COMMISSIONER OF INCOME TAX-I LUDHIANA V. MANJIT SINGH

ITA/56/2013

AI Insights

The case revolves around the assessment of the fair market value of a piece of land sold by the respondent, Manjit Singh, which was situated on the main road Rahon. The dispute originated from the differing valuations of the land's fair market value as of 1.4.1981 for the purpose of calculating the indexed cost of acquisition. The Assessing Officer and the Commissioner of Income Tax (Appeals) had valued the land at \\u20b927030 per acre based on a report from the Tehsildar, Ludhiana. However, the Tribunal reassessed this value to \\u20b93.5 lacs per acre, considering additional evidence including a certificate from the Patwari and a report from the Tehsildar's field staff. The Revenue's appeal contested the Tribunal's reassessment, but the High Court found no merit in altering the Tribunal's decision.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 730360 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 17-02-2014
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax Vs. J.V.K. Rao, Ved Prakash Vs. Commissioner of Income Tax-ITR(265)-642
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S K MUKHI; RAJIV SHARMA
• Assessee Lawyers: RAJESH KATOCH
• Keywords: Capital Gain; Fair market value; Indexed cost of acquisition; Tehsildar report; Patwari certificate
• Section: 260-A

Judgement Text

" ITA No. 56 of 2013 1 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH I.T.A. No. 56 of 2013 (O&M) Date of Decision: 17.02.2014 Commissioner of Income Tax-I, Ludhiana. ... Appellant vs. Manjit Singh ... Respondent CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MRS. JUSTICE ANITA CHAUDHRY Present:- Mr. Rajesh Katoch, Advocate for the appellant. Mr. S.K. Mukhi, Advocate and Mr. Rajiv Sharma, Advocate for the respondent. --- ANITA CHAUDHRY, J. 1. Revenue is in appeal against the order dated 28.9.2012 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B' (for brevity, 'the Tribunal'), whereby the Tribunal assessed the fair market value of the land to be `3.5 lacs per acre as on 1.4.1981, instead of `27030/- per acre, fixed by the Assessing Officer and Commissioner of Income Tax(Appeals) [in short, CIT(A)] vide orders dated 31.12.2010 and 7.9.2011 respectively. 2. The assessee-respondent derived income from capital gain and house property and had filed return on 18.12.2008 for the assessment year 2008-09. The assessee sold land situated on the main road Rahon(to be referred hereinafter as 'land in question') and paid tax on the sale value as long term capital gain. For the purpose of the indexed cost of acquisition of Sharma Jiten 2014.05.20 14:06 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 56 of 2013 2 the land sold, he submitted the calculations. On the basis of a certificate issued by Patwari concerned, he took the fair market value of the land as on 1.4.1981 at `5 lacs per acre. The said figure was not accepted by the Assessing Officer and he re-computed the long term capital gain on sale of land by taking fair market value of land as on 1.4.1981 to be `27030/- per acre. The CIT(A), on an appeal preferred by the assessee, confirmed the said computation. The Tribunal, however, differed with both the authorities and assessed the fair market value of the land at `3.5 lacs per acre as on 1.4.1981 for the purpose of calculation of the indexed cost of acquisition. Aggrieved with the same, revenue has filed this appeal. 3. We have heard learned counsel for the parties and have gone through the paper-book carefully. In our opinion, no question of law, much less substantial question of law arises for determination in the instant appeal. 4. Learned counsel for the appellant, while referring to Commissioner of Income Tax Vs. J.V.K. Rao, (2003) 184 CTR(Mad.) 187, has contended that the report of Tehsildar mentioning the price of the land in question to be `27030/- per acre is an admissible document and has rightly been relied upon by the Assessing Officer and the CIT(A) and the Tribunal ought not to have disturbed the findings arrived at by both the authorities. 5. The Assessing Officer as well as the CIT(A) re- computed the fair market value of the land by emphasizing on the report dated 20.12.2010 submitted by the Tehsildar(East), Ludhiana, pursuant to the information sought by the Assessing Sharma Jiten 2014.05.20 14:06 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 56 of 2013 3 Officer regarding the circle rate of the land in question and the land adjacent to it. In the said report, the average price of the land in the area in the year 1980-81 was taken on the basis of various registries made during that period i.e. `27030/- per acre. The Assessing Officer as well as CIT(A) ignored the later part of the same report, wherein on the basis of report of field staff and on enquiry from eminent persons of the vicinity,the Tehsildar reported that the rate of agricultural land on the main road Rahon, where the land in question existed, was `5 lacs per acre. The Assessing Officer as well as CIT(A) omitted to consider this vital piece of evidence and also failed to take into consideration the certificate issued by the Patwari, appended by the assessee along with return, wherein he had mentioned the market value of the land in question to be `5 lacs per acre. Any document relied upon by the authorities while adjudicating any issue has to be read in its entirety and not in a pick and choose manner. Therefore, J.V.K. Rao's case (supra) cannot come to the rescue of the appellant. 6. In an another round of litigation, for the assessment year 2005-06, relating to the respondent-assessee, the Assessing Officer adopted fair market value of the land as on 1.4.1981 at `1,80,000/- per acre which was deep inside the village, but in the case in hand, it took the value of the land at `27030/- per acre only. 7. Another aspect which weighed in the mind of the Tribunal was that during search and seizure, an agreement entered into between the assessee and buyer was recovered from the premises of the buyer, wherein the land in question was Sharma Jiten 2014.05.20 14:06 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 56 of 2013 4 agreed to be sold at `43.25 lacs per acre. The revenue, thus, adopted the sale consideration of the said land for the purpose of computation of capital gains at the aforesaid rate, but volte face rejected the same while determining the fair market value of the same land as on 1.4.1981. This contradictory approach led the Tribunal to conclude that adoption of average value of land at `27030/- per acre as on 1.4.1981 was not legally or factually tenable and it had rightly computed the same at `3.50 lacs per acre and resorted to the touch-stone of pragmatic and factual rationale. All these facts strengthen the plea of the assessee and were rightly taken into consideration by the Tribunal to arrive at the conclusion that the fair market value of the land in question was much more than the one re-computed by the Assessing Officer as well as CIT(A). 8. In the appellate jurisdiction under Section 260-A of the Act, this Court normally does not interfere by substituting its own estimate in place of the one of the Tribunal unless it is shown that the estimate of the Tribunal could not possibly be reached. Reliance can be placed on Ved Prakash Vs. Commissioner of Income Tax-ITR(265)-642. Thus, no ground for interference is called for. 9. In view of the above, we find no merit in the appeal and dismiss the same. (AJAY KUMAR MITTAL) (ANITA CHAUDHRY) JUDGE JUDGE 17.02.2014 Jiten Sharma Jiten 2014.05.20 14:06 I attest to the accuracy and integrity of this document High Court Chandigarh "