Assistant Commissioner of Income Tax,Central Circle-2, Nagpur V. M/s. Jabalpur Shitgruh Private Limited, Nagpur

ITA 136/NAG/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3100 (ITAT-NAGPUR)
• Duration Of Justice: 7 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 29-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H WANARE DR M BHUSARI
• Keywords: Depreciation; Fair market value; Valuation report; Assessment record

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR , BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO. 1 36 / N AG / 20 1 1 ( ASSESSMENT YEAR S : 200 7 - 0 8 ) ACIT, CIR - 2, NAGPUR - 440 001 VS. M/S JABALPUR SHEETGRIHA PVT. LTD., G - 10, ANJUMAN BUILDING, ALOK AGENCY, SADAR, NAGPUR PAN/GIR NO. : A A JCS 2672 L ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 13 9 / NAG /20 1 1 ( ASSESSMENT YEARS :2007 - 08 ) M/S JABALPUR SHEETGRIHA PVT. LTD., G - 10, ANJUMAN BUILDING, ALOK AGENCY, SADAR, NAGPUR VS. ACIT, CIR - 2, NAGPUR - 440 00 1 PAN/GIR NO. : A AJCS 2672 L ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR. H.WANARE DR. M. BHUSARI /ASSESSEE BY : MR. K.P. DEWANI DATE OF H EARING : 21 ST DEC ., 2012 DATE OF PRONOUNCEMENT : 9 TH JAN . ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E DEPARTMENT HAS PREFERRED AN APPEAL I.E. ITA NO. 136/N/2011, WHEREAS THE ASSESSEE HAS ALSO PREFERRED AN APPEAL I .E. ITA NO. 139/N/2011 BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE COMMON ORDER DATED 8 - 7 - 2011 OF LEANED CIT(A) - I , NAGPUR ITA NO. 1 36 &1 3 9 /20 1 1 2 (MAHARASHTRA) , RELA TING TO THE ASSESSMENT YEAR S 200 7 - 08 , WHICH HA VE BEEN HEARD THROUGH E - COURT, MUMBAI. 2 . SINCE, THE FACTS IN B OTH THE APPEALS ARE SIMILAR, THEREFORE, BOTH THE APPEALS OF THE DEPARTMENT ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. 3 . IN ITA NO. 136/N/2011 , THE DEPARTMENT HAS RAISED THE FIRST ISSUE AGAINST DELETING ADDITION OF RS. 20,00,000/ - TREATED BY THE AO AS INCO ME OF THE ASSESSEE FROM UNEXPLAINED SOURCES. 3 .1 THE RETURN OF INCOME WAS FILED DECLARING INCOME OF RS. 1,69,07,850/ - . DURING THE COURSE OF ASSESSMENT PROCEEDING S , AO HAS SOUGHT DETAILS REGARDING THE PROPERTIES SOLD ON WHICH LONG TERM CAPITAL GAINS WAS OF FERED. WHILE COMPLETING ASSESSMENT AO HAS ADDED BACK AMOUNTS BEING MONEY PAID TO CONSENTERS OF RS. 20 LAKHS, INDEXED COST OF STRUCTURE OF RS. 1,06,57,712/ - AND EXCESS COST OF LAND OF RS. 1,35,71,092/ - . AS REGARDS MONEY PAID TO CONSENTERS, AO HAS HELD THAT, OUT OF RS. 50 LAKHS PAID, RS. 20 LAKHS WAS PAID BY CASH. AO HAS FURTHER HELD THAT NEITHER ITS GENUINENESS NOR AT PURPOSE OF PAYMENT HAS BEEN PROVED AND THEREFORE DISALLOWED THE SAME. REGARDING THE COST OF STRUCTURE CLAIMED BY APPELLANT, AO HAS STATED THAT THERE WAS NO EVIDENCE OF AN EXISTING OF A STRUCTURE ON LAND AT THE TIME OF SALE. THE SALE DEED ONLY REFERS TO SALE OF LAND WITHOUT ANY SUPERSTRUCTURE. FURTHER APPELLANT HIMSELF HAS SUBMITTED THAT THE STRUCTURE WAS A BUSINESS ASSET. DEPRECIATION HAS BEEN C LAIMED AND STRUCTURE WAS DEMOLISHED A ITA NO. 1 36 &1 3 9 /20 1 1 3 COUPLE OF YEARS BACK. AC HAS ALSO OBSERVED THAT THE VALUATION REPORT WAS NOT RELIABLE AND THE VALUER HIMSELF HAS ACCEPTED THAT HE WAS MISGUIDED REGARDING THE SAME. THE INDEXED COST OF STRUCTURE IS THEREFORE HELD TO BE INADMISSIBLE IN COMPUTING CAPITAL GAINS. AS REGARDS THE COST OF LAND AS ON 01 - 04 - 1981 CLAIMED BY ASSESSEE AC HAS HELD THAT THIS WAS NOT PROPER AS THIS WAS PURELY IMAGINARY. AC HAS THEREFORE ADOPTED COST OF LAND AT RS. 3/ - PER SQ.FT. AND ALLOWED INDEXATION THEREON. 3.2 DURING THE COURSE OF ASSESSMENT PR OCEEDINGS AO HAS RECORDED A STATEMENT FROM SMT. ANJU KEDIA, DIRECTOR OF THE AS SESSEE COMPANY ON 17 - 11 - 2009. AO HAS RELIED ON THIS STATEMENT TO SUPPORT HIS CLAIM THAT THE PURPORTED PAYMENT MADE TO THE CONSENTE R WAS NOT GENUINE AND THERE WAS NO STRUCTURE OTHER THAN A BOUNDARY WALL. FURTHER REGARDING THE COST OF LAND IT IS STATED BY AO THAT THE DIRECTOR HAS GIVEN EVASIVE ANSWERS STATING THAT SHE WAS A NON TECHNICAL PERSON. A O HAS REJECTED THE VALUATION REPORT ON THE GROUND THAT NO SALE INSTANCE WAS CONSIDERED IN THE VALUATION REPORT. A O HAS ALSO STATED THAT METHOD OF VAL UATION WAS WITHOUT ANY BASIS. AO HAS FURTHER STATED THAT VALUATION OF LAND WAS ADOPTED BY METHOD OF REVERSE INDEXATION WHICH IS NOT ACCEPTABLE. AT THE TIME OF ASSESSMENT PROCEEDINGS THE ASSESSEE IN SUPPORT OF ITS VALUATION OF LAND AS ON 01 - 04 - 1981 HAS PRODUCED A COMPARABLE INSTANCE OF SALE DATED 29 - 01 - 1982 BEING LAND SOLD BY HAJARILAL SONI, KHASRA NO. 72/1, 72/2 CHERITAL, SARAWATI COLONY, JABALPUR. THE AREA OF SAID LAND WAS 1380 SQ.FT. AND RATE APPROXIMATELY ITA NO. 1 36 &1 3 9 /20 1 1 4 32 / - PER SQ.FT. AO HAS HOWEVER REJECTED THIS ON THE GROUND THAT THIS SALE INSTANCE WAS NOT CITED AT THE TIME OF VALUATION THE PROPERTY AND THAT THE LAND WAS AT MADHOTAL AND NOT IN CHERITAL. FURTH ER ACCORDING TO A O THE SALE INSTANCE WAS FOR LAND ADMEASURING 1380 SQ.FT. WHEREAS ASSESSEES LAND IS MORE THAN 1 IAKH SQ.TT. THIS LAND ALSO SUPPORTED A BUILDING WHEREAS ASSESSEES LAND WAS OPEN LAND. FURTHER AO HAS POINTED OUT THAT ALTHOUGH ASSESSEE HAS FU RNISHED VALUATION REPORT QUOTING RATES OF RS. 75, 85 AND 95 FOR THE PERIOD 1984, 1985 AND 1986, ASSESSEES LAND WAS LOCATED BEYOND THE CITY LIMIT AND WAS FOR A MUCH LARGER AREA. FURTHER THE EVIDENCE PRODUCED TOWARDS THE FAG END OF ASSESSMENT PROCEEDINGS. A O HAS THEREFORE PROCEEDED TO ADOPT SALE INSTANCES OF THE SAME LOCALITY AND OF LARGE AREA OF OPEN LAND BASED ON VALUES RECEIVED FROM SUB - REGISTRAR, JABALPUR. AO HAS THEREFORE ADOPTED RS. 3/ - PER SQ.FT. AS VALUE OF LAND AND ASSESSED CAPITAL GAINS ACCORDINGLY . 4 . AGGRIEVED THEREBY THE ASSESSEE PREFERRED APPEAL BEFORE THE LEANED CIT(A) AGAINST VARIOUS ADDITIONS MADE I.E. ADDITION OF RS. 20 LAKHS ON ACCOUNT OF MONEY PAID TO CONSENTERS, ADDITION OF RS. 1,0 6, 57,712/ - ON ACCOUNT OF INDEXED COST OF STRUCTURE AND AD DITION OF RS. 1,35,71,092/ - ON ACCOUNT OF INDEXED COST OF LAND. 4.1 REGARDING ADDITION OF RS. 20 LAKHS, IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT A SUM OF RS. 50 LAKHS HAS BEEN PAID TO THREE PARTNERS AS CONSENTERS TO THE SALE AND THESE PARTIES HAVE S IGNED THE ITA NO. 1 36 &1 3 9 /20 1 1 5 SALE DEED AS CONSENTERS. THE DETA ILS FURNISHED AT THE TIME OF ASSESSMENT CLEARLY REVEAL THAT RS. 50 LAKHS HAS BEEN PAID PARTLY BY CHEQUE AND PARTLY BY CASH. THE REGISTERED SALE DEED ALSO CONTAINS DETAILS OF PAYMENTS TO CONSENTERS BOTH BY CASH AND CHEQUE. THIS LEGAL EVIDENCE PLACED ON RECORD WHICH HAS NOT BEEN DISPUTED BY AO. THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS HAD RECORDED STATEMENT OF SHRI SHANKAR MANCHANI ONE OF THE CONSENTERS IN ORDER TO VERIFY THE PAYMENT MADE BY ASSE SSEE COMPANY. SHRI SHANKAR MANCHANI IN THE STATEMENT BEFORE AO HAS ADMITTED THAT HE HAS RECEIVED CONSENT MONEY OF RS. 20 LAKHS. AS REGARD TO CONSENT MONEY PAID TO SHRI ASHOK SARAF AND RAMJI SARAF AO HAS ACCEPTED THE CLAIM OF ASSESSEE WITH REGARD TO PAYMENT MADE TO THEM AT RS. 5 LAKHS BY CHEQUE TO EACH OF THEM. THE ASSESSING OFFICER COULD NOT LOCATE THEM AND THEREFORE HAS DRAWN ADVERSE INFERENCE AND DISALLOWED THE AMOUNT PAID IN CASH TO TWO PERSONS. THE ASSESSING OFFICER HAVING ACCEPTED THE PAYMENT MADE BY C HEQUE TO AFORESAID PERSONS HAD NO VALID JUSTIFICATION IN NOT ACCEPTING THE PAYMENT WHICH ARE MADE IN CASH TO AFORESAID PARTIES. 4.2 AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, LEARNED CIT(A) WAS SATISFIED THAT THE ASSESSEE HAS P AID RS. 20 LAKHS IN CASH TO THE BUYERS AND THE SAME IS SHOWN IN THE SALE DEED ALSO, THEREFORE, THERE WAS NO QUESTION OF MAKING ANY ADDITION. ACCORDINGLY, HE DELETED THE ADDITION. ITA NO. 1 36 &1 3 9 /20 1 1 6 5 . LEARNED DR PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. ON THE OTHE R HAND LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF CIT(A). 6 . AFTER CONSIDERING THE ORDER OF THE AO AND THE CIT(A), WE FOUND THAT NO UNREASONABLENESS IN THE ORDER OF THE LEARNED CIT(A), WHO DELETED THE ADDITION OF RS.20 LAKHS. FINDINGS OF THE CIT(A) HAVE BEEN RECORDED IN PARA 6 & 7, WHICH ARE AS UNDER : - 6. I HAVE GIVEN CAREFUL CONSIDERATION TO THE FACTS OF THE CASE. AS POINTED OUT BY THE AR OF THE APPELLANT THE PAYMENTS TO CONSENTERS ARE EVIDENCED BY THE SALE DEED. AO HAS ALSO RECORD ED IN THE ASSESSMENT ORDER THAT THERE WAS A CIVIL SUIT FILED BY SHRI SHANKAR MANCHANI. AO HAS ALSO ACCEPTED THE PAYMENT BY WAY OF CHEQUE TO THE CONSENTERS. AO HAS FURTHER STATED THAT THE GENUINENESS OF PAYMENT CANNOT BE ,1 THE REASON FOR ALLOWABILITY UNLES S IT IS PROVED THAT PAYMENT WAS NECESSARY FOR THE PURPOSE OF SALE WHICH ASSESSEE HAS TO PROVE WITH PROPER EVIDENCE. IT IS THUS SEEN THAT AO HAS ADOPTED A CONTRADICTORY STAND AS REGARDS THE PAYMENT TREATING PART OF PAYMENT BY WAY OF CHEQUE AS GENUINE AND PA RT OF PAYMENT BY WAY OF CASH AS NOT GENUINE. THE EVIDENCE FOR THE TOTAL PAYMENT OF RS. 50 LAKHS TO THE CONSENTERS IS THE REGISTERED SALE DEED. AO CONSIDERING THIS PIECE OF EVIDENCE WHICH IS DULY REGISTERED DOCUMENT OF SALE IS NOT JUSTIFIED IN HIS ACTION OF APPROBATE AND REPROBATE, IN AS MUCH AS HE HAS ACCEPTED THE PART REGARDING PAYMENT BY WAY OF CHEQUE TO THE VERY SAME CONSENTERS WHILE ON THE OTHER HAND HOLDING THAT THE CASH PAYMENT IS NOT GENUINE. AO HAS NOT LED ANY EVIDENCE TO STATE THAT THE CHEQUE PAYME NTS ARE GENUINE WHILE CASH PAYMENTS ARE NOT GENUINE. THIS PIECE OF EVIDENCE BEING A DULY REGISTERED DOCUMENT CANNOT BE HELD TO BE APPROBATE AND REPROBATE AT THE SAME TIME. 7. CONSIDERING THE FACTS IN TOTALITY I HOLD THAT THE AOS ACTION IS NOT TENABLE. AO IS DIRECTED TO ALLOW THE SAID AMOUNT OF RS. 20 LAKHS PAID TO CONSENTERS AGAINST THE SALE CONSIDERATION RECEIVED IN COMPUTING CAPITAL GAINS. THIS GROUND IS ALLOWED. THE FINDINGS OF THE LEARNED CIT(A) REMAINED UNCONTROVERTED, THEREFORE, FOR THE REASONING GIVEN BY THE LEARNED CIT(A), WE CONFIRM THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. ITA NO. 1 36 &1 3 9 /20 1 1 7 7 . REMAINING ISSUE IN THE APPEAL OF THE DEPARTMENT IS AGAINST ACCEPTING THE COST OF LAND AT RS. 27/ - PER SQ.FT. BASED ON VALUATION REPORT AND AGAINST THE VALUE OF LAND AT RS .3/ - PER SQ.FT. ADOPTED BY THE AO. 7.1 FACTS IN THIS REGARD HAVE ALREADY BEEN DISCUSSED IN THE BODY OF THIS ORDER ABOVE. BEFORE LEARNED CIT(A), IT WAS SUBMITTED THAT THE AO REJECTED THE COMPARABLE INSTANCE OF SALE FURNISHED IN ASSESSMENT PROCEEDINGS, THER EFORE, THE THERE WAS NO GROUND FOR TAKING THE COST OF LAND AT RS. 3/ - SQ.FT. AS ON 1 - 4 - 1981. IT WAS FURTHER CONTENDED THAT THE AO HAS WITHOUT ANY VALID JUSTIFICATION REJECTED THE FAIR MARKET VALUE OF NEARBY AREA AS ON 31 - 3 - 1984. THE ASSESSEE ALSO OBJECTED TO THE SALE I NS TANCE ADOPTED BY THE AO ON THE GROUND THAT THIS RELATES TO PROPERTY LOCATED AWAY FROM THE ROAD AND IS SURROUNDED BY AGRICULTURAL LAND. VARIOUS SUBMISSIONS OF THE ASSESSEE WERE SENT TO THE AO FOR HIS REMAND REPORT. THE REMAND REPORT WAS SENT BY THE AO. THE CONTENTS OF THE REMAND REPORT HAS BEEN TABULATED IN THE ORDER OF LEARNED CIT(A) AT PAGES 6 TO 8. COPY OF THE REMAND REPORT WAS GIVEN TO THE COUNSEL OF THE ASSESSEE FOR COUNTER REPLY. THE COUNTER REPLY WAS FILED WHEREIN IT WAS SUBMITTED THAT THE COST INFLATION INDEX AS NOTIFIED BY CENTRAL GOVERNMENT IS TAKEN FOR DETERMINING THE VALUE OF ASSET, AND THE SAME IS DETERMINED CONSIDERING VARIOUS ASPECTS AFFECTING VALUATION. IN ABSENCE OF ANY OTHER DIRECT COMPARABLE EVIDENCE BACKWARD COMPU TATION IS R EASONABLE METHOD FOR ESTIMATING THE VALUE IN EARLIER YEAR. THE DVOS REPORT INDICATING COMPARABLE VALUE OF LAND A ON ITA NO. 1 36 &1 3 9 /20 1 1 8 31/3/1984 AT RS.75 / - EVIDENCE TO SUPPORT THE C LA IM OF ASSESSEE IN RESPECT TO FAIR MARKET VALUE AS ON 1/4/1981 AT RS.27/ - . AS REGARD TO INST ANCE OF COMPARABLE EVIDENCES A. O HAS REFERRED TO OBSERVATION AS MADE IN ASSESSMENT ORDER AT PARA 6.4 AND 7.2. THE A. O HAS NOT FOUND ANY OF THE SUBMISSIONS AS MADE B EFORE YOUR HONOUR TO BE INCORRECT IN RESPECT TO ANY FACTUAL ASPECT THEREOF. THE OBSERVATION OF A. 0. THAT THIS IS SELF SERVING POSITION MERITS NO CONSIDERATION IN AS MUCH AS SALE INSTANCES AND DVOS REPORT RELIED UPON BY ASSESSEE BEFORE A. O . ARE CREDIBLE AND INDEPENDENT LEGAL EVIDENCE ON RECORD. 7.2 AFTER CONSIDERING THE SUBMISSION, LEARNED CIT (A) FOUND THAT THE AO WAS NOT JUSTIFIED IN TAKING THE COST OF LAND AT RS. 3/ - PER SQ.FT. AS ON 1 - 4 - 1981 . THE CIT(A) NOTED THAT VALUER HAS GIVEN A VALUATION OF RS. 75/ - PER SQ.FT. AS ON 31 - 3 - 1984. THEREFORE, HE HELD THAT COST OF LAND ADOPTED BY THE ASSESSEE A T RS. 27/ - PER SQ.FT. AS ON 1 - 4 - 1981 WAS CORRECT. 7.3 AGAIN LEARNED DR PLACED RELIANCE ON THE ORDER OF AO, WHEREAS ON THE OTHER HAND, LEARNED COUNSEL PLACED RELIANCE ON THE ORDER OF CIT(A) . 8 . AFTER CONSIDERING THE ORDER OF AO AND CIT(A) WE FOUND NO INF IRMITY IN THE FINDING OF THE CIT(A) ON THE ISSUE INVOLVED. THE FINDING OF THE LEARNED C IT(A) HAS BEEN RECORDED IN PAGE 9, WHICH ARE AS UNDER : - 10. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT. FROM THE VALUATION REPORT AND THE ASSESSMENT RECORD IT IS SEEN THAT ITA NO. 1 36 &1 3 9 /20 1 1 9 ASSESSEE HAS SUBSTANTIATED ITS CLAIM MADE IN THE VALUATION REPORT BY FURNISHING SALE INSTANCES IN RESPECT OF LAND WHEREIN RATE OF LAND WAS RS. 32/ - PER SQ.FT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN THE VALUATION REPORT THE C OST HAS BEEN ADOPTED TO RS. 27/ - PER SQ.FT. ONE OF THE REASONS AMONG OTHERS TO REJECT THE VALUATION REPORT BY AC IS THAT NO COMPARABLE INSTANCE HAVE BEEN CITED. HOWEVER, AC HAS FURTHER REJECTED THE COMPARABLE INSTANCE FURNISHED DURING THE COURSE OF ASSESSM ENT PROCEEDINGS ON A RRISAPPREHENSION THAT THIS RELATES TO A DIFFERENT LOCALITY. AC HAS HELD THAT THE PROPERTIES ARE AT DIFFERENT LOCATIONS AND THAT AREA AND EXTENT OF LAND IS SMALLER AND THERE IS A BUILDING IN THE SAID LAND. HOWEVER AS POINTED OUT BY APPE LLANT THE VALUATION, REPORT CLEARLY INDICATES THAT THE PROPERTY OF THE ASSESSEE IS AT CHERITAL WARD OF MADHOTAL AREA WHICH IS THE SAME LOCALITY WHERE THE COMPARABLE INSTANCE OF SALE IS LOCATED. AO HAS NOT DISPUTED THIS FACT EVEN IN THE REMAND REPORT THEREF ORE PRESUMPTION OF THE AC IN THE ASSESSMENT ORDER IS CLEARLY ERRONEOUS. THE FAIR MARKET VALUE AS ON 29 - 01 - 1982 IS THUS SUPPORTED BY RECORD HAS BEEN RS. 32/ - PER SQ.FT. AGAINST AS CLAIMED RS. 27/ - PER SQ.FT. IN MY CONSIDERED OPINION THE VALUE CLAIMED BY ASS ESSEE CANNOT BE FAULTED. FURTHER IT WOU LD HAVE BEEN APPROPRIATE EVEN IF THE AO HAD REFERRED THE MATTER TO THE VALUATION OFFICER TO DETERMINE FAIR MARKET VALUE 04 - 1981, IF HE WAS CONVINCED THAT THE CLAIM OF ASSESSEE IS EXCESSIVE. HOWEVER THAT HAS NOT BEEN D ONE. AS REGARDS THE ADOPTION OF RS. 3/ - PER SQ.FT. AO HAS FAILED TO REBUT THE CONTENTION OF THE APPELLANT THAT THE LAND WAS FAR AWAY FROM ROAD AND SURROUNDED BY AGRICULTURAL LAND. SINCE THERE IS A COMPARABLE INSTANCE OF SALE IN THE SAME LOCALITY IT IS NOT POSSIBLE TO THIS BRUSH ASIDE AS DONE BY AO. CONSIDERING THE VALUATION REPORT FURNISHED BY ASSESSEE, I AM OF THE VIEW THAT VALUE OF PROPERTY AS ON 01 - 04 - 1981 CAN BE ADOPTED AT RS. 27/ - PER SQ.FT. AND THIS CANNOT BE CONSIDERED EXCESSIVE OR UNRELIABLE. AO IS THEREFORE DIRECTED TO COMPUTE THE CAPITAL GAINS BY TAKING FAIR MARKET VALUE AS ON 01 - 04 - 1981 OF RS. 27/ - . 10.1 REGARDING THE FINDING OF THE AO FOR THE AREA OF LAND WAS 108900 SQ.FT.AS AGAINST 122882, ASSESSEE HAS NOT DISPUTED THIS FACTUAL FINDING. AD IS T HEREFORE DIRECTED TO C OMPUTE THE INDEX COST OF 108900 SQ.FT. O F LAND AT RS. 27/ - PER SQ.FT. THE ABOVE FINDING OF THE LEARNED CIT(A) ARE REASONABLE. WE TAKE TAKEN INTO CONSIDERATION T HE SALE RATE OF COMPARABLE CASES AND THE VALUATION DONE BY THE VALUATI ON OFFICER. THE VALUATION OFFICER HAS GIVEN A REPORT THAT COST OF LAND AS ON 31 - 3 - 1984 WAS AT RS. 75/ - PER SQ.FT. IF REVERSE CALCULATION IS DONE THEN IT CAN BE SAID THAT THE VALUATION MAY BE MORE THAN THE VALUATION SHOWN BY THE ASSESSEE AT RS. 27/ - PER SQ.FT . AS ON 1 - 4 - 1981 . KEEPING IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES ITA NO. 1 36 &1 3 9 /20 1 1 10 OF THE CASE AND THE REASONING OF THE LEARNED CIT(A) , WHICH REMAINED UN CONTROVERTED, WE CONFIRM THE ORDER OF LEARNED CIT(A) ON THIS ISSUE ALSO. 9 . NOW, WE WILL TAKE THE APPEAL OF THE AS SESSEE I.E. ITA NO. 139/N/2011 . 9.1 THE ASSESSEE IN ITS APPEAL IS OBJECTING THE CONFIRMATION OF ADDITION OF RS.1,06,57,712/ - IN RESPECT OF COST OF BUILDING. 9.2 DURING THE ASSESSMENT PROCEEDING, THE AO NOTED THAT THE ASSESSEE HAS REDUCED THE COST OF STRU CTURE FROM SALE CONSIDERATION WHILE COMPUTING CAPITAL GAIN. THE AO NOTED THAT THE STATEMENT OF ONE OF THE DIRECTOR SMT. ANJU KEDIA WAS RECORDED, WHO STATED THAT THE STRUCTURE WAS DEMOLISHED BEFORE REGISTRY. THE AO FURTHER NOTED THAT ON STRUCTURE/BUILDING, THE ASSESSEE WAS CLAIMING DEPRECIATION, THEREFORE, THE SAME WAS BUSINESS ASSET AND ACCORDINGLY IT WAS HELD THAT NO DEDUCTION CAN BE ALLOWED IN RESPECT OF STRUCTURE WHICH WAS NOT THERE AT THE TIME OF REGISTRY. THE AO ALSO MADE CLEAR THAT IF IT IS ALLOWABLE THEN ONLY WDV WHICH WAS RS. 23,000/ - AS PER BOOKS AND ACCOUNTS OF THE ASSESSEE CAN BE REDUCED. THE AO OBSERVED IN HIS ORDER THAT IF THE APPELLATE AUTHORITY ACCEPTS THAT STRUCTURE WAS THERE, THEN ITS WDV SHOULD NOT BE MORE THAN RS. 23,000/ - SHOWN IN THE ASSE SSEES BOOKS. ITA NO. 1 36 &1 3 9 /20 1 1 11 9.3 THE CIT(A) CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT THE QUESTION OF INDEXING THE COST OF A DEPRECIABLE ASSET DOES NOT ARISE IN THE SCHEME OF COMPUTATION OF LONG TERM CAPITAL GAINS AS THE ASSET WAS BUSINESS ASSET AND, THEREFORE, THE SAME IS NOT ALLOWABLE. 9.4 LEARNED COUNSEL OF THE ASSESSEE STATED THAT THE STRUCTURE WAS VERY MUCH THERE, WHICH IS VERIFIABLE. COST OF STRUCTURE HAS TO BE REDUCED WHILE COMPUTING THE CAPITAL GAIN. RELIANCE WAS PLACED ON THE DECISION REPORTED IN 46 DTR (AGRA) TRIB 314 . 9.5 ON THE OTHER HAND, LEARNED DR STATED THAT THIS ISSUE CAN BE SENT BACK TO THE FILE OF THE AO TO FIND OUT AS TO WHETHER THERE WAS ANY STRUCTURE OR NOT AS HE LEARNED AO HAS GIVEN A CATEGORICAL FINDING THAT THERE WAS NO STRUCTURE. 10 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE COST OF STRUCTURE HAS TO BE REDUCED IF THERE WAS ANY STRUCTURE. O N SIMILAR FACTS THE TRIBUNAL IN CASE OF SUBASHCHANDRA KAPOOR VS. ITO, REPORTED IN 46 DTR (AGRA) TRIB 31 4 , HAS ALLOWED THE CLAIM OF THE ASSESSEE. IT HAS TO BE ASCERTAINED THAT WHETHER THERE WAS ANY BUILDING BEFORE MAKING THE SALE OF LAND, FACTS ARE NOT CLEAR, THEREFORE, WE FEEL THAT THE MATTER SHOULD BE SENT BACK TO THE FILE OF THE AO FOR ASCERTAINING THE FA CTUAL ASPECT AS TO WHETHER THERE WAS ANY STRUCTURE/BUILDING OR NOT. WHATEVER THE COST OF THE STRUCTURE/BUILDING WAS SHOWN BY THE ASSESSEE, WHICH HAS BEEN ACCEPTED BY THE ITA NO. 1 36 &1 3 9 /20 1 1 12 DEPARTMENT IN PAST, THAT HAS TO BE REDUCED. IF THE DEPRECIATION HAS BEEN CLAIMED THAT HAS ALSO TO BE REDUCED FROM THE COST OF STRUCTURE/BUILDING AS PER THE PROVISION OF LAW WHILE GIVING THE DEDUCTION ON ACCOUNT OF COST OF STRUCTURE/BUILDING IN COMPUTING THE CAPITAL GAIN. ONUS LAYS UPON THE ASSESSEE TO PROVE THAT THERE WAS A BUILDING/STRUCTU RE AND THE COST HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE RESTORE THIS ISSUE TO THE FILE OF THE AO TO PASS A FRESH ORDER AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE. 1 1 . RESULTANTLY , A PPEAL OF THE DEPARTMENT I.E. ITA NO. 136/N/2011 IS DISMISSED AND THE APPEAL OF THE ASSESSEE I.E. ITA NO. 139/N/2011 IS ALLOWED FOR STATISTICAL PURPOSES . ITA NO.136/N/2011 ) ITA NO.139/N/2011 ) ORDER PRONOUNCED IN THE E - COURT ON THIS 9 TH DAY OF JAN. 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 09 / 01 / 201 3 . /PKM , PS ITA NO. 1 36 &1 3 9 /20 1 1 13 COPY OF THE ORDER FORWARDED TO : 1. / TH E APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE CO PY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI