Shri Prahladbhai Mahipatbhai Patel, Ahmedabad V. The Income Tax Officer, Ward-3(4), Ahmedabad

ITA 1257/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9020 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 09-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P L SHAH
• Keywords: Cost of acquisition; Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI S. S. GODARA, JM & SHRI MANISH BORAD, AM. ITA NO.1257/AHD/2014 ASST. YEAR: 2008-09 PRAHLADBHAI MAHIPATBHAI PATEL, 1, SIDDANATH SADAN, NR. GHIYANAGAR SOCIETY, NARODA, AHMEDABAD. VS. ITO, WD-3(4), AHMEDABAD. APPELLANT RESPONDENT PAN AHSPP 6444N APPELLANT BY SHRI P. L. SHAH, AR RESPONDENT BY SHRI PRASOON KABRA, SR.DR DATE OF HEARING: 9/3/2017 DATE OF PRONOUNCEMENT: 14/03/2017 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF ASSESSEE FOR ASST. YEAR 2008-09 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (A)-6, AHMEDABAD DATED 21/02/2014 IN APPEAL NO.CIT(A)-VI/I TO WD 3(4)/587/10-11 ARISING OUT OF ORDER U/S 143(3) OF T HE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) FRAMED ON 29.12.2010 BY ITO , WD-3(4), AHMEDABAD. FOLLOWING GROUND HAS BEEN RAISED BY THE ASSESSEE :- 1. THE LEARNED CIT(A) ERRED IN LAW AND IN FACTS IN CON FIRMING THE ADDITION OF LONG TERM CAPITAL GAIN MADE BY AO R S. 4,55,295/-, WHICH IS REQUESTED TO BE DELETED. ITA NO. 1257/AHD/2014 ASST. YEAR 2008-09 2 2. BRIEFLY STATED FACTS OF THE CASE AS CULLED OUT F ROM THE RECORDS ARE THAT ASSESSEE IS AN INDIVIDUAL EARNING INCOME F ROM HOUSE PROPERTY CAPITAL GAIN AND OTHER SOURCES. RETURN OF INCOME FOR ASST. YEAR 2008-09 WAS FILED ON 29.07.2008 DECLARING TOTA L INCOME AT RS.3,77,660/-. CASE WAS SELECTED THROUGH CASS AND N OTICE U/S 143(2) OF THE ACT WAS ISSUED ON 24.08.2009. NECESSA RY DETAILS WERE CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEED INGS IT WAS OBSERVED THAT THE ASSESSEE HAD SOLD IMMOVABLE PROPE RTY SITUATED AT NARODA FOR A SALE CONSIDERATION OF RS.8,00,000/-. T HIS PROPERTY WAS ACQUIRED BEFORE 1.4.1981 AND THEREFORE, ASSESSEE TO OK RATE OF RS.195 PER SQ.M. AS COST OF ACQUISITION AND ACCORDINGLY CA LCULATED LONG TERM CAPITAL GAIN OF RS.9,205/-. LD. ASSESSING OFFICER C ALLED FOR NECESSARY INFORMATION TO ASCERTAIN THE COST OF ACQUISITION IN CLUDING VALUATION REPORT AND DETAILS FROM SUB-REGISTRAR OFFICE AND FI NALLY ADOPTED THE RATE OF RS.85/- PER SQ.M. AS COST OF ACQUISITION AN D CALCULATED LONG TERM CAPITAL GAIN AT RS.4,55,295/- BY OBSERVING AS FOLLOWS :- 3.9 I HAVE CONSIDERED THE FACTS OF THE CASE. I HAVE ALSO GONE THROUGH THE SUBMISSION / DETAILS FILED BY THE ASSESSEE. HERE IT IS IMPORTANT TO STATE THAT DURING THE F.Y. 2007-08 ANOTHER LAND AT SURVEY NO. 533/2/1 , 533/2/2 AND 533/2/3, ON NARODA DEHGAM ROAD, NARODA, WAS SOLD. THE SAID LAND IS SITUATED IN THE VICINITY OF NARODA AREA. FOR THE SAID LAND THE ASSESSEE HAS FILED VALUATION REPORT OF A GOVERNMENT APPROVED VALUER, HE HAS ESTIMATED THE CO ST ABOVE STATED LAND SITUATED AT ABOVE MENTIONED SURVEY NUMBERS AT RS..8 5 PER SQ RNETER. THE VALUER HAS CONSIDERED SEVERAL SALE INSTANCES OF THE NARODA AREA IN THE CASES WHERE (AND WAS SOLD DURING THE YEAR 1980-1981. IT IS TO M ENTIONED HERE THAT ASSESSMENT OF THE ASSESSEE PERTAINING TO THE ABOVE STATED LAND WAS FINALIZED BY THE UNDERSIGNED DURING THE MONTH OF DEC-10. FURTHER , AFTER CONSIDERING ALL THE RELEVANT FACTS THE COST ACQUISITION @ RS.85 PER SQ MTR AS ON 1/4/1981 WAS ACCEPTED. THEREFORE, LOOKING TO THE FACTS OF THE IN STANT CASE AND FAILURE OF ASSESSEE TO PROVE HIS CLAIM REGARDING COST OF ACQUI SION, THE UNDERSIGNED IS ITA NO. 1257/AHD/2014 ASST. YEAR 2008-09 3 ADOPTED THE COST OF ACQUISITION OF THE LAND AT RS.8 5 PER SQ METER AND WORKED OUT THE LONG TERM CAPITAL GAIN / LOSS IN THE CASE OF AS SESSEE AS UNDER :- 3.10 THE LONG TERM CAPITA! GAIN/LOSS OF THE ASSESSE E FOR THE YEAR UNDER CONSIDERATION IS RE-WORKED AS UNDER;- COMPUTATION OF LONG TERM CAPITAL GAIN 1) TOTAL LAND 736 SQ. MTS. TOTAL SALE CONSIDERATION RS.8,00,000/- AS PER SALE DEED, SATE CONSIDERATION - - . RS.8,00,000/- COST OF ACQUISITION (RS,85 PER SQ MTR AS DETERMINED ABOVE) SQ, MTS. 736 X RS.85 PER SQ MTR RS.62,560/- INDEXED COST OF ACQUISITION 62560 X 5,51 = RS.3.44,705/- LONG TERM CAPITAL GAIN.... RS. 4,55,295/- 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CO MMISSIONER OF INCOME TAX(A) BUT COULD NOT SUCCEED AS THE ADDITION WAS CONFIRMED BY HIM AFTER OBSERVING AS FOLLOWS :- 3.2 THE GRIEVANCE OF THE APPELLANT IS REGARDING TH E COST OF ACQUISITION AS ON 01- 04-1981 ADOPTED BY THE A.O., WHILE ASSESSING THE LT CG ON THE SALE OF IMMOVABLE PROPERTY BY THE APPELLANT . IN THE RO1 FI LED APPELLANT ADMITTED LTCG ON SALE OF LAND. THE COST OF ACQUISITION AS ON 01-0 4-1981 WAS TAKEN AT RS. 195 PER SQUARE METRE, AS AGAINST RS. 130/- AS PER THE R EPORT OF THE APPROVED VALUER. AS PER THE INFORMATION COLLECTED BY THE A.O. FROM S UB-REGISTRAR, THE SALE TRANSACTIONS (IN THE VICINITY OF THE APPELLANT'S LA ND) WERE EFFECTED AT RS. 11 PER SQ. METRE, IN THE YEAR 1980-81. FOR THE DETAILED REASON ING GIVEN IN THE ASSESSMENT ORDER, A.O. ADOPTED THE RATE AT RS. 85 PER SQ. METR E, WHICH IS QUITE REASONABLE. THE WRITTEN SUBMISSION REPRODUCED ABOVE IS GENERAL, VAGUE AND IS UNSUBSTANTIATED. A.O.'S OBSERVATIONS REMAIN UNCONTR OVERTED. HENCE, THIS GROUND OF APPEAL IS DISMISSED. 4. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE TRIB UNAL. ITA NO. 1257/AHD/2014 ASST. YEAR 2008-09 4 5. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT RAT E TAKEN BY LD. ASSESSING OFFICER FOR CALCULATING INDEX COST OF CAL CULATION IS ON ESTIMATE BASIS. HE FURTHER SUBMITTED THAT LAND SOLD BY THE ASSESSEE IS SITUATED AT N.H.8, NARODA WHICH IS AT A PRIME LOCAT ION AND THE VALUATION REPORT OF THE REGISTERED VALUER OF THE LA ND IN BLOCK 1162, NARODA WHICH IS NOT IN N.H.8 WAS VALUED AT RS.130/- PER SQ.MTRE AS ON 1.4.1981. AS THE LOCATION OF THE IMPUGNED LAND I S PRIME, APPROX. RATE OF 195 PER SQ.M. WAS TAKEN AS ON 1.4.1981 FOR CALCULATING THE CAPITAL GAIN. LD. AUTHORISED REPRESENTATIVE PLACED ON RECORD THE VALUATION REPORT DATED 1.8.2005 PREPARED BY GOVERNM ENT APPROVED VALUER DURING THE COURSE OF HEARING. 6. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE VEHEMENTLY ARGUED AND SUBMITTED THAT THE ALLEGED VA LUATION REPORT OF REGISTERED VALUER IS OF ANOTHER ADDRESS AND NOT OF THE LAND IN QUESTION AND ASSESSEE COULD NOT PLACED ANY DOCUMENTARY EVIDE NCE IN SUPPORT OF THE RATE OF IMPUGNED LAND AS ON 1.4.1981. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. SOLITARY GRIEVANCE OF THE ASSESSE E IS AGAINST LD. COMMISSIONER OF INCOME TAX(A)S ORDER CONFIRMING TH E ADDITION OF LONG TERM CAPITAL GAIN OF RS.4,55,295/- MADE LD. A SSESSING OFFICERS APPLYING RATE OF RS.85/- PER SQ.M. AS AGAINST RS.19 5/- PER SQ.M. ADOPTED BY THE ASSESSEE FOR CALCULATING LONG TERM C APITAL GAIN FROM SALE OF LAND AT VILLAGE NARODA. FROM PERUSAL OF REC ORDS, WE OBSERVE THAT THERE IS NO DISPUTE WITH RESPECT TO SALE CONSI DERATION FROM SALE OF IMMOVABLE PROPERTY I.E. THE LAND SITUATED AT NARODA . THE ONLY DISPUTE ITA NO. 1257/AHD/2014 ASST. YEAR 2008-09 5 AROSE WITH REGARD TO COST OF LAND TAKEN AS ON 1.4.1 981. ASSESSEE HAS ADOPTED RS.195 PER SQ.M., SUB REGISTRAR, GHEE KANTA , AHMEDABAD GAVE RS.11 PER SQ. M. , GOVT. APPROVED VALUER ADOPT ED RS.130 PER SQ.M. FOR A LAND IN ADJOINING AREA AND ASSESSING OF FICER HAS FINALIZED THE ASSESSMENT BY ADOPTING RS.85 PER SQ.M. WE FURTH ER OBSERVE THAT THERE IS NO PROOF AVAILABLE IN THE FORM OF A REPORT ISSUED BY REGISTERED VALUER REPORT OR SUB-REGISTRAR OFFICER F OR THE ACTUAL LOCATION WHEREIN THE IMPUGNED LAND IS SITUATED AND MERE ESTIMATION IS MADE BY THEM AT THE END OF ASSESSEE AS WELL AS BY L D. ASSESSING OFFICER. 7.1 WE, HOWEVER, OBSERVE THAT ASSESSEE HAS REFERRED TO THE GOVERNMENT APPROVED VALUERS REPORT VALUING FAIR MA RKET VALUE AS ON 1.4.1981 AT RS.130 PER SQ.M. BUT THE LAND IS SITUAT ED AT BLOCK NO.1162 OF NARODA T.P.S. NO.I.F.P. 280, NARODA WHICH IS NOT VERY FAR FROM THE IMPUGNED LAND SITUATED AT N.H.8 AND THIS LAND WAS S OLD BY ASSESSEE IN ASST. YEAR 2005-06 ADOPTING COST OF ACQUISITION OF RS.110 PER SQ.M. EVEN IF WE PRESUME THAT THE LAND IN QUESTION SITUATED AT N.H.8 IS AT A PRIME LOCATION THEN ALSO ADOPTING RATE OF R S.130 PER SQ.M. WILL BE A FAIR ESTIMATION OF THE COST OF ACQUISITION AS ON 1.4.1981. 7.2 WE, THEREFORE, IN TOTALITY OF FACTS AND IN VIEW OF THE VALUATION REPORT GIVEN BY GOVT. APPROVED VALUER, FIND IT JUST IFIED TO APPLY RATE OF RS.130 PER SQ.M. AS ON 1.4.1981 FOR THE PURPOSE OF CALCULATING THE COST OF ACQUISITION OF THE IMPUGNED LAND SO AS TO C ALCULATE LONG TERM CAPITAL GAIN. ACCORDINGLY, THE GROUND OF ASSESSEE I S PARTLY ALLOWED. ITA NO. 1257/AHD/2014 ASST. YEAR 2008-09 6 8. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH, 2017 SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 14/03/2017 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 10/03/2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 14/03/2017 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 14/3/17 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: