Income Tax Officer, Ward-2, Nellore V. Smt. Jakka Janakamma, Nellore

ITA 1044/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2849 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: T SRINIVASULU
• Keywords: Value adopted by valuation officer; Question of law; Cost of acquisition; Fair market value; Valuation report
• Section: 143(3); 147; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1044 & 1045/HYD/2012 ASSESSMENT YEAR 2008-2009 & 2009-2010 INCOME TAX OFFICER, WARD- 2, 24-2-438, GNT ROAD, DARGAMITTA, NELLORE VS. SMT. JAKKA JANAKAMMA, D.NO.24-423A, SHANTHI NAGAR, DARGAMITTA, NELLORE. PAN ACDPJ9501C (APPELLANT) (RESPONDENT) ITA.NO.1058 & 1059/HYD/2012 ASSESSMENT YEAR 2008-2009 & 2009-2010 SMT. JAKKA JANAKAMMA, D.NO.24-423A, SHANTHI NAGAR, DARGAMITTA, NELLORE. PAN ACDPJ9501C VS. INCOME TAX OFFICER, WARD-2, 24-2-438, GNT ROAD, DARGAMITTA, NELLORE (APPELLANT) (RESPONDENT) ITA.NO.1046/HYD/2012 ASSESSMENT YEAR 2008-2009 INCOME TAX OFFICER, WARD- 2, 24-2-438, GNT ROAD, DARGAMITTA, NELLORE VS. SMT. JAKKA SANJANA, D.NO.24-423A, SHANTHI NAGAR, DARGAMITTA, NELLORE. PAN ACKPJ5104N (APPELLANT) (RESPONDENT) ITA.NO.1060/HYD/2012 ASSESSMENT YEAR 2008-2009 SMT. JAKKA SANJANA, D.NO.24-423A, SHANTHI NAGAR, DARGAMITTA, NELLORE. PAN ACKPJ5104N VS. INCOME TAX OFFICER, WARD-2, 24-2-438, GNT ROAD, DARGAMITTA, NELLORE (APPELLANT) (RESPONDENT) 2 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA ITA.NO.1047/HYD/2012 ASSESSMENT YEAR 2008-2009 INCOME TAX OFFICER, WARD- 2, 24-2-438, GNT ROAD, DARGAMITTA, NELLORE VS. SMT. JAKKA SWAPNAMMA, D.NO.24-2-438, SHANTHI NAGAR, DARGAMITTA, NELLORE. PAN ACDPJ9219M (APPELLANT) (RESPONDENT) ITA.NO.1061/HYD/2012 ASSESSMENT YEAR 2008-2009 SMT. JAKKA SWAPNAMMA, D.NO.24-2-438, SHANTHI NAGAR, DARGAMITTA, NELLORE. PAN ACDPJ9219M VS. INCOME TAX OFFICER, WARD-2, 24-2-438, GNT ROAD, DARGAMITTA, NELLORE (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI M.H.NAIK (DR) FOR ASSESSEE : SHRI T.SRINIVASULU (AR) DATE OF HEARING : 28.05.2013 DATE OF PRONOUNCEMENT : 31.07.2013 ORDER PER SMT. ASHA VIJAYARAGHAVAN, J.M. THESE APPEALS BY THE ASSESSEE AS WELL AS REVENUE A RE DIRECTED AGAINST THE ORDERS OF CIT(A). AS THE COMMO N ISSUES ARE INVOLVED IN THESE APPEALS, THEY WERE CLUBBED AND HE ARD TOGETHER AND, THEREFORE, A COMMON ORDER IS PASSED FOR THE SA KE OF CONVENIENCE. ITA.NO.1058/HYD/2012 : 1. THIS APPEAL FILED BY THE ASSESSEE SMT. JAKKA JAN AKAMMA. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFI CER DETERMINED THE ASSESSEES TOTAL INCOME AT RS.20,89,130/- WHILE COMPLETING 3 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTI ON 147 OF THE I.T. ACT. 2. THE ASSESSEE FILED RETURN OF INCOME FOR THE A.Y. 2008-09 ADMITTING INCOME AT RS.2,50,652/-. IN THE ASSESSMEN T ORDER, THE ASSESSEE HAS SHOWN INCOME WHICH HAS BEEN DERIVED FR OM COMMISSION, INTEREST INCOME AND LONG TERM CAPITAL G AINS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE ALONG WI TH 2 OTHERS HAD SOLD THE PROPERTY ADMEASURING 780 SQ. YARDS WIT H BUILT-UP AREA OF 6768 SQ. FT. ON 26.07.2007, FOR A TOTAL CON SIDERATION OF RS.87,68,000/-, OUT OF WHICH THE ASSESSEES SHARE I S RS.21,92,000/- AND THE SAME WAS CLAIMED AS EXEMPT U NDER SECTION 54 OF THE I.T. ACT, THOUGH SHE HAD NOT DEPO SITED THE GAINS INTO SPECIFIED MODES OF INVESTMENT. THE ASSESSING O FFICER ISSUED NOTICE UNDER SECTION 148 ON 23.04.2010 AND IN RESPO NSE, THE ASSESSEE FILED REVISED COMPUTATION OF STATEMENT OF TOTAL INCOME AND RETURNED INCOME AT RS.3,06,370/-. 3. THE ASSESSEE HAD SHOWN THE COST OF ACQUISITION A T RS.3,98,250/- AND WORKED OUT THE INDEXED COST OF AC QUISITION AT RS.21,94,358/- AND ARRIVED AT A NET CAPITAL LOSS OF RS.2358/- AS THERE WAS NO BASIS FOR ARRIVING AT THE VALUE OF THE PROPERTY AS ON 1.4.1981. THE MATTER WAS REFERRED TO THE JOINT SUB REGISTRAR, NELLORE AND HE HAD REPORTED THE MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 AT RS.92,898/-. FURTHER, WHILE REPORTIN G THE MARKET VALUE OF THE SAID PROPERTY AS ON 1.4.1981 AT RS.2,9 7,090/-, THE SRO, NELLORE, HAS SHOWN THE PARTY VALUE AT RS.7,96, 500/- AND ON FURTHER CLARIFICATION, THE SRO STATED THAT THERE IS NO BASIS FOR THE PARTY VALUE AND THE MARKET VALUE AS ON 1.4.1981 IS THE BASIS FOR REPORTING THE VALUE AT RS.2,97,090/- WHICH IS AS PE R THE REGISTERS MAINTAINED IN THEIR OFFICE. THE ASSESSING OFFICER I SSUED A LETTER TO THE ASSESSEE PROPOSING TO ADOPT THE VALUE OF THE PR OPERTY AS ON 4 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA 1.4.1981 AS REPORTED BY THE SUB-REGISTRARS OFFICE AS AGAINST THE COST OF ACQUISITION WORKED OUT BY THE ASSESSEE. 4. IN RESPONSE, THE ASSESSEE FILED VALUATION REPORT BY A REGISTERED VALUER WHEREIN THE VALUE WAS ESTIMATED A S ON 1.4.1981 AT RS.16,18,500/-. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER ADOPTED THE VALUE AS REPORTED BY THE SRO, NELLORE FOR DETERMINING THE COST OF ACQUISITION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS WHICH WORKED OUT TO RS .17,82,760/- WHICH RESULTED IN A DEMAND OF RS.4,99,020/-. 5. AGGRIEVED, ASSESSEE FILED VALUATION REPORT BY A REGISTERED VALUER WHEREIN THE VALUE WAS ESTIMATED AS ON 1.4.19 81 AT RS.16,18,500/-. WHILE COMPLETING THE ASSESSMENT, TH E ASSESSING OFFICER DEBITED THE VALUE AS REPORTED BY JOINT SUB- REGISTRAR, NELLORE FOR DETERMINING THE COST OF ACQUISITION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS WHICH WORKED OUT TO RS .17,82,760/- WHICH RESULTED IN A DEMAND OF RS.4,99,020/-. 6. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT(A). BEFORE THE CIT(A) THE ASSESSEE RAISED THE FOLLOWING GROUNDS : (I) THE ASSESSING OFFICER ERRED IN ADOPTING THE MARKET VALUE GIVEN BY JOINT SUB-REGISTRAR AS THE COST OF ACQUISITION. (II) THE LEARNED ASSESSING OFFICER ERRED IN NOT RELYING ON THE VALUATION REPORT GIVEN BY THE INCOME TAX APPROV ED VALUER. (III) THE LEARNED ASSESSING OFFICER ERRED IN NOT REFERRIN G THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER TO FIN D OUT THE ACTUAL COST OF ACQUISITION IN SPITE OF THE REQU EST OF THE APPELLANT. 5 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA (IV) THE LEARNED ASSESSING OFFICER ERRED IN OBSERVING TH AT THERE IS NO BASIS OR PROOF IN SUPPORT OF COST OF CONSTRUCTION AS ON 1.4.1981. (V) THE LEARNED ASSESSING OFFICER ERRED IN NOT RELYING ON THE PARTY VALUE GIVEN BY THE JOINT SUB-REGISTRAR. 7. THE CIT(A) HELD AS FOLLOWS : 4.3. THE COST OF ACQUISITION CLAIMED BY THE APPELL ANT AS ON 01.4.1981 WAS RS.3,98,250/- AND THE INDEXED COST OF ACQUISITION WAS ARRIVED AT RS.21,94,358/-. THERE IS NO DISPUTE WITH REGARD TO THE SALE CONSIDERATION OF RS.21,92,000/-. IN MY CONSIDERED OPINION ENDS OF JUSTICE WILL MEET IF 5% OF THE INDEXED COST OF ACQUISITION I.E., RS.1,09,718/- IS DISALLOWED FROM THE INDEXED COST OF ACQUISITION OF RS.21,94,358/- CLAIM ED BY THE APPELLANT. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO TAKE INDEXED COST OF ACQUISITION AT RS.20,84,640/- (RS.21,94,358/- MINUS RS.1,09,718/-) AND SALE CONSIDERATION OF RS.21,92,000/- AND RE- COMPUTE THE LONG TERM CAPITAL GAINS ACCORDINGLY. TH US, THE APPELLANT IS ENTITLED FOR A PARTIAL RELIEF. 8. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A) WHICH ARE AS FOLLOWS : 1. THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFF ICER IS WRONG IN ADOPTING THE MARKET VALUE GIVEN BY THE JOINT SUB-REGISTRAR AS THE COST OF ACQUISITION. THE MARKET VALUE IS DIFFERENT FROM THE COST OF ACQUISIT ION AND HENCE, THE ASSESSING OFFICER GROSSLY ERRED IN ADOPTING THE MARKET VALUE AS ON 01.4.1981 OBTAINED FROM THE SUB-REGISTRAR OFFICE. 2. UNDER SECTION 48 OF THE INCOME TAX ACT, ACTION I S TO THE ASSESSEE TO ADOPT EITHER THE ACTUAL COST OR THE FAIR MARKET VALUE OF THE ASSET AS ON 1.4.1981 AS COST OF 6 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA ACQUISITION. HENCE, THE ASSESSEE WAS CORRECT IN ADOPTING THE COST OF ACQUISITION OF THE PREVIOUS OW NER AS ON 1.4.1981. 3. FURTHER, THE ASSESSING OFFICER WAS INCORRECT IN EXERCISING THE OPTION OF REFERRING THE MATTER TO JO INT SUB-REGISTRAR. 4. THE LEARNED ASSESSING OFFICER ALSO ERRED IN NOT RELYING ON THE VALUATION REPORT GIVEN BY THE INCOME TAX APPROVED VALUER. 5. THE ASSESSEE OBTAINED THE VALUATION REPORT OF TH E PROPERTY BY THE APPROVED REGISTERED VALUER WHO IS A N INDEPENDENT PROFESSIONAL HAVING TECHNICAL QUALIFICA TION AND KNOWLEDGE AS TO THE VALUE OF THE PROPERTY AND T HE ASSESSING OFFICER OUGHT TO HAVE ADOPTED THE VALUATI ON REPORT. 6. FURTHER, THE MATTER HAS NOT BEEN REFERRED TO TH E DEPARTMENTAL VALUATION OFFICER BY THE ASSESSING OFF ICER TO FIND OUT THE ACTUAL COST OF ACQUISITION IN SPITE OF THE REQUEST BY THE ASSESSEE. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE FIND THAT THE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RAMAN KUMAR SINGHVI HAS BEEN HELD THAT WITH RESPECT TO THE DETERMINATIO N OF THE FAIR MARKET VALUE AS ON 1 ST APRIL, 1981 THE VALUATION DONE BY A REGISTERED VALUER OF THE INCOME TAX DEPARTMENT WOUL D CERTAINLY TAKE PRECEDENCE OVER NABI GUIDE TO HOUSE TAX. THE C OURT HAD CONCLUDED THAT THE DETERMINATION OF FAIR MARKET VAL UE AS ON 1 ST APRIL, 1981 IS A QUESTION OF FACT AND THE TRIBUNAL S DECISION THAT THE FAIR MARKET VALUE AS ESTIMATED BY THE REGISTERE D VALUER ON 1 ST APRIL, 1981 IS ACCEPTABLE. IT ALSO HELD THAT THE FI NDING OF THE TRIBUNAL IS NEITHER PERVERSE NOR ARBITRARILY DONE S O AS TO RAISE A 7 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA SUBSTANTIAL QUESTION OF LAW. 10. THOUGH THE VALUATION DONE BY THE REGISTERED VA LUER IS WITH REGARD TO A SPECIFIC PROPERTY AND IS CLAIMED BY THE LEARNED COUNSEL FOR THE ASSESSEE AS MOST APPROPRIATE AND CO RRECT VALUATION WHICH IS TO BE ADOPTED IN DETERMINING THE COST OF ACQUISITION WHILE WORKING OUT THE CAPITAL GAIN, WE HAVE ALSO TO TAKE INTO ACCOUNT THE ARGUMENT OPPOSING THE ADOPTIO N OF THE SAME ON THE GROUND THAT THE REGISTERED VALUER WOULD BE INFLUENCED BY VESTED INTEREST HAVING BEEN CHOSEN BY THE ASSESSEE FOR THE PURPOSE OF VALUING THE PROPERTY. THEREFORE , THE FAIR MARKET VALUE HAS TO BE BASED ON COMPARABLE SALE INS TANCES. IN THE CASE OF DCIT VS. CHATURBHUJ VALLABHDAS HUF, MUM BAI BENCH 130 ITD 230 IT HAS BEEN CONCLUDED THAT : REFERENCE TO VALUATION OFFICER UNDER S. 55A CAN BE MADE BY A.O. IGNORING THE REPORT OF REGISTERED VALU ER REGARDLESS OF THE FACT THAT THE FAIR MARKET VALUE O F THE PROPERTY AS ON 1 ST APRIL, 1981 AS SHOWN BY THE ASSESSEE WAS MORE THAN ITS REAL FAIR MARKET VALUE; VALUATION REPORT OF THE DVO IS A RELEVANT AND ADMISSIBLE EVIDENCE ON THE MATTER IN ISSUE IRRESPEC TIVE OF ILLEGALITY OF REFERENCE MADE BY THE A.O. 11. IN THE CASE OF DCIT (INTERNATIONAL TAXATION) VS . HARBIR SINGH (2012) 34 CCH 167 (DEL.) (TRIBU.) IT HAS BEEN HELD BY THE DELHI BENCH OF THE TRIBUNAL THAT IN RESPECT OF COST OF ACQUISITION AS ON 1.4.1981 OF THE LAND SITUATED AT E-25, NEW DEFENCE COLONY, NEW DELHI, THE ASSESSEE ADOPTED COST OF ACQUISITION AS PER REPORT OF REGISTERED VALUER WHILE THE A.O. DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE OR 66 PERCENT INCREASE IN RATES FOR DE TERMINING COST OF ACQUISITION OVER AND ABOVE THE AVERAGE AUCTION R ATES OF LAND IN THE SAFDARJUNG ENCLAVE AREA. BOTH THE ASSESSEE AND REVENUE ARE AGGRIEVED WITH THE FINDINGS OF THE LEARNED CIT(A). THE LEARNED AR FAIRLY ADMITTED THAT THERE WAS NO BASIS FOR INCREAS ING THE AVERAGE AUCTION RATES PREVAILING IN SAFDARJUNG ENCLAVE 66 P ERCENT WHILE 8 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA THE LEARNED DR VEHEMENTLY ARGUED THAT REPORT OF REG ISTERED VALUER BEING WITHOUT ANY BASIS NOR HAVING CONSIDERE D COMPARATIVE INSTANCES OF COST OF LAND AS ON 1.4.1981 IN DEFENCE COLONY OR ADJOINING AREAS, COULD NOT BE RELIED UPON. IN THE L IGHT OF THESE SUBMISSIONS ON BEHALF OF BOTH THE PARTIES, CONSIDER ING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, ESPECIALLY WHEN THE REPORT OF REGISTERED VALUER DOES NOT DISCLOSE THE BASIS FO R CHOOSING AVERAGE LAND AUCTION RATES IN SAFDARJUNG ENCLAVE AR EA NOR THE BASIS OF INCREASE OF SUCH RATES BY 66 PERCENT AND N OR EVEN ANY REASONS FOR NOT IDENTIFYING COMPARATIVE INSTANCES O F COST OF SIMILARLY SITUATE PROPERTIES IN DEFENCE COLONY AREA WHILE THE IMPUGNED ORDER DOES NOT DISCLOSE THE BASIS OF INCRE ASE BY 40 PERCENT OVER THE AVERAGE AUCTION RATES IN SAFDARJUN G ENCLAVE AREA, NOT MUCH RELIANCE CAN BE PLACED ON THE VALUAT ION REPORT PREPARED BY THE REGISTERED VALUER AND PARTLY RELIED UPON BY THE LEARNED CIT(A). THE DETERMINATION OF COST OF ACQUIS ITION OF A PROPERTY IS A TECHNICAL ASPECT AND WITHOUT HAVING C OMPLETE FACTS AND DETAILS OF PROPERTY, ITS LOCATION, AND ITS SURR OUNDINGS AND COMPARATIVE INSTANCES OF SIMILARLY SITUATE PROPERTI ES, COST OF ACQUISITION AS ON 1.4.1981 CANNOT BE DETERMINED IN A PRECISE MANNER. THE LEARNED CIT(A) HAVING NOT ADVERTED TO A LL THESE ASPECTS NOW RAISED, APPARENTLY THE IMPUGNED ORDER S UFFERS FROM LACK OF REASONING AND IS NOT A SPEAKING ORDER. IN V IEW OF THE FOREGOING, THE MATTER RESTORED TO THE FILE OF THE A .O. FOR DECIDING THE MATTER AFRESH IN ACCORDANCE WITH LAW, AFTER HAV ING A REPORT OF DISTRICT VALUATION OFFICER ON THE COST OF ACQUISITI ON AS ON 1.4.1981 OF THE SAID PROPERTY AND OF COURSE AFTER ALLOWING S UFFICIENT OPPORTUNITY TO THE ASSESSEE. 12. THEREFORE, IN OUR OPINION, THE ASSESSING OFFICE R SHOULD CONSIDER THE FOLLOWING : 9 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA 1. THE REGISTERED VALUER REPORT AS SUBMITTED BY THE ASSESSEE. 2. REFERENCE TO THE DVO HAS TO BE MADE BY THE ASSESSIN G OFFICER AND THE REPORT OF THE DVO ON THE COST OF ACQUISITION AS ON 01/04/1981 OF THE PROPERTY HAS TO BE CONSIDERED. 3. INHERENT QUALITY OF THE PROPERTY NAMELY SIZE, LOCA TION, ROAD FRONTAGE, CORNER PLOT, IF ANY, ETC. TO BE EXAM INED. 4. ANY COMPARABLE PROPERTY IN THE SAME LOCALITY SHOULD BE TAKEN FOR CONSIDERATION. 13. THEREAFTER, THE ASSESSING OFFICER SHALL AFTER EXAMINING THOROUGHLY THE NATURE OF THE PROPERTY AND THE PECUL IAR CIRCUMSTANCES AS WELL AS THE VALUES GIVEN BY THE DI FFERENT PERSONS NAMELY DVO AND THE REGISTERED VALUER SHALL DECIDE T HE ISSUE DENOVO. IT IS NEEDLESS TO SAY THAT A REASONABLE OPP ORTUNITY OF BEING HEARD SHOULD BE GIVEN TO THE ASSESSEE. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ITA.NO.1060 & 1061/HYD/2012 - A.Y. 2008-09 15. SINCE THE ASSESSEES ARE CO-OWNERS WITH THAT OF JAKKA JANAKAMMA AND THE FACTS OF THE CASE ARE MUTATIS-MUT ANDIS, FOLLOWING THE CONCLUSIONS DRAWN IN THE CASE OF JAKK A JANAKAMMA AND THE SAME CONCLUSION SHALL BE DRAWN IN THESE CAS ES ALSO. ITA.NO.1044/HYD/2012 A.Y. 2008-2009 : 16. THIS DEPARTMENTAL APPEAL COME UP ON CROSS-APPEA L AGAINST THE ORDER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO 10 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA DISALLOW 5% OF THE INDEX COST OF ACQUISITION CLAIME D BY THE ASSESSEE. THE DEPARTMENT HAS ALSO RAISED FOLLOWING GROUNDS : 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN DISREGARDING THE DETERMINATION OF FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 MADE BY THE ASSESSING OFFICER ON THE BAS IS OF MARKET VALUE OBTAINED FROM THE REGISTERS OF THE JOI NT SUB- REGISTRAR FOR ARRIVING AT THE COST OF ACQUISITION I N THE COMPUTATION OF LONG TERM CAPITAL GAINS AND DIRECTIN G THE ASSESSING OFFICER TO DISALLOW 5% OF THE INDEXED COS T OF ACQUISITION CLAIMED BY THE ASSESSEE. 3. THE ORDER OF THE LEARNED CIT(A) IS EX-FACIE PERVERS E ON FACTS AS HIS FINDING OF FACT THAT THE ASSESSEE HAS OPTED TO TAKE ACTUAL COST FOR THE PURPOSE OF COST OF ACQUI SITION OUT OF THE TWO OPTIONS OF ACTUAL COST AND FAIR MARKE T VALUE AS ON 01.04.1981 AVAILABLE TO HER UNDER SECTION 55(2)(B)(II) IS CONTRARY TO THE MATERIAL AVAILABLE ON RECORD. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE STATEMENT OF COMPUTATION OF LONG TERM CAPITAL GAINS FURNISHED BY THE ASSESSEE UNAMBIGUOUSLY SHOWS THAT SHE HAS ADOPTED MARKET VALUES OF LAND AND BUILDING AS O N 01.04.1981 FOR COMPUTING COST OF ACQUISITION IMPLYI NG THAT SHE OPTED FOR FAIR MARKET VALUE AS ON 01.04.1 981. 4. THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN ASCERTAINING AND ADOPTING THE MARKET VALUE AS ON 01.04.1981 FROM THE REGISTERS OF THE JO INT SUB REGISTRAR ON ACCOUNT OF ASSESSEE OPTING FOR FAI R MARKET VALUE AS ON 01.04.1981 AS THE BASIS FOR COST OF ACQUISITION AND HER FAILURE TO SUBSTANTIATE THE MAR KET VALUES ADOPTED BY HER WITH DOCUMENTARY EVIDENCE. 5. THE LEARNED CIT(A) OUGHT NOT TO HAVE DIRECTED THE ASSESSING OFFICER TO DISALLOW 5% OF THE INDEXED COS T OF ACQUISITION CLAIMED BY THE ASSESSEE AS THE SAID DIR ECTION IS DEVOID OF ANY BASIS. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 17. SINCE, IN THE ASSESSEES APPEAL ITA.NO.1058/HYD /2012 FOR THE A.Y. 2008-09, WE HAVE DISCUSSED THIS ISSUE AND REMITTED THE SAME TO THE FILE OF THE ASSESSING OFFICER, THE APPE AL FILED BY THE 11 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA DEPARTMENT ITA.NO.1044/HYD/2012 FOR THE A.Y. 2008-2 009 IS ALSO SET ASIDE FOR STATISTICAL PURPOSES. ITA.NO.1046 & 1047/HYD/2012 A.Y. 2008-09 18. SINCE THESE TWO REVENUES APPEALS ARE MUTATIS- MUTANDIS AND THE FACTS OF THE CASE ARE MUTATIS-MUTANDIS, FOL LOWING THE CONCLUSIONS DRAWN IN ANOTHER REVENUES APPEAL ITA.NO.1044/HYD/2012, THE SAME CONCLUSION SHALL BE DRAWN IN THESE CASES ALSO. ITA.NO.1059/HYD/2012 A.Y. 2009-10 19. IN THE CASE OF JAKKA JANAKAMMA ONE MORE GROUND HAS BEEN RAISED WHICH IS AS FOLLOWS : 2. THE HONBLE CIT(A) HAVING ACCEPTED THE GROUNDS OF APPEAL OF THE APPELLANT OUGHT NOT HAVE DISALLOWED EXPENDITURE INCURRED IN CONNECTION WITH THE SALE OF RS.2,50,000/-. 20. THE HONBLE CIT(A) HAVING ACCEPTED THE GROUNDS OF APPEAL OF THE ASSESSEE OUGHT NOT TO HAVE DISALLOWED EXPENDITU RE INCURRED IN CONNECTION WITH THE SALE AMOUNTING TO RS.2,50,000/- . THE DEPARTMENT HAS FILED CROSS APPEAL (ITA.NO.1045/HYD/ 2012 A.Y. 2009-2010) AND RAISED THE FOLLOWING GROUNDS : 7. THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESS ING OFFICER TO ALLOW DEDUCTION FOR EXPENDITURE INCURRED IN CONNECTION WITH SALE AMOUNTING TO RS.2,50,000/- IN THE COMPUTATION OF LONG TERM CAPITAL GAINS THOUGH NO CL AIM FOR SUCH EXPENDITURE WAS MADE EITHER IN THE RETURN OF INCOME OR DURING THE ASSESSMENT PROCEEDINGS AND NO DETAILS REGARDING THE NATURE OF EXPENDITURE, IDENTI TY OF THE PAYEES AND DETAILS OF PAYMENT WERE FURNISHED DURING THE APPELLATE PROCEEDINGS. 8. THE LEARNED CIT(A) OUGHT TO HAVE RECORDED THE RE ASONS FOR ADMITTING THE ADDITIONAL CLAIM MADE BY THE 12 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA ASSESSEE DURING THE APPELLATE PROCEEDINGS REGARDING THE EXPENDITURE INCURRED IN CONNECTION WITH THE SAL E IN ACCORDANCE WITH RULE 46A(2) OF THE INCOME TAX RULES , 1962 AND OUGHT TO HAVE ALLOWED AN OPPORTUNITY TO TH E ASSESSING OFFICER TO EXAMINE THE ADDITIONAL CLAIM M ADE AND FURNISH HIS REPORT WHICH IS MANDATORY AS PER RU LE 46A(3) OF THE INCOME TAX RULES, 1962. 21. THE DEPARTMENT IS AGGRIEVED THAT THE PROVISIONS OF RULE 46A (2) OF THE I.T. RULES, 1962 HAS NOT BEEN FOLLOWED A ND THE ASSESSING OFFICER HAS NOT BEEN ALLOWED AN OPPORTUNI TY TO EXAMINE THE ADDITIONAL CLAIM AND WAS NOT ASKED TO FURNISH H IS REPORT. THIS MANDATORY PROVISION HAS BEEN OVERLOOKED BY THE CIT( A). THE CIT(A), BEFORE CONSIDERING THE SAME, IN ALL FAIRNES S, SHOULD HAVE GIVEN OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMI NE THE SAME AND OFFER HIS COMMENTS THEREON. IN THE CIRCUMSTANCE S, WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO REXAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. THE ASSESSEE I S DIRECTED TO FURNISH ALL THE RELEVANT DOCUMENTS IN SUPPORT OF IT S CLAIM BEFORE THE ASSESSING OFFICER, AND THE ASSESSEE IS DIRECTED TO EXAMINE THE SAME, AND REDECIDE THE ISSUE ACCORDINGLY IN ACCORDA NCE WITH LAW AND BY PASSING A SPEAKING ORDER, AFTER GIVING DUE O PPORTUNITY OF HEARING TO THE ASSESSEE. 22. IN THE RESULT, APPEAL OF THE REVENUE ITA.NO.104 5/HYD/2012 IS SET ASIDE FOR STATISTICAL PURPOSES AND ASSESSEE S APPEAL ITA.NO.1059/HYD/2012 ON THIS ISSUE IS ALSO SET ASID E ON STATISTICAL PURPOSES. 23. TO SUM-UP ASSESSEES APPEALS ITA.NO.1058, 1059, 1060 & 1061/HYD/2012 ARE ALLOWED FOR STATISTICAL PURPOSES AND ITA.NO.1044, 1045, 1046 & 1047/HYD/2012 OF THE REVE NUES APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 13 ITA NOS. 1044 TO 1047/H/12 AND 1058 TO 1061/H/12 SMT. JAKKA JANAKAMMA 24. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2013. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATE 31 ST JULY, 2013. VBP/- COPY TO 1. INCOME TAX OFFICER, WARD-2, 24-2-438, GNT ROAD, DAR GAMITTA, NELLORE 2. SMT. JAKKA JANAKAMMA, D.NO.24-423A, SHANTHI NAGA R, DARGAMITTA, NELLORE. PAN ACDPJ9501C. 3. SMT. JAKKA SANJANA, D.NO.24-423A, SHANTHI NAGAR, DARGAMITTA, NELLORE. PAN ACKPJ5104N. 4. SMT. JAKKA SWAPNAMMA, D.NO.24-2-438, SHANTHI NAG AR, DARGAMITTA, NELLORE. PAN ACDPJ9219M. 5. CIT(A), GUNTUR 6. CIT, GUNTUR 5. D.R. A BENCH, I.T.A.T. HYDERABAD