K.A.S.K.Jaffer Ali, CHENNAI V. ITO, Erode

ITA 1081/CHNY/2015

• Counselvise Citation: 108121714 RSA 2015
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2015
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Fair market value
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1081/MDS/2015 / ASSESSMENT YEAR : 2011-12 SHRI K.A.S.K. JAFFER ALI NO.1 GOVINDARAJ NAGAR PERIYAR NAGAR ERODE 638 001 VS. THE INCOME TAX OFFICER WARD I(2) ERODE [PAN ACGPJ 3531 R] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : DR. ANITA SUMANTH, ADVOCATE /RESPONDENT BY : SHRI S. DAS GUPTA, JCIT / DATE OF HEARING : 08 - 0 7 - 2015 ! / DATE OF PRONOUNCEMENT : 06 - 0 8 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-3, COIMBA TORE, DATED 23.1.2015 AND PERTAINS TO ASSESSMENT YEAR 2011-1 2. 2. THE FIRST GROUND OF APPEAL IS WITH REGARD TO DETERM INATION OF FAIR MARKET VALUE AS ON 1.4.1981 FOR COMPUTING CAPI TAL GAINS. ITA NO.1081/15 :- 2 -: 3. DR. ANITA SUMANTH, LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ASSESSEE CLAIMED THE FAIR MARKET VALUE AS ON 1.4.1981 AT ` 50/- PER SQ FT. HOWEVER, THE ASSESSING OFFICER EST IMATED THE FAIR MARKET VALUE ON THE BASIS OF THE GUIDELINE VALUE OF THE SUB-REGISTRAR OFFICE AT ` 0.968 PER SQ FT. REFERRING TO THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN SPECIAL TAHSILDAR VS K.A.S.KHA DAR SAHIB & OTHERS IN A.S.NO.190 OF 2001, DATED 22.6.2015, THE LD. COU NSEL SUBMITTED THAT THE SUBJECT LAND WAS ACQUIRED BY THE GOVERNMENT BY NOTIFICATION ISSUED U/S 4(1) OF THE LAND ACQUISITION ACT, 1894 . THE POSSESSION OF THE LAND WAS TAKEN FROM THE ASSESSEE ON 30.3.1980 ITSELF. THE LAND ACQUISITION OFFICER PASSED AN AWARD ON 31.1.1990 FI XING THE FAIR MARKET VALUE OF THE LAND AT ` 20/- PER SQ FT. HOWEVER, ON A REFERENCE TO THE LAND ACQUISITION TRIBUNAL, THE FAIR MARKET VALUE WA S DETERMINED AT ` 150/- PER SQ FT. THE SPECIAL TAHSILDAR CHALLENGED THE AWARD PASSED BY THE LAND ACQUISITION TRIBUNAL BEFORE THE HIGH COURT . THE HIGH COURT, AFTER CONSIDERING THE COMPARABLE CASES AND ORAL EVI DENCE, FOUND THAT EVEN ON 17.9.1986 THE LAND IN SURVEY NO.1597 WAS SO LD AT ` 125/- PER SQ FT. THE HIGH COURT ALSO FOUND THAT THE SAID LAN D WAS SITUATED ON THE WAY FROM THE GOVERNMENT GENERAL HOSPITAL AT ERO DE AND THE RAILWAY JUNCTION. ACCORDINGLY, THE HIGH COURT CONF IRMED THE FAIR MARKET VALUE DETERMINED BY THE LAND ACQUISITION TRI BUNAL AT ` 150/- PER SQ FT. THIS RATE WAS FIXED FOR THE LAND TAKEN O VER BY THE ITA NO.1081/15 :- 3 -: GOVERNMENT ON 30.3.1980. THEREFORE, ACCORDING TO T HE LD. COUNSEL, THE FAIR MARKET VALUE HAS TO BE FIXED AT ` 150/- PER SQ FT. 4. ON THE CONTRARY, SHRI S. DAS GUPTA, LD. DEPARTMENTA L REPRESENTATIVE SUBMITTED THAT THE ORDER OF THE LAND ACQUISITION OFFICER OR THE ONE PASSED BY THE LAND ACQUISITION TRIBUNAL ARE NOT AVAILABLE BEFORE THE ASSESSING OFFICER. THE HIGH COURT JUDGM ENT RELIED UPON BY THE LD. COUNSEL IS DATED 22.6.2015. THEREFORE, THE LOWER AUTHORITIES HAD NO OCCASION TO CONSIDER ALL THESE MATERIAL EVID ENCE AT THE TIME OF DETERMINING THE FAIR MARKET VALUE. THEREFORE, THE LD. DR SUBMITTED THAT AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSING O FFICER TO EXAMINE THE ORDERS OF THE LAND ACQUISITION TRIBUNAL AND T HE HIGH COURT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT I S NOT IN DISPUTE THAT THE ASSESSEE CLAIMED FAIR MARKET VALUE AT ` 50/- PER SQ FT. HOWEVER, THE ASSESSING OFFICER FIXED THE FAIR MARKET VALUE A S ON 1.4.1981 LESS THAN ` 1/- PER SQ FT ON THE BASIS OF THE GUIDELINE VALUE MAINTAINED BY THE SUB-REGISTRAR. IT IS WELL SETTLED PRINCIPLES O F LAW THAT GUIDELINE VALUE IS ONLY TO GUIDE THE SUB-REGISTRAR TO DETERMI NE THE MARKET VALUE OF THE LAND. THE GUIDELINE VALUE CANNOT BE SUBSTIT UTED FOR FAIR MARKET VALUE. THE FAIR MARKET VALUE IS NOTHING BUT A PRI CE THAT MAY BE AGREED BETWEEN A WILLING PURCHASER AND WILLING SELL ER. THEREFORE, THIS ITA NO.1081/15 :- 4 -: TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE GUID ELINE VALUE OF THE SUB-REGISTRAR ALONE CANNOT BE A BASIS FOR DETERMINI NG THE FAIR MARKET VALUE. THE FAIR MARKET VALUE DEPENDS UPON VARIOUS FACTORS SUCH AS, THE LOCATION OF THE LAND, AVAILABILITY OF INFRASTRU CTURE FACILITY AROUND THE PARTICULAR LAND, ACCESS TO THE INFRASTRUCTURE FACIL ITY, AVAILABILITY OF TRANSPORT FACILITY SUCH AS AIRPORT, RAILWAY STATION ETC. THE LAND ACQUISITION TRIBUNAL AND THE HIGH COURT, WHILE ESTI MATING THE FAIR MARKET VALUE FOR THE PURPOSE OF AWARDING COMPENSATI ON, FOUND THAT THE SAID LAND IS LOCATED ON THE WAY FROM GOVERNMENT GENERAL HOSPITAL, ERODE AND RAILWAY JUNCTION. THE LAND WAS TAKEN BY THE GOVERNMENT FORCEFULLY ON 30.1980 ITSELF. THEREFORE, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE FAIR MARKET VALUE DETER MINED BY THE LAND ACQUISITION TRIBUNAL WHICH WAS CONFIRMED BY THE HIG H COURT IS A MATERIAL FACTOR WHICH IS TO BE TAKEN INTO CONSIDERA TION BY THE ASSESSING OFFICER FOR THE PURPOSE OF DETERMINING THE FAIR MAR KET VALUE AS ON 1.4.1981. SINCE THESE ORDERS OF THE LAND ACQUISITI ON TRIBUNAL AND THE HIGH COURT ARE NOT AVAILABLE BEFORE THE LOWER AUTHO RITIES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSUE OF DETERMINING FAIR MARK ET VALUE FOR COMPUTING GAINS IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER I N THE LIGHT OF THE ITA NO.1081/15 :- 5 -: JUDGMENT OF THE HIGH COURT IN A.S. NO.190 OF 2001 A ND THEREAFTER DETERMINE THE FAIR MARKET VALUE AS ON 1.4.1981 AND ACCORDINGLY COMPUTE THE CAPITAL GAINS AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDITIO N OF ` 61,50,000/- U/S 68 OF THE ACT. 7. DR. ANITA SUMANTH, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REVENUE AUTHORITIES FOUND ` 61,50,000/- IN THE CHEST OF THE ASSESSEES HOUSE. THE ASSESSEE CLAI MED BEFORE THE LOWER AUTHORITIES THAT THERE WAS A FAMILY SETTLEMEN T IN THE FAMILY AND THE ASSESSEE RECEIVED THE MONEY FROM THE FAMILY ME MBERS. ALL THE FAMILY MEMBERS HAVE ALSO FILED AFFIDAVITS BEFORE TH E ASSESSING OFFICER CONFIRMING THE FAMILY SETTLEMENT AND PAYMENT OF MON EY TO THE ASSESSEE. FROM THE ORDER OF THE ASSESSING OFFICER, IT APPEARS THAT THE RESPECTIVE FAMILY MEMBERS WERE SUMMONED AND THEY WE RE ALSO EXAMINED. HOWEVER, NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO CROSS EXAMINE THE FAMILY MEMBERS. THE COPIES OF TH E STATEMENTS RECORDED FROM THE FAMILY MEMBERS WERE ALSO NOT FURN ISHED TO THE ASSESSEE. THEREFORE, THE ASSESSEE HAS NO OCCASION TO ESTABLISH THE CLAIM OF FAMILY SETTLEMENT BEFORE THE ASSESSING OFF ICER. HOWEVER, BASED ON THE STATEMENTS RECORDED FROM THE FAMILY ME MBERS BEHIND ITA NO.1081/15 :- 6 -: THE BACK OF THE ASSESSEE, THE ASSESSING OFFICER CA ME TO THE CONCLUSION THAT THERE WAS NO FAMILY SETTLEMENT AS CLAIMED BY T HE ASSESSEE. ACCORDING TO THE LD. COUNSEL, AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO EXPLAIN THE MATTER BEFORE THE ASSESSING OFFICER AFTER EXAMINING THE STATEMENTS SAID TO BE RECORDED FROM T HE FAMILY MEMBERS OF THE ASSESSEE. 8. ON THE CONTRARY, SHRI S. DAS GUPTA, LD. DEPARTMENTA L REPRESENTATIVE SUBMITTED THAT ADMITTEDLY A SUM OF ` 61,50,000/- WAS FOUND IN CASH IN HOME CHEST ACCOUNT. HOWEVER, THE ASSESSING OFFICER, ON EXAMINATION OF THE MEMBERS OF THE FAMILY, FOUND THAT THERE WAS NO FAMILY SETTLEMENT AS CLAIMED BY THE ASSESSEE, THER EFORE, ADDITION WAS MADE U/S 68 OF THE ACT TO THE EXTENT OF ` 61,50,000/-. THE LD. DR FURTHER POINTED OUT THAT THE AFFIDAVITS SAID TO BE FILED BY THE FAMILY MEMBERS OF THE ASSESSEE ARE FOUND TO BE FALSE BY T HE ASSESSING OFFICER. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT A SUM OF ` 61,50,000/- WAS FOUND IN THE HOME CHEST OF THE AS SESSEE. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THERE WAS A FAMILY SETTLEMENT. TO SUBSTANTIATE THE CLAIM OF FAM ILY SETTLEMENT, THE ASSESSEE APPEARS TO HAVE FILED AFFIDAVITS OF THE FA MILY MEMBERS. THE ITA NO.1081/15 :- 7 -: ASSESSING OFFICER EXAMINED THE FAMILY MEMBERS AND C AME TO THE CONCLUSION THAT THERE WAS NO FAMILY SETTLEMENT, THE REFORE, ADDITION WAS MADE U/S 68 OF THE ACT. THE ASSESSEE NOW CLAIMS THAT THE STATEMENTS SAID TO BE RECORDED FROM THE FAMILY MEMB ERS ARE NOT FURNISHED TO HIM AND THEREFORE, AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO CROSS EXAMINE THOSE PERSONS. THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE REVENUE COLLECTS S OME MATERIAL AGAINST THE ASSESSEE AND THE SAME IS USED FOR MAKI NG AN ASSESSMENT, COPIES OF SUCH MATERIAL SHALL BE FURNISHED TO THE ASSESSEE. IN THIS CASE, UNFORTUNATELY, THE COPIES OF THE STATEMENTS S AID TO BE RECORDED FROM THE FAMILY MEMBERS WERE NOT FURNISHED TO THE ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE COPI ES OF THE STATEMENTS SAID TO BE RECORDED FROM THE FAMILY MEMBERS AND OTH ER DOCUMENTS, IF ANY, SHALL BE FURNISHED TO THE ASSESSEE AND AN OPP ORTUNITY OF CROSS EXAMINING THE SAME SHALL ALSO BE GIVEN TO THE ASSE SSEE BEFORE PLACING ANY RELIANCE ON SUCH MATERIAL. SINCE NO SUCH EXER CISE WAS DONE BY THE ASSESSING OFFICER, THE MATTER NEEDS TO BE REMAN DED BACK TO THE FILE OF THE ASSESSING OFFICER. ACCORDINGLY, THE EN TIRE ISSUE OF ADDITION OF ` 61,50,000/- MADE U/S 68 OF THE ACT IS REMITTED BA CK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH AFTER FURNISHING COPIES OF THE STATEMENTS RE CORDED FROM THE FAMILY MEMBERS AND THE DOCUMENTS, IF ANY, TO THE ASSESSEE AND ALSO ITA NO.1081/15 :- 8 -: PROVIDE AN OPPORTUNITY TO CROSS EXAMINE THE FAMILY MEMBERS FROM WHOM THE STATEMENTS WERE RECORDED AND THEREAFTER DE CIDE THE MATTER IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPO RTUNITY TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH OF AUGUST, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 06 TH AUGUST, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF