Shri K.Gangaprasad, CHENNAI V. ITO, CHENNAI

CO 63/CHNY/2010

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 5056 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 22-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH A : CHENNAI [BEFORE SHRI PRADEEP PARIKH, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NO.1044/MDS/2010 ASSESSMENT YEAR : 2006-07 THE ITO WARD XIII(3) CHENNAI VS SHRI K. GANGAPRASAD KRISHNA KRIPA NO.12, 3 RD CROSS STREET ORMES ROAD, KILPAUK, CHENNAI - 10 [PAN AFBPG6221P] (APPELLANT) (RESPONDENT) C.O.NO.63/MDS/2010 ASSESSMENT YEAR : 2006-07 SHRI K. GANGAPRASAD CHENNAI - 10 VS THE ITO WARD XIII(3), CHENNAI (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI SHAJI P. JACOB ASSESSEE BY : SHRI PHILIP GEORGE O R D E R PER HARI OM MARATHA, JM: THE APPEAL BY THE REVENUE AND THE CROSS OBJECT ION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-XII, DATED 19.3.2010. THE REVENUE HAS RAISED THE FOLLOWING GR OUNDS: 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN ALLOWING THE ASSESSEE TO ADOPT 1981 AS THE BASE YEAR FOR THE PURPOSE OF COMPUTING INDEXED COST OF ACQUISITION. 3. THE ID CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THE ASSESSING OFFICER HAD RIGHTLY ADOPTED THE YEAR 1984 AS THE BASE YEAR IN ITA 1044/10 CO 63/10 :- 2 -: RESPECT OF 1/4 TH OF THE PROPERTY AND THE YEAR 1999 FOR THE BALANCE 3/4 TH OF THE PROPERTY. 4. THE ID CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE'S FATHER DIED INTESTATE IN THE YEAR 1984 LEAVING FOUR LEGAL HEIRS INCLUDING THE ASSESSEE. THE SHARE OF THE OTHER LEGAL HEIRS DWELLED ON THE ASSESSEE IN THE YEAR 1999 ONLY VIDE THE PARTITION DEED DTD.23.04.1999, AND THE BENEFIT OF INDEXATION CANNOT BE EXTENDED FOR THIS PORTION OF THE PROPERTY BEYOND THE YEAR 1999. 5. 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 OFFICER BE RESTORED. 2. IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED FO LLOWING GROUNDS: 1. THE COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN ADOPTING RS.80,000/- AS FAIR MARKET VALUE AS ON 01.04.1981 IN RESPECT OF THE PROPERTY AT BALFOUR ROAD. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE ADOPTED THE FAIR MARKET VALUE AS ON 01.04.1981 AT RS.2,50,000/- PER GROUND FOR THE PROPERTY AT BALFOUR ROAD. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE SALE DEED IN RESPECT OF THE PROPERTY AT TAYLORS ROAD MEASURING 5568 SQ FT. WHICH WAS SOLD FOR A SUM OF RS.2,50,000/- WHICH WORKS OUT TO RS.1,08,000/- PER GROUND AND WHEREAS BALFOUR ROAD IS MUCH MORE EXCLUSIVE AND SITUATED IN A POSH AND PRIME LOCALITY COMPARED TO TAYLORS ROAD AND THEREFORE OUGHT TO HAVE UPHELD THE ITA 1044/10 CO 63/10 :- 3 -: VALUE ADOPTED BY THE CROSS OBJECTOR AS ON 01.04.1981 AT RS.2,50,000/- PER GROUND. 4. THE CROSS OBJECTOR CRAVES LEAVE TO FILE ADDITIONAL GROUNDS OF CROSS OBJECTION IF ANY AT OR BEFORE THE TIME OF HEARING. 3. THE ONLY ISSUE INVOLVED IN THE REVENUES APPEAL RE LATES TO ADOPTION OF THE BASE YEAR FOR THE PURPOSE OF COMPUT ATION OF INDEXED COST OF ACQUISITION OF AN ASSET FOR DETERM INING THE LONG TERM CAPITAL GAINS. THE FACTS OF THE CASE ARE THA T THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE ASSESSMENT YE AR 2 00 6- 0 7 O N 0 6 . 09. 200 6 ADMITT I N G A T OTAL INCO M E OF ` 1 , 3 4 , 0 8 1 /- WA S ACC EPT E D U/S 1 43 ( 1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT) . LAT ER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) A ND U/ S 14 2 ( 1 ) W E R E ISSUED . SUBSEQ U ENT L Y , O R D ER U / S 14 3( 3 ) DATED 31 . 1 2 . 0 8 WA S PASS E D BY THE AS S ESS I NG OFFICER DETER M INING THE LONG - TERM CAP IT AL G A INS OF T H E AP PELL A NT A T ` 8 2 , 3 9 , 336/ - AN D A CCE PTING THE I N C OM E RE T U RN ED A T ` 1 , 34 , 081/ - , T HER EBY RAI SING A D EMA N D O F ` 2 2 , 5 3 , 4 51/- ON A C C OU NT OF LONG TERM CAPITAL GAI N S WHICH I S IN C LUS I V E OF IN TEREST U / S 23 4B A T ` 5 ,5 5 , 819/ - . AG G R IE V E D B Y THE A BOV E AC TION OF TH E ASSESSING OFFICER AND THE DEMAND RAISED , ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS A LLOWED THE ASSESSEE TO ADOPT 1981 AS THE BASE YEAR FOR THE PUR POSE OF ITA 1044/10 CO 63/10 :- 4 -: COMPUTING INDEXED COST OF ACQUISITION AGAINST WHICH REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS A ND THE MATERIAL AVAILABLE ON RECORD. IT WAS ARGUED BY T HE LD.AR THAT THE ISSUE STANDS SQUARELY COVERED BY THE DECISION OF TH E SPECIAL BENCH OF MUMBAI TRIBUNAL IN THE CASE OF DY. CIT VS MANJU J. SHAH IN I.T.A.NO. 7315/MUM/2007, ORDER DATED 16.10.2009. T HE LD.DR COULD NOT BRING TO OUR NOTICE ANY CONTRARY DECISION S. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF THE LD. CIT(A) AND CONFIRM THE SAME. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DIS MISSED. 6. IN THE CROSS OBJECTION, THE ADOPTION OF ` 80,000/- AS FAIR MARKET VALUE AS ON 1.4.1981 IN RESPECT OF PROPERTY SITUATED AT BALFOUR ROAD, HAS BEEN DISPUTED BY THE ASSESSEE. THE CASE OF THE ASSESSEE IS THAT THE LD. CIT(A) SHOULD HAVE ADOPTED THE FAIR MA RKET VALUE AS ON 1.4.1981 AT ` 2,50,000/- PER GROUND. HE HAS GIVEN ONE EXAMPLE OF THE SALE DEED IN RESPECT OF PROPERTY AT TAYLORS RO AD MEASURING 5568 SQ FT WHICH WAS SOLD FOR A SUM OF ` 2,50,000/- GIVING A RATE OF ` 1,08,000/- PER GROUND AND THAT BALFOUR ROAD IS MUCH MORE EXCLUSIVE AND SITUATED IN A POSH AND PRIME LOCALITY AS COMPAR ED TO TAYLORS ROAD AND THEREFORE, THE VALUE ADOPTED BY THE ASSESSEE AT ` 2,50,000/- PER GROUND SHOULD BE ADOPTED. BUT DURING ARGUMENT, IT WAS STATED THAT IN ITA 1044/10 CO 63/10 :- 5 -: THE INTEREST OF JUSTICE, THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR ARRIVING AT THE FAIR MARKET V ALUE ON THE BASIS OF EVIDENCE PRODUCED BY THE ASSESSEE. ON THE OTHER HA ND, THE LD.DR HAS RELIED ON THE ORDER OF THE LD. CIT(A). 7. AFTER CONSIDERING THE ENTIRETY OF THE FACTS AND CI RCUMSTANCES OF THE CASE, IF INSTEAD OF ` .80,000/- PER GROUND, ` 1,00,000/- IS ADOPTED AS FAIR MARKET VALUE AS ON 1.4.1981 IN RESPECT OF THE IMPUGNED PROPERTY, THE ENDS OF JUSTICE WOULD MEET. THE AS SESSING OFFICER IS, THEREFORE, DIRECTED TO COMPUTE THE FAIR MARKET VAL UE ACCORDINGLY. 8. IN THE RESULT, THE CROSS OBJECTION BY THE ASSESSE E IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISMI SSED AND THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 17.9 .10. SD/- SD/- (PRADEEP PARIKH) VICE-PRESIDENT ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 17 TH SEPTEMBER, 10 RD : COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR