ACIT, Nashik V. Shri Dashrath Kashinath Mandlik, Nashik

ITA 1322/PUN/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9821 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-10-2012
• Assessment Year: misc
• Appeal Filed On: 19-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Business income; Search and seizure; Cost of acquisition; Fair market value; Valuation report; Block assessment
• Section: 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1322/PN/2009 (BLOCK PERIOD 1997-98 TO 2003-04) ASSISTANT COMMISSIONER OF INCOME TAX, APPELLANT CIRCLE-1, GADKARI CHOWK, OLD AGRA ROAD, NASHIK V. SHRI DASHRATH KASHINATH MANDLIK, RESPONDENT MANDLIKWADA, ANANDVALI, GANGAPUR ROAD, NASHIK PAN : AOMPM 5516R APPELLANT BY : MS. AN N KAPTHUAMA RESPONDENT BY : NONE DATE OF HEARING : 17/10/1 2 DATE OF PRONOUNCEMENT : 27 -11-12 O R D E R PER R.S. PADVEKAR, JM IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE IMP UGNED ORDER OF THE LD CIT(A) I, NASHIK DATED 14/9/2009 AND THIS APPEAL IS ARISING FROM THE BLOCK ASSESSMENT FRAMED BY THE A.O U/S. 15 8 BD R.W.S. 144 OF THE INCOME TAX ACT. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A)-I, NASHIK HAS ERRED IN ALLOWING THE DEDUCTIO N OF INDEXED COST OF ACQUISITION OF RS. 72,88,164/- FROM THE TOTAL SALES CONSIDERATION OF RS. 1,24,27,000/- 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, NASHIK IS JUSTIFIED IN ACCEPTING THE VALU ATION OF REGD. GOVT. VALUER AS AT 01.04.1981 OF RS. 20,76,400/- WHEN THE METHOD OF VALUATION FOLLOWED BY THE VALUER ITSELF IS WRONG ON FACTS. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, NASHIK HAS ERRED IN ACCEPTING THE VALUATI ON OF THE ASSETS AS AT 01.04.1981 WITHOUT REFERRING THE VALUATION TO DEPAR TMENTAL VALUATION OFFICER. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A)-I, NASHIK HAS ERRED IN MENTIONING THAT THE A .O. IN HIS REMAND REPORT HAS ACCEPTED THAT THE DEDUCTION OF INDEXED COST OF THE SAID LAND 2 ITA NO. 1322/PN/2009 SHRI DASHRATH KASHINATH MANDLIK (BLOCK PERIOD 97-98 TO 2003-04) SHOULD BE ALLOWED FROM THE SALES CONSIDERATION, WHE N THE A.O. HAS NOT REPORTED THE SAME IN HIS REMAND REPORT DTD. 03.10.2 008. 3. THE RELEVANT FACTS EMERGE FROM THE RECORD ARE AS UNDER. THERE WAS A SEARCH AND SEIZURE ACTION U/S. 132(1) OF THE ACT IN THE CASE OF SHRI BALASAHEB BARKU KOLHE/ SHRI. SAMARTH DEVELOPERS PVT . LTD., NASHIK. IN THE SAID SEARCH ACTION, A SATHEKHAT (AGREEMENT TO SALE) DATED 27.04.1998 WAS FOUND WHICH WAS SEIZED AS ENCLOSURE 13, PAGE NOS. 103 TO 111. THE SATHEKHAT WAS IN RESPECT OF LAND BELON GING TO SHRI. KASHINATH LAXMAN MANDLIK AND 8 OTHERS. THE CO-OWNE RS HAD GIVEN GENARAL POWER OF ATTORNEY(GPA) IN RESPECT OF THE SA ID LAND IN FAVOUR OF THE ASSESSEE AND ON THE BASIS OF SAID GPA, HE HAD E NTERED INTO AGREEMENT TO SALE FOR TRANSFERRING THE RIGHT IN THE LAND TO SHRI SAMARTH DEVELOPERS PVT. LTD., NASHIK. THE A.O ISSUED NOTIC E U/S. 158 BD OF THE ACT AND ASSESSMENT WAS COMPLETED BY DETERMINING UND ISCLOSED INCOME OF RS. 1,24,27,000/- WHICH WAS THE TOTAL SALE CONSIDE RATION MENTIONED IN THE SEIZED SATHEKHAT. SO FAR AS THE LIMITED CONTRO VERSY BEFORE US IS CONCERNED I.E. THE LD CIT(A) HAS ACCEPTED THE VALU ATION OF THE REGISTERED GOVT. VALUER AS ON 1.4.1981 OF RS. 20,76,400/-. IN RESPECT OF THE ISSUE OF TAXABILITY OF THE ENTIRE CONSIDERATION IN THE HA NDS OF THE ASSESSEE IS CONCERNED, THE LD CIT(A) HAS CONFIRMED THE ORDER OF THE A.O. 4. THE ASSESSEE RAISED THE PLEA BEFORE THE LD CIT(A ) THAT WHILE ARRIVING AT CAPITAL GAINS, THE A.O. SHOULD HAVE ALL OWED ENTIRE COST OF THE LAND AS ON 01.4.1981. THE LD CIT(A) HAS OBSERVED T HAT THE A.O. IN HIS REMAND REPORT DATED 03 OCTOBER 2008 HAS ACCEPTED TH AT THE DEDUCTION OF INDEX COST OF SAID LAND SHOULD BE ALLOWED FROM THE SALE CONSIDERATION. THE ASSESSEE FILED THE VALUATION REPORT OF THE APPR OVED REGISTERED VALUER DETERMINING THE FAIR MARKET VALUE OF THE SAID PROPE RTY AS ON 1.4.1981 AND AS PER THE SAID VALUATION REPORT, THE FAIR MARKET V ALUE OF LAND IS DETERMINED AS AT RS. 20,76,400/-. THE LD CIT(A), T HEREFORE, CONSIDERED THE INDEX AT 351 WHICH IS APPLICABLE TO THE YEAR O F SALE AND DIRECTED THE A.O. TO ALLOW THE DEDUCTION OF RS.72,88,164/- AS AN INDEX COST OF ACQUISITION FROM THE SALE CONSIDERATION OF RS.1,24, 27,000/-. THE GRIEVANCE OF THE REVENUE IS THAT THE LD CIT SHOULD HAVE REFERRED THE MATTER OF THE VALUATION TO THE DEPARTMENTAL VALUER. 5. WE HAVE HEARD THE LD. D.R. THE D.R. WAS DIRECT ED TO FILE THE COPY OF THE VALUATION REPORT. AS PER THE DIRECTIONS OF THE BENCH, THE A.O HAS FILED THE COPIES OF THE VALUATION REPORT AS WELL AS REMAND REPORT WHICH ARE 3 ITA NO. 1322/PN/2009 SHRI DASHRATH KASHINATH MANDLIK (BLOCK PERIOD 97-98 TO 2003-04) PLACED ON RECORD. WE HAVE EXAMINED THE VALUATION R EPORT OF ONE SHRI. D.P. MADIWALE, WHO IS THE GOVERNMENT APPROVED VALUE R OF THE AGRICULTURAL LAND DATED 12 TH JANUARY 2008. THE REGISTERED VALUER HAS GIVEN THE DETAILS OF THE LAND AND HAS ALSO CONSIDER ED THE LOCATION AND OTHER ACCESS TO THE SAID LAND. HE HAS ADOPTED THE RATE AT RS. 116/- PER SQ. METER AND ACCORDINGLY WORKED OUT THE FAIR MARKE T VALUE OF THE SAID LAND AS ON 01.4.1981 AT RS. 20,76,400/-. NOTHING HAS BEEN POINTED OUT BEFORE US WHY THE LD CIT(A) SHOULD NOT HAVE ACCEPTE D THE VALUATION REPORT FILED BY THE ASSESSEE. 6. AFTER CONSIDERING THE MATTER AT ENTIRETY, WE DO NOT FIND ANY FAULT IN THE ORDER OF THE LD CIT(A) ON THIS ISSUE. WE, ACCO RDINGLY, CONFIRM THE SAID ORDER AND DISMISS ALL THE GROUNDS OF THE REVEN UE. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27TH NOVEMBER 2012. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (R.S.PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 27 NOVEMBER, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (CENTRAL), NAGPUR 4. THE CIT(A)-I, NASHIK 5. THE D.R. A BENCH, PUNE 6. GUARD FILE /- TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE