MOUNT VIEW CLUB & RESORTS P. LTD, NAVI MUMBAI V. ITO 10(3)(4), MUMBAI

ITA 1361/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8710 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 17-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 15-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ANUPAMA SINGHLADR
• Keywords: Sale consideration of property below Jantri Value; Business income; Question of law; Valuation report

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, G MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO.1361/MUM/2011 ASSESSMENT YEAR: 2007-08 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 27, MAHAVIR CENTRE, SECTOR-17, VASHI, NAVI MUMBAI-400705 / VS. INCOME TAX OFFICER-10(3)(4), MUMBAI ( !'# $ /ASSESSEE) ( / REVENUE) PAN. NO . AACCM5353M % & $ ' / DATE OF HEARING : 17/01/2017 & $ ' / DATE OF ORDER: 18/01/2017 ! / REVENUE BY SHRI PRAKASH PANDIT !'# $ ! / ASSESSEE BY MS. ANUPAMA SINGHLA-DR ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 2 / O R D E R PER JOGINDER SINGH(JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 29/12/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ASSESSEE HAS FILED PRECISE GROUNDS OF APPEAL OU T OF WHICH GROUND NO.1 TREATING THE CLUB RENT OF RS.45,7 1,097/- AS RENTAL INCOME AND AS SUCH RECEIPTS FALLS UNDER T HE HEAD INCOME FROM HOUSE PROPERTY AGAINST THE CLAIM OF T HE ASSESSEE AS BUSINESS RECEIPT, IS CONCERNED, THE LD. DR, MS. ANUPAMA SINGHLA, CONTENDED THAT THE IMPUGNED ISSUE IS COVERED AGAINST THE ASSESSEE BY ORDER OF THE TRIBUN AL DATED 28/11/2010 (ITA NO.5451/MUM/2009) FOR ASSESSMENT YE AR 2005-06. THE LD. COUNSEL FOR THE ASSESSEE, SHRI PRA KASH PANDIT, DID NOT CONTROVERT THE ASSERTION MADE BY LD . DR. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE AFORESAID ORDER OF THE TRIBUNAL DATED 26/1 1/2010:- 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS ACTIVITIES OF CLUB HOUSE AND RESORT AND PR OVIDES RECREATION FACILITIES OF SWIMMING POOL, INDOOR GAME S, JOYRIDE AND ENTERTAINMENTS. THE ASSESSEES RESORT IS LOCATED IN MUMBAI PUNE HIGH WAY AT VILLAGE VINEIGAON, TALUKA, KHALAPUR, DI ST. RAIGAD. THE ASSESSEE TOOK OVER THE MANAGEMENT OF THE EXISTI NG COMPANY. DURING THE RELEVANT YEAR TO THE ASSESSMENT YEAR UND ER CONSIDERATION, THE DEVELOPMENT ACTIVITIES OF THE BU ILDING WERE ALSO IN PROGRESS. THE ASSESSEE LEASED OUT THE CLUB ROOMS AND OTHER ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 3 INFRASTRUCTURES IN THE BUILDING TO MMTI EDUCATIONAL RESEARCH TRUST, VEERA DESAI ROAD, ANDHERI (W), MUMBAI FOR A SUM OF RS.20,52,000/- THE ASSESSEE ADMITTED THE RENTAL INC OME AS BUSINESS INCOME. THE AO QUESTIONED THE NATURE OF TH E INCOME AND ASKED THE ASSESSEE TO EXPLAIN THE NATURE OF RENT. T HE ASSESSEE HAS STATED BEFORE THE AO AS THE DEVELOPMENT ACTIVITIES OF THE CLUBROOMS AND OTHER WORK WAS IN PROGRESS, THE ASSES SEE THOUGHT IT FIT TO COMMERCIALLY EXPLOIT LETTING OF THE SAID PRO PERTY TEMPORARILY FOR A PERIOD OF THREE YEARS BY ENTERING INTO AGREEM ENT WITH THE SAID MMTI. THE MAIN CONTENTION OF THE ASSESSEE BEFO RE THE AO WAS THAT THE ASSESSEE HAS EXPLOITED THE BUSINESS PR EMISES/ASSETS COMMERCIALLY AND THE INCOME ARISEN THERE FROM IS NO THING BUT INCOME FROM BUSINESS. THE AO DID NOT ACCEPT THE EXP LANATION OF THE ASSESSEE. THE AO NOTED THAT THE TDS HAS BEEN DE DUCTED FROM THE INCOME WHICH SHOWN AS RENT RECEIVED FROM MMTI E DUCATIONAL. RESEARCH TRUST. ACCORDINGLY THE AO HELD THAT THE IN COME RECEIVED UNDER THE HEAD CLUB RENT IS NOTHING BUT THE INCOME FROM HOUSE PROPERTY. CONSEQUENTLY, THE AO ALSO DISALLOW ED THE CLAIM OF THE EXPENSES. THE AO HAS RELIED UPON THE DECISIO N OF THE HON. SUPREME COURT IN THE CASE OF M/S SHAMBHU INVESTMENT S PRIVATE LIMITED V/S CIT (263ITR 143). 4. ON APPEAL, THE LEARNED CIT(A) HAS CONFIRMED THE DISALLOWANCE MADE BY THE AO BY HOLDING AS UNDER : 2.4 NOW, IN THE INSTANT CASE, I HAVE ALREADY HELD THAT THE APPELLANT HAS NOT STARTED THE BUSINESS ACTIVITY AS PER ITS OWN OBJECTIVES, AS GIVEN IN THE MEMORANDUM OF ASSOCIATION. HENCE, THE AO HAS RIGHTLY HELD THAT THIS IS NOT A CASE OF EXPLOITING THE BUSINESS ASSETS. THE PROPERTY HAS BEEN LEASED OUT TO AN EDUCATIONAL INSTI TUTION AS OWNER OF THE PROPERTY. HENCE THE INCOME IS TAXABLE UN DER THE HEAD INCOME FROM HOUSE PROPERTY. THIS GROUND OF APP EAL IS DISMISSED 5. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS SU BMITTED THAT THE PART OF THE BUSINESS PREMISES WAS LET OUT TO MM TI EDUCATIONAL. RESEARCH TRUST FOR A PERIOD OF THREE Y EARS. THE ASSESSEE SURRENDERED THE CLUB AND RESORT BUSINESS A ND THE PART OF ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 4 ITS PREMISES WAS LET OUT FOR A TEMPORARY PERIOD IN ORDER TO EXPLOIT THE BUSINESS PREMISES TILL THE DEVELOPMENT AND CONS TRUCTION WORK IS COMPLETED. THEREFORE, THE ASSESSEE WAS EXPLOITED THE BUSINESS ASSET FOR MAKING THE PROFIT IN THAT BUSINESS. THE A SSESSEE HAS BEEN DOING BUSINESS FROM THE OTHER PART OF THE BUSI NESS PREMISES. HE HAS RELIED UPON THE DECISION OF THE HON.SUPREME COURT IN THE CASE OF UNIVERSAL PLAST LTD. V. COMMISSIONER OF INC OME-TAX REPORTED IN [1999] 237 ITR 454 (SC) AS WELL AS THE DECISION OF THE HON. JURISDICTIONAL HIGH COURT IN THE CASE OF C OMMISSIONER OF INCOME TAX VS MOHIDDIN HOTELS PVT. LTD. AND ANR. REPORTED IN 200 CTR 329. 6. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE HAD NOT STARTED THE BUSINESS ACTIVITIES AS PER ITS OWN OBJECTIVE AS GIVEN IN THE MEMORANDUM OF ASSOCIATION . THE PORTION OF THE PREMISES WAS LET OUT FOR THE PURPOSE S OF EARNING THE INCOME TO THE MMTI EDUCATIONAL. RESEARCH TRUST FOR HOLDING THE CLASSES AND THEREFORE EVEN THE PREMISES WAS LET OUT FOR CARRYING OUT ANY BUSINESS OF RESORT OR HOTELS AS PE R THE BUSINESS OBJECT OF THE ASSESSEE. THEREFORE, IT IS THE CASE O F EARNING THE INCOME BY LETTING OUT THE BUSINESS PREMISES AND NOT EXPLOITING THE BUSINESS ASSET. HE HAS RELIED UPON THE DECISION OF THE HON. SUPREME COURT IN THE CASE OF M/S SHAMBHU INVESTMENT S PRIVATE LIMITED V/S CIT (263ITR 143). 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND REL EVANT RECORD. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAD NOT COM PLETED ITS CONSTRUCTION WORK OF THE PREMISES FOR RUNNING THE B USINESS OF CLUB AND RESORT. THE PART OF THE PREMISES WAS LEASE D OUT TO MMTI EDUCATIONAL. RESEARCH TRUST FOR A PERIOD OF THREE Y EARS AS PER THE LEASE AGREEMENT. SINCE THE DEVELOPMENT WORK OF THE BUSINESS PREMISES WAS IN PROGRESS, THEREFORE, THE PORTION WH ICH WAS LEASED OUT BY THE ASSESSEE WAS NEVER UTILIZED BY TH E ASSESSEE FOR ITS BUSINESS ACTIVITIES. IT IS NOT THE CASE OF LETT ING OUT THE BUSINESS ASSET WHICH IS READY FOR RUNNING THE BUSINESS OF RE SORT OR CLUB BUT THE ASSESSEE HAS SIMPLY LET OUT THE PREMISES TO AN EDUCATIONAL ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 5 INSTITUTION FOR CONDUCTING THE EDUCATION CLASSES WH ICH HAS NO CONNECTION WITH THE BUSINESS ACTIVITIES OF THE ASSE SSEE. THEREFORE, IT IS NOT A CASE OF LETTING OUT OF PREMISES ALONGWI TH THE MACHINERY, FURNITURE, FIXTURES AND ELECTRICAL FITTI NGS WHICH ARE NECESSARY FOR CONDUCTING THE BUSINESS ACTIVITY FOR THE ASSESSEES BUSINESS. BUT THIS IS A CASE OF SIMPLE LETTING OUT THE BUILDING PREMISES. THEREFORE, THE ASSESSEE HAS NOT MADE OUT THE CASE OF EXPLOITATION OF THE BUSINESS ASSET FOR MAKING THE P ROFIT IN RESPECT OF USING THE SAME FOR ITS OWN BUSINESS. IN THE CASE OF IN UNIVERSAL PLAST LTD. V. COMMISSIONER OF INCOME TAX, THE HON. SUPREME COURT HAS DECIDED THE ISSUE IN HE FACTS WHERE THE A SSESSEE LEASED OUT THE FACTORY NOT FOR RUNNING OUT OF THE BUSINESS BUT IT WAS JUST A MAKE-SHIFT TRANSIENT ALTERNATIVE MEANS OF COMMERC IAL EXPLOITATION OF THE COMMERCIAL ASSETS WHEN THE ASSE SSEE SUFFERED LOSS FOR CONSECUTIVE TWO YEARS. THEREFORE, THE SAID DECISION IS NOT APPLICABLE TO THE PRESENT CASE WHERE THE ASSESSEE H AS NOT ALL UTILIZED THE PREMISES IN QUESTION FOR ITS OWN BUSIN ESS. MOREOVER, THE HON. SUPREME COURT HAS SUMMARIZED THE PROPOSITI ON AT PAGE 461 OF THE REPORTER AS UNDER : (1) NO PRECISE TEST CAN BE LAID DOWN TO ASCERTAIN WHETHER INCOME (REFERRED TO BY WHATEVER NOMENCLATURE, LEASE, AMOUNT, RENTS, LICENCE FEE) RECEIVED BY AN ASSESSEE FROM LEASING OR LETTING OUT OF ASSETS WOULD FALL UNDER T HE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'; (2) IT IS A MIXED QUESTION OF LAW AND FACT AND HAS T O BE DETERMINED FROM THE POINT OF VIEW OF A BUSINESSMAN I N THAT BUSINESS ON THE FACTS AND IN THE CIRCUMSTANCES OF EACH CASE, INCLUDING TRUE INTERPRETATION OF THE AGREEMEN T UNDER WHICH THE ASSETS ARE LET OUT; (3) WHERE ALL THE ASSETS OF THE BUSINESS ARE LET OUT, THE PERIOD FOR WHICH THE ASSETS ARE LET OUT IS A RELEVANT FACTOR TO FIND OUT WHETHER THE INTENTION OF THE ASSESSEE IS TO GO OUT OF BUSINESS ALTOGETHER OR TO COME BACK AND REST ART THE SAME; (4) IF ONLY A FEW OF THE BUSINESS ASSETS ARE LET OUT TEMPORARILY, WHILE THE ASSESSEE IS CARRYING OUT HIS OT HER BUSINESS ACTIVITIES, THEN IT IS A CASE OF EXPLOITING THE BUSINESS ASSETS OTHERWISE THAN EMPLOYING THEM FOR HIS OWN USE FOR MAKING PROFIT FOR THAT BUSINESS; BUT IF THE ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 6 BUSINESS NEVER STARTED OR HAS STARTED BUT CEASED WIT H NO INTENTION TO BE RESUMED, THE ASSETS ALSO WILL CEASE TO BE BUSINESS ASSETS AND THE TRANSACTION WILL ONLY BE EXPLOITATION OF PROPERTY BY AN OWNER THEREOF, BUT NO T EXPLOITATION OF BUSINESS ASSETS. 8. FROM THE DECISION OF THE HON. SUPREME COURT IT I S CLEAR THAT NO PRESCRIBED TEST CAN BE LAID DOWN TO ASCERTAIN WHETH ER THE LEASE/RENT RECEIVED BY THE ASSESSEE WOULD FALL UNDE R THE HEAD PROFIT AND GAIN OF BUSINESS OR PROFESSION OR INCO ME FROM HOUSE PROPERTY. THE ISSUE HAS TO BE DETERMINED ON THE BA SIS OF THE FACTS AND CIRCUMSTANCES OF THE CASE. IT WAS ALSO HELD THA T IF THE ASSESSEE NEVER STARTED BUSINESS OR HAS STARTED THE BUSINESS BUT CEASED BUT NO INTENTION TO RESUMPTION THEN THE ASSET ALSO WILL CEASED TO BE A BUSINESS ASSET. IN THE CASE OF COMMISSIONER OF INCO ME TAX VS MOHIDDIN HOTELS PVT. LTD. AND ANR. (SUPRA) THE LEAS ED OUT PREMISES WAS THE HOTEL ALONG WITH THE BUSINESS. THE REFORE, IT WAS HELD THAT THE INTENTION WAS TO EXPLOIT THE HOTEL AS BUSINESS ASSET. IN THE CASE IN HAND, IT WAS NOT LEASED OUT OF PREMISES ALONG WITH THE BUSINESS BUT IT WAS ONLY A PART OF INCOMPLETE PREMI SES LEASED OUT FOR THE PURPOSE OF OTHER THAN THE BUSINESS ACTIVITI ES. THEREFORE, IN VIEW OF THE DECISION OF THE HON. SUPREME COURT IN T HE CASE OF SHAMBHU INVESTMENT (SUPRA), THE RENT RECEIVED BY TH E ASSESSEE IS ASSESSABLE AS INCOME FROM HOUSE PROPERTY. ACCORDING LY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDE R OF THE CIT(A). 9. THE APPEAL OF THE ASSESSEE IS DISMISSED. WE FIND THAT IN THE AFORESAID ORDER, THE TRIBUNAL H AS DULY CONSIDERED THE FACTUAL MATRIX ALONG WITH THE D ECISION FROM HON'BLE APEX COURT IN THE CASE OF M/S SHAMBHU INVESTMENTS PVT. LTD. VS CIT 263 ITR 143 (SC) AND A NOTHER DECISION IN UNIVERSAL PLAST LTD. VS CIT (1999) 237 ITR 454 (SC) AS WELL AS THE DECISION FROM THE HON'BLE JURIS DICTIONAL HIGH COURT IN THE CASE OF CIT VS MOHIDDIN HOTELS PV T. LTD. & ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 7 ORS. 200 CTR 329 AND THEN REACHED TO A CONCLUSION. NEITHER CONTRARY FACTS WERE BROUGHT TO OUR NOTICE B Y THE ASSESSEE NOR ANY DECISION IN ITS SUPPORT, THEREFORE , FOLLOWING THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2005- 06, IN THE CASE OF ASSESSEE ITSELF, WE DISMISS THIS GROUND OF THE ASSESSEE. IT IS PERTINENT TO MENTION HERE THAT EVE N, DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE FAIRLY AG REED THAT THIS GROUND IS COVERED AGAINST THE ASSESSEE. 3. THE NEXT GROUND PERTAINS TO ADDING A SUM OF RS.10,69,979/- BEING THE DIFFERENCE BETWEEN THE SAL E CONSIDERATION RECEIVED BY THE APPELLANT AND THE VAL UE COMPUTED BY THE VALUATION OFFICER U/S 50C(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) FOR TWO PLOTS O F LAND, SOLD BY THE ASSESSEE WHILE COMPUTING THE CAPITAL GAINS. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO VARI OUS PAGES OF THE PAPER BOOK BY CONTENDING THAT THE DVO REDUCE D THE VALUE OF THE PROPERTY BY RELYING OF VARIOUS SALE IN STANCES AND CONVENIENTLY IGNORED THE VALUE OF THE ADJACENT PLOT . OUR ATTENTION WAS INVITED TO PAGES 92 TO 95, 98 AND 99 OF THE PAPER BOOK BY CONTENDING THAT THE DVO RELIED UPON T HE INSTANCES OF THE PLOTS, WHICH ARE OF LOWER VALUE, T HUS, CONTRADICTORY STAND WAS TAKEN WITH RESPECT TO THE P LOT OF THE ASSESSEE. IT WAS POINTED OUT THAT THE METHOD OF VAL UATION ADOPTED BY THE DVO ITSELF IS WRONG, HOWEVER, IN THE CASE OF THE ASSESSEE, HE HAS TAKEN A DIFFERENT STAND. ON TH E OTHER HAND, THE LD. DR CONTENDED THAT THE IMPUGNED ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 8 ISSUE/GROUND WAS NEVER RAISED BEFORE THE ASSESSING OFFICER/ LD. COMMISSIONER OF INCOME TAX (APPEAL) AND SUCH PL EA HAS BEEN PREFERRED FOR THE FIRST TIME BEFORE THE TRIBUN AL. THE LD. COUNSEL RELIED UPON THE DECISION IN THE CASE OF CIT VS SMT. RAJKUMARI VIMLA DEVI & ORS. (2005) 279 ITR 360 (ALL .) 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CLUB HOUSE & RESORTS, PROVIDING RECREATION FACILITIES, S WIMMING POOL, INDOOR GAMES, JOY RIDES, ETC. THE ASSESSEE SO LD TWO PLOTS NAMELY PLOT NO. 46/0, KANDHROLI, DIST. RAIGAD AND 42/2. IT WAS EXPLAINED THAT THE STAMP DUTY AUTHORI TIES VALUED THE PROPERTY/PLOT NO.46 AT RS.32,21,000/- AG AINST THE AMOUNT OF RS.22 LAKH, RECEIVED BY THE ASSESSEE AND OTHER PLOT AT RS.88,48,000/- AS AGAINST THE AMOUNT OF RS.58,27,800/-, ACTUALLY RECEIVED BY THE ASSESSEE. THE LD. ASSESSING OFFICER REFERRED BOTH THE PROPERTIES TO T HE VALUATION OFFICER, INVOKING THE PROVISIONS OF SECTI ON 50C(2) OF THE ACT. THE VALUATION OFFICER SENT A PRELIMINA RY VALUATION REPORT DATED 07/12/2009, WHEREBY, HE VALU ED THE PLOT NO.46 AT RS.24,52,200/- AND THE REMAINING PLOT AT RS.66,45,398/-. THE ASSESSEE OBJECTED TO THE REPORT . HOWEVER, THE VALUATION OFFICER VIDE ORDER DATED 08/12/2009, CONFIRMED THE VALUATIONS MADE BY HIM. O N THE BASIS OF THIS VALUATION REPORT, THE ASSESSING OFFIC ER ADDED A SUM OF RS.10,69,797/-, BEING THE DIFFERENCE BETWEEN THE ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 9 SALE VALUE DISCLOSED BY THE ASSESSEE AND THE VALUAT ION ADOPTED BY THE VALUATION OFFICER, AS DEEMED CONSIDE RATION RECEIVED BY THE ASSESSEE. ON APPEAL, BEFORE THE LD . COMMISSIONER OF INCOME TAX (APPEAL), THE STAND TAKE N IN THE ASSESSMENT ORDER WAS AFFIRMED. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 3.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, BEFORE US, THE LD. COUN SEL FOR THE ASSESSEE EXPLAINED THAT THE LAND IS LOCATED 300 MTS AWAY FROM OLD MUMBAI PUNE HIGHWAY, HAVING ROCKY AND UNEV EN SURFACE, LACK OF INFRASTRUCTURE, SCARCITY OF WATER AND VICINITY IS POLLUTED BY NALLAH AND THERE IS NO PROPER APPROA CH ROAD. THE COST OF DEVELOPMENT OF LAND AND CREATION OF INFRASTRUCTURE WAS QUITE HIGH. IT WAS ALSO EXPLAIN ED THAT LAND AT NEW MUMBAI PUNE EXPRESSWAY WAS ON MORE DEMAND AND THE RATES AT THE OLD ROAD DECREASED. IT WAS ALSO CONTENDED THAT DUE TO SLOW DOWN IN THE ECONOMY, AT THE RELEVANT TIME, THE REAL ESTATE SECTOR WAS BADLY AFF ECTED RESULTING INTO FALL IN LAND PRICES. IT WAS EXPLAINE D THAT THE SUB-REGISTRAR/VALUATION OFFICER DID NOT CONSIDER TH ESE FACTS, WHILE CALCULATING THE MARKET VALUE OF THE PLOT. IN VIEW OF THESE FACTS, THE BUSINESS OF THE ASSESSEE WAS ALSO CLAIMED TO BE AFFECTED AND TO TIDE OVER THE CRISIS, THE LAND W AS SOLD AT ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 10 DISTRESS PRICES. IT WAS CONTENDED THAT THE FIGURES OF SALE MENTIONED IN THE DOCUMENTS IS THE TRUE MARKET VALUE OF THE PROPERTY. WE FIND THAT THE MATTER WAS REFERRED TO THE DISTRICT VALUATION OFFICER, VIDE LETTER DATED 08/12 /2009 AND THE VALUATION REPORT WAS ACCORDINGLY SENT. IN VIEW OF THIS FACTUAL MATRIX, WE ARE OF THE CONSIDERED OPINION TH AT MARKET VALUE DEPENDS UPON SO MANY FACTORS LIKE LOCATION OF THE PLOT, WHETHER THE PLOT IS LOCATED ON A HIGHWAY OR APPROAC H ROAD OR ON A KACHCHA ROAD, WHETHER THE PLOT IS A CORNER PLOT, DISTANCE OF THE PLOT TO THE BASIS AMENITIES, NATUR E OF LAND, DEMAND AND SUPPLY, MARKET TREND, ETC. WE HAVE PERU SED THE ESTIMATION OF PROPERTY/VALUATION REPORT (PAGE 9 1 ONWARDS OF THE PAPER BOOK). THE PROPERTY WAS INSPE CTED BY THE VALUATION OFFICER AND IT HAS BEEN SPECIFICALLY MENTIONED IN COLUMN 3.4(PAGE-95 OF THE PAPER BOOK) THAT THE P ROPERTY IS SITUATED ABOUT 300 TO 400 MTS. FROM THE MAIN ROA D, CONTAINING HILL/SLOPE ARE TOUCHING THE BOUNDARY OF ADIVASHI HUTMENTS. THE SIZE OF THE LAND IS ALSO NOT SQUARE A ND TOUCHING THE BIG NALLA. THE METHOD ADOPTED BY THE ASSESSING OFFICER IS COMPARISON OF STAMP DUTY/READY RECKONER 2007 AND THE SALE INSTANCES ADOPTED FOR AL L THESE PROPERTIES. THE ASSESSEE ALSO OBJECTED TO THE REPO RT. WE HAVE ALSO PERUSED THE SALE INSTANCES (PAGE -99 OF T HE PAPER BOOK), WHEREIN, THE VALUATION COMES TO RS.192.36 PE R SQ. MTR, WHEREAS, IN THE CASE OF THE ASSESSEE, THE VALU ATION HAS BEEN ADOPTED TOWARDS HIGHER SIDE. CONSIDERING THE T OTALITY OF FACTS, WE FIND FORCE IN THE EXPLANATION OF THE A SSESSEE, ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 11 THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE T HE ADDITION, BECAUSE, THE VALUATION ADOPTED BY THE VALUATION OFF ICER DOES NOT DEPICTS THE TRUE FACTS AND THE LACUNAS, AS DISC USSED ABOVE AND EXPLAINED BY THE ASSESSEE WERE NOT CONSID ERED WHILE ADOPTING THE VALUE OF THE PLOT. THE VALUATIO N OFFICER ADOPTED THE RATES OF THE PROPERTY TOWARDS HIGHER SI DE QUOTING THE SALE INSTANCES, WHICH ARE NOT OF SIMILA R LAND. EVEN OTHERWISE, THE POINTS QUOTED/EXPLAINED BY THE ASSESSEE WERE CONVENIENTLY IGNORED. THUS, THIS GROU ND OF THE ASSESSEE IS ALLOWED AND THE ADDITION MADE ON THIS C OUNT IS DIRECTED TO BE DELETED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT O N 18/01/2017. SD/- SD/- ( MANOJ KUMAR AGGARWAL ) (JOGINDER SINGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER % MUMBAI; ) DATED : 18/01/2017 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT (RESPECTIVE ASSESSEE) 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( + ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI, 5. 34 .$! , 0 +' ! 5 , % / DR, ITA NO.1361/MUM/2011 M/S MOUNT VIEW CLUB & RESORTS PVT. LTD. 12 ITAT, MUMBAI 6. 6' 7% / GUARD FILE. ! / BY ORDER, /3+$ .$ //TRUE COPY// /! (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI