Membrane Hitec (Division of Chemfab Alkalis Ltd.), CHENNAI V. ACIT, CHENNAI

CO 60/CHNY/2011

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6135 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 29-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: J CHANDRASEKARAN WTA; ITA CO
• Keywords: Sale consideration of property below Jantri Value; Gift; Earning of tax free income; Fair market value; Valuation report; Right to appeal; Revised return
• Section: 143(3); 50C; 12A; 246

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH B : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] W.T.A NO.18/MDS/2011 & I.T.A.NO. 568/MDS/2011 ASSESSMENT YEAR : 2005-06 THE ACIT COMPANY CIRCLE IV(2) CHENNAI VS M/S MEMBRANE HITEE (M/S MEMBRANE TECHNOLOGIES P. LTD) TEAM HOUSE, GST ROAD VANDALUR CHENNAI 600 048 [PAN AABCM9278N] (APPELLANT) (RESPONDENT) C.O. NO.59/MDS/2011 [IN W.T.A NO.18/MDS/2011] & C.O.NO.60/MDS/2011 [IN I.T.A.NO. 568/MDS/2011] ASSESSMENT YEAR : 2005-06 M/S MEMBRANE HITEE (M/S MEMBRANE TECHNOLOGIES P. LTD) TEAM HOUSE, GST ROAD VANDALUR CHENNAI 600 048 VS THE ACIT COMPANY CIRCLE IV(2) CHENNAI (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI P.B.SEKARAN, CIT ASSESSEE BY : SHRI J.CHANDRASEKARAN WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 2 -: O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: ALL THESE CAPTIONED MATTERS ARE BEING DISPOSED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE AS EXACTLY IDENT ICAL ISSUES ARISING OUT OF COMMON FACTS ARE INVOLVED THEREIN. THE APPE ALS BY THE REVENUE ONE UNDER THE WEALTH TAX ACT AND THE OTHE R UNDER INCOME- TAX ACT, ARE PERTAINING TO ASSESSMENT YEAR 2005-0 6. THE ASSESSEE HAS FILED CROSS OBJECTIONS IN RELATION TO THE APPEA LS FILED BY THE REVENUE. 2. THE COMMON SET OF FACTS LEADING TO THESE APPEAL S IS THAT THE ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2005-06 ADMITTING INCOME OF ` 6,20,810/-. SUBSEQUENTLY THE ASSESSEE FILED REVISE D RETURN DECLARING TOTAL INCOME OF ` 20,20,809/-. THE ASSESSING OFFICER, AFTER MENTIONING THAT THE REVISED RETURN WAS FILED ON 20. 3.2007, HAS MADE THE ASSESSMENT BASED ON THE ORIGINAL RETURN FILED. IN THE ASSESSMENT ORDER COMPLETED U/S 143(3) ON 31.12.2007, THE ASSES SING OFFICER HAS DETERMINED TOTAL INCOME AT ` 48,04,130/-. IN DOING SO, HE HAS ARRIVED AT THE CAPITAL GAINS DETERMINED AS PER THE PROVISIO NS OF SECTION 50C(1) OF THE INCOME-TAX ACT, DISCARDING THE REAL INCOME D ECLARED UNDER THE HEAD CAPITAL GAINS RETURNED BY THE ASSESSEE AT ` 24,44,728/-, WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 3 -: DETERMINED AT ` 60,48,428/-. THE ASSESSING OFFICER HAD MADE REFERENCE TO THE DISTRICT VALUATION OFFICER(DVO) UN DER THE PROVISIONS OF SECTION 16(A) OF THE WEALTH TAX ACT R.W. SEC 50C(2) OF THE I.T.ACT FOR ASCERTAINING THE FAIR MARKET VALUE OF THE LAND SOLD . THE ASSESSING OFFICER COMPLETED THE ASSESSMENT EVEN BEFORE THE R ECEIPT OF DVOS REPORT BECAUSE THE ASSESSMENT WAS GETTING TIME BARR ED BY 31.12.2007. THE DVO HAS ESTIMATED THE FAIR MARKET VALUE OF THIS LAND AT ` 1,02,48,528/-. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL U/S 12A OF THE WEALTH TAX ACT. THE LD. CIT(A) HAS ACCEPTED THE FAIR MARKET VALUE AT ` 40 LAKHS BY REJECTING THE ESTIMATED VALUE DONE BY THE DVO. THE ASSESSING OFFICER ALSO PASSED ORDER UNDER INCOM E-TAX ACT ON THE SAME LINES. AGAINST BOTH THE ORDERS, THE ASSESSEE PREFERRED APPEALS BEFORE THE LD. CIT(A), WHO HAS PASSED THE IMPUGNED ORDERS DATED 22.12.2010 BY ACCEPTING THE FAIR MARKET VALUE OF TH E LAND AT ` 40 LAKHS. NOW THE REVENUE IS AGGRIEVED AND HAS RAISED THE FOLLOWING GROUNDS: W.T.A.18/MDS/2011 1. THE ORDER OF THE LEARNED CIT (A) IS CONTRARY T O LAW AND FACTS OF THE CASE. 2.1. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT T HE SALE VALUE OF ` 40 LAKHS TO BE THE FAIR MARKET VALUE OF THE PROPER TY AS AGAINST ` 1,02,48,528/- STATED BY THE VALUATION OFFICER. 2.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E ORDER OF THE VALUATION OFFICER U/S 16 (A) (5) OF THE WT ACT READ WITH SEC WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 4 -: 50 C(2) IS NOT AN APPEALABLE ORDER U/S 23A OF THE W T ACT. IT IS SUBMITTED THAT IN ANY CASE NO APPEAL AGAINST THE VA LUATION REPORT LIES U/S 246 A OF THE ACT. 2.3 IT IS SUBMITTED THAT THE BASIC RIGHT TO APPEAL U/S 246 A ARISES ONLY WHEN THE ASSESSEE DENIES THE LIABILITY TO BE ASSESSED. THE BASIC CONDITION TO APPEAL DID NOT ARI SE IN THIS CASE SINCE THE VALUE AS PER THE DVO'S REPORT WAS NO T ADOPTED BY THE ASSESSING OFFICER. 2.4 IN VIEW OF THE ABOVE THE CIT(A) ACTED BEYOND HI S JURISDICTION IN ENTERTAINING THE APPEAL AGAINST THE VALUATION REPORT SINCE AN AMOUNT OF ` 76,03,700 WHICH WAS THE STAMP VALUATION AUTHORITY'S VALUATION HAS BEEN ADOPTED BY THE ASSESSING OFFICER TO COMPUTE CAPITAL GAINS. 2.5 IT IS SUBMITTED THAT AS PER THE PROVISIONS OF S ECTION 50C(3) IF THE VALUE DETERMINED BY THE DVO IS IN EXCESS OF THE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY, IT IS MANDATORY TO ADOPT THE LATTER VALUE FOR THE PURPOSE OF COMPUT ING CAPITAL GAINS. 2.6 WITHOUT PREJUDICE TO THE GROUNDS 2.2 TO 2.5 IT IS SUBMITTED THAT THE LEARNED CIT(A) FAILED TO APPRECIATE THAT A LL THE OBJECTIONS RAISED BY THE ASSESSEE BEFORE THE CIT(A) WERE RAISED BY THE ASSESSEE BEFORE THE VALUATION OFFICER . 2.7 IT IS SUBMITTED THAT THE VALUATION OFFICER IN HIS ORDER HAS DEALT WITH THE OBJECTIONS OF THE ASSESSEE. 2.6 IT IS SUBMITTED THAT THE PRELIMINARY VALUATION WAS COMMUNICATED BY THE VALUATION OFFICER ON 12/12/2008 DETERMINING THE VALUE AT ` 1,12,92,360. TAKING INTO CONSIDERATION THE ASSESSE'S OBJECTIONS, THE FINAL V ALUE WAS ARRIVED AT ` 1,02,48,528/-. 2.7 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT T HE VALUATION OFFICER HAS HELD THAT THE SALE INSTANCES CITED BY THE ASSESSEE ARE NOT COMPARABLE SALE INSTANCES. 2.8 IT IS SUBMITTED THAT THE CIT(A) WHILE HOLDING T HE SALE VALUE AT ` 40 LAKHS, HAS NOT STATED THE REASONS AS TO WHY TH E VALUATION OFFICER'S REPORT WAS NOT CORRECT. 2.9 IT IS SUBMITTED THAT THE CIT(A) HAS FAILED TO STATE THE BASIS ON WHICH THE VALUE WAS FIXED AT ` 40 LAKHS. WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 5 -: 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER RESTORED. I.T.A.NO. 568/MDS/2011 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2.1. THE LEARNED CIT(A) HAS ERRED IN DELETING THE A DDITION OF ` 63,238 BEING 2% OF EXEMPT INCOME DISALLOWED BY A.O. HOLDING THEM TO BE PASSIVE INVESTMENTS. 2.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E ASSESSEE AT LEST OUGHT TO HAVE INCURRED SOME ADMINISTRATIVE EXPENSES TO REALIZE SUCH EXEMPT INCOME WHICH HAS BEEN ESTIMATED AT 2% BY THE ASSESSING OFFICER. 3.1 THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE A SSESSING OFFICER TO ADOPT THE FAIR MARKET VALUE OF THE SUBJE CT MATTER LAND AT ` 40 LAKHS TO DETERMINE CAPITAL GAINS U/S 50C . 3.2 IT IS SUBMITTED THAT THE AS ASSESSING OFFICER H AD REFERRED THE VALUATION OF THE PROPERTY TO THE DISTRICT VALUA TION OFFICER AS PER SECTION 50C (2) AT ASSESSE'S INSTANCE. 3.3 THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ADOPTING THE STAMP VALUATION AUTHORITY'S VALUE OF ` 76,03,700 FOR THE PURPOSE OF CALCULATION OF CAPITAL GAINS U/S 50C SIN CE THE VALUATION REPORT WAS NOT RECEIVED AND THE ASSESSMEN T WAS GETTING BARRED BY LIMITATION. 3.4 THE VALUATION REPORT VALUING THE PROPERTY AT ` 1,02,48,528 WAS RECEIVED SUBSEQUENT TO THE ASSESSMENT AND IT WA S FORWARDED TO THE CIT(A) BY THE ASSESSING OFFICER . THE ASSESSING OFFICER DID NOT MODIFY OR RE-OPEN THE ASS ESSMENT TO ADOPT THIS VALUE TO COMPUTE CAPITAL GAINS. 3.5 IT IS SUBMITTED THAT AS PER THE PROVISIONS OF S ECTION 50C(3) WHERE THE VALUE ASCERTAINED UNDER SECTION 50C (2) E XCEEDS THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATIO N AUTHORITY, THE VALUE ADOPTED BY SUCH AUTHORITY SHAL L BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION. WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 6 -: 3.6 IT IS THEREFORE SUBMITTED THAT THE CIT(A) OUGHT NOT TO HAVE DIRECTED THE ASSESSING OFFICER TO ADOPT THE FAIR MA RKET VALUE OF THE LAND AT ` 40,00,000 WHEN THE VALUE ASCERTAINED BY THE V.O EXCEEDED THE VALUE ADOPTED BY THE STAMP VALUATI ON AUTHORITY. TO THIS EXTENT THE DIRECTIONS OF THE CIT (A) ARE IN DIRECT CONTRAVENTION OF SECTION 50C(3) OF THE ACT. THE CIT(A) HAS THEREFORE ACTED BEYOND JURISDICTION. 3.7 WITHOUT PREJUDICE TO THE ABOVE T IS SUBMITTED T HAT THE DECISION OF THE CIT(A) IN ITA NO 589/08-09 DATED 22 /12/2010 RELIED UPON BY THE CIT(A) HAS NOT BECOME FINAL AND APPEAL TO THIS HON'BLE TRIBUNAL HAS BEEN FILED BY THE DEPARTM ENT. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUC ED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT (A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER RESTORED. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE P ERUSED THE ENTIRE RECORD. WE FIND THAT THE LD. CIT(A) HAS TAK EN THE FOLLOWING FACTORS FOR ARRIVING AT HIS CONCLUSION: I) INCREASE IN THE MARKET VALUE AS PER VALUATION FOR THE PURPOSE OF STAMP DUTY BETWEEN MARCH 2005 AND OCTOBER 2006: THERE HAS BEEN AN INCREASE OF 213% AFTER MARCH 2005. II) THE SUBJECT MATTER PROPERTY IS SANDWICHED BETWE EN THE RAILWAY TRACK AND THE NATIONAL HIGHWAY NO 45 AS PER THE PLAN ENCLOSED. III) THE THREAT FACED BY THE APPELLANT OF POSSIBLE ACQUISITION OF LAND FOR THE PURPOSE OF WIDENING THE NATIONAL HIGHW AY ROAD, AND ACQUISITION OF THE LAND FOR EXTENDING THE RAILW AY TRACK THEREBY AFFECTING THE EXTENT AND VALUE OF THE PROPE RTY. IV) THE COMMERCIAL PRUDENCE OF THE APPELLANT TO DIS POSE OFF THE PROPERTY AT THE BEST POSSIBLE MARKET PRICE. V) THE TRANSACTION OF SALE HAS TAKEN PLACE BETWEEN UNRELATED PARTIES. WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 7 -: VI) ARRIVING AT THE FAIR MARKET VALUE OF THE SUBJEC T MATTER PROPERTY FROM THE VALUATION MADE BY THE DVO AS PER THE MARKET RATE PREVAILING ON OCTOBER 2006 AND GIVING S UITABLE REDUCTION FOR THE INCREASE IN THE VALUE OF PROPERTI ES AFTER MARCH 2005 BY 213%. VII) TAKING INTO ACCOUNT COMPARATIVE SALE INSTANCES CLOSER TO THE DATE OF THE SALE (23.3.2005) OF THE SUBJECT MATTER PROPERTY, CITED BY THE APPELLANT BEFORE THE DVO AND NOT CONSI DERED BY THE OVA IN THE VALUATION REPORT. VIII)CONSIDERING THE VARIOUS LEGAL SUBMISSIONS MADE BY THE APPELLANT AND FOLLOWING INTERPRETATION OF STATUTORY ENACTMENT KEEPING IN MIND THE INTENT OF THE LEGISLATURE :- A) THE TASK OF INTERPRETATION OF A STATUTORY ENACTMENT IS NOT A MECHANICAL TASK. IT IS MORE THAN A MERE READING OF MATHEMATICAL FORMULAE BECAUSE FEW WORDS POSSESS THE PRECISION OF MATHEMATICAL SYMBOLS. IT IS AN ATTEMPT TO DISCOVER THE INTENT OF THE LEGISLATURE FROM THE LANGUAGE USED BY IT AND IT MUST ALWAYS BE REMEMBERED THAT LANGUAGE IS AT BEST AN IMPERFECT INSTRUMENT FOR THE EXPRESSION OF HUMAN THOUGHT AND, AS POINTED OUT BY LORD DENNING, IT WOULD BE IDLE TO EXPECT EVERY STATUTORY PROVISION TO BE 'DRAFTED WITH DIVINE PRESCIENCE AND PERFECT CLARITY' OF JUDGE LEARNED HAND '' ..... IT IS TRUE THAT THE WORDS USED, EVEN IN THEIR LITERAL SENSE, ARE THE PRIMARY AND ORDINARILY THE MOST RELIABLE SOURCE OF INTERPRETING THE MEANING OF ANY WRITING: BE IT A STATUTE, A CONTRACT OR ANYTHING ELSE. BUT IT IS ONE OF TILE SUREST INDEXES OF A MATURE AND DEVELOPED JURISPRUDENCE NOT TO MAKE A FORTRESS OUT OF THE DICTIONARY; BUT TO REMEMBER THAT STATUTES ALWAYS HAVE SOME PURPOSE OR OBJECT TO ACCOMPLISH, WHOSE SYMPATHETIC AND IMAGINATIVE DISCOVERY IS THE SUREST GUIDE TO THEIR MEANING.' B) ONE MUST NOT ADOPT A STRICTLY LITERAL INTERPRETATION OF ANY PROVISION BUT MUST CONSTRUE ITS LANGUAGE HAVING REGARD TO THE OBJECT AND PURPOSE WHICH THE LEGISLATURE HAD IN VIEW IN ENACTING THAT PROVISION AND IN THE CONTEXT OF THE SETTING IN WHICH IT OCCCURS. ONE WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 8 -: CANNOT AND SHOULD NOT IGNORE THE CONTEXT AND THE COLLOCATION OF THE PROVISIONS BECAUSE, AS POINTED OUT BY JUDGE LEARNED HAND IN THE MOST FELICITOUS, LANGUAGE:' THE MEANING OF A SENTENCE MAY BE MORE THAN THAT OF THE SEPARATE WORDS, AS A MELODY IS MORE THAN THE NOTES, AND NO DEGREE OF PARTICULARITY CAN EVER OBVIATE RECOURSE TO THE SETTING IN WHICH ALL APPEARS, AND WHICH ALL COLLECTIVELY CREATE.' C) IT IS A WELL-RECOGNISED RULE OF CONSTRUCTION THA T A STATUTORY PROVISION MUST BE SO CONSTRUED, IF POSSIB LE, THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED. IT IS NOW A WELL SETTLED RULE OF CONSTRUCTION THAT WHERE THE PLAIN LITERAL INTERPRETATION OF A STATUTORY PROVISI ON PRODUCES A MANIFESTLY ABSURD AND UNJUST RESULT WHICH COULD NEVER HAVE BEEN INTENDED BY THE. LEGISLATURE, THE COURT MAY MODIFY THE LANGUAGE USED BY THE LEGISLATURE OR EVEN 'DO SOME VIOLENCE' TO IT., SO AS TO ACHIEVE THE OBVIOUS INTENTION OF THE LEGISLATURE AND PRODUCE A RATIONAL CONSTRUCTION: VIDE LUKE VS. IRC (1963) AC 557; (1964) 54 ITR 692 (CAL), THE COURT MAY ALSO IN SUCH C CASE READ INTO THE STATUTORY PROVISION A CONDITION WHICH, THO UGH NOT EXPRESS ED, IS IMPLICIT AS CONSTITUTING THE BAS IC ASSUMPTION UNDERLYING THE STATUTORY PROVISION. THE S.C. IN K. P. VARGHESE VS. ITO (1981) 131 ITR 597 (SC), ESCHEW LITERALNESS IN THE INTERPRETATION OF S . TI2, SUB-SO (2), AND TRIED TO ARRIVE AT AN INTERPRE TATION WHICH AVOIDS THE ABSURDITY AND MISCHIEF AND MAKES THE PROVISION RATIONAL AND SENSIBLE. IT ULTIMATELY RESULTED IN DELETION OF SECTION 52 FROM THE INCOME- TAX ACT, 1961. D) IT IS A SOUND RULE OF CONSTRUCTION OF A STATUTE FIRMLY ESTABLISHED IN ENGLAND AS FAR BACK AS 1584 WHEN HEYDONS CASE (1584) 3 CO. REP.7A WAS DECIDED THAT: ..FOR THE SURE AND TRUE INTERPRETATION OF ALL STATUTES IN GENERAL .... FOUR THINGS ARE TO BE DISCERNED AND CONSIDERED: (1) WHAT WAS THE COMMON LAW BEFORE THE MAKING OF THE ACT, (2) WHAT WAS THE MISCHIEF AND DEFECT FOR WHICH THE COMMON LAW DID NOT PROVIDE, (3) WHAT REMEDY THE PARLIAMENT HATH RESOLVED AND APPOINTED TO CURE THE DISEASE OF THE COMMONWEALTH AND (4) THE TRUE REASON OF THE REMEDY; AND THEN THE OFFICE OF ALL THE WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 9 -: JUDGES IS ALWAYS TO MAKE SUCH CONSTRUCTION AS SHALL SUPPRESS THE MISCHIEF, AND ADVANCE THE REMEDY' . E) IN RE MAYFAIR PROPERTY COMPANY (1898) 2 CH (CA) LINDLEY M.R. IN 1898 FOUND THE RULE 'AS NECESSARY NOW AS IT WAS WHEN LORD COKE REPORTED HEYDON'S CASE'. THE RULE WAS REAFFIRMED BY THE EARL OF HALSBURY IN EASTMAN PHOTOGRAPHIC MATERIALS COMPANY LTD. VS. COMPTROLLER-GENERAL OF PATENTS, DESIGNS AND TRADE-MARKS (1898) AC 571, 576 (HL) IN THE FOLLOWING WORDS: 'MY LORDS, IT APPEARS TO ME THAT TO CONSTRUE THE STATUTE NOW IN QUESTION, IT IS NOT ONLY LEGITIMATE BUT HIGHLY CONVENIENT TO REFER BOTH TO THE FORMER ACT AND TO THE ASCERTAINED EVILS TO WHICH THE FORMER ACT HAD GIVEN RISE, AND TO THE LATTER ACT WHICH PROVIDED THE REMEDY. THESE THREE THINGS BEING COMPARED, I CANNOT DOUBT THE CONCLUSION.' THIS RULE BEING A RULE OF CONSTRUCTION HAS BEEN REPEATEDLY APPLIED IN INDIA IN INTERPRETING STATUTORY PROVISIONS. 4. FINALLY, HE HAS CONCLUDED THAT SECTION 50C BEING SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAI N CASES, CANNOT BE TREATED AS THE FINAL AND AS UN-REBUTTABLE. THE ASS ESSEE, AS PER THE LD. CIT(A), HAS A RIGHT TO HAVE RECOURSE TO CONTEST THE VALUATION DONE BY THE DVO BY FILING APPEAL BEFORE THE HIGHER AUTHORIT IES AND SEEK REDRESSAL, IF ANY INJUSTICE IS DONE. 5. AFTER HEARING BOTH SIDES, WE ARE ALSO OF THE SAME OPINION THAT HIGHER AUTHORITY CAN CORRECT ANYTHING DONE WHICH IS FOUND TO BE INCORRECT. THE GIST OF DECISIONS OF HON'BLE JURISD ICTIONAL HIGH COURT WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 10 - : REFERRED TO IN PARAS 20 AND 21 OF THE LD. CIT(A)S ORDER, IS BEING REPRODUCED HEREIN BELOW, FOR READY REFERENCE: 20. IN CGT V. R. JAWAHAR (1996) 217 ITR 59 (MAD), GUIDELINES VALUE ADOPTED FOR REGISTRATION PURPOSE W AS NOT FOUND TO BE RELEVANT FOR DETERMINATION OF VALUE OF GIFTED PROPERTY, A VIEW REITERATED IN CGT V. R, DAMODARAN (2001) 247 ITR 698 (MAD) FOR PURPOSES OF GIFT-TAX WHEN IT WAS IN VOGUE. IT FOLLOWS THAT SUCH VALUE MAY NOT BE RELEVA NT EVEN AS ONE OF THE SUPPORTING MATERIALS, BECAUSE IT DOES NO T RELATE TO THE VALUE OF THE PROPERTY REQUIRED TO BE VALUED. BU T AN EXPLANATION FOR THE DIFFERENCE BETWEEN SUCH VALUE A ND THE APPARENT CONSIDERATION MAY SOMETIMES BECOME NECESSA RY TO CARRY CONVICTION AS TO THE GENUINENESS OF APPARENT CONSIDERATION AS THE REAL TRANSACTION PRICE. IN THE CASE OF HINDUSTAN MOTORS V. MEMBERS, APPROPRIATE AUTHORITY (2001) 249 ITR 424 (MAD), THE MADRAS HIGH COURT AT PAGE 43 4 HELD AS UNDER: ' IN THIS REGARD, THE APPROPRIATE AUTHORITY HAS CONCLUDED THAT GUIDELINE VALUES ARE FIXED BY THE REGISTERING AUTHORITIES FOR THE PURPOSES OF COLLECT ION OF STAMP DUTY AND THAT GUIDELINE VALUES OF LAND FOR THE PURPOSES OF REGISTRATION OF AN IMMOVABLE PROPERTY CAN HAVE NO APPLICATION FOR DETERMINING TH E MARKET VALUE UNDER CHAPTER XX-C OF THE ACT. THE APPROPRIATE AUTHORITY HAS RELIED ON A DECISION OF T HE RAJASTHAN HIGH COURT IN KRISHNA KUMAR RAWAT V. UNION OF INDIA (1995) 214 ITR 610, WHEREIN IT WAS HELD THAT THE MARKET RATES FOR THE PURPOSE OF REGISTRATION OF AN IMMOVABLE PROPERTY AS NOTIFIED B Y THE SUB-REGISTRAR CAN HAVE NO APPLICATION FOR DETERMINING THE MARKET VALUE UNDER CHAPTER XX-C OF THE ACT. IT IS FURTHER STATED THAT IT IS LIMITED ONLY FOR PAYMENT OF STAMP DUTY. I AM IN AGREEMENT WITH THE VIEW EXPRESSED BY THE RAJASTHAN HIGH COURT. FURTHER, THE PRINCIPLES FOR VALUATION IN RESPECT OF AN IMMOVABLE PROPERTY UNDER THE WEALTH-TAX ACT OR OTHER TAXATION LAWS ARE DIFFERENT FROM THE PRINCIPL ES WHICH ARE APPLICABLE TO ACQUISITION PROCEEDINGS. TH E PROCEEDINGS UNDER CHAPTER XX-C ARE AKIN TO THE ACQUISITION PROCEEDINGS AND NOT TO THE VALUATION PRINCIPLES WHICH ARE APPLICABLE FOR ASSESSING THE T AX ON THE BASIS OF THE VALUATION OF THE PROPERTY. 'A CERTAIN ELEMENT OF GUESS HAS TO BE THERE BASED ON OBJECTIVE FACTORS HAVING REASONABLE NEXUS WITH THE WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 11 - : EVIDENCE ON RECORD. THE VARIOUS FACTORS ARE THERE ON THE BASIS OF WHICH OUT OF THE VARIOUS METHOD BY WHICH THE VALUATION .OF THE IMMOVABLE PROPERTY CAN BE MADE, APPROPRIATE METHOD IS TO BE ADOPTED. IT DEPENDS ON THE LOCATION OF THE PROPERTY, THE PURPOSE FOR WHICH THE PROPERTY IS USED, THE NATURE OF THE PROPERTY THE TIME WHEN THE AGREEMENT IS ENTERED INTO AND SIMILAR OTHER OBJECTIVE FACTORS. THE VALUATION, THEREFORE, HAS TO BE DONE BY A METHOD WHICH IS MORE OBJECTIVE AND COULD FURNISH RELIABLE DATA TO ARRIVE AT A JUST CONCLUSION. AS ALREADY STATED, THE MARKET RATES NOTIFIED BY THE SUB-REGISTRAR FOR THE PURPOSE OF REGISTRATION CANNOT BE A PROPER GUIDE FOR VALUATION IN RESPECT OF PRE- EMPTIVE PURCHASE'. (EMPHASIS SUPPLIED). 21 . T HE ABOVE WAS A CASE IN RESPECT OF PRE-EMPTIVE PURCH ASE. SIMILARLY IN THE CASE OF CGT V. R. DAMODARAN (2001) 247 ITR 698 (MAD) AT PAGE 700 PERTAINING TO THE GIFT TAX CASE, THE MADRAS HIGH COURT HELD AS UNDER : THE REGISTERED CONVEYANCE DEED SHOWED THE VALUE OF ` 1,70,000. THE COMMISSIONER HAS FOUND THAT THE ENHANCED STAMP DUTY WAS PAID AS THE REGISTERING AUTHORITIES HAD THEIR OWN METHOD OF EVALUATING PROPERTIES. ON THE FACTS, IT HAS BEEN FOUND BY THE COMMISSIONER THAT THERE IS NO MATERIAL TO SHOW THAT THE ASSESSEE HAD RECEIVED EXCESS CONSIDERATION. SO, IT IS SEEN FROM THE RECORDS THAT THE PROPERTIES GIFTED WERE NOT FOR INADEQUATE CONSIDERATION AND TH E CONSIDERATION APPEARS TO BE REASONABLE. THE INFORMATION RECEIVED BY THE GIFT-TAX OFFICER ON THE AUDIT REPORT WOULD NOT BE A VALID GROUND TO COME TO THE CONCLUSION THAT THE TRANSFERS WERE FOR INADEQUATE CONSIDERATION. THE DECISION REPORTED IN CGT V. INDO TRADERS AND AGENCIES (MADRAS) P. LTD. (1981) 131 ITR 313 (MAD) STATES THAT UNLESS THE PRICE WAS SUCH AS TO SHOCK THE CONSCIENCE OF THE COURT, IT WOULD NOT BE POSSIBLE TO HOLD THAT THE TRANSACTION IS OTHERWISE THAN FOR ADEQUATE CONSIDERATION. WTA 18/11 & ITA 568/2011 CO 59 & 60/2011 :- 12 - : 6. FROM THE SHEER PERUSAL OF THE ABOVE DECISIONS, IT IS AMPLY CLEAR THAT THE FINDING OF THE LD. CIT(A) IS CORRECT BEING IN LINE WITH THE JURISDICTIONAL HIGH COURTS VIEW. THERE IS NO REAS ON TO DEVIATE FROM HIS FINDING. THE GROUNDS RAISED BY THE REVENUE ARE FOU ND TO BE MERITLESS. THE VALUATION ADOPTED BY THE ASSESSEE AS WELL AS TH E LD. CIT(A) ARE CORRECT AND ARE APPROVED. CONSEQUENTLY, WE CONFIRM THE APPELLATE FINDINGS AND DISMISS BOTH THE APPEALS - FILED IN RE LATION TO WEALTH TAX ASSESSMENT AND INCOME-TAX ASSESSMENT. 7. THE CROSS OBJECTIONS ARE SIMPLY IN SUPPORT OF THE A PPELLATE FINDINGS, HENCE, THEY DO NOT REQUIRE ANY ADJUDICATI ON BY US. 8. IN THE RESULT, BOTH, THE APPEALS OF THE REVENUE AN D THE CROSS OBJECTIONS OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 4.6.2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 14 TH JUNE, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR