SMT LAKSHMI BALAKRISHNAN, CHENNAI V. ITO NON CORPORATE WARD 1 (3), CHENNAI

ITA 1780/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0868 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR ADD L
• Assessee Lawyers: T PRAMODKUMAR CHOPDA
• Keywords: Additional evidence; Fair market value; Valuation report

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.1780/CHNY/2018 & '& / ASSESSMENT YEAR : 2013-14 SMT. LAKSHMI BALAKRISHNAN, NEW NO.1, MURUGESAN STREET, T. NAGAR, CHENNAI - 600 017. PAN : AAEPB 1691 E V. THE INCOME TAX OFFICER, NON CORPORATE WARD 1(3), CHENNAI - 600 034. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI T. PRAMODKUMARCHOPDA, ADVOCAT E +,)* - . / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADD L.CIT / - 0' / DATE OF HEARING : 12.11.2018 12' - 0' / DATE OF PRONOUNCEMENT : 16.11.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -2, CHENNA I, DATED 26.03.2018 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. SHRI T. PRAMODKUMAR CHOPDA, THE LD.COUNSEL FOR T HE ASSESSEE, SUBMITTED THAT THE CIT(APPEALS) ENHANCED THE LONG TERM 2 I.T.A. NO.1780/CHNY/18 CAPITAL GAIN BY 29,73,480/- AND DISALLOWED THE INDEX COST OF THE BUILDING. ACCORDING TO THE LD. COUNSEL, THE ASSESS EE ENTERED INTO A JOINT DEVELOPMENT AGREEMENT IN RESPECT OF PROPERTY AT NEW NO.1, MURUGESA MUDALI STREET AND NO.18/37, MAHARAJA SYRYA ROAD, ALWARPET, CHENNAI-18. ACCORDING TO THE LD. COUNSEL , AS ON 01.04.1981, THE ASSESSEE DISCLOSED THE FAIR MARKET VALUE AT 107/- PER SQ.FT. HOWEVER, THE ASSESSING OFFICER BY REFER RING TO GUIDELINE VALUE OF SUB-REGISTRAR, HAS TAKEN THE GUIDELINE VAL UE AT 20,000/- PER GROUND. THE LD.COUNSEL CLARIFIED THAT PER GROU ND MEANS 2400 SQ.FT. THE LD.COUNSEL FURTHER SUBMITTED THAT THE C OST ADOPTED BY THE ASSESSING OFFICER WAS VERY HIGH WHEN COMPARED TO TH E LOCATION OF THE BUILDING. THE LD.COUNSEL ALSO CLARIFIED THAT T HERE WAS NO COMPARATIVE SALE INSTANCE IN THE NEARBY AREA, THERE FORE, THE FAIR MARKET VALUE HAS TO BE ESTIMATED ON THE BASIS OF TH E MATERIAL AVAILABLE. PLACING A COPY OF THE VALUATION REPORT, THE LD.COUNSEL SUBMITTED THAT THIS IS AN ADDITIONAL EVIDENCE FILED BEFORE THIS TRIBUNAL. IN THE ABSENCE OF ANY FURTHER MATERIAL, ACCORDING TO THE LD. COUNSEL, THE VALUATION REPORT FILED BY THE ASSE SSEE HAS TO BE TAKEN INTO CONSIDERATION FOR ESTIMATING THE FAIR MA RKET VALUE AS ON 01.04.1981. 3 I.T.A. NO.1780/CHNY/18 3. ON THE CONTRARY, SHRI R. CLEMENT RAMESH KUMAR, T HE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE VAL UATION REPORT FILED BY THE ASSESSEE DOES NOT DISCLOSE THE CORRECT FAIR MARKET VALUE AS ON 01.04.1981. EVEN IN THE VALUATION REPORT, AC CORDING TO THE LD. D.R., THE VALUER HAS TAKEN THE GUIDELINE VALUE AND HE HAS WORKED BACKWARD FOR THE PURPOSE OF ASCERTAINING THE FAIR M ARKET VALUE. THEREFORE, ACCORDING TO THE LD. D.R., THE COMPUTATI ON OF FAIR MARKET VALUE BY THE VALUATION OFFICER HAS TO BE IGNORED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUE ARISES FOR CONSIDERATION IS ESTIMATION OF FAIR MARKET VALU E AS ON 01.04.1981. THE FAIR MARKET VALUE IS NOT A CONSTAN T FIGURE. IT MAY VARY DEPENDING ON VARIOUS FACTORS SUCH AS AREA OF T HE LAND, LOCATION OF THE LAND, INFRASTRUCTURE FACILITIES AVAILABLE AR OUND THE LAND AND POTENTIAL FOR FUTURE DEVELOPMENT, ETC. IN THIS CAS E, NEITHER THE ASSESSING OFFICER NOR THE VALUATION OFFICER HAS CON SIDERED THE LOCATION OF THE PROPERTY, INFRASTRUCTURE FACILITIES AVAILABLE AROUND THE LAND, AREA OF THE LAND AND POTENTIAL FOR FUTURE DEV ELOPMENT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GUIDELIN E VALUE DOES NOT 4 I.T.A. NO.1780/CHNY/18 REFLECT THE FAIR MARKET VALUE ALWAYS. THE GUIDELIN E VALUE IS ONLY TO GUIDE THE SUB-REGISTRAR TO DETERMINE THE FAIR MARKE T VALUE FOR THE PURPOSE OF COLLECTION OF STAMP DUTY. THEREFORE, TH E GUIDELINE VALUE IS ALSO ONE OF THE FACTORS TO BE TAKEN INTO CONSIDE RATION FOR THE PURPOSE OF DETERMINATION OF FAIR MARKET VALUE AS ON 01.04.1981. 5. APART FROM GUIDELINE VALUE, THE ASSESSING OFFICE R IS ALSO EXPECTED TO TAKE INTO CONSIDERATION THE LOCALITY WH EREIN THE SUBJECT LAND IS SITUATED, INFRASTRUCTURE FACILITIES AVAILAB LE AROUND THE LAND, POTENTIAL FOR FUTURE DEVELOPMENT, AVAILABILITY OF M EDICAL FACILITIES, TRANSPORT FACILITIES LIKE AIRPORT, BUS STAND AND RA ILWAY STATION. UNFORTUNATELY, THESE FACTORS WERE NOT TAKEN INTO CO NSIDERATION BY EITHER OF THE AUTHORITIES BELOW. THEREFORE, THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECO NSIDERED. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF TH E ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER A ND BRING ON RECORD THE LOCALITY OF THE BUILDING, POTENTIAL FOR FUTURE DEVELOPMENT, AVAILABILITY OF INFRASTRUCTURE FACILITIES SUCH AS H OSPITALS, EDUCATIONAL INSTITUTIONS, ROAD TRANSPORT FACILITIES, ETC AND TH EREAFTER DECIDE THE 5 I.T.A. NO.1780/CHNY/18 ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. THE NEXT ISSUE ARISES FOR CONSIDERATION IS RENT PAID BY THE DEVELOPER / BUILDER FOR ALTERNATIVE ACCOMMODATION. 7. SHRI T. PRAMODKUMARCHOPDA, THE LD.COUNSEL FOR TH E ASSESSEE, SUBMITTED THAT THE RENT PAID BY THE BUILD ER TO THE ASSESSEE DURING THE PERIOD OF CONSTRUCTION WAS TAKE N AS PART AND PARCEL OF SALE CONSIDERATION BY THE ASSESSING OFFIC ER. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE WAS RESIDING IN HIS O WN HOUSE AND TO ACCOMMODATE THE ASSESSEE DURING THE COURSE OF CONST RUCTION, THE BUILDER PAID RENT TO THE ASSESSEE, THEREFORE, IT CA NNOT BE TAKEN AS SALE CONSIDERATION. 8. WE HEARD SHRI R. CLEMENT RAMESH KUMAR, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. SINCE THE MAIN I SSUE REGARDING DETERMINATION OF FAIR MARKET VALUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THIS ISSUE ALSO NEEDS TO BE RECONSIDERED BY THE ASSESSIN G OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSES SING OFFICER. THE 6 I.T.A. NO.1780/CHNY/18 ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER AND F IND OUT WHETHER THE RENT PAID BY THE DEVELOPER / BUILDER TO THE ASS ESSEE DURING THE COURSE OF CONSTRUCTION IS PART OF SALE CONSIDERATIO N OR NOT AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WI TH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 9. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WHETH ER THE ASSESSEE HAS TRANSFERRED ONLY A VACANT LAND OR LAND ALONGWITH BUILDING. 10. THIS ISSUE ALSO NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER FOR THE SAKE OF CONSISTENCY. SINCE THE MAI N ISSUE OF DETERMINATION OF FAIR MARKET VALUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THIS ISSUE ALSO NEEDS TO BE RECONSIDERED BY THE ASSESSIN G OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF TH E ASSESSING OFFICER. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7 I.T.A. NO.1780/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 16 TH NOVEMBER, 2018AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 16 TH NOVEMBER, 2018. KRI. - +056 76'0 /COPY TO: 1. )*/ APPELLANT 2. +,)*/ RESPONDENT 3. / 80 () /CIT(A)-2, CHENNAI-34 4. PRINCIPAL CIT, CHENNAI-1, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.