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

ITA 1292/AHD/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1139 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-07-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Keywords: Cost of acquisition; Valuation report
• Section: 143(3)

Judgement Text

ITA NO. 1292/AHD/2014 VASUDEV MANILAL PATEL VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] ITA NO.1292/AHD/2014 ASSESSMENT YEAR: 2008-09 VASUDEV MANILAL PATEL ....... ..... APPELLANT SHIV TRADERS, SURVEY NO.6, OPP. MAHALAXMI INTERCITY, KATHWADA ROAD, NARODA, AHMEDABAD 382 330 [PAN: AJGPP 9155 N] VS. INCOME TAX OFFICER ..................... RESPONDENT WARD 3(4), AHMEDABAD APPEARANCES BY PRITESH SHAH, FOR THE APPELLANT LALIT P JAIN , FOR THE RESPONDENT HEARING CONCLUDED ON: 10.09.2018 ORDER PRONOUNCED ON : 17.09.2018 O R D E R PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE-APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 21 ST FEBRUARY, 2014, PASSED BY THE CIT(A)-6, AHMEDABAD, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME-TAX A CT, 1961, FOR THE ASSESSMENT YEAR 2008-09, ON THE FOLLOWING GROUND:- THE LEARNED CIT(A) ERRED IN LAW AND IN FACTS IN CO NFIRMING THE ADDITION OF LONG TERM CAPITAL GAIN MADE BY AO AMOUNTING TO RS.6 ,71,768/-, WHICH IS REQUESTED TO BE DELETED. 2. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE HAD SOLD LAND, ALONG WI TH SOME CO-OWNERS, FOR A TOTAL SALE CONSIDERATION OF RS.70,00,000/-. THE FAIR MARKET VA LUE OF THE SAID PROPERTY AS ON 01.04.1981 WAS CLAIMED TO HAVE BEEN COMPUTED AT RS. 110/- PER SQ. MTRS. WHILE EXAMINING THE VALUATION REPORT IN SUPPORT OF THE SA ID VALUATION, THE ASSESSING OFFICER NOTED THAT THE AVERAGE SALE PRICE, TAKEN ON THE BAS IS OF COMPARABLE SALE INSTANCES, WAS RS.79/- PER SQ. MTR.; AND, YET THE VALUATION HAS BE EN DONE AT RS.110/- PER SQ. MTR. BY OBSERVING THAT THE LOCATION OF THE ASSESSEES LAND WAS PRIME LOCATION. HE THUS ADOPTED RS.79/- PER SQ. MTR. AS THE VALUE OF THE SAID LAND AS ON 01.04.1981 AND THUS PARTLY REJECTED THE VALUATION REPORT. 3. AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. WHILE REJECTING THE CLAIM OF THE ASSESSEE, THE LEARNED CIT(A) RELIE D UPON THE SALE CONSIDERATION AND OBSERVED AS FOLLOWS:- ITA NO. 1292/AHD/2014 VASUDEV MANILAL PATEL VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 2 OF 3 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 LTCG ON THE SALE OF IMMOVABLE PROPERTY BY THE APPELLANT. IN THE ROI FIL ED APPELLANT HAD NOT DISCLOSED THE SALE TRANSACTION. ON THE BASIS OF ITS/AIR INFOR MATION, A.O. CALLED FOR THE DETAILS. AS PER THE WORKING FURNISHED BY THE APPELL ANT, COST OF ACQUISITION AS ON 01-04-1981 WAS TAKEN AT RS. 110 PER SQUARE METRE, O N THE BASIS OF THE REPORT OF THE APPROVED VALUER. AS PER THE INFORMATION COLLECT ED BY THE A.O. FROM SUB- REGISTRAR, THE SALE TRANSACTIONS (IN THE VICINITY O F THE APPELLANT'S LAND) WERE EFFECTED AT RS. 11 PER SQ. METRE IN THE YEAR 1980-8 1. FOR THE DETAILED REASONING GIVEN IN THE ASSESSMENT ORDER, A.O. ADOPTED THE RAT E AT RS. 79 PER SQ. METRE, WHICH IS QUITE REASONABLE. THE WRITTEN SUBMISSION R EPRODUCED ABOVE IS GENERAL, VAGUE AND IS UNSUBSTANTIATED. A.O.'S OBSERVATIONS R EMAIN UNCONTROVERTED. HENCE, THIS GROUND OF APPEAL IS DISMISSED. 4. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 6. WE HAVE NOTED THAT THE AUTHORITIES BELOW HAVE PR OCEEDED TO ADOPT THE VALUATION OF THE LAND AS ON 01.04.1981 STRICTLY ON THE BASIS OF COMPARABLE SALES INSTANCES AND HAVE COMPLETELY DISREGARDED THE OBSERVATIONS MADE I N THE VALUATION REPORT TO THE EFFECT THAT THE LOCATION OF THE LAND WAS RELATIVELY PRIME LOCATION VIS-A-VIS SUCH SALE TRANSACTION. WE ARE UNABLE TO SEE ANY MERITS ON THIS APPROACH. T HE VALUATION AS ON 01.04.1981 CANNOT BE DONE SOLELY ON THE BASIS OF COMPARABLE S ALE INSTANCES INASMUCH AS THE LOCATION OF TWO PIECES OF LAND, NO MATTER HOW SIMIL AR, CANNOT BE THE SAME. THE VERY BASIS OF ADOPTING THE COMPARABLE SALE INSTANCES PRO CEEDS ON SWEEPING GENERALIZATIONS. IN ANY CASE, IT CANNOT BE OPEN TO THE ASSESSING OFF ICER/CIT(A) TO PARTLY ACCEPT THE VALUATION REPORT AND PARTLY REJECT THE SAME. IT IS ALSO A KNOWN FACT THAT AT THE RELEVANT POINT OF TIME I.E. ON 01.04.1981, IT WAS MORE OF A PRACTICE THAN AN EXCEPTION THAT THE SALE CONSIDERATION DISCLOSED TO THE AUTHORITIES WAS UNDERSTATED. IT WAS BECAUSE OF THIS BLATANT PRACTICE OF USE OF UNACCOUNTED MONEY IN PRO PERTY TRANSACTIONS THAT SEVERAL REFORMS HAD TO BE BROUGHT IN. KEEPING THESE GROUND REALITIES IN MIND, RELIANCE ON SALE INSTANCES ALONE CANNOT BE A DECISIVE FACTOR TO ASCE RTAIN THE VALUE OF PIECE OF LAND, AT LEAST, SO FAR AS 01.04.1981 IS CONCERNED. IN VIEW OF THESE DISCUSSIONS, AND BEARING IN MIND THE FACT THAT NO MATERIAL WHATSOEVER TO DISLOD GE THE FINDINGS OF THE VALUATION OFFICER AND THAT THE DIFFERENCE BETWEEN THE VALUATI ON AS PER THE REGISTERED SALE DEED AND THE VALUE ADOPTED IN THE VALUATION REPORT IS LE SS THAN 25% WHICH STANDS REASONABLY EXPLAINED, WE DEEM IT FIT AND PROPER TO UPHOLD THE PLEA OF THE ASSESSEE. THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER THUS INDEED DESERVES TO BE DELETED. WE ORDER ACCORDINGLY. 7. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 17 TH SEPTEMBER, 2018 SD/- SD/- MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEM BER) DATED: 17 TH SEPTEMBER, 2018 BT* ITA NO. 1292/AHD/2014 VASUDEV MANILAL PATEL VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 3 OF 3 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF TAKING DICTATION: 2 PAGES DICTATION PA D ATTACHED 12.09.2018 2. DATE OF TYPING & DRAFT ORDER PLACED BEFORE THE DI CTATING MEMBER: 12.09.2018.. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S.: ...17.09.2018.......................... ... 4. DT. ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT: . 17.09.2018.. ......... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: . ... 17.09.2018....................... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: ..... 7. THE DT. ON WHICH THE FILE GOES TO THE ASTT. REGISTR AR FOR SIGNATURE ON THE ORDER: .................. ....... 8. DATE OF DESPATCH OF THE ORDER: ................. .......