The ACIT, Circle-7, Ahmedabad V. Smt. Rekhaben D.Contractor, Ahmedabad

ITA 1702/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89710 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S N DIVETIA
• Keywords: Cost of acquisition; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA NO.1702/AHD/2011 ASST. YEAR 2007-08 ASST. CIT, CIR-7, AHMEDABAD APPELLANT VS. SMT. REKHABEN D. CONTRACTOR, SANSKRIT, VAKIL FAR, OPP. VIKRAM NAGAR, SATELLITE, AHMEDABAD RESPONDENT PAN :ACCPM 9043P APPELLANT BY : SHRI B. L. YADAV, SR. DR RESPONDENT BY :SHRI S. N. DIVETIA, AR DATE OF HEARING : 09/06/2015 DATE OF PRONOUNCEMENT :24/6/2015/06/2015 ITA NO.1702/AHD/2011 ASST. YEAR 2007-08 2 O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) DATED 26/04/2011 FOR AY 2007-08. THE ONLY EF FECTIVE GROUND RAISED BY THE REVENUE IN ITS APPEAL IS AS UN DER :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOL DING THAT THE REFERENCE MADE BY THE ASSESSING OFFICER UNDER S ECTION 55A TO THE DVO WAS WITHOUT JURISDICTION, THEREBY DE LETING THE ADDITION OF RS.70,16,582/- ON ACCOUNT OF LONG T ERM CAPITAL GAIN FROM THE SALE OF PLOT. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEES FA THER-IN-LAW HAD PURCHASED THE PROPERTY IN QUESTION SOMETIME IN 1975 , AND BY HIS WILL DATED 1982 LEFT THE PROPERTY EQUALLY TO HIS SO N AND DAUGHTER- IN-LAW. ON HIS DEMISE IN 1995, THE PROPERTY DEVOLVE D ON THE ASSESSEE AND HER HUSBAND. SINCE THE PROPERTY WOULD BE CONSIDERED AS ACQUIRED PRIOR TO 1981, THE ASSESSEE OPTED TO VA LUE THE SAME AS ON 1.4.1981 TO ARRIVE AT THE COST OF ACQUISITION. I T WAS ALSO NOTED ITA NO.1702/AHD/2011 ASST. YEAR 2007-08 3 THAT THOUGH THE HALF SHARE OF THE ASSESSEE WAS SOLD FOR A NET CONSIDERATION OF RS.2,11,11,550, THE PROPERTY WAS N OT REFLECTED IN THE BALANCE-SHEET OF THE ASSESSEE AS ON 31.03.2006. FURTHER, NO WEALTH TAX RETURN HAD BEEN FILED. A QUERY IN THIS R EGARD RESULTED IN THE REPLY THAT ALL THE JOINT PROPERTIES WITH THE HU SBAND WERE REFLECTED IN A SEPARATE JOINT BALANCE SHEET OF THE TWO. THIS PRACTICE IS CONTRARY TO THE REQUIREMENTS OF THE WEALTH-TAX A CT, SINCE THESE ASSETS HAVE REMAINED UN-ASSESSED TO WEALTH TAX IN T HE HANDS OF EITHER THE ASSESSEE OR HER HUSBAND. THE MATTER WAS REFERRED TO DISTRICT VALUATION OFFI CER AND ON THE BASIS OF DVOS REPORT THE AO MADE THE IMPUGNED ADDITION OF RS.70,16,582/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND THE CIT(A) AFTER CONSIDERING THE ASSESSMENT ORDER AND T HE SUBMISSIONS OF THE ASSESSEE AND BY FOLLOWING THE DECISION OF TH E JURISDICTIONAL HIGH COURT IN THE CASE OF HIABEN JAYANTILAL SHAH VS . ITO & ITA NO.1702/AHD/2011 ASST. YEAR 2007-08 4 ANR.310 ITR 31 (2009) (GUJ) DELETED THE ADDITION OF RS.70,16,582/- BY OBSERVING AS UNDER :- 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSE SSMENT ORDER AND APPELLANTS SUBMISSION. IT IS NOT IN DISPUTE THAT A PPELLANT WAS 50% OWNER OF THE LAND ALONG WITH HER HUSBAND SHRI DEEPA K S. CONTRACTOR. THE IDENTICAL ADDITION WAS MADE IN THE CASE OF DEEPAK S. CONTRACTOR AND CIT(A) XV, AHMEDABAD PASSED ORDER ON 20.12.2010. THE RELEVANT EXTRACT OF THE ORDER IS QU OTED BELOW :- DURING THE COURSE OF APPELLATE PROCEEDINGS IT WAS ARGUED THAT SALE CONSIDERATION WAS NOT DOUBTED BY THE AO THAT A CCORDING TO THE AO THE VALUE OF LAND AS ON 1.04.1981 WAS LESS T HAN WHAT WAS CALCULATED BY THE APPELLANT FOR THE PURPOSE OF TAKI NG OUT LTCG._____ 6. IT IS SEEN THAT HONOURABLE GUJARAT HIGH COURT DE CISION IN THE CASE OF HIRABEN J. SHAH VERSUS ITO 310 ITR 31 IS AP PLICABLE IN THE CASE OF APPELLANT WHEREIN IT WAS HELD THE ESTIMATED VALUE PROPOSED BY THE DVO IS AT RS.39 7000 WHICH IS LESS THAN THE FAIR MARKET VALUE SHOWN BY THE ASSESS EE AS ON 1.04.1981. THEREFORE, CLAUSE (A) OF SECTION 55A CANNOT BE MADE APPLICABLE. CLAUSE (B) OF SECTION 55A CAN BE INVOKED ONLY IN ANY OTHER CAS E NAMELY WHEN THE VALUE OF ASSET CLAIMED BY THE ASSESSEE IS NOT SUPPORTED B Y AN ESTIMATE MADE BY REGISTERED VALUER. IN THE CONCLUSION HONOURABLE HIGH COURT STATED AS U NDER :- REFERENCE MADE BY THE AO UNDER SECTION 55A TO DVO ON 26 APRIL 1996 FOR DETERMINING THE VALUE OF PROPERTY AS ON 1.04.1981 A ND ON THE DATE OF SALE WAS WITHOUT JURISDICTION FOR THE REASONS THAT RETUR N WAS FILED BY THE ASSESSEE ONLY ON 27.08.1986, VALUE OF PROPERTY AS ON 1.04.19 81 AS DECLARED BY THE ASSESSEE SUPPORTED BY ESTIMATE OF REGISTERED VALUER WAS HIGHER THAN ESTIMATED BY DVO AND NO OPINION WAS FORMED BY THE A O THAT THE FAIR MARKET ITA NO.1702/AHD/2011 ASST. YEAR 2007-08 5 VALUE AS CLAIMED BY THE ASSESSEE WAS REQUIRED TO DI STURB BECAUSE PRESCRIBED PARAMETERS WERE FULFILLED. 7. AFTER GOING THROUGH FACTS OF THE CASE, THE AO IS DIRECTED TO DELETE THE ADDITION AS HONOURABLE GUJARAT HIGH COURT DECISION 310 ITR 31 IS DIRECTLY APPLICABLE IN THE APPELLANTS CASE AS MENTIONED IN PARA -6 ABOVE. THE VALUE OF THE PROPERTY WAS DECLARED AS PER REGISTERED VALU ERS REPORT BY THE APPELLANT AND THE VALUE ESTIMATED BY THE DVO WAS LE SS THAN THE DECLARED BY THE APPELLANT, THEREFORE, 310 ITR 31 IS APPLICABLE. 8. IN THE RESULT THE APPEAL IS ALLOWED. MY LEARNED COLLEAGUE CIT(A) XV, AHMEDABAD IN THE C ASE OF APPELLANTS HUSBAND WHO IS JOINT OWNER OF THE PROPE RTY HELD THAT IN VIEW OF THE JURISDICTIONAL HIGH COURT DECISION, THE REFERENCE MADE BY THE ASSESSING OFFICER UNDER SECTION 55A TO DVO I S WITHOUT JURISDICTION. SINCE THE VALUE AS ON 1.04.1981 WAS S HOWN BY THE APPELLANT HIGHER, REFERENCE TO DVO CANNOT BE MADE B Y THE ASSESSING OFFICER AND ACCORDINGLY THE ADDITION MADE PURELY ON SUCH DVOS REPORT CANNOT BE SUSTAINED. RESPECTFULLY FOLLOWING THE DECISION REFERRED ABOVE, THE CHANGE IN VALUE AS ON 1.04.1981 MADE BY THE ASSESSING OFFICER IS NOT CONFIRMED. THE ADDI TION IS THEREFORE DELETED. THE REVENUE IS IN APPEAL BEFORE US. 3. THE LD. DR SUPPORTED THE ORDER OF ASSESSING OFFI CER AND SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY DELETED T HE ADDITION. HIS ORDER MAY BE SET ASIDE AND THAT OF THE AO BE RESTOR ED. ITA NO.1702/AHD/2011 ASST. YEAR 2007-08 6 ON THE OTHER HAND, THE LD. AR RELIED ON THE ORDER O F LD. CIT(A) AND SUBMITTED THAT THE LD. FIRST APPELLATE A UTHORITY HAS RIGHTLY DELETED THE ADDITION. HE ALSO SUBMITTED THA T THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE TRIBUNAL VIDE ORDER DATED 20.03.2015 IN ITANO.284/AHD/2011 F OR AY 2007-08 IN THE CASE O DCIT VS. SHRI DIPAKBHAI SHANK ARLAL CONTRACTOR. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND TH AT A SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL IN THE CASE OF DCIT VS. SHRI DIPAKBHAI SHANKARLAL CONTRACTOR, HUSBAND AND CO-OWN ER OF THE SAME PROPERTY. THE TRIBUNAL, WHEREIN AFTER CONSIDER ING THE FACTS AND CIRCUMSTANCES OF THAT CASE DELETED THE ADDITION MADE BY AO WITH THE FOLLOWING OBSERVATION:- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE G RANTING THE RELIEF TO THE ASSESSEE HAD RELIED ON THE DECISION O F HONBLE GUJARAT HIGH COURT IN THE CASE OF HIRABEN JAYANTILAL SHAH V S. ITO 310 ITR 31 (GUJ) AND HAD HELD THAT THE RATIO OF THE AFORESA ID DECISION WAS ITA NO.1702/AHD/2011 ASST. YEAR 2007-08 7 DIRECTLY APPLICABLE TO THE CASE OF ASSESSEE. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING DECISION NOR COULD CONTROVERT THE FINDINGS OF LD. CIT(A). IN VIEW OF THE AFORESAID FA CTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AN D THUS THE GROUND OF REVENUE IS DISMISSED. IN THE CASE BEFORE US THE FACTS AND CIRCUMSTANCES A RE IDENTICAL TO THAT OF SHRI DIPAKBHAI SHANKARLAL CONTRACTOR (SUPRA ). THEREFORE, FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL, WE OBSER VED THAT LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. THERE IS N O INFIRMITY IN HIS ORDER. WE UPHOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF JUNE, 2015 SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED :24/6/2015 MAHATA/- ITA NO.1702/AHD/2011 ASST. YEAR 2007-08 8 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY.REGISTRAR,ITAT, AHMEDABAD 1. DATE OF DICTATION: 09/06/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 10/6/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 24/6/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: