THE ESTATE OF SHBHACHAND HIRALAL KHOTAD TRUST, MUMBAI V. ITO WD 12(1)(4), MUMBAI

ITA 1841/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100910 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 18-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Corroborative evidences; Valuation report

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND RAM L AL NEGI, JUDICIAL MEMBER / I .T.A. NO. 1841/ MUM /2014 ( / ASSESSMENT YEAR : 2004 - 05 THE ESTATE OF SHOBHACHAND HIRALAL KHATOD TRUST, EMPIRE HOUSE, 3 RD FLOOR, 214, DADABHAI NOWROJI ROAD, FORT, MUMBAI - 400 001 / VS. THE ITO, WARD - 12(1)(4), MUMBAI ./ ./ PAN/GIR NO. : AAFTS 4256F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: DR. K. SHIVARAM SHRI RAHUL R. SARDA / RESPONDENT BY: SHRI AJAY MODI / DATE OF HEARING : 0 7 .0 9 .2015 / DATE OF PRONOUNCEMENT : 0 7 .0 9 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - IT/TP, PUNE D ATED . 30.1.2014 PERTAINING TO ASSESSMENT YEAR 200 4 - 0 5 . 2. THE ASSESSEE HAS RAISED FOUR SUBSTANTIVE GROUNDS OF APPEAL. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT UNDER THE ITA. NO. 1841/M/2014 2 INSTRUCTIONS HE IS NOT PRESSING GROUND NO. 1. GROUND NO. 1 IS ACCORDINGLY DISMISSED AS NOT PRESSED. 3. GROUND NO. 2 TO 4 RELATES TO THE SAME ISSUE IN RESPECT OF THE COST OF ACQUISITION AS ON 1.4.1981. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE TRUST. FROM THE EXTRACTS OF PROPERTY REGISTER IN FORM INDEX - 11 RECEIVED FROM SUB - REGISTRAR SHRIRAMPUR THE ASSESSING OFFICER FOUND THAT THE ASSESSEE - TRUST HAS SOLD PLOT NO. 1051A IN CTS NO. 767 ADMEASURING 4085.54 SQ. MTRS ALO NG WITH A GODOWN BUILDING ADMEASURING 1001.78 SQ. MT R S. THE AO FURTHER NOTICED THAT THE PROPERTY IS SITUATED WITHIN THE MUNICIPAL JURISDICTION OF SHRIRAMPUR NAGAR PARISHAD. THE PROPERTY WAS SOLD ON 12.12.2003 FOR A CONSIDERATION OF RS. 35 LAKHS. THE G OVERNMENT VALUATION OF WHICH WAS RS. 97,08,000/ - . 4.1. FURTHER PROBE, THE AO NOTICED THAT THE YEAR OF ACQUISITION IS 1954 THEREFORE AS PER THE PROVISIONS OF SEC. 55(2)(B)(I) OF THE ACT, THE COST OF ACQUISITION AS ON 1.4.1981 IS TO BE ADOPTED. THE AO FU RTHER OBSERVED THAT THE ASSESSEE - TRUST HAS NOT PROVIDED ANY INFORMATION WITH SUPPORTING EVIDENCES REGARDING THE COST OF ACQUISITION. THE AO PROCEEDED BY TAKING THE COST OF ACQUISITION AS ON 1.4.1981 AT RS. 50/ - PER SQ. MTR. AND ACCORDINGLY COMPUTED THE CA PITAL GAINS. 5. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND CHALLENGED THE COST OF ACQUISITION ADOPTED BY THE AO AT RS. 50/ - . IN SUPPORT OF ITS CLAIM, THE ASSESSEE FURNISHED COPY OF A ITA. NO. 1841/M/2014 3 GOVERNMENT REGISTERED APPROVED VA LUER CLAIMING THE COST OF ACQUISITION AS ON 1.4.1981 AT RS. 200.02 PER SQ. MTR. AFTER CAREFULLY PERUSING THE VALUATION REPORT, THE RELEVANT PORTION OF WHICH IS EXTRACTED AT PARA - 2.2.11 OF LD. CIT(A)S ORDER. THE LD. CIT(A) ARRIVED AT THE AVERAGE SALE RA TE AT RS. 55.53 PER SQ. MTR AND DIRECTED THE AO TO RECOMPUTE THE CAPITAL GAIN BY ADOPTING RS. 55.53 PER SQ. MTR AS THE COST OF ACQUISITION ON 1.4.1981. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE GOVERNMENT APPROVED VALUERS REPORT VEHEMENTLY SUBMITTED THAT THE VALUER HAS CONSIDERED 8 COMPARABLES FOR ARRIVING THE COST OF ACQUISITION AS ON 1.4.1981. THE LD. CIT(A) HAS ACCEPTED 7 COMPARABLES AND WITHOUT ASSIGNING ANY COGENT REASON REJECTED THE 8 TH COMPARABLES. IT IS THE SAY OF THE LD. COUNSEL THAT ONCE THE VALUERS REPORT HAS BEEN ACCEPTED, THE VALUATION SHOULD ALSO BEEN ACCEPTED BY THE FIRST APPELLATE AUTHORITY. 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF T HE AO AND THE FIRST APPELLATE AUTHORITY. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY DISPUTE IS THE DETERMINATION OF COST OF ACQUISITION AS ON 1.4.1981. THE VALUATION ADOPTED BY THE ASSESSEE IS SUPPORTED BY A GOVERNMENT APPROVED VALUERS REPORT WHEREAS THE VALUATION S DETERMINED BY THE REVENUE AUTHORITIES ARE BASED ON ITA. NO. 1841/M/2014 4 ASSUMPTION AND CONJECTURES . WE FIND FORCE IN THE SUBMISSION OF THE LD. COUNSEL THAT ONCE THE VALUATION REPORT HAS BEEN ACCEPTED TH EN THERE IS NO REASON WHY ONE COMPARABLE IS NOT ACCEPTED. WE FIND THAT THE VALUATION IN RESPECT OF 7 COMPARABLES RANGES FROM RS. 49/ - TO RS. 73/ - WHEREAS ONE COMPARABLE, THE VALUATION IS TAKEN AT RS. 408/ - JUST BECAUSE THIS VALUATION IS AT AN EXORBITANT F IGURE, THE SAME CANNOT BE BRUSHED ASIDE LIGHTLY BECAUSE IT IS PART OF THE VALUERS REPORT. HOWEVER, TO PUT AN END TO THE LITIGATION, CONSIDERING THE PECULIARITY OF THE CASE, IT IS AGREED BY BOTH LD. COUNSEL THAT THE RATE SHOULD BE TAKEN AT RS. 150/ - PER S Q. MTR FOR WORKING OUT THE COST OF ACQUISITION AS ON 1.4.1981. ON THIS CONCESSION, WE RESTORE THIS ISSUE TO THE FILE OF THE AO. THE AO IS DIRECTED TO RECOMPUTE THE CAPITAL GAINS BY TAKING RS. 150/ - PER SQ. MTR AS THE COST OF ACQUISITION AS ON 1.4.1981. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 7 TH SEPTEMBER , 2015 . SD/ - SD/ - ( RAM L AL NEGI ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 7 TH SEPTEMBER , 2015 . . ./ RJ , SR. PS ITA. NO. 1841/M/2014 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI