M/s Jai Bharath Metal Rolling Mills, Bangalore V. DCIT, Bangalore

ITA 17/BANG/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 8670 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-11-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Question of law; Cost of acquisition; Fair market value; Valuation report
• Section: 12

Judgement Text

ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A NO.1201/BANG/2009 (ASSESSMENT YEAR : 2006-07) ASST. COMMISSIONER OF INCOME-TAX, CIRCLE -1(1), BANGALORE .. APPELLANT V. M/S. JAI BHARATH METAL ROLLING MILLS, J-13, P. V. R. ROAD, BANGALORE -53 .. RESPONDENT I.T.A NO.17/BANG/2010 (ASSESSMENT YEAR : 2006-07) (BY THE ASSESSEE) ASSESSEE BY : SHRI. P. C. CHADAGA, ITP REVENUE BY : SHRI. G. V. GOPALA RAO, COMMISSIONER OF INCOME-TAX-I O R D E R PER DR. O. K. NARAYANAN, VICE PRESIDENT : THESE ARE CROSS APPEALS FILED BY THE REVENUE AND B Y THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2006-07. THESE APPEALS ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(A)-1, AT BANGALORE, DATED.25.9.2009. THESE APPEALS ARISE OU T OF THE ASSESSMENT COMPLETED U/S.143(3) OF THE IT ACT, 1961. ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 2 2. THE ASSESSEE IS A FIRM ENGAGED IN OF METAL ROLLI NG BUSINESS. THE ASSESSEE FIRM HAS DECLARED TOTAL INCOME OF ` .5,22,79,213/- IN WHICH A MAJOR PORTION RELATED TO LONG TERM CAPITAL GAINS. THE ASSESSING OFFICER HAS DETERMINED A TOTAL INCOME OF ALMOST AN EQUAL AMOUNT OF ` 5,73,87,778/-, BUT FOR CERTAIN SMALL ADDITIONS. BU T THE COMPOSITION OF INCOME HAS BEEN SUBSTANTIALLY ALTERED BY THE ASSESS ING OFFICER BY REAPPORTIONING THE CAPITAL GAINS INCOME INTO LONG TERM AND SHORT TERM AS AGAINST THE PROPORTION ADOPTED BY THE ASSESSEE F IRM. AS PER THE ASSESSEE'S ALLOCATION, A LION'S SHARE OF THE CONSID ERATION RELATED TO THE SALE OF LAND GENERATING A SUBSTANTIAL AMOUNT OF LON G TERM CAPITAL GAINS. IN THE COMPUTATION MADE OUT BY THE ASSESSING OFFICE R THE LONG TERM CAPITAL GAINS HAS BEEN REDUCED AND THE SHORT TERM C APITAL GAINS HAS BEEN INCREASED. 3. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSM ENT YEAR UNDER APPEAL, THE ASSESSEE FIRM HAD SOLD TWO ITEMS OF PRO PERTY. THE FIRST ONE WAS THE SALE OF PROPERTY AT SITE NO.46, INDUSTRIAL SUBURB, YESHWANTPUR AT BANGALORE. THE PROPERTY CONSISTING OF LAND TO T HE EXTENT OF 43,560 SFT WAS SOLD FOR A CONSIDERATION OF ` .5,66,28,000/-. THE SALE WAS MADE ON 17.12.2005. IN THE COMPUTATION MADE BY THE ASSE SSEE FIRM, IT MADE OUT A LONG TERM CAPITAL GAINS ON THE SALE OF LAND A T ` 5,10,49,016/- AND SHORT TERM CAPITAL GAINS OF ` 7,220/- ON THE BUILDING. THE EXCESS OF ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 3 SALE OF BUILDING WAS TREATED AS SHORT TERM CAPITAL GAINS AS THE BUILDING WAS DEPRECIATED IN EARLIER ASSESSMENT YEARS. IN OR DER TO DERIVE THE ACQUISITION COST BY INDEXATION, THE FMV OF THE PROP ERTY AS ON 01.04.1981 WAS ADOPTED BY THE ASSESSEE FIRM AT ` 10,67,200/- BASED ON THE REPORT OF A REGISTERED VALUER. 4. IN HIS COMPUTATION THE ASSESSING OFFICER FOUND T HAT IN THE SALE DEED THE ASSESSEE FIRM HAS NOT MENTIONED THE VALUE ASSIGNED FOR THE SALE OF LAND AND THE VALUE ASSIGNED FOR THE BUILDIN G THEREON. IN THE ABSENCE OF ANY SUCH CONTRACTUAL DIVISION OF CONSIDE RATION THE ASSESSING OFFICER FOUND THAT THE APPORTIONMENT OF C ONSIDERATION BETWEEN LONG-TERM CAPITAL ASSET AND SHORT TERM CAPI TAL ASSET AS MADE BY THE ASSESSEE FIRM WAS HIGHLY DISTORTED INASMUCH THE ASSESSEE HAS OVERSTATED THE CONSIDERATION ATTRIBUTABLE TO THE LA ND AND VERY MUCH UNDER STATED THE CONSIDERATION ATTRIBUTABLE TO THE BUILDING. THE ASSESSING OFFICER, THEREFORE, MADE ENQUIRIES AND FO UND THAT THE MARKET PRICE OF INDUSTRIAL LAND ON THE DATE OF TRANSFER WO ULD BE ` 1,000/- PER SFT. ONCE THE SALE CONSIDERATION OF THE LAND HAS B EEN COMPUTED AS STATED ABOVE, THE BALANCE AMOUNT OF THE CONSIDERATI ON WAS ATTRIBUTEDI TO THE SALE OF BUILDING. ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 4 5. IN ADDITION TO THE ABOVE ADJUSTMENT, THE ASSESSI NG OFFICER HAS ALSO REJECTED THE FMV OF THE PROPERTY AS ON 01.04.1 981 ADOPTED BY THE ASSESSEE FIRM. THE ASSESSEE FIRM HAS ADOPTED THE V ALUE OF LAND AT ` 10,67,200/- AS ON 01.04.1981. THE BENEFIT OF INDEX ATION WAS WORKED OUT ON THE ABOVE FMV. ON ENQUIRIES MADE THE ASSESS ING OFFICER FOUND THAT THE VALUE OF THE INDUSTRIAL LAND AS ON 0 1.04.1981 WOULD BE RS.10/- PER SFT AND THIS VALUE WAS SO REASONABLE WH EN COMPARED TO THE COST OF INDEXATION OF THE LAND. HE ACCORDINGLY ADO PTED THE FMV OF THE LAND AT RS.4,35,600/- AS ON 01.04.1981. 6. ON THE BASIS OF THE ABOVE ADJUSTMENTS, THE ASSES SING OFFICER HAS DETERMINED LONG TERM CAPITAL GAINS OF ` .4,35,60,000/- AS AGAINST LONG TERM CAPITAL GAINS OF RS.5,10,49,016/- DECLARE D BY THE ASSESSEE. THE SALE CONSIDERATION IN THE NATURE OF SHORT TERM CAPITAL GAINS RELATING TO THE BUILDING HAS BEEN WORKED OUT AT ` 1,28,60,220/-. 7. ANOTHER PROPERTY SOLD BY THE ASSESSEE FIRM WAS P ROPERTY SITUATED AT NO.10, PVR ROAD FOR A CONSIDERATION OF ` 28,75,000/-. AS FAR AS THIS SALE IS CONCERNED THE ASSESSEE HAS COMP UTED LONG-TERM CAPITAL GAINS AT ` 9,42,143/-. THE ASSESSING OFFICER FOUND THAT THE GROUND FLOOR OF THE PROPERTY WAS USED FOR BUSINESS PURPOSES AND THE ASSET WAS DEPRECIATED AND, THEREFORE, THE SURPLUS A TTRIBUTABLE TO THE ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 5 GROUND FLOOR OF THE BUILDING HAS TO BE TREATED AS S HORT-TERM CAPITAL GAINS. THE ASSESSING OFFICER DID NOT CONSIDER THE CONTENTION OF THE ASSESSEE FIRM THAT THE FIRST FLOOR OF THE BUILDING WAS USED FOR RESIDENTIAL PURPOSES AND THE SURPLUS ARISING OUT OF SALE OF THE FIRST FLOOR SHOULD INVARIABLY CONSIDERED IN THE NATURE OF LONG TERM CAPITAL GAINS. THE ASSESSING OFFICER TREATED THE ENTIRE SALE CONSI DERATION AS GENERATING SHORT TERM CAPITAL GAINS WHICH WORKED OU T AT ` .28,26,444/-. 8. WHEN THE DISPUTES RELATING TO CAPITAL GAINS WERE TAKEN BEFORE THE COMMISSIONER OF INCOME-TAX(A), THE COMMISSIONER OF INCOME- TAX(A) FOUND THAT THE ASSESSING OFFICER HAS OVERLOO KED CERTAIN VITAL ASPECTS OF THE PROPERTY WHILE CONSIDERING THE LONG- TERM AND SHORT TERM CAPITAL GAINS. IN THE CASE OF INDUSTRIAL LAND AT Y ESHWANTPUR THE COMMISSIONER OF INCOME-TAX(A) HAS IN PRINCIPLE ACCE PTED THE METHOD OF APPORTIONMENT ADOPTED BY ASSESSING OFFICER. BUT HE HELD THAT THE ASSESSING OFFICER HAS GONE WRONG IN ADOPTING THE PU RCHASE VALUE OF THE LAND AS ON 01.04.1981 AT ` 10/- PER SFT. THE COMMISSIONER OF INCOME-TAX(A) OBSERVED THAT THE ASSESSING OFFICER W AS HIGHLY CARRIED AWAY BY THE COST OF THE LAND AT THE TIME OF PURCHAS E WHICH WAS ` 1.77 PER SFT. THE COMMISSIONER OF INCOME-TAX(A) ON THE OTHER HAND FOUND THAT THE VALUATION FOUND BY THE REGISTERED VALUER A T ` 24.49 PER SFT WAS QUITE REASONABLE AS THE VALUATION REPORT HAD CONSID ERED ALL ASPECTS OF ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 6 THE VALUATION OF THE PROPERTY. ACCORDINGLY THE COM MISSIONER OF INCOME-TAX(A) ACCEPTED THE VALUATION OF ` 24.49 PER SFT AS THE FMV AS ON 01.04.1981 AND THEREAFTER GRANTED THE BENEFIT OF INDEXATION. ON THE BASIS OF THE ABOVE COMPUTATION HE DETERMINED THE LO NG TERM CAPITAL GAINS IN RESPECT OF THE SALE OF LAND AT ` 3,39,00,016/-. THIS VALUE HAS BEEN ADOPTED BY THE COMMISSIONER OF INCOME-TAX(A) A GAINST THE VALUE OF ` 4,13,95,068/- ADOPTED BY THE ASSESSING AUTHORITY. ON THIS GROUND THE ASSESSEE GOT A RELIEF OF ` 74,95,052/-. 9. IN RESPECT OF SHORT TERM CAPITAL GAINS ATTRIBUTA BLE TO THE BUILDING THE COMMISSIONER OF INCOME-TAX(A) HAS ACCEPTED THE VERY SAME METHOD OF BALANCING ADOPTED BY THE ASSESSING AUTHOR ITY. THE REVISED SALE CONSIDERATION ATTRIBUTED TO THE LAND VALUE WAS REDUCED FROM THE TOTAL CONSIDERATION. WHILE THE COMMISSIONER OF INC OME-TAX(A) HAS MODIFIED THE SALE CONSIDERATION ATTRIBUTABLE TO THE LAND, OBVIOUSLY BY VIRTUE OF THE BALANCING METHOD, THE VALUE ATTRIBUTA BLE TO THE SALE OF BUILDING WOULD BE ` 1,71,56,220/-. THIS HAS RESULTED IN ENHANCEMENT OF ` 43,56,000/-. 10. REGARDING THE PROPERTY AT PVR ROAD THE COMMISSI ONER OF INCOME-TAX(A) HAS CONSIDERED THE CONTENTION OF THE ASSESSEE THAT THE FIRST FLOOR OF THE BUILDING WAS USED FOR RESIDENTIA L PURPOSES AND THE ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 7 SURPLUS ATTRIBUTABLE TO THAT PORTION OF THE LAND WA S TO BE TREATED AS LONG TERM CAPITAL GAINS. ACCORDINGLY, HE APPORTIONED TH E SALE CONSIDERATION ON THE BASIS OF THE PLINTH AREA OF THE FIRST FLOOR AND THE GROUND FLOOR AND BIFURCATED THE SALE CONSIDERATION INTO LONG TER M AND SHORT TERM CAPITAL GAINS. THE COMMISSIONER OF INCOME-TAX(A) D ETERMINED A SUM OF ` 10 LAKHS AS LONG TERM CAPITAL GAINS ATTRIBUTABLE T O THE FIRST FLOOR. 11. BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE AG GRIEVED ON THE ORDERS OF THE COMMISSIONER OF INCOME-TAX(A). AS FA R AS THE ASSESSEE FIRM IS CONCERNED, THE GRIEVANCE IS REGARDING THE I NSUFFICIENCY OF THE RELIEF GRANTED IN RESPECT OF LONG TERM CAPITAL GAIN S ATTRIBUTABLE TO THE SALE OF PROPERTY AT YESHWANTPUR. AS FAR AS THE REV ENUE IS CONCERNED, THE MAIN GRIEVANCE IS THAT THERE WAS NO NEED TO ALL OCATE A PORTION OF SALE CONSIDERATION OF THE PROPERTY AT PVR ROAD INTO LONG TERM AND SHORT TERM CAPITAL GAINS. IT IS IN THIS CONTEXT TH AT THESE CROSS APPEALS ARE FILED BEFORE US. 12. FIRST WE WILL CONSIDER THE APPEAL FILED BY THE REVENUE. THE ONLY AND EFFECTIVE GROUND IS THAT THE COMMISSIONER OF INCOME-TAX(A) WAS NOT JUSTIFIED IN GIVING RELIEF OF ` 10 LAKHS IN RESPECT OF CAPITAL GAINS ASSESSABLE IN RESPECT OF THE PROPERTY LOCATED AT PVR ROAD FOR THE ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 8 RESIDENTIAL PORTION OF THE BUILDING. IT IS THE CAS E OF THE REVENUE THAT THE ENTIRE AMOUNT HAS TO BE TREATED AS SHORT TERM C APITAL GAINS. 13. WE CONSIDERED THE MATTER. THE MATERIALS ON REC ORD SHOW THAT THE FIRST FLOOR OF THE PROPERTY AT PVR ROAD WAS USE D AS HOUSE PROPERTY. NO DEPRECIATION WAS CLAIMED ON THE SAID PORTION. THE ASSESSEE FIRM HAD EVEN OFFERED RENTAL INCOME FROM T HAT PORTION OF THE PROPERTY. IN SUCH CIRCUMSTANCES THE ARGUMENT OF TH E ASSESSEE THAT THE SURPLUS ATTRIBUTABLE TO THE SALE OF THE FIRST FLOOR OF THE BUILDING SHOULD BE TREATED AS LONG TERM CAPITAL GAINS IS IN ACCORDA NCE WITH LAW. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS NO T ERRED IN ACCEPTING THE SAID CONTENTION OF THE ASSESSEE AND I N BIFURCATING THE CONSIDERATION INTO LONG TERM AND SHORT TERM CAPITAL GAINS. WE ALSO FIND THAT THE METHOD OF APPORTIONMENT ADOPTED BY TH E COMMISSIONER OF INCOME-TAX(A) IS SCIENTIFIC AS HE HAS BIFURCATED THE CONSIDERATION ON THE BASIS OF THE AREA OCCUPIED BY THE GROUND FLOOR AND FIRST FLOOR. IN THESE CIRCUMSTANCES, WE FIND THAT THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) ON THIS POINT IS JUST, PROPER AND IS IN ACCORDANCE WITH LAW. 14. THE REVENUE FAILS IN ITS APPEAL. ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 9 15. THE FIRST GROUND RAISED BY THE ASSESSEE IN ITS APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(A) HAS ERRED IN UPHOLDIN G THE ASSESSMENT ORDER WHICH IS VOID- AB-INITIO AS NOTICE U/S.143(2) HAD NOT BEEN SERVED ON ANY ONE OF THE PARTNERS SINCE THE FI RM HAD BEEN DISSOLVED AT THE TIME OF ISSUE OF NOTICE. 16. IT IS THE CASE OF THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE THAT THE SERVICE OF NOTICE U/S.143(2) WAS MANDATORY FOR COMPLETING AN ASSESSMENT U/S.143(3). THE ASSESSING OFFICER HAS S TATED THAT THE ASSESSEE FIRM HAD FAILED TO INTIMATE THE CHANGE OF ADDRESS EITHER TO THE POSTAL DEPARTMENT OR TO THE IT DEPARTMENT AND THERE FORE THE LETTER ISSUED TO THE ASSESSEE WAS RETURNED AND IN SUCH CIR CUMSTANCES THE SERVICE OF NOTICE WAS DEEMED AND ASSESSMENT WAS COM PLETED IN ACCORDANCE WITH LAW. THE CASE OF THE ASSESSEE IS T HAT THE PROCEDURE ADOPTED BY THE ASSESSING OFFICER WAS NOT CORRECT. THE CORRECT PROCEDURE IN SUCH CASE WAS TO SERVE THE NOTICE BY A FFIXING THE NOTICE ON THE LAST ADDRESS UNDER THE CPC WHICH HAS NOT BEE N DONE IN THIS CASE. HE THEREFORE SUBMITTED THAT THERE WAS NO NOT ICE U/S.143(2) AND THE ASSESSMENT WAS VOID-AB-INITIO. 17. WHEN IT WAS POINTED OUT TO THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE THAT THIS WAS NOT RAISED BEFORE THE CO MMISSIONER OF ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 10 INCOME-TAX(A), THE LEARNED COUNSEL ARGUED THAT THIS BEING A QUESTION OF LAW COULD BE RAISED BEFORE ANY AUTHORITY. WE AG REE WITH THE ARGUMENT OF THE LEARNED COUNSEL THAT THE QUESTION O F LAW CAN BE RAISED FOR THE FIRST TIME, IF THE CIRCUMSTANCES SO WARRANT EVEN BEFORE THE APEX COURT. THE LEGAL POSITION ON THIS POINT IS VERY CL EAR. BUT THE CRUCIAL POINT TO BE REMEMBERED IS THAT SUCH A FREEDOM GIVEN TO AN ASSESSEE TO RAISE THE QUESTION OF LAW BEFORE ANY AUTHORITY IS T HE FREEDOM TO RAISE THE QUESTION OF LAW FOR THE FIRST TIME . IN THE PRESENT CASE THE FACTS ARE A LITTLE DIFFERENT. THE ISSUE OF NOTICE U/S.143(2) W AS RAISED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND THE SAID ISSUE WAS CONSIDERED BY THE ASSESSING OFFICER IN HIS ASSESSME NT ORDER AND THE MATTER WAS DECIDED AGAINST THE ASSESSEE FIRM. IT I S NOT A CASE THAT THIS ISSUE WAS NOT RAISED BEFORE THE LOWER AUTHORITIES A T ALL. THE ISSUE WAS VERY MUCH RAISED BEFORE THE ASSESSING AUTHORITY. W HEN THE ASSESSING OFFICER HAS DISMISSED THIS PARTICULAR CONTENTION RA ISED BY THE ASSESSEE REGARDING THE VERY JURISDICTION OF THE ASSESSMENT, IT WAS FOR THE ASSESSEE TO TAKE THE SAID DECISION OF THE ASSESSING OFFICER IN FIRST APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(A). T HE ASSESSEE OUGHT TO HAVE RESORTED TO THE STATUTORY REMEDY AVAI LABLE TO IT. BUT WHAT HAPPENED IN THE PRESENT CASE ? THE ASSESSEE H AS NOT TAKEN ANY GROUND AGAINST THE DECISION OF THE ASSESSING AUTHOR ITY ON THE QUESTION OF ISSUE OF NOTICE U/S.143(2). WHEN THE ASSESSEE H AS NOT TAKEN SUCH A ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 11 GROUND BEFORE THE COMMISSIONER OF INCOME-TAX(A), TH E NORMAL CONCLUSION IS THAT THE ASSESSEE HAS ACCEPTED THE VE RDICT OF THE ASSESSING AUTHORITY ON THIS PARTICULAR ISSUE AND T HE ASSESSEE WAS NOT INTERESTED IN PURSUING THE MATTER FURTHER. THEREFO RE AS A MATTER OF FACT THE ISSUE SHOULD BE CLOSED THERE. THE ASSESSEE FIR M WITHOUT RAISING THE ISSUE IN FIRST APPEAL BEFORE THE COMMISSIONER OF IN COME-TAX(A) NOW ARGUES BEFORE THE TRIBUNAL THAT THE SAID GROUND SHO ULD BE AGAIN CONSIDERED AS THE GROUND IS A QUESTION OF LAW. WE ARE UNABLE TO AGREE WITH THIS PROPOSITION. IF THIS QUESTION WAS NOT CO NSIDERED BY THE ASSESSING OFFICER THE MATTER WOULD HAVE BEEN DIFFER ENT. THE ASSESSEE COULD RAISE THE ISSUE BEFORE THE TRIBUNAL FOR THE F IRST TIME AND THE TRIBUNAL WAS BOUND TO EXAMINE THAT. BUT IN THE PRE SENT CASE THE ISSUE WAS CONSIDERED BY THE ASSESSING AUTHORITY AND THE M ATTER WAS DECIDED AGAINST THE ASSESSEE FIRM AND THE ASSESSEE FIRM OPT ED TO CLOSE THE MATTER THERE AND DID NOT PREFER TO FILE AN APPEAL B EFORE THE COMMISSIONER OF INCOME-TAX(A) ON THAT POINT. AS TH E ASSESSEE HAS NOT RAISED THIS ISSUE BEFORE THE COMMISSIONER OF IN COME-TAX(A), THE SAME CANNOT BE RAISED BEFORE THE TRIBUNAL AS WELL. EVEN THOUGH THIS IS A QUESTION OF LAW THIS HAS BEEN DETERMINED BY THE A SSESSING OFFICER AND THE DECISION HAS BEEN CONSTRUCTIVELY ACCEPTED B Y THE ASSESSEE FIRM. THEREFORE, THE MATTER HAS COME TO AN END. T HIS GROUND IS THEREFORE DISMISSED. ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 12 18. THE SECOND GROUND IN ASSESSEE'S APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(A) HAS ERRED IN FIXING T HE SALE VALUE OF THE INDUSTRIAL LAND AT ` 3.,92,04,000/- AS AGAINST ` 5,63,53,000/- DECLARED BY THE ASSESSEE WHICH WAS SUPPORTED BY A R EGISTERED VALUER'S REPORT. WE CONSIDERED THIS ISSUE. IT IS A FACT ON RECORD THAT THE SALE DEED OF THE ASSESSEE HAS NOT APPORTIONED THE SALE C ONSIDERATION BETWEEN THE LAND AND THE BUILDING. THEREFORE IT WA S INCUMBENT UPON THE ASSESSING OFFICER TO MAKE APPORTIONMENT ON THE BASIS OF AVAILABLE MATERIALS. THE ASSESSING OFFICER HAS ADOPTED THE V ALUE OF THE LAND ON THE BASIS OF SALE VALUE OF ` 1,000/- PER SFT. THE COMMISSIONER OF INCOME-TAX(A) HAS MODIFIED THIS VALUE BY ACCEPTING THE VALUATION REPORT ON THIS POINT. THE COMMISSIONER OF INCOME-T AX(A) HAS ACCEPTED THE VALUE PERSISTED AT THE TIME OF ORIGINA L PURCHASE OF THE LAND AS DISCLOSED IN THE VALUATION REPORT AND ENHAN CED THE APPORTIONED VALUE OF SALE CONSIDERATION RELATING TO THE LAND. THAT METHOD ADOPTED BY THE COMMISSIONER OF INCOME-TAX(A) IS PROPER AND HE HAS DONE IT ON THE BASIS OF A VALUATION REPORT. THEREFORE, THERE IS NO ROOM FOR THE ASSESSEE TO AGGRIEVE ON THIS DECISION. THEREFORE, WE FIND THAT THIS GROUND RAISED BY THE ASSESSEE IS LIABLE TO BE DISMI SSED. 19. THE THIRD GROUND IS THAT THE COMMISSIONER OF IN COME-TAX(A) HAS ERRED IN NOT GIVING FULL RELIEF IN THE ADDITION MADE BY THE ITA.1201/B/2009 & ITA.17/B/2010 PAGE - 13 ASSESSING OFFICER ON CAPITAL GAINS ON SALE OF PROPE RTY AT NO.10, PVR ROAD. WE FIND THE COMMISSIONER OF INCOME-TAX(A) HA S APPORTIONED THE VALUE ON A SCIENTIFIC METHOD. HE HAS APPORTION ED THE VALUE ON THE BASIS OF THE PHYSICAL AREA OF THE GROUND FLOOR AND THE FIRST FLOOR. THE ASSESSEE HAS NOT SUGGESTED ANY BETTER METHOD OTHER THAN THE METHOD OF ARBITRARY APPORTIONMENT ADOPTED BY IT. THIS GROUND ALSO FAILS. 20. IN RESULT, THE APPEAL FILED BY THE REVENUE AS W ELL AS THE APPEAL FILED BY THE ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 10TH DAY OF NOVE MBER, 2010 AT BANGALORE. SD/- SD/- (SMT. P. MADHAVI DEVI) (DR. O. K. NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT