Smt. Bharati J. Takalikar, L/h. of Late Shri Jayant N. Takalikar, Solapur V. Assistant Commissioner of Income-tax,

ITA 1472/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9281 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-06-2017
• Assessment Year: 2000-2001
• Appeal Filed On: 22-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA SR
• Keywords: Capital asset; Opportunity of being heard; Cost of acquisition; Fair market value; Valuation report

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 1472/PUN/2014 / ASSESSMENT YEAR : 2000-01 SMT. BHARATI J. TAKALIKAR LEGAL HEIR OF LATE JAYANT N. TAKALIKAR, 543, NORTH SADAR BAZAR, KUMBHAR GALLI, SOLAPUR 413 003 PAN : AFAPT5231M . / APPELLANT V/S ACIT, CIRCLE - 1 , SOLAPUR . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK, ADVOCATE REVENUE BY : SHRI MUKESH JHA, SR. AR / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-III, PUNE DATED 31-08-2013 FOR THE ASSESSMENT YEAR 200 0-01. 2. ASSESSEE IS A LEGAL HEIR OF LATE SHRI JAYANT N. TAKALIKAR. ASSESSEE FILED THE APPEAL RAISING 7 GROUNDS. THE GROUND NO. 2 CONTAINS THE MAIN ISSUE AND THEREFORE THE SAME IS REPRODUCED AS UNDER : 2. THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTIO N OF THE A.O. IN DETERMINING THE FAIR MARKET VALUE OF THE SAID PROPE RTY AS ON 01-04-1981 AT RS.2.78 PER SQ.FT. AND NOT AT RS.6.30 PER SQ.FT. AS ADOPTED BY THE ASSESSEE. / DATE OF HEARING :27.06.2017 / DATE OF PRONOUNCEMENT: 28.06.2017 2 ITA NO.1472/PUN/2014 3. BRIEFLY STATED, RELEVANT FACTS ARE THAT THE ASSE SSEE FILED THE RETURN OF INCOME DECLARING INCOME OF RS.12,070/-. DURING THE ASSESSMENT PROCEEDINGS, THE ISSUE RELATING TO COMPUTATION OF C APITAL GAINS THAT ARISES ON THE TRANSFER OF CAPITAL ASSET (LAND) WAS THE SUBJEC T MATTER OF DEEP SCRUTINY. AO NOTICED THAT THE ASSESSEE HAS 1/3 RD SHARE IN THE LAND ALONG WITH HIS TWO OTHER BROTHERS NAMED MR. AJIT N. TAKALIKAR AND MR. SAJIT N. TAKALIKAR. ASSESSEE SOLD THE LAND FOR A CONSIDERATION OF RS.60 LAKHS. FOR COMPUTING CAPITAL GAINS, ASSESSEE CONSIDERED THE FAIR MARKET VALUE OF THE SAID LAND AS ON 01-04-1981 AT RS.68/- PER SQ. MTR (RS.6.30 PER S Q.FT.) FOR THE PURPOSE OF COST OF ACQUISITION. IN SUPPORT, ASSESSEE FILED A VALUATION REPORT DATED 04- 03-2000 TO SUBSTANTIATE THE RATE OF RS.68/-. HOWEV ER, THE AO NOTICED THAT SHRI AJIT N. TAKALIKAR, BROTHER OF THE ASSESSEE SOL D HIS SHARE OF THE LAND AND CONSIDERED THE FAIR MARKET VALUE AS ON 01-04-1981 @ RS.29.91 PER SQ.MTR (RS.2.78 PER SQ.FT.). WITHOUT OBTAINING ANY EXPERT REPORT FROM THE DVO, THE AO CONSIDERED THE SAID RATE OF RS.29.91 PER SQ.MTR AND REJECTED THE SAID REGISTERED VALUERS REPORT OF THE ASSESSEE. AO DETE RMINED THE CAPITAL GAINS AT RS.34,70,785/-. ACCORDING TO THE AO, THE COST OF A CQUISITION OF THE LAND IS WORKED AT RS.6,50,184/- BEFORE INDEXATION. CIT(A) CONFIRMED THE SAME. THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US. 4. DURING THE HEARING PROCEEDINGS, LD. COUNSEL FOR THE ASSESSEE NARRATED THE ABOVE FACTS AND SUBMITTED THAT THE COST OF ACQU ISITION DETERMINED BY THE AO CONSTITUTES A CASE OF ADHOCISM AS THE SAME DOES NOT HAVE THE BASIS OF ANY EXPERT OPINION. DEVIATING FROM THE GROUNDS OF APPEAL RAISED BEFORE US, SHRI NIKHIL PATHAK, LD. AUTHORISED REPRESENTATIVE F OR THE ASSESSEE SUBMITTED THAT, IN ALL FAIRNESS, THE MATTER SHOULD BE REMAND ED TO THE FILE OF THE AO WITH A DIRECTION TO ADOPT THE FAIR MARKET VALUE AS AROUND RS.481/- OF THE SAID PROPERTY AFTER OBTAINING THE EXPORT REPORT FRO M THE DVO OF THE 3 ITA NO.1472/PUN/2014 DEPARTMENT. LD. AUTHORISED REPRESENTATIVE ALSO SUB MITTED THAT AO HAS NOT GIVEN ANY REASON TO THE ASSESSEE AS TO WHY THE FAIR MARKET VALUE OF THE LAND IS ONLY RS.29.91 PER SQ.MTR IN THE CASE OF SHRI AJI T N. TAKALIKAR. 5. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE AO AND THE CIT( A). LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT SUCH ORAL GROUND CANN OT BE ADMITTED AT THIS STAGE AND REQUESTED FOR CONFIRMING THE ORDER OF THE AO/CIT(A) ON THIS ISSUE. 6. ON HEARING BOTH THE SIDES AND AFTER GOING THROUG H THE ORDERS OF THE REVENUE, IT IS NOTICED THAT THE AO HAS NOT GIVEN TH E REASONS AS TO WHY THE REGISTERED VALUERS REPORT IS UNSUSTAINABLE IN LAW. CONSIDERING THE LEGAL NATURE OF THE ORAL GROUND, WE PROCEED TO ADMIT THE SAME. THE AO SHOULD HAVE GIVEN THE REASONS BEFORE REJECTING THE ASSESSE ES CLAIM. IN ALTERNATIVE, HE SHOULD HAVE REFERRED THE MATTER TO THE VALUATION CELL AND OBTAIN THE DVOS REPORT, AN EXPERT ON THE SUBJECT AND COMPUTE THE CA PITAL GAINS WITH THE HELP OF THE SAID REPORT, IF ANY. BUT, THAT DID NOT HAPP EN IN THE PRESENT CASE. ADOPTING OF THE VALUE FOR COST OF ACQUISITION, BORR OWING THE FIGURES FROM THE TRANSACTION ENTERED INTO BY CO-OWNER OF THE PROPERT Y AT THE BACK OF THE ASSESSEE DOES NOT HAVE LEGAL SANCTITY. THEREFORE, WE ARE OF THE OPINION THAT WITHOUT GOING INTO THE MERITS ALL THE GROUNDS RAISE D BEFORE US SHOULD BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATI ON AFTER OBTAINING THE DVOS REPORT WITH DUE REFERRAL TO THE DVO AS DESIRE D BY THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE. AO SHALL GRANT RE ASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, ALL THE G ROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4 ITA NO.1472/PUN/2014 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JUNE, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; DATED : 28 TH JUNE, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// /ASSISTANT REGISTRAR , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - I I I, PUNE 4. TH E CIT - I I I, PUNE 5. DR, ITAT, A BENCH PUNE; 6. / GUARD FILE.