Hafizunnisha Abdulrehman Shaikh, Ahmedabad V. ITO, Ward-1(3)(2), Ahmedabad

ITA 16/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5800 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 04-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MAKWANA
• Assessee Lawyers: VARIS ISANI
• Keywords: Capital asset; Depreciation; Principle of natural justice; Cost of acquisition; Fair market value; Valuation report; Competent authority; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER) [THROUGH VIRTUAL COURT] ITA. NO: 16/AHD/2019 (ASSESSMENT YEARS: 2013-14) HAFIZUNNISHA ABDULREHMAN SHAIKH,2501, JAMADARS DEHLA, NR. LAL SCHOOL SHAHPUR, AHMEDABAD- 380001 PAN NO. DHJPS8677E V/S I.T.O., WARD-1(3)(2), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VARIS ISANI, A.R. RESPONDENT BY : SHRI R. R. MAKWANA, SR. D.R. ( )/ ORDER DATE OF HEARING : 07-09-2021 DATE OF PRONOUNCEMENT : 14 -09-2021 PER MAHAVIR PRASAD, J.M. 1. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) VIDE APPEAL NO. CIT(A)-10/10928/2016-17 ORDER DATED 27/12/2018 ARISING ITA NO. 16/AHD/2019 . A.Y. 2013-14 2 OUT OF ASSESSMENT ORDER DATED 18/03/2016. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1) THE HON. CIT APPEALS - 10, AHMEDABAD, HAS ERRED IN LAW IN DISMISSING THE APPEAL OF THE APPELLANT AND CONFIRMING THE ADDITION MADE BY ITO WARD 1(3)(2). 2. THE HON. CIT (A) HAS CONFIRMED THE ADDITION OF RS. 22,77,990/- U/S. 143(3) OF THE IT ACT AND ASSESSED TOTAL INCOME OF THE APPELLANT AT RS. 24,65,5007- AND AS A RESULT RAISED HUGE DEMAND OF RS. 5,79,000/- IN THE ORDER ISSUED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HON. CIT (A) ERRED IN NOT TAKING INTO CONSIDERATION THE MATERIAL AND DOCUMENTARY EVIDENCES PLACED ON THE RECORDS. 4. THE HON. CIT (A) HAS GRIEVOUSLY ERRED IN LAW IN CONFIRMING THE VALUATION ADOPTED BY THE ASSESSING AUTHORITY WHICH IS BASED ON REPORT OF THE VALUER. INFACT, THE REPORT OF THE GOVERNMENT APPROVED VALUER HAS NOT BEEN TAKEN BY THE DVO IN CONSIDERATION AND BASE TAKEN BY THE DVO IS NOT IN ACCORDANCE WITH THE LAW. 5. THE HON. CIT (A) HAS ERRED IN LAW IN NOT ACCEPTING THE CIRCUMSTANTIAL EVIDENCES AND PROVISIONS OF SECTION 55 A OF THE IT ACT. 6. THE HON. CIT (A) HAS ERRED IN LAW IN NOT CONSIDERING THE VARIOUS SUBMISSION AND EXPLANATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME. 7. THE ORDER PASSED BY AO, CONFIRMED BY CIT (A) IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GOA EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. QUESTION BEFORE US IS THAT LD. CIT(A) WHETHER REPORT OF DVO OR GOVERNMENT OF RULE VALUER/REGISTERED WERE TO BE ACCEPTED. AND LD. CIT(A) ARGUED THAT LOWER AUTHORITIES HAVE NOT TAKEN THE ACTUAL VALUE OF THE PROPERTY IN QUESTION. 3. THE LD. A.R. CITED AN ORDER OF CO-ORDINATE BENCH AND ARGUED THAT IN THE CASE OF CO- ONWER ITAT HAS SET ASIDE MATTER TO THE FILE OF THE LD. CIT(A) WITH THE FOLLOWING OBSERVATIONS: PER BENCH: PRESENT FOUR APPEALS ARE FILED AT THE INSTANCE OF DIFFERENT ASSESSEES AGAINST ORDERS OF LD.CIT(A), AHMEDABAD DATED 17.1.2018 AND 2.8.2018 PASSED FOR THE ASSTT.YEAR 2013-14. SINCE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS, WE PROCEED TO ADJUDICATE ALL THESE APPEALS BY THIS CONSOLIDATED ORDER. ITA NO. 16/AHD/2019 . A.Y. 2013-14 3 2. SOLE ISSUE INVOLVED IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT THE REVENUE AUTHORITIES BELOW HAVE WRONGLY ADOPTED COST OF ACQUISITION OF LAND AS ON 1.4.1981 AT RS.26,14/- FOR DETERMINATION LONG TERM CAPITAL GAIN ARISING FROM THE SALE OF IMMOVABLE PROPERTY SITUATED AT RAMSOL, AHMEDABAD. 3. FOR ADJUDICATION OF THIS ISSUE, FIRSTLY, WE SHALL TAKE NOTE OF ORDER SHEET DATED 8.10.2018 VIDE WHICH WE HAVE RECORDED THAT 16 PERSONS WERE OWNERS AND IN POSSESSION OF PROPERTY COMPRISED AT SURVEY NO.16/1, RAMSOL, TAL. AHMEDABAD, TP SCHEME NO.115, ADMEASURING AREA OF 16,997 SQ.METERS. THIS LAND WAS SOLD ON 11.10.2012 GIVING RISE TO CAPITAL GAIN IN THE HANDS OF VENDORS. DURING THE COURSE OF HEARING ON OUR DIRECTION, THE LD.COUNSEL FOR THE ASSESSEE COMPILED DETAILS IN TABULAR FORM EXHIBITING STATUS OF THE LITIGATION IN THE CASE OF CO-OWNERS. SUCH DETAILS READ AS UNDER: SR. NO. NAME OF ASSESSEE APPEAL NO. BEFORE CIT(A) STATUS ITA BEFORE THE ITAT FILED ON 1. ABDUL LATIF A. SHAIKH 60-CIT-VII DISMISSED ON 17.1.2018 535/AHD/2018 7.3.2018 2. ABDUL MUNAF A. SHAIKH 655-CIT-III DISMISSED ON 2.8.2018 1981/AHD/2018 19.9.2018 3. NAFISABANU A. SHAIKH 653- CIT-III DISMISSED ON 2.8.2018 1964/AHD/2018 17.9.2018 4. GULSHANBANU S. SHAIKH 466 & 482- CIT-III DISMISSED ON 2.8.2018 1974/AHD/2018 18.9.2018 5. HAFIZUNISHA A. SHAIKH 10928 X PENDING 6. FIROZABANU I. SAIYED 10586 X PENDING 7. RAZIYABANU M. SHAIKH 10591 X PENDING 8. FIRDOSHBANU A. SHAIKH 10578 X PENDING 9. MOHAMMADIRFAN A. SHAIKH 10947 X PENDING 10. MOHAMMAD SOHEB M. SHAIKH 10943 X PENDING 11. MOHAMMAD RAFIK FARUKI 10946 X PENDING 12 MOHAMMAD ARIF FARUKI 10944 X PENDING ITA NO. 16/AHD/2019 . A.Y. 2013-14 4 4. A PERUSAL OF THE ABOVE WOULD INDICATE THAT DISPUTE IN THE CASE OF FOUR ASSESSEES TRAVELLED UPTO THE TRIBUNAL. APPEALS OF ABDUL LATIF A. SHAIKH, ABDUL MUNAF A. SHAIKH, NAFISABANU A. SHAIKH AND GULSHANBANU S. SHAIKH WERE DISMISSED BY THE LD.CIT(A) ON 17.1.2018 AND 2.8.2018 BY SEPARATE ORDER. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. FOR THE FACILITY OF REFERENCE, WE TAKE UP THE FACT FROM THE CASE OF ABDUL LATIF A. SHAIKH. 6. THE ASSESSEE WAS HAVING 14.81% SHARES IN THE ABOVE LAND. HE CALCULATED LONG TERM CAPITAL GAIN AT RS.1,88,223/-. HE ADOPTED ACQUISITION COST AS ON 1.4.1981 AT RS.69,51,770/- ON THE STRENGTH OF REGISTRATION VALUERS REPORT. THE LD.AO REFERRED THE ISSUE TO THE DVO FOR DETERMINING FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981, WHO DETERMINED SUCH VALUE AT RS.26,314/-. HE COMPUTED LONG TERM CAPITAL GAIN AT RS.89,26,147/-. IN THIS CASE, THE AO HAS REPRODUCED BOTH THE COMPUTATIONS ON PAGE NO.3 OF THE ASSESSMENT ORDER. IT READS AS UNDER: LONG TERM CAPITAL GAIN AS UNDER: SALE CONSIDERATION: 14.81 % OF RS. 6,05,00,000 = RS. 89,60,050/-(FINAL PLOT NO. 16/1, RAMOL, TALUKA AHME-DABAD) LESS: INDEXED COST OF ACQUISITION 6951770X852/100=59229080 = RS. 87,71,827/- SHARE 14.81% =8771827 CAPITAL GAIN = RS. 1,88,223/- TAXABLE LONG TERM CAPITAL GAIN RS. 1,88,223/- CONSIDERING THE VALUATION REPORT DATED 20/01/2015 SUBMITTED BY THE DISTRICT VALUATION OFFICER, THE FAIR MARKET VALUE FOR THIS PROPERTY AS ON 01/04/1981 IS DETERMINED AT RS. 26,314/-THE LONG TERM CAPITAL GAIN IN THE CASE OF ASSESSEE IS COMPUTED AS UNDER: ITA NO. 16/AHD/2019 . A.Y. 2013-14 5 SALE CONSIDERATION: 14.81 % OF RS. 6,05,00,000 = RS. 89,60,050/- (FINAL PLOT NO. 16/1, RAMOL, TALUKA AHMEDABAD) LESS: INDEXED COST OF ACQUISITION 26314X852/100 =RS. 2,24,195 = RS. 33,203/- SHARE 14.81% =RS. 33,203.27 CAPITAL GAIN = RS. 89,26,147/- LESS : ALREADY SHOWN AS LTCG IN YOUR RETURN OF INCOME 1,88,223 UNDISCLOSED LONG TERM CAPITAL GAIN = RS 8737924 / ACCORDINGLY, AN AMOUNT OF RS. 87,37,9247- IS BEING ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD OF LONG TERM CAPITAL GAIN. PENALTY PROCEEDINGS U/S. 271(L)(C) OF THE ACT ARE BEING SEPARATELY INITIATED. 7. THUS DISPUTE BEFORE US IS, WHETHER CAPITAL GAIN IN THE HANDS OF VENDORS SHOULD BE DETERMINED ON THE BASIS OF DVOS REPORT DETERMINING VALUE OF THE PROPERTY AT RS.26,314/- AS ON 1.4.1981 FOR THE PURPOSE OF INDEXATION OR IT IS TO BE DETERMINED ON THE BASIS OF VALUE DETERMINED BY THE REGISTRATION VALUER AT RS.69,51,770/-. THE LD.COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING DREW OUR ATTENTION TOWARDS REPORT OF DVO AND SUBMITTED THAT THE LD.DVO HAS DETERMINED VALUE OF THE PROPERTY AS ON 1.4.1981 ON THE BASIS OF SALE INSTANCE OF ADJOINING LAND, BUT INSTEAD OF TAKING AREA ADJACENT TO THE ASSESSEES LAND, THE DVO TOOK INTO CONSIDERATION SALE INSTANCE OF SURVEY NOS.248 TO 250. THESE PIECES OF LAND ARE LOCATED AT FARAWAY PLACE FROM THE LAND OF THE ASSESSEE. HE POINTED OUT THAT GEOGRAPHICAL LOCATION OF THE LAND HAS BEEN NOTICED BY THE REGISTERED VALUER. HE POINTED OUT THAT THIS LAND IS SITUATED JUST 200 SQ.FEETS DISTANCE FROM RING ROAD. HENCE, ITS POTENTIAL IS FAR MORE THAN THE LAND CONSIDERED BY THE AO. HE EMPHASIZED THAT THE REPORT OF THE DVO OUGHT NOT TO BE RELIED UPON. 8. ON THE OTHER HAND, THE LD.DR SUBMITTED THAT REGISTERED VALUER HAS DETERMINED THE VALUE OF THE LAND ON THE BASIS OF APPRECIATION/DEPRECIATION IN RATE OF GOLD, WHICH IS NOT A VERY SCIENTIFIC FORMULA FOR DETERMINING THE VALUE OF THE LAND AT A PARTICULAR POINT. ITA NO. 16/AHD/2019 . A.Y. 2013-14 6 9. WE HAVE DULY CONSIDERED THE ISSUE AND WE HAVE CALLED FOR STATUS OF THE LITIGATIONS IN THE CASE OF OTHER CO-OWNERS. WE HAVE EXTRACTED ABOVE THE STATUS OF OTHER LITIGATIONS IN EARLIER PART OF THIS ORDER. IT REVEALS THAT APPEALS OF EIGHT MORE CO-OWNERS ARE PENDING BEFORE THE LD.CIT(A), WHEREAS THE APPEALS OF FOUR ASSESSES HAVE BEEN DECIDED BY THE LD.CIT(A)-3 AS WELL AS LD.CIT(A)-7. WITH REGARD TO OTHER CO-OWNERS, IT WAS SUBMITTED THAT NO ACTION WAS TAKEN AT THE END OF THE AO. WHATEVER VIEW IS BEING TAKEN FOR DETERMINING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 WOULD AMOUNT TO AN ADVANCE AUTHORITY FOR THE REMAINING EIGHT ASSESSEES WHOSE APPEALS ARE PENDING BEFORE THE LD.CIT(A). THIS VIEW COULD BE AN EXPARTE VIEW QUA THEM. WE CAN BE EXPOSED TO SOME CONTRADICTION ALSO DEPENDING UPON THE NATURE OF EVIDENCE SUBMITTED BY EACH ASSESSEE IN THE APPEALS PENDING BEFORE THE LD.CIT(A). IT IS ALSO PERTINENT TO OBSERVE THAT VALUE DETERMINED BY THE LD.DVO AT RS.26,314/- BY ADOPTING THE RATE AT 1.55 PER SQ.METER APPEARS TO BE ON THE LOWER SIDE. HE HAS NOT TAKEN INTO CONSIDERATION THE SALE INSTANCE OF ADJOINING AREA. RATHER, SALE DEEDS OF FAR AWAY KASARAT NUMBERS HAVE BEEN CONSIDERED. THE GEOGRAPHICAL LOCATION OF THE LAND SOLD BY THE ASSESSEE IS ABUTTING TO THE RING ROAD, HENCE, IT HAS MORE POTENTIAL VALUE. THE DVO SHOULD ALSO ASCERTAIN CIRCLE RATE NOTIFIED BY THE STAMP DUTY VALUATION AUTHORITY FOR THE PURPOSE OF THIS LAND IN HIS AREA. HE COULD MAKE A REVERSE CALCULATION ON THE BASIS OF THOSE CIRCLE RATES. THE METHOD DESCRIBED BY THE REGISTERED VALUER IS ALSO NOT SUCH AN ABSURD METHOD WHICH CAN BE BRUSHED ASIDE OUTRIGHTLY. THEREFORE, CONSIDERING ALL THESE ASPECTS, WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDERS OF THE LD.CIT(A), AND REMIT THIS ISSUE BACK TO THE FILE OF THE LD.CIT(A) WITH A DIRECTION THAT THE LD.CIT(A) SHALL CALL FOR A REMAND REPORT AND AGAIN MAKE REFERENCE TO THE DVO FOR DETERMINING FAIR MARKET VALUE OF THE PROPERTY. THE LD.DVO SHOULD LAY HIS HAND ON THE SALE INSTANCE OF EXACTLY SIMILAR LAND OR NEARBY LANDS. IF NOT AVAILABLE, THEN HE WOULD TAKE INTO CONSIDERATION OTHER CIRCUMSTANTIAL EVIDENCE. THE ASSESSEES ARE DIRECTED TO COOPERATE WITH THE DVO AND SUBMIT NECESSARY DETAILS AS WELL AS THEIR OBJECTIONS, IF ANY, ON THE FORMATION OF OPINION. AFTER OBTAINING THIS REPORT, THE LD.CIT(A) SHOULD DECIDE THE APPEALS. IT WILL BE APPRECIATED IF ON THE APPLICATION OF THE ASSESSEE, THE LD. COMPETENT AUTHORITY WOULD TRANSFER ALL THESE APPEALS TO THE LD.CIT(A)-X, BEFORE WHOM A LARGE NUMBER OF APPEALS ON THE ISSUE ARE PENDING, WHICH WOULD AVOID ITA NO. 16/AHD/2019 . A.Y. 2013-14 7 EXPRESSION OF CONTRADICTORY VIEWS ON THE COMMON ISSUE. THE ASSESSEE WILL FILE AN APPLICATION BEFORE THE COMPETENT AUTHORITY IN THIS REGARD. OBSERVATION MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF THE ASSESSEE AND WILL NOT CAUSE ANY PREJUDICE/EXPLANATION OF THE ASSESSEE. THE LD.CIT(A) WOULD DECIDE ALL THE APPEALS IN ACCORDANCE WITH LAW. 10. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSE. 4. THUS IN PARITY WITH THE CO-ORDINATE BENCH ORDER, WE SET ASIDE THIS MATTER TO THE FILE OF THE LD. CIT(A) TO DECIDE THIS APPEAL ALONG WITH THE CASE OF CO-OWNER. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 14 - 09- 2021 SD/- SD/- (AMARJIT SINGH) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 14/09/2021 RAJESH COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD