DCIT, Pondicherry V. Subramaniya Mudaliar Estates, Pondicherry

ITA 1246/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96124 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 28-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-05-2014
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: S SRIDHAR
• Keywords: Cost of acquisition; Fair market value

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY , ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 1246/MDS/2014 / ASSESSMENT YEAR :200 8 - 0 9 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, D.P. THOTTAM, MUTHIALPET, PUDUCHERRY 605 003. VS. M/S. SUBRAMANIYA MUDALIAR ESTATES, PLOT NO.S 84 & 8 5, 13 TH CROSS, ANNA NAGAR, PONDICHERRY. [PAN: AAAHS8371Q] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI A.B. K O LI, JCIT / RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE / DATE OF HEARING : 28 . 0 9 .201 5 / DATE OF P RONOUNCEMENT : 30. 0 9 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH IS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) V I , CHENNAI , DATED 2 6 . 0 2 .20 1 4 RELEVANT TO THE ASSESSMENT YEAR 200 8 - 0 9 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE - HUF HAS FILED ITS RETURN ADMITTING TOTAL INCOME OF .52,92,780/ - , WHICH INCLUDED LONG TERM CAPITAL GAINS OF .52,21,870/ - AND INCOME FROM OTHER SOURCES OF .70,905/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) I.T.A. NO . 1246 /M/ 14 2 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICED UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE CALLING VARIOUS DETAILS. THE DETAILS FILED BY THE ASSESSEE WERE EXAMINED AND THE ASSESSING OFFICER HAS FOUND THAT WITH REGARD TO LONG TERM CAPITAL GAINS, THE LAND WAS ACQUIRED IN JULY, 1956 AND FEBRUARY, 1957 AND THE COST WAS TAK EN AS .11,83,000/ - FOR THE FINANCIAL YEAR 1981 FOR CALCULATION OF INDEXED COST OF ACQUISITION. BUT AS PER THE REGISTRATION DEPARTMENT, GOVERNMENT OF PONDICHERRY, THE GUIDELINE VALUE OF THE LAND PER HECTARE IS BETWEEN .55,000/ - AND .65,000/ - , WHICH WORKS OUT T O .0.511/ - AND .0.614/ - PER SQ.FT. WHEN THE ASSESSEE WAS ASKED TO FILE ANY OBJECTION WITH REGARD TO THE ABOVE GUIDELINE VALUE OF REGISTRATION DEPARTMENT OF THE GOVERNMENT OF PONDICHERRY, THE ASSESSEE HAS FILED ITS REPLY AND ALSO FILED A COPY OF THE REGIS TERED DOCUMENT VIDE NO. 4332/1981 IN RESPECT OF A PROPERTY (TILED HOUSE) AT OLD NO. 140, NEW NO. 2/42, SUBRAMANIA KOIL STREET, KADIRKAMAM VILLAGE, PONDICHERRY. THE PROPERTY INVOLVED MEASURES TOTAL EXTENT OF 3060 SQ.FT. AND EXTENT OF THE BUILDING IS 1078 SQ .FT. AND THE VALUE OF THE SALE CONSID E RATION IS .75,000/ - . THE GUIDELINE VALUE OF THE PROPERTY AT KADIRKAMAM IS .15 PER SQ.F.T. AS ON 01.04.1981. HENCE, IT WORKS OUT TO .15.00 PER SQ.FT. X 3060 SQ.FT. = .45,900/ - . THE VALUE OF THE BUILDING (TILED HOUSE MEASURING 1078 SQ.FT. COMES TO .24,000/ - , WHIC H WORKS OUT TO .22/ - PER SQ.FT. HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE ABOVE REPLY OF THE ASSESSEE AND BY APPLYING THE HIGHER VALUE OF .0.614/ - PER SQ.FT. AS I.T.A. NO . 1246 /M/ 14 3 COST OF THE LAND , AS OBTAINED FROM THE REGISTRATION DEPARTMENT, GOVERNMENT OF PONDI CHERRY, WORKED OUT THE LONG TERM CAPITAL GAINS AND COMPLETED THE ASSESSMENT. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO ADOPT THE VALUE FIXED BY THE ASSESSEE IN THE RETURN OF INCOME AT .11,63,000/ - ONLY. 4. THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND THE LD. DR HAS STRONGLY CONTENDED THAT THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSING OFFICER HAS ADOPTED THE GUIDELINE VALUE OF THE LAND AS PER THE REGISTRATI ON DEPARTMENT, GOVERNMENT OF PONDICHERRY. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AU THORITIES BELOW. THE LAND IN QUESTION WAS ACQUIRED IN JULY, 1956 AND FEBRUARY, 1957 AND THE COST OF THE LAND WAS TAKEN AS .11,63,000/ - FOR THE FINANCIAL YEAR 1981 FOR CALCULATION OF INDEX COST OF ACQUISITION . HOWEVER, THE ASSESSING OFFICER, AFTER OBTAININ G GUIDELINE VALUE OF THE LAND FROM THE REGISTRATION DEPARTMENT, GOVERNMENT OF PONDICHERRY, BY APPLYING THE VALUE OF .0.614/ - PER SQ. FT. AS THE COST OF THE LAND AND I.T.A. NO . 1246 /M/ 14 4 WORKED OUT THE LONG TERM CAPITAL GAINS. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE L D. CIT(A) DIRECTED THE ASSESSING OFFICER TO ADOPT THE VALUE AS WORKED OUT BY THE ASSESSEE IN THE RETURN OF INCOME AT .11,63,000/ - . 7. IN THIS CASE, THE ASSESSING OFFICER HAS TAKEN THE GUIDELINE VALUE, AS FURNISHED BY THE REGISTRATION DEPARTMENT, GOVERN MENT OF PONDICHERRY AS FAIR MARKET VALUE OF THE LAND . HOWEVER, T HE GUIDELINE VALUE IS TO GUIDE THE SUB - REGISTRAR TO ASCERTAIN FOR THE PURPOSES OF REGISTRATION OF THE PROPERTY AND COLLECTION OF STAMP FEE ETC. AND NOT FOR ANY OTHER PURPOSES. THE SAME CANNOT BE PRESUMED AS FAIR MARKET VALUE OF A PROPERTY FOR THE PURPOSE OF COMPUTING CAPITAL GAINS BEING GENERAL IN NATURE. THEREFORE, IN OUR OPINION, THE VALUE ADOPTED BY THE ASSESSING OFFICER TO ASCERTAIN THE FAIR MARKET VALUE IS NOT ACCEPTABLE. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED A COPY OF THE REGISTERED DOCUMENT IN RESPECT OF A SIMILAR PROPERTY IN NEARBY AREA, WHEREIN THE GUIDELINE VALUE OF THE PROPERTY [KADIRKAMAM VILLAGE, PONDICHERRY] IS .15 PER SQ.FT. AS ON 01.04.1981 AND THE SAME SHALL BE MORE REASONABLE IN THE PRESENT CASE ALSO TO WORK OUT THE COST OF THE LAND FOR THE CALCULATION OF THE INDEXED COST OF ACQUISITION. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO ADOPT THE FAIR MARKET VALUE AT .15/ - PER SQ.FT. AS COST OF THE LAND AND REWORK OUT THE INDEXED COST OF ACQUISITION FOR THE PURPOSE OF LONG TERM CAPITAL GAINS. I.T.A. NO . 1246 /M/ 14 5 8 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUN CED ON THE 30 TH SEPTEMBER , 2015 AT CHENNAI. SD/ - SD/ - (A.MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 30 . 0 9 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.