Dy Director of Income Tax, Chandigarh V. Smt. Savita Sood,

ITA 1021/CHANDI/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2334 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 1021/CHD/2012 ASSESSMENT YEAR : 2009-10 DY. DIRECTOR OF INCOME V SMT. SAVITA SOOD TAX (INTERNATIONAL 11, CANAL ROAD TAXATION) CHANDIGARH JAMMU BSVPS 9869 K (APPELLANT) (RESPONDENT) APPELLANT BY SHRI N.K. SAINI RESPONDENT BY: SHRI R.K. GUPTA DATE OF HEARING 16.4.2013 DATE OF PRONOUNCEMENT 29.4.2013 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A), CHANDIGARH DATED 31.7.2012. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 78 ,68,640/- ON ACCOUNT OF ENHANCED CAPITAL GAIN ON A SALE OF A PL OT SITUATED IN GREATER KAILASH-I, NEW DELHI MADE BY THE ASSESSI NG OFFICER BY HOLDING THAT THE ASSESSING OFFICER WAS NOT RIGHT IN ADOPTING A LOW RATE AT RS. 1000/- PER SQ YARD INSTEAD OF RS. 500/- PER SQ YARDS, AS ADOPTED BY THE ASSESSEE FOR DETERMININ G COST PRICE THEREBY IGNORING THE REPORT RECEIVED FROM THE REGISTRAR OF PROPERTIES, NEW DELHI WHICH STATES THAT THE AVER AGE SALE RATE OF PLOTS IN THE E BLOCK OF THE LOCALITY WAS AR OUND RS. 1000/- PER SQ YARDS. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT IN T HIS CASE DURING THE YEAR THE ASSESSEE AS SOLD HER HOUSE SITU ATED AT C- 156, GREATER KAILASH-!, NEW DELHI FOR A CONSIDERATI ON OF RS. 2 6,18,75,000/- ON 25.4.2008. THIS PROPERTY WAS ACQU IRED BY THE ASSESSEE AND HER MOTHER ON 13.4.1966 AND AFTER THE DEATH OF HER MOTHER THE ASSESSEE BECAME THE SOLD OWNER OF TH IS PROPERTY. WHILE COMPUTING THE CAPITAL GAIN, THE FA IR MARKET VALUE OF THE PROPERTY WAS TAKEN AT RS. 5000 PER SQ YARD AS ON 1.4.1981 TOTALING TO RS. 16,90,000/- AND THE COST OF BUILDING WAS TAKEN AT RS. 2 LAKHS. FOR THIS PURPOSE THE ASS ESSEE FURNISHED THE VALUATION REPORT. THE GIST OF THE VA LUE AT PAGE 5 OF THE REPORT HAS BEEN EXTRACTED BY THE ASSESSING O FFICER WHICH IS AS UNDER: TOTAL PLOT AREA OF 338 SQ YARDS AND IS SITUATED IN ONE OF DEVELOPED LOCALITY OF SOUTH DELHI ABUTTING ON ONE O F ROAD IN THE FRONT. LAND RATE AS ON 1.4.1984 ARE NOT AVAILA BLE. HOWEVER, LAND AVERAGE RATE FOR THE HIGHEST BID IN T HE AUCTION HELD DURING 1983-84 ARE RS. 3020.25 PER SQ MT I.E. RS. 2526.23 PER SQ YD OR SAY RS. 2500 PER SQ YD. THE S ITE IN QUESTION IS A FREE HOLD AS COMPARED TO THE AUCTION CITED. KEEPING IN MIND THE ABOVE FACTS, WE ENHANCE THE SAM E FIGURE BY 100% FOR THE RELEVANT DATE (AS THERE IS NO UNEAR NED INCREASE AND NO RESTRICTION ON ITS SALE AS ON 1.4.1 981) THE LAND VALUE COMES TO RS. 2500 + 100% I.E. RS. 5000 P ER SQ YARD. ACCORDINGLY THE LAND VALUE COMES TO RS. 500 0 X 338 I.E. RS. 16,90,000/- THE ASSESSING OFFICER WROTE A LETTER TO THE SUB-REG ISTRAR, MEHRAULI TO PROVIDE CIRCLE RATES FOR SOUTH DELHI (GREATER KA ILASH) AS ON 1.4.1981. HE ALSO SOUGHT VALUE OF THE PROPERTY BET WEEN 1.1.1981 AND 30.6.1981. HE ALSO SOUGHT COPIES OF THE REGIST RIES OF SIMILAR PROPERTIES. SUB-REGISTRAR REPORTED THAT NO CIRCLE RATES WERE AVAILABLE FOR 1981. THEREAFTER THE ASSESSING OFFIC ER WROTE A LETTER TO THE VALUER, SHRI PARAMJIT SINGH ASKING FOR THE B ASIS OF VALUE BUT NO REPLY WAS RECEIVED. THE ASSESSING OFFICER AFTER CONSIDERING THE RELEVANT MATERIAL ON RECORD, ADOPTED THE VALUE OF R S. 1000/- PER SQ YARD AND COMPUTED THE CAPITAL GAIN ACCORDINGLY. 4. BEFORE THE LD. CIT(A) IT WAS MAINLY SUBMITTED TH AT THE ASSESSING OFFICER HAS WRITTEN A LETTER TO THE VALUE R BUT THE ADDRESS 3 WAS INCOMPLETE, THEREFORE, THAT LETTER WAS NEVER R ECEIVED BY THE VALUER. IT WAS POINTED OUT THAT THE VALUER HAD VAL UED THE PROPERTY ON THE BASIS OF DDA OPTIONS IN THE NEARBY AREAS AND IN DDA OPTIONS THE LAND WAS SOLD AT RS. 3151 PER SQ YARD. SINCE T HESE PROPERTIES HAD MORE VALUE. THE RATE FOR FREE HOLD PROPERTY WA S TWICE THAT OF LAST FREE HOLD PROPERTY. THE VALUE WOULD COME TO R S. 6060 PER SQ YARD WHEREAS VALUE HAD BEEN ADOPTED AT RS. 5000 PER SQ YARD WHICH WAS JUSTIFIED. REFERENCE WAS MADE TO CERTAIN CASE LAWS ALSO. ON THE BASIS OF ABOVE THE LD. CIT(A) OBSERVED THAT VALUER HAD REPLIED TO THE ASSESSING OFFICER BUT THE REPLY WAS NOT RECEIVED BY THE ASSESSING OFFICER BEFORE COMPLETION OF ASSESSME NT. IT WAS FURTHER FOUND THAT IN THE REPLY REGD VALUER HAS CLE ARLY STATED THAT THE VALUE WAS ADOPTED ON THE BASIS OF DDA OPTIONS. RELIANCE WAS ALSO PLACED ON THE DECISION OF COCHIN BENCH IN CASE OF MRS. SOSAMMA PAULOSE V JCIT, ITA NO. 259/COCH/2000: 79 T TJ (COCH) 573 (COCH) WHEREIN VALUE OF RS. 10,500 FOR GULMOHAR PARK WAS ACCEPTED BY THE REVENUE. THE ASSESSING OFFICER FOU ND THAT THERE WAS NO VALUE FOR REJECTING THE VALUERS REPORT AND ACCORDINGLY ACCEPTED THE VALUE OF RS. 5000 PER SQ YARD. 5 BEFORE US, THE LD. DR FOR THE REVENUE MAINLY SUBM ITTED THAT EVEN IF DDA OPTIONS WAS TO BE TAKEN THAT WAS O NLY RS. 3151 PER SQ YARD AND THAT TOO ON 5.11.1981 AND THER EFORE, SAME VALUE CANNOT BE ADOPTED ON 1.4.1981. 6 ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSE E REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSIN G OFFICER AND THE LD. CIT(A). HE FURTHER STATED THAT THE REP LY WAS SENT TO THE ASSESSING OFFICER VIDE LETTER DATED 2.1.2012. (COPY OF WHICH IS PLACED AT PAGE 6 & 7 OF THE PAPER BOOK). IN THIS REPLY THE BASIS OF VALUATION HAS BEEN EXPLAINED WHICH IS ON THE BASIS 4 OF DDA OPTIONS. THIS LETTER WAS WRITTEN BECAUSE TH E VALUER HAD NOT RECEIVED THE LETTER OF THE ASSESSING OFFICER BE CAUSE OF INCOMPLETE ADDRESS. HE ALSO REFERRED TO THE DECISI ON OF COCHIN BENCH IN CASE OF MRS. SOSAMMA PAULOSE V JCIT, ITA N O. 259/COCH/2000: 79 TTJ (COCH) 573 (COCH) WHEREIN VAL UE OF RS. 12,000 PER SQ YARD FOR GULMOHAR PPARK WAS HELD TO B E REASONABLE. HE ALSO RELIED ON THE DECISION OF HON'BLE DELHI HI GH COURT IN CASE OF R.B. JODHAMAL & CO. PVT LTD V. UNION OF INDIA, 1 84 OF 1998 (COPY FILED AT PAGE 18 TO 28 OF THE PAPER BOOK). HE ALSO SUBMITTED THAT THE ASSESSING OFFICER HAS NO BASIS TO VALUE THE FAI R MARKET VALUE AS ON 1.4.1981 AT RS. 1000 PER SQ YARD. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. WE ARE OF THE OPINION THAT IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT VALUATION, HE SHOULD HAVE REFERRED THE MATTER TO THE DVO AS PR OVIDED IN THE ACT BECAUSE THE ASSESSING OFFICER IS NOT AN EXPERT IN DETERMINATION OF THE VALUE OF LAND. AT THE SAME TIME, BASIS TO P RESUME THAT FREE HOLD PROPERTY WOULD TWICE THE VALUE THAN THAT OF LE ASE HOLD PROPERTY. THE CAUTION WAS CONDUCTED BY DDA ON 5.11 .1981 AND RATE WAS RS. 3151 PER SQ YARD. THUS THERE IS NO JU STIFICATION IN ADOPTING THE VALUE OF RS. 5000 PER SQ YARD. THE DE CISION OF HON'BLE DELHI HIGH COURT IN CASE OF R.B. JODHAMAL & CO. PVT LTD V. UNION OF INDIA, 184 OF 1998 HAS BEEN RENDERED UNDER LAND ACQUISITION ACT AND MAY NOT BE RELEVANT FOR THE PR ESENT PURPOSES. SIMILARLY IN CASE OF MRS. SOSAMMA PAULOSE V JCIT, I TA NO. 259/COCH/2000: 79 TTJ (COCH) 573 (COCH), THE LAND W AS LOCATED IN GULMOHAR PARK WHICH IS ABOUT 3 KMS AWAY FROM GREATE R KAILASH AS ADMITTED BY THE ASSESSEE. IT IS A COMMON KNOWLEDGE THAT THE VALUE OF LAND WOULD DEPEND FROM COLONY TO COLONY AND SUCH RATES ARE NOT COMPARABLE. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO TH E FILE OF 5 ASSESSING OFFICER WITH A DIRECTION TO REFER THE MAT TER TO DVO FOR DETERMINATION OF CORRECT VALUE AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 8. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 29.4.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29.4.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR