS), AMRITSAR, IT IS REQUESTED THAT THE FAIR MARKET VALUE OF IHE ABOVE SAID LAND AS ON 01-04- 1981 MAY KINDLY BE INTIMATED TO THIS OFFICE. 09 IN RESPONSE TO THE ABOVE SAID LETTER OF THIS OFFICE , TEHSILDAR, AMRITSAR-I, AMRITSAR HAS SUBMITTED HIS REPORT IN PU NJABI ALONGWITH REPORT OF THE CONCERNED PATWARI WHICH HAS BEEN RECEIVED IN THIS OFFICE ON 11-02-2013 VIDE RECEIPT NO. 4942 CONTAINING 7 PAGES.(PHOTO COPY ENCLOSED FOR YOUR KI ND PERUSAL). THE REPORT SUBMITTED BY TEHSILDAR, AMRITS AR-I, AMRITSAR IS REPRODUCED IN ENGLISH AS UNDER:- WITH REFERENCE TO ABOVE, IT IS SUBMITTED THAT RS. 35,000/- - RS. 40,000/- WAS THE RATE OF ORDINARY LA ND AT THAT TIME WHEREAS KHASRA NO. 48/21-22/49/6/2, 49/9 15/1, 16/2, 17/1,24-25, 54/4/5-7, 14/1-17 6/2 14/2,54/15-6/1,55/1-2,9/1,9/2,9/3,10 ARE TREATED AS COMMERCIAL BEING SITUATED ON ROAD. THEREFORE, ESTIM ATED VALUE AT THAT TIME WAS RS.6,50,000/-. THE DIFFERENC ED IN BOTH THE REPORTS IS RELATED TO ENTRIES OF KHASRA NO S. 10. IN VIEW OF THE ABOVE DETAILED SUBMISSIONS, IT I S REQUESTED THAT THE APPEAL FILED BY THE ASSESSEE FOR THE ASSES SMENT YEAR UNDER CONSIDERATION MAY KINDLY BE DECIDED ON MERITS KEEPING IN VIEW BOTH THE REPORTS SUBMITTED BY TEHSILDAR, AM RITSAR-I, AMRITSAR. 15. PARA 9 OF THE ABOVE REPORT IS THE CLEAN-CHIT. AS PER THIS PARA, ACCORDING TO THE LETTER OF THE TEHSILDAR, AMRITSAR- 1, HE SUBMITTED HIS REPORT TO THE AO ALONGWITH THE REPORT OF THE CONCER NED PATWARI. AS PER ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 18 THIS REPORT, THE RATE OF RS.35,000/- TO RS.40,000/- PER ACRE WAS THE RATE OF ORDINARY LAND IN VILLAGE KHANKOT AT THAT TIME, W HEREAS THE KHASRA NOS. SOLD BY THE ASSESSEE WERE TREATED AS COMMERCIAL, SI NCE THEY WERE SITUATED BUTTING A ROAD. IT WAS ON THIS BASIS THAT AS PER THE REPORT, THE ESTIMATED VALUE PER ACRE OF THE LAND WAS RS.6,50,00 0/- AS CORRECTLY CLAIMED BY THE ASSESSEE. IN THE REPORT, IT WAS ALSO SPECIFICALLY STATED THAT THE DIFFERENCE IN BOTH THE REPORTS WAS RELATED TO T HE ENTRIES OF KHASRA NOS. 16. REMARKABLY, IN THE REMAND REPORT, TAKING THE AB OVE REPORT OF THE TEHSILDAR, AMRITSAR-1, ALONGWITH THE REPORT OF THE CONCERNED PATWARI, TO BE DECISIVE AND CONCLUSIVE IN THE MATTER, THE AO RE QUESTED THE LD. CIT(A) TO DECIDE THE APPEAL KEEPING IN VIEW BOTH THE REPOR TS SUBMITTED BY THE TEHSILDAR, AMRITSAR-1. 17. IT IS THE ABOVE SEQUENCE OF EVENTS WHICH HAS LE D TO THE PASSING OF THE ORDER UNDER APPEAL. 18. THE LD. CIT(A) HAS ADOPTED THE RATE OF RS.6,50, 000/- PER ACRE AS THE FAIR MARKET VALUE OF THE LAND, AS CLAIMED BY TH E ASSESSEE. WHILE DOING SO, IT HAS BEEN HELD AS FOLLOWS: 6. THE ISSUE RAISED IN GROUNDS OF APPEAL NO.1 TO 5 IS RELATING TO FAIR MARKET VALUE OF THE LAND OF THE ASSESSEE SITU ATED AT VILLAGE KHANKOT BEARING KHASRA NOS.48/21-22, 54/5/2-9-15/1- 16/2- 17/1/24-25, 54/4- 5-7, 54/14/1-17, 55/1-2-0/1,54/6/ 2-14/2-15, 55/9/2, 54/6/1, 55/9/3-10 TOTALLING 118 KANALS-14 MARLAS AS ON 1.4.1981 FOR DETERMINING THE COST OF ITS ACQUISITIO N, WHETHER THE RATE CERTIFIED BY S.GURDARSHAN SINGH, EX-SARPANCH, KHANK OT, S.AJIT SINGH, SARPANCH, S.HARPARKASH SINGH, S.MANJIT SINGH AND COUNTERSIGNED BY TEHSILDAR, AMRITSAR-I AT RS.6,50,0 00/- DATED 21.4.2011 PRODUCED BEFORE THE ASSESSING OFFICER AND THE APPELLATE ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 19 AUTHORITY IS THE CORRECT VALUE OR THE VALUE OBTAINE D BY THE AO U / S . 133 [ 6 ] FROM THE TEHSILDAR-I, AMRITSAR AT RS.40,000/- PER A CRE. AS MENTIONED EARLIER, THE ASSESSEE CLAIMED THAT THE RATES SUBMITTED BY HIM WAS ISSUED BY 4 OFFICERS AND IS BASED ON PRE VAILING 7 MARKET RATES AND ALSO ON EXACT LOCATION OF THE LAND WHEREA S THE J ASSESSING OFFICER HAS ACCEPTED CERTIFICATE OF RATE GIVEN BY O NE OFFICER, WHICH HAD BEEN ISSUED IN A ROUTINE AND GENERAL MANNER WIT HOUT TAKING INTO CONSIDERATION THE MARKET RATES AND OTHER IMPOR TANT FACTORS ESPECIALLY THE LOCATION OF THE APPELLANTS LAND ON THE ROAD SIDE. THE ASSESSING OFFICER ON 19.12.2012 WROTE LETTER TO THE TEHSILDAR, AMRITSAR-I REQUESTING HIM TO GO THROUGH THE TWO LET TERS WHICH HAVE BEEN ISSUED BY THE TEHSILDAR OFFICE AND INTIMATE TH E CORRECT FAIR MARKET VALUE OF THE SAID LAND AS ON 01.04.1981 KEEP ING IN VIEW THE SITUATION AND LOCATION OF THE LAND IN QUESTION. THE AO RECEIVED THE TEHSILDAR, AMRITSAR-IS REPORT ON 11-02-2013 CONTAINING 7 PGS WHICH MENTIONED THAT RS.35,000/- T O RS.40,000/- WAS THE RATE OF ORDINARY LAND AT THAT TIME WHEREAS THE KHASRA NUMBERS OF THE ASSESSEES LAND ARE TREATED AS COMME RCIAL BEING SITUATED ON ROAD AND THEREFORE, THE ESTIMATED VALUE AT THAT TIME WAS RS.6,50,000/-PER ACRE. AS THE TEHSILDAR, AMRITSAR-I, AMRITSAR HAS GIVEN SP ECIFICALLY THE FAIR MARKET VALUE AT RS.6,50,000/- PER ACRE, ON THE SPEC IFIC QUERY OF THE ASSESSING OFFICER AFTER GOING THROUGH BOTH THE LETT ERS ISSUED BY ITS DEPARTMENT EARLIER, THE RATE PROVIDED IN THE LATEST INTIMATION GIVEN BY THE TEHSILDAR, AMRITSAR-I CANNOT BE IGNORED AND BRUSHED ASIDE. THE AO HAS NOT REBUTTED THE WORKING OF THE F.M.V. A T RS.7,04,225/- AS ON 1.4.1981 GIVEN IN HIS WRITTEN SUBMISSIONS, ON THE BASIS OF CURRENT CIRCLE RATE WHICH IS @ RS.60 LACS PER ACRE TO JUSTIFY THE CORRECTNESS OF THE RATE OF RS.6,50,000/- PER ACRE A S ON 1.4.1981 FOR THE PURPOSE OF WORKING THE LONG TERM CAPITAL GAIN. CONSIDERING THE INFORMATION COLLECTED BY THE AO FRO M THE TEHSILDAR ON 11.2.2013 AND THE SUBMISSIONS MADE BY THE COUNSE L OF THE ASSESSEE, THE RATE APPLIED AT RS.40,000 PER ACRE AS FMV AS ON 1.4.1981 FOR THE SAID LAND IS NOT CORRECT RATE OF R S.6,50,000/- PER ACRE IS TO BE ADOPTED AS F.M.V. OF COST OF ACQUISIT ION FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN. ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 20 19. FROM THE ABOVE OBSERVATIONS OF THE LD. CIT(A), IT IS EVIDENT THAT THE CERTIFICATE PRODUCED BY THE ASSESSEE WAS ISSUED BY FOUR OFFICERS. IT WAS BASED ON THE PREVAILING MARKET RATE. ALSO, IT WAS W ITH REGARD TO THE EXACT LOCATION OF THE LAND. ON THE OTHER HAND, THE CERTIF ICATE ACCEPTED BY THE AO WAS OF THE RATE GIVEN BY ONLY ONE OF THEM, ISSU ED IN A ROUTINE MANNER, WITHOUT MAKING REFERENCE TO THE MARKET RATE S. THE FACTUM OF THE ASSESSEES LAND LYING ON THE ROAD SIDE WAS ALSO NOT TAKEN INTO CONSIDERATION, WHICH MISTAKE WAS ACCEPTED IN THE L ATER REPORT FURNISHED DURING THE ASSESSMENT PROCEEDINGS, STATING THAT THE RATE OF RS.35,000/- TO RS.40,000/- PER ACRE WAS THE RATE OF THE ORDINA RY LAND AT THAT TIME, WHEREAS SINCE THE KHASRA NOS. OF THE ASSESSEES LAN D WERE SITUATED ON ROAD AND THEY WERE TREATED AS COMMERCIAL, DUE TO WH ICH, THE ESTIMATED VALUE OF THE LAND AT THAT TIME WAS RS.6,50,000/- PE R ANNUM. IT IS PERTINENT TO MENTION AGAIN THAT THE SAID LATER REPO RT OF THE TEHSILDAR, AMRITSAR-1, WAS ACCOMPANIED BY THE REPORT OF THE CO NCERNED PATWARI AND THERE WAS NO DIFFERENCE IN THE RATE GIVEN THEREIN, FROM THE RATE GIVEN IN THE CERTIFICATE PRODUCED BY THE ASSESSEE, AS ABOVE. 20. SO FAR AS REGARDS THE ASSESSMENT ORDER, DESPITE THE CERTIFICATE PRODUCED BY THE ASSESSEE, THE SAME WAS REJECTED BY THE AO, WITHOUT ASSIGNING ANY REASON FOR SUCH REJECTION. IT WAS ME RELY OBSERVED AS FOLLOWS (RELEVANT PORTION): ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 21 IN REPLY TO THIS, VIDE ORDER SHEET ENTRY DATED 8.1 2.2011, THE C.A. FOR THE ASSESSEE WAS CLARIFIED WITH THE RATES SUPPL IED BY THE ASSESSEE ARE BASED ON THE CERTIFICATE ISSUED BY SARPANCH/EX-SARPANCH AND COUNTER-SIGNED BY THE TEH SILDAR, AMRITSAR-1, WHICH CANNOT BE ACCEPTED. HOWEVER, .. OPPORTUNITY WAS GIVEN TO THE ASSESSEE FOR HIS EXPLANATION.. THE REPLY OF THE ASSESSEE IS NOT SATISFACTORY AND IS REJECTED. IN VIEW OF THE RATES PROVIDED BY THE TEHSILDAR, AMR ITSAR-1, AND THE FACTS STATED ABOVE, THE MAXIMUM RATES OF RS.40,000 /- PER ANNUM ARE ADOPTED FOR CALCULATING CAPITAL GAIN 21. 21. AS IS EVIDENT FROM THE ABOVE, THE ASSESSMEN T ORDER WAS A WHOLLY NON-SPEAKING ORDER, PASSED AS A RESULT OF CO MPLETE MIS-READING AND NON-READING OF THE MATERIAL EVIDENCE BROUGHT O N RECORD BY THE ASSESSEE, IN THE SHAPE OF THE CERTIFICATE DATED 21. 04.2011 CERTIFIED BY S. GURDARSHAN SINGH, EX-SARPANCH KHANKOT, S. AJIT SING H, SARPANCH, S. HARPARKASH SINGH AND S. MANJIT SINGH AND COUNTER-SI GNED BY THE TEHSILDAR, AMRITSAR-1, CERTIFYING THE FAIR MARKET VALUE OF THE LAND OF THE ASSESSEE TO BE @ RS.6,50,000/- PER ACRE, AS ON 01.0 4.1981. 22. THE LD. CIT(A) HAS OBSERVED AND CORRECTLY SO, T HAT THE AO HAS NOT REBUTTED THE WORKING OF THE FAIR MARKET VALUE AT RS .7,04,225/- AS ON 1.4.1981 GIVEN IN THE WRITTEN SUBMISSION, ON THE BA SIS OF THE CURRENT CIRCLE RATE WHICH IS @ RS.60,000 PER ACRE, TO JUSTI FY CORRECTNESS OF THE RATE OF RS.6,50,000/- PER ACRE AS ON 01.04.1981 FOR THE PURPOSE OF WORKING OUT LONG TERM CAPITAL GAIN. ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 22 23. EVEN BEFORE US, NO REBUTTAL IN THIS REGARD HAS BEEN PUT-FORWARD BY THE LD. DR. THEREFORE, GROUND NO.1, WHICH ALLEGES THAT THE LD. CIT(A) TREATED THE FAIR MARKET VALUE IN QUESTION AT RS.6,5 0,000/- PER ACRE WITHOUT ANY BASIS LACKS MERIT. THE ORDER UNDER APP EAL IS A WELL BASED ORDER, TAKING INTO CONSIDERATION ALL THE MATERIAL F ACTS ON RECORD. THE LAST REPORT OF THE TEHSILDAR, AMRITSAR-1, TO REITERATE, HAS ITSELF BACK-TRACKED THE EARLIER REPORT OF THE TEHSILDAR, AMRITSAR-1. 24. FURTHER, THE CONTENTION OF THE DEPARTMENT IN GR OUND NO.1 IS THAT AT THE RELEVANT TIME, THERE WAS NO CONCEPT OF MULTI-CO MPLEXES OR SHOPPING COMPLEXES EVEN IN URBAN AREAS, WHAT TO TALK OF THE VILLAGE IN WHICH THE LAND IS SITUATED. THIS SUBMISSION IS NEITHER HERE, NOR THERE. THE FAIR MARKET VALUE OF THE LAND HAS BEEN STATED AT RS.6,50 ,000/- PER ACRE, SINCE THE LAND OF THE ASSESSEE WAS TAKEN AS COMMERCIAL L AND, AS DISCUSSED. 27. LIKEWISE, THERE IS NO MERIT IN GROUND NO.2 RAI SED BY THE DEPARTMENT, IN WHICH GROUND, IT HAS BEEN CONTENDED THAT THE LD. CIT(A) HAS ERRONEOUSLY ACCEPTED THE VALUE OF THE LAND IN QUESTION AT RS.6,50,000/- PER ACRE, TREATING IT AS COMMERCIAL L AND WITHOUT RECORDING HER OWN SATISFACTION IN THIS REGARD. THIS IS SO, TO REITERATE, AS THE LD. CIT(A) HAS PASSED A WELL REASONED AND SPEAKING ORDE R, TAKING ALL THE RELEVANT FACTS AND DOCUMENTARY EVIDENCE INTO CONSI DERATION WHILE ACCEPTING THIS FAIR MARKET VALUE OF THE LAND AT RS. 6,50,000/- PER ANNUM. ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 23 THIS MARKET VALUE STANDS ACCEPTED BY THE TEHSILDAR , AMRITSAR-1 IN HIS REPORT, ALONGWITH THE REPORT OF THE CONCERNED PATW ARI, OVER-RIDING EARLIER REPORT OF THE TEHSILDAR, AMRITSAR-1, WHICH REPORT, GIVING THE FAIR MARKET VALUE OF THE ASSESSEES LAND AT RS.35000/- TO RS.40 ,000/- PER ACRE, WAS ACCEPTED BY THE AO WITHOUT ANY BASIS AGAINST THE AS SESSEES LEGITIMATE CLAIM OF FAIR MARKET VALUE OF RS.6,50,000/- PER AC RE. 26. SIMILAR IS THE FATE OF GROUND NO.3, WHICH CONT ENDS THAT THE LD. CIT(A) WAS NOT CORRECT IN REJECTING, WITHOUT ASSIGN ING ANY REASON, THE RATE OF RS.40,000/- PER ACRE APPLIED BY THE AO. IT CANNOT BE GAINSAID THAT THE LD. CIT(A) HAS ASSIGNED AMPLE REASONS FOR ACCEP TING THE RATE OF RS.6,50,000/- PER ACRE QUA THE ASSESSEE LAND, AS AG AINST THAT OF RS.40,000/-, AS ARBITRARILY APPLIED BY THE AO, AS D ISCUSSED. 27. FOR THE ABOVE DISCUSSION, THE GRIEVANCE OF THE DEPARTMENT BY WAY OF ALL THE GROUNDS OF APPEAL RAISED IN BOTH THE APP EALS IS REJECTED. BOTH THE ORDERS OF THE LD. CIT(A) ARE UPHELD. 28. SO FAR AS REGARDS THE CROSS OBJECTIONS RAISED B Y THE ASSESSEE, GROUND NOS. 1 & 2 OF THESE C.OS FOR BOTH THE YEAR S UNDER CONSIDERATION ARE SUPPORTIVE TO THE LD. CIT(A)S ORDER. GROUND N O.3 OF THE C.OS. HAS NOT BEEN PRESSED BY THE LD. COUNSEL FOR THE ASSESSE E. GROUND NO.4 OF THE C.OS. IS GENERAL IN NATURE. ITA NOS.339 & 340(ASR)/2013 CO NOS. 34 & 35(ASR)/2013 24 29. ACCORDINGLY, THE C.OS RAISED BY THE ASSESSEE AR E REJECTED. 30. IN THE RESULT, BOTH THE APPEALS AS WELL AS BOTH THE C.OS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/02/2016 . SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 25/02/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:SH. JAGIR SINGH, AMRITSAR 2. THE ITO 3. THE CIT(A), 4. THE CIT, 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.