Rahul Popat Nadhe, Pune V. Income-tax Officer, Ward - 8(3), Pune

ITA 1391/PUN/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5235 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-08-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 04-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VISHWAS MUNDHE
• Assessee Lawyers: DINESH R GUL A BANI
• Keywords: Cost of acquisition; Valuation report
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL , VICE PRESIDENT . / ITA NO. 1391 /PUN/20 18 / ASSESSMENT YEAR : 2013 - 14 SHRI RAHUL POPAT NADHE, H. NO.557, NR. PCMC SCHOOL, KALEWADI GAOTHAN, PIMPRI, PUNE - 411 017 PAN : ARIPN7039D ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 8(3), PUNE / RESPONDENT A SSESSEE BY : SHRI DINESH R. GULABANI REVENUE BY : SHRI VISHWAS MUNDHE / DATE OF HEARING : 14 .0 8 .2019 / DATE OF PRONOUNCEMENT : 19 .08 .2019 / ORDER PER R.S. SYAL, VP : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) - 8 , PUNE ON 05.06.2018 IN RE LATION TO THE ASSESSMENT YEAR 2013 - 14. 2. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE , ALONG WITH CERTAIN OTHER CO - OWNER S , SOLD AN IMMOVABLE PROPERTY 2 ITA NO. 1391 /PUN/20 18 A.Y. 2013 - 14 LOCATED AT SURVEY NO.102, MAUJE RAHATANI, KALEWADI, TAL. HAVELI, PUNE TO M/S. B. K. ASSOCIATES FOR A CONSIDERATION OF RS.9,07,00,000/ - . THE ASSESSEE RECEIVED H IS SHARE OF RS.35,00,000/ - IN THE SALE CONSIDERATION. IN THE COMPUTATION OF CAPITAL GAIN, THE ASSESSEE TOOK COST OF ACQUISITION OF HIS SHARE OF PROPERTY AS ON 01.04.1981 AT RS.2,35,343/ - , WHICH WAS BASED ON THE REPORT OF A REGISTERED VALUER DATED 06.04.2012 DETERMINING THE COST OF THE LAND AT RS.525/ - PER SQUARE METER. THE AO OBSERVED THAT ANOTHER CO - OWNER OF THE SAME PROPERTY , NAM ELY, SHRI PRAKASH PANDURANG NADHE , CLAIMED COST OF ACQUISITION AS ON 01.04.1981 @ RS.20/ - PER SQUARE METER, AS AGAINST THE VALUATION REPORT OBTAINED BY SHRI PRAKASH PANDURANG NADHE , ESTIMATING COST OF ACQUISITION AS ON 01.04.1981 AT RS.38/ - PER SQUARE METER ONLY. SINCE THE ASSESSEE COULD NOT PROVIDE CONVINCING EXPLANATION TO SUPPORT HIS VERSION OF COST OF ACQUISITION , THE AO COMPUTED T HE AMOUNT OF CAPITAL GAIN BY TAKING THE RATE AT RS.38/ - PER S QUARE METER , WHICH ACTION WAS UPHELD BY THE LD. F IRST A PPELLATE A UTHORITY. 3. I HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THE LD. AR TRIED TO JUSTIFY THE COST OF ACQUISITION ADOPTED AT RS.525/ - PER SQUARE METER ON THE BASIS OF THE REPORT OF THE REGISTERED VALUER, A COPY OF WHICH HAS BEEN PLACED AT PAGE 11 ONWARD S OF THE PAPER BOOK. T HE 3 ITA NO. 1391 /PUN/20 18 A.Y. 2013 - 14 DETERMINATION OF COST OF PROPERTY AS ON 01.04.1981 AT RS.525/ - PER SQUARE METER HA S BEEN DEPICTED AT PAGE NO.16 OF THE PAPER BOOK . IT HAS BEEN MENTIONED IN THE REPORT THAT I TRIED TO GET SOME SALE DEED OF LAND IN THE SAID AREA. AS IT WAS NOT AVAILABLE, I HAD TO DEPEND ON LOCAL ENQUIRY TO SEVERAL LAND OWNERS AND ESTATE AGENTS WORKING IN THE SAID AREA FOR A LONG PERIOD. ON ENQUIRY IT WAS FOUND THAT THE PRICE OF LAND IN THE SAID AREA WAS WITHIN RS.500.00 TO RS.550.00 PER SQM. CONSIDERING ALL ASPECTS THOSE GOVERN THE PRICE OF LAND PER SQM. I HAVE CONSIDERED THE PRICE OF LAND TO RS.525.00/ - PER SQM. THUS, IT IS APPARENT FROM THE REPORT OF T HE REGISTERED VALUER THAT HE HAD NO COMPARABLE INSTANCE AVAILABLE WITH HIM TO SUBSTANTI ATE THE FIGURE OF RS.525/ - PER S QM . , WHICH IS SIMPLY BASED ON LOCAL ENQUIRY. 4. ANOTHER CO - OWNER, SHRI PRAKASH PANDURANG NADHE FURNISHED A REPORT OF YET ANOTHER REGISTERED VALUER , WHOSE COPY HAS BEEN PLACED AT PAGE 33 OF THE PAPER BOOK. FROM THIS REPORT, IT CAN BE SEEN THAT THE REGISTERED VALUER COMPUTED THE LAND RATE AT RS.38/ - PER S QM. BY NOT I CI NG THAT COMPARING THE SALES INSTANCES OF PLOTS OF LAND, PREVAILING LAND RATES IN RAHATANI, KALEWADI, PUNE AREA HAVE BEEN CONSIDERED WHILE CALCULATING LAND PRICE, THEN ARE CONSIDERED TO ARRIVE AT ITS VALUATION OF YEAR 1981, AS THERE ARE NO SALES INSTANCES OF ANY DOCUMENTS AVAILABLE FOR THE YEAR 1981 AT THE OFFICE OF SUB - RE GISTER. 4 ITA NO. 1391 /PUN/20 18 A.Y. 2013 - 14 5. ON A COMPARATIVE ANALYSIS OF THE REPORTS OF TWO REGISTERED VALUERS , I T CAN BE CLEARLY SEEN THAT WHEREAS THE ASSESSEES REGISTERED VALUER DID NOT REFER TO ANY COMPARABLE INSTANCE AND MERELY ACTED ON LOCAL ENQUIRY, THE OTHER REGISTERED VALUER COMPARED THE SALES INSTANCES OF PLOTS OF LAND, PREVAILING LANDS RATES IN RAHATANI IN THE YEAR 1981. THE VALUATION REPORT FURNISHED BY THE OTHER CO - OWNER IS MORE AUTHENTIC AS COMPARED TO THE VALUATION REPORT FURNISHED BY THE ASSESSEE. SINCE IT IS TH E SAME PROPERTY WHICH HAS BEEN VALUED BY THE TWO REGISTERED VALUER S AS ON 1.4.1981 , CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, I AM OF THE CONSIDERED OPINION THAT THE VALUATION GIVEN BY THE REGISTERED VALUER AT RS.38/ - P ER S QM. IS IN ORDER , WHICH DOES NOT CALL FOR ANY INTERFERENCE. THUS, THIS GROUND IS NOT ALLOWED . 6 . THE SECOND ISSUE RAISED IN THIS APPEAL IS AGAINST TREATING COST OF ACQUISITION AT NIL AS AGAINST RS.1,67,861/ - CLAIMED BY THE ASSESSEE. THE AO DID NOT ALLOW THE BENEFIT O F DEDUCTION O F THE COST OF IMPROVEMENT ON THE GROUND THAT THE ASSESSEE COULD NOT FURNISH ANY PROOF IN RESPECT OF CLAIM OF IMPROVEMENT. THE LD. CIT(A) RESTORED THIS ISSUE TO THE FILE OF AO FOR VERIFICATION. 5 ITA NO. 1391 /PUN/20 18 A.Y. 2013 - 14 7. I HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE PROPERTY UNDER CONSIDERATION IS AN ANCESTRAL PROPERTY WHICH WAS ACQUIRED BEFORE 01.04.1 981. IN THE VALUATION REPORT , A BUILDING AREA OF 700 S Q.FT WAS SHOWN ON THE LAND AS ON 01.04.1981. SINCE IT IS A N OLD PROPERTY, IT MUST HAVE REQUIRED SOME REPAIR OVER THE PERIOD. FURTHER, T HE ASSESSEE CLAIMED IMPROVEMENT COST S TO HAVE BEEN INCURRED IN THE YEARS 1985 - 86,2001 - 02, 2002 - 03 AND 2005 - 06. CONSIDERING THE TIME GAP BETWEEN THE DATES OF IMPROVEMENT AND THE T RANSACTION BEING SCRUTINIZED IN RELATION TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THAT IS, 2013 - 14, MORE PARTICULARLY THE QUANTUM OF IMPROVEMENT AT RS.1,67,861/ - , THE AMOUNT CLAIMED BY THE ASSESSEE APPEARS TO BE REASONABLE. I ALLOW THE CLAIM OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO NOUNCED ON 19 TH DAY OF AUGUST , 201 9 . SD/ - R . S . SYAL / VICE - PRESIDENT / PUNE; / DATED : 19 TH AUGUST , 201 9 . SB 6 ITA NO. 1391 /PUN/20 18 A.Y. 2013 - 14 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 8, PUNE. 4. THE PR. CIT - 5, PUNE. 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . DATE 1. DRAFT DICTATED ON 14 - 08 - 2019 PS 2. DRAFT PLACED BEFORE AUTHOR 19 - 08 - 2019 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. DATE OF UPLOADING ORDER PS 8. FILE SENT TO THE BENCH CLERK PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *