Panna Lal HUF, Ambala Cantt. V. ACIT, Ambala

ITA 105/CHANDI/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2333 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Fair market value; Valuation report
• Section: 143(3); 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.105 /CHD/2013 (ASSESSMENT YEAR : 2009-10) PANNA LAL HUF, VS. THE A.C.I.T., C/O THE ORIENTAL SCIENCE AMBALA. APPARATUS WORKSHOPS, JAGADHARI ROAD, AMBALA CANTT. PAN: AAAHP7073A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 18.03.2013 DATE OF PRONOUNCEMENT : 29.04.2013 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA DAT ED 13.12.2012 RELATING TO ASSESSMENT YEAR 2009-10 AGAINST THE ORD ER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPE AL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR THE PURPOSE OF CALCULATION OF CAPITAL GAIN HAS ERRED IN LAW AND FACTS IN CONFIRMING THE LAND RATE AS ON 01.04.1981 @ RS.35 PER SQ. YARD S AS ADOPTPED BY THE LEARNED ACIT INSTEAD OF RS.70 PER SQ. YARDS AS DECLARED BY THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD SOLD LAND MEASURING 28 KANAL 2 MARLA (3 ACRE 4 KANAL 2 MARLA) IN VILLAGE SALARHERI, DISTRIC T AMBALA ON 2.4.2008. THE ASSESSEE HAD DECLARED INCOME FROM LONG TERM CAP ITAL GAINS ON THE 2 SALE OF THE SAID PLOT OF LAND @ RS.70/- PER SQ.YD. AS ON 1.4.1981. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED THE VALUATION REPORT DATED 18.4.2008 IN RESPECT OF THE SAID PIECE OF LAND. THE ASSESSING OFFICER, HOWEVER, SOUGHT INFORMATION UNDER SECTION 133(6) OF THE ACT FROM THE LAND REVENUE AUTHORITIES AND THE INSPECTOR WAS DEPUTED FOR COLLECTING THE SALE/PURCHASE DEEDS FOR THE YEAR 1980-81 OF THE SAME LOCALITY. THE REVENUE RECORDS RECEIVED FROM THE LAND REVENUE AUTHORITIES REFLECTED THAT THE LAND RATES I N THE SAID LOCALITY VARIED FROM RS.1.25 PER SQ.YD. TO RS.1.95 PER SQ.YD . THE ASSESSING OFFICER SUMMONED THE APPROVED VALUER UNDER SECTION 131 OF THE ACT AND RECORDED HIS STATEMENT WHICH IS REPRODUCED AT PAGES 2 TO 4 OF THE ASSESSMENT ORDER. THE VALUER IN REPLY STATED THAT THE VALUATION REPORT WAS BASED ON MARKET ENQUIRIES OF THE LAND RATES AS ON 1.4.1981 FROM VARIOUS PROPERTY DEALERS. IT WAS FURTHER STATED AS UNDER: I HAVE ELABORATED/GIVEN JUSTIFICATION OF RATE ADOP TED IN MY LETTER NO.VPG/AMB/11/13 DATED NOVEMBER 28, 2011. THE RATE OF AGRICULTURE LAND ALONG JAGADHRI ROAD UPTO THE DEPTH OF TWO KILAS IS RS.16 LACS PER ACRE AS ON APRIL 8.2.2008, THE DATE OF VALUATION. BY APPLYING COST INFLATION INDEX OF 551, THE RATE OF L AND WORKS OUT TO RS.60/- PER SQ.YARD. KEEPING IN VIEW THE ALREADY DEVELOPED INDUSTRIAL ESTATE ALONG JAGADHRI GATE, OPPOSITE TO THE LAND BEING VALUED. THE RATE WAS ENHANCED TO RS.70/- PER SQ.YARD. 4. THE VALUER ADMITTED THAT NO REGISTRY FOR SALE DE ED WAS AVAILABLE FOR THE SAID PIECE OF LAND. THE VALUER WAS ALSO CONFRO NTED WITH THREE REGISTRIES OF THE LAND SITUATED IN THE VICINITY OF LAND SOLD BY SH.PANNA LAL (HUF). AS PER THE REGISTRY THE RATES PER SQ.YA RD VARIED FROM RS.1.25 PER SQ.YD. TO RS.1.95 PER SQ.YD. IN REPLY, THE VAL UER HAD NO EXPLANATION. THE ASSESSEE WAS SHOW CAUSED WITH THE THREE REGISTR IES PROCURED FROM THE LAND REVENUE AUTHORITIES RELATING TO THE FINANC IAL YEAR 1980-81. THE EXTRACT OF THE SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE IS REPRODUCED AT PAGES 4 AND 5 OF THE ASSESSMENT ORDER. THE REPL Y OF THE ASSESSEE TO 3 THE SAID SHOW CAUSE NOTICE IS REPRODUCED AT PAGES 5 TO 7 OF THE ASSESSMENT ORDER IN WHICH REFERENCE WAS MADE TO ANO THER THREE VALUATION REPORTS FOR THE PERIOD 1.4.1981 TO 31.3.1986, WHICH RELATED TO THE VALUATION OF LAND RATES PREVALENT IN AMBALA DURING THE RELEVANT PERIOD. THE FIRST REPORT IS IN RELATION TO A HOUSE ON AMBAL A JAGADHRI ROAD SOLD ON 16.6.1985. THE SECOND VALUATION IS IN RELATION TO ANOTHER HOUSE IN AMBALA CANTT. DATED 23.4.1985 AND THE LAST REGISTRY WAS IN RELATION TO ANOTHER HOUSE IN AMBALA CANTT. THE ASSESSING OFFIC ER REJECTED THE REFERENCES MADE BY THE ASSESSEE. THE ASSESSING OFF ICER THEREAFTER RECOMPUTED THE VALUE OF THE LAND AT RS.35/- PER SQ. YD. AS ON 1.4.1981 AND RECOMPUTED THE INCOME FROM LONG TERM CAPITAL GAINS RESULTING IN ADDITION OF RS.34,62,900/-. 5. THE CIT (APPEALS) UPHELD THE ORDER OF THE ASSESS ING OFFICER OBSERVING THAT THE ASSESSEE HAD RELIED UPON THE REP ORT OF HIS VALUER DATED 18.4.2008, HOWEVER, THE RATES VARIED BETWEEN RS.1.2 5 PER SQ.YD. TO RS.1.95 PER SQ.YD. AND EVEN IF THE CREDIT FOR LOCAT ION WAS ALLOWED THE DIFFERENCE IN THE VALUE OF LAND @ RS.70/- PER SQ.YD . COULD NOT BE EXPLAINED. THE COMPARABLE VALUATION REPORTS FILED BY THE ASSESSEE WERE REJECTED BY THE CIT (APPEALS) RELATING TO THE PERIO D OTHER THAN THE RELEVANT PERIOD AND ALSO BEING IN RELATION TO RESID ENTIAL PROPERTIES. THE CIT (APPEALS) NOTED THAT THE LAND OF THE ASSESSEE W AS LOCATED IN VILLAGE IN COMPARISON TO THE VALUATION REPORTS OF THE PROPE RTIES IN AMBALA CANTT. AND THE ASSESSING OFFICER HAVING ALLOWED THE CREDIT BY APPLYING VALUATION RATE OF RS.35/- PER SQ.YD. BEING REASONAB LE, NO INTERFERENCE WAS CALLED FOR IN THE ORDER OF THE ASSESSING OFFICE R. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT (APPEALS). SHRI SUDHIR SEHGAL APPEARED ON BEHALF OF THE ASSESS EE AND SHRI AKHILESH 4 GUPTA HAS PUT IN APPEARANCE FOR THE REVENUE AND PUT FORWARD THEIR CONTENTIONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE COMPUTATION OF LONG TERM CAPITAL GAINS. THE ASSESSEE DURING THE Y EAR UNDER CONSIDERATION HAD SOLD THE PLOT OF LAND IN VILLAGE SALARHERI ON 2.4.2008. WHILE COMPUTING THE COST OF THE SAID LAND AS ON 1.4 .1981, THE ASSESSEE APPLIED RATE OF RS.70/- PER SQ.YD. AS PER THE VALUA TION REPORT OF THE APPROVED VALUER. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS SOUGHT INFORMATION FROM THE LAND REVENU E OFFICER WHO IN TURN INFORMED THAT THE LAND RATES IN THE SAID LOCAL ITY VARY FROM RS.1.25 PER SQ.YD. TO RS.1.95 SQ.YD. THE VALUATION OFFICER WAS ALSO SUMMONED UNDER SECTION 131 OF THE ACT BY THE ASSESSING OFFIC ER AND IN HIS STATEMENT HE ADMITTED THAT HE HAD ADOPTED THE RATE OF RS.70/- PER SQ.YD. ON THE BASIS OF HIS VALUATION REPORT AND ALSO POINT ED OUT THAT THE RATE WAS BASED ON MARKET ENQUIRY. HOWEVER, THE VALUER A DMITTED THAT THERE IS NO DOCUMENTARY EVIDENCE AVAILABLE WITH HIM IN SUPPO RT OF VALUATION REPORT EXCEPT FOR THE RATE OF AGRICULTURAL LAND SOL D ON 8.4.2008. THE VALUER WAS ALSO CONFRONTED WITH THE THREE REGISTRIE S OF THE LAND SITUATED IN THE VICINITY WHEREIN RATES WERE VERY LOW AND NO SATISFACTORY REPLY WAS GIVEN BY THE VALUER. THE ASSESSING OFFICER IN THE ABOVE SAID CIRCUMSTANCES WORKED OUT FAIR MARKET RATE OF LAND I N QUESTION AT RS.35/- PER SQ.YD. AS ON 1.4.1981. THE ASSESSING OFFICER H AD FAILED TO REFER THE MATTER TO THE DISTRICT VALUATION OFFICER IN ORDER T O COMPUTE THE COST OF LAND AS ON 1.4.1981 AND WORKED OUT THE ESTIMATE ON HIS OWN MOTION. WE FIND NO MERIT IN THE ABOVE SAID WORKING OF THE ASSE SSING OFFICER AS THE SERVICES OF THE DISTRICT VALUATION OFFICER ARE AVAI LABLE WHO IS COMPETENT PERSON TO WORK OUT THE FAIR MARKET VALUE OF THE COS T OF LAND AS ON 5 1.4.1981. IN ORDER TO MEET THE ENDS OF JUSTICE, WE DEEM IT FIT TO RESTORE THE ISSUE OF DETERMINATION OF FAIR MARKET VALUE OF COST OF LAND AS ON 1.4.1981 BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL MAKE A REFERENCE TO THE DISTRICT VALUATION OFFICER AND DEC IDE THE ISSUE IN ACCORDANCE WITH LAW. REASONABLE OPPORTUNITY OF HEA RING SHALL BE AFFORDED TO THE ASSESSEE BY THE ASSESSING OFFICER A ND THE DVO. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS ALL OWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF APRIL, 2012. SD/- SD/- (T.R. SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 29 TH APRIL, 2013 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 6