ITO, NCW - 10 (5), CHENNAI V. SHRI R. RAMADOSS, CHENNAI

ITA 1896/CHNY/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 6828 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 21-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N ARJUN RAJC A S SRIDHAR
• Assessee Lawyers: P MUTHUSHANKAR
• Keywords: Cost of acquisition; Fair market value; Set aside; Capital Gains
• Section: 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , , ' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 1896/CHNY/2019 / ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, NON-CORPORATE WARD -10(5), ROOM NO. 627, 6 TH FLOOR, WANAPARTHY BLOCK, 121 M G ROAD, CHENNAI 600 034. VS. SHRI. R. RAMADOSS, FLAT NO. F-V, TENERIFE TERRACES, 173/3, POONAMALLE HIGH ROAD, KILPAUK, CHENNAI 600 010. [PAN: ALQPR 8704D] ( / APPELLANT) ( #$& /RESPONDENT ) & ' / APPELLANT BY : SHRI. N. ARJUNRAJ, CA FOR S. SRIDHAR, ADVOCATE #$& ' / RESPONDENT BY : SHRI. P. MUTHUSHANKAR, JCIT ' /DATE OF HEARING : 01.10.2019 ' /DATE OF PRONOUNCEMENT : 23.12.2019 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE REVENUE FILED THIS APPEAL AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNAI IN ITA NO. 51/CIT(A)-12/2014-15 DATED 26.03.2019 FOR ASSESSMEN T YEAR 2008-09. :-2-: ITA NO.1896/CHNY/2019 2. THERE IS A DELAY OF 13 DAYS IN FILING THE APPEAL . THE AO FILED A CONDONATION PETITION EXPLAINING THE REASON FOR THE DELAY. AFTER HEARING THE PARTIES, WE CONDONE THE DELAY. 3. SHRI R. RAMADOSS, THE ASSESSEE, AND CO-OWNERS S OLD A PROPERTY FOR A CONSIDERATION OF RS. 5,18,23,000/-, OF WHICH THE ASSESSEES SHARES WAS RS. 2,46,62,500/-. AFTER BROKERAGE, THE SAME W AS DECLARED BY THE ASSESSEE AND ACCEPTED BY THE DEPARTMENT. AS THE PR OPERTY WAS INHERITED PRIOR TO 1981, THE ASSESSEE HAD ADOPTED T HE FAIR MARKET VALUE OF THE PROPERTY @ 100 PER SQ.FT. AS ON 01.04.1981 W HILE ARRIVING THE INDEXED COST OF ACQUISITION FOR THE PURPOSE OF COMP UTING THE LONG TERM CAPITAL GAINS. WHILE MAKING THE ASSESSMENT, INTER ALIA, THE AO BASED ON COMMUNICATION RECEIVED FROM THE SUB-REGISTRAR ADOPT ING THE RATE AT 15 PER SQ.FT. AS ON 01.04.1981. AGGRIEVED, THE ASSES SEE FILED AN APPEAL BEFORE THE CIT(A). 4. BEFORE THE LD. CIT(A), THE ASSESSEE BROUGHT TO H IS NOTICE, THE DECISION OF THIS TRIBUNAL IN THE CO-OWNERS CASES VI Z., MR. S.S. MANTHIRIKUMAR & SMT. BANUMATHY, IN ITA NOS. 1931/CH NY/2016 & 1970/CHNY/2016 FOR ASSESSMENT YEAR 2008-09 DATED 07 .03.2019. THIS HONBLE TRIBUNAL BY CONSIDERING THE LOCATION AND PO TENTIAL FOR FUTURE DEVELOPMENT ACCEPTED THE FAIR MARKET VALUE AS ON 01 .04.1981 AT RS. :-3-: ITA NO.1896/CHNY/2019 100 PER SQ.FT. THEREFORE, THE LD. CIT(A) FOLLOWING THAT DECISION DIRECTED THE AO TO ADOPT THE RATE AT RS. 100 PER SQ.FT. AS O N 01.04.1981 AND RE- COMPUTED THE CAPITAL GAINS. 5. AGGRIEVED AGAINST THAT ORDER, THE REVENUE FILED THIS APPEAL WITH THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW AND FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE CIT(A) HAS ERRED IN DIRECTING THE AO TO RE-C OMPUTE THE LONG TERM CAPITAL GAINS BY ADOPTING THE RATE ON SIM ILAR LINES IN THE CASE OF CO-OWNERS OF THE SAME PROPERTY AS HELD BY T HE HONBLE ITAT. 3. THE CIT(A) HAS ERRED IN DIRECTING THE AO TO ADOP TE THE FAIR MARKET VALUE @ 100/- PER SQ.FT. AS PER ITATS ORDER IN THE CASE OF OTHER CO-OWNERS. 4. THE CIT(A) HAS NOT CONSIDERED THE FACT THAT THER E WAS NO DOCUMENTARY EVIDENCE FURNISHED BY THE ASSESSEE AT A NY STAGE FOR ADOPTION OF RS. 100 SQ.FT. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . THE LD. DR ARGUED THE CASE ON THE LINES OF GROUNDS OF APPEAL, SUPRA. PER CONTRA, THE LD. AR RELIED ON THE DECISION OF TH E CIT(A). 6. WE HEARD THE RIVAL SUBMISSIONS CAREFULLY. THE R ELEVANT PORTION OF THE ORDER OF THIS TRIBUNAL, SUPRA, IS EXTRACTED AS UNDER: :-4-: ITA NO.1896/CHNY/2019 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. VALUATION OF PROPERTY AS ON 01.04.1981 HAS TO BE MADE ON THE BAS IS OF THE LOCATION OF THE PROPERTY, POTENTIAL FOR FUTURE DEVELOPMENT, AVAILABILITY OF INFRASTRUCTURE AROUND THE PROPERTY, ACCESS TO THE I NFRASTRUCTURE FACILITIES, ETC. IN THIS CASE, THE ASSESSING OFFIC ER HAS SIMPLY FOLLOWED THE GUIDELINE VALUE FIXED BY THE SUB-REGISTRAR FOR REGISTRATION OF PROPERTY AT G1.38 PER SQ.FT. IT IS WELL SETTLED PR INCIPLES OF LAW THAT THE GUIDELINE VALUE IS ONLY TO GUIDE THE SUB-REGISTRAR TO FIND OUT MARKET VALUE OF THE PROPERTY FOR THE PURPOSE OF COLLECTION OF STAMP DUTY. THE GUIDELINE VALUE MAY NOT ALWAYS REPRESENT THE MARKET VALUE. THE MARKET VALUE IS SOMETHING DIFFERENT FROM GUIDELINE VALUE, WHICH IS PRESCRIBED FOR GUIDING THE SUB-REGISTRAR TO FIND OU T THE MARKET VALUE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MAR KET VALUE IS NOT A CONSTANT FIGURE. IT WOULD FLUCTUATE DEPENDING UPON VARIOUS FACTORS SUCH AS THE AREA OF THE LAND, LOCATION OF LAND, AVA ILABILITY OF INFRASTRUCTURE FACILITIES AROUND THE LAND, POTENTIA L FOR FUTURE DEVELOPMENT, ACCESS TO THE INFRASTRUCTURE FACILITIE S TO THE LAND, ETC. THE ASSESSING OFFICER WITHOUT CONSIDERING ANY OF TH ESE FACTORS, HAS SIMPLY ADOPTED THE GUIDELINE VALUE OF THE REGISTRAT ION AUTHORITY. 6. FROM THE DEPARTMENTAL VALUATION OFFICERS REPORT IN THE CASE OF ONE OF THE CO-OWNERS, IT APPEARS THAT THE PROPER TY IS LOCATED IN PRIME LOCATION OF CUDDALORE. THE PROPERTY APPEARS TO HAVE BEEN LOCATED ON THE EASTERN SIDE OF LINK ROAD TO RAILWAY OVER BRIDGE AND CUDDALORE MAIN BUS STAND. THE DEPARTMENTAL VALUATI ON OFFICER HAS ALSO NOTED THAT IT IS LOCATED ON THE REAR SIDE OF B USY LAWRENCE ROAD AND EVEN IN THE YEAR 1981, THE DEPARTMENTAL VALUATI ON OFFICER FOUND THAT THERE WAS HIGH POTENTIAL FOR DEVELOPMENT OF PR OPERTY AS COMMERCIAL CAMPUS / CINEMA THEATRES / KALYANA MANDA PAM, ETC. THE FRONTAGE OF THE BUILDING IS ADMITTEDLY 178 FT. BY CONSIDERING THE NATURE OF BUILDING, FUTURE DEVELOPMENT AND POTENTIA L FOR ESTABLISHING COMMERCIAL CAMPUS / CINEMA THEATRES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE VALUE OF THE PROPERTY C OULD NATURALLY BE :-5-: ITA NO.1896/CHNY/2019 ESTIMATED AT G100 PER SQ.FT. AS ESTIMATED BY THE AS SESSEES. EVEN THOUGH THE VALUATION OFFICER HAS TAKEN THREE INSTAN CES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT BY CONSIDERING THE L OCATION AND POTENTIAL FOR FUTURE DEVELOPMENT, IT WOULD EASILY F ETCH G100/- PER SQ.FT. AS ON 01.04.1981. THEREFORE, THIS TRIBUNAL IS UNAB LE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, ORDE RS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO TAKE THE MARKET VALUE AS ON 01.04.1981 AT G100/- PE R SQ.FT. AND THEREAFTER RECOMPUTE THE CAPITAL GAIN. FROM THE ABOVE, IT IS CLEAR THAT THE LD. CIT(A) FOL LOWED THE DECISION OF THIS TRIBUNAL IN THE CO-OWNERS CASE, SUPRA. THEREF ORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. C IT(A). THE CORRESPONDING GROUNDS OF THE REVENUES APPEAL IS DI SMISSED. 7. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED ON 23 RD DECEMBER, 2019 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 23 RD DECEMBER, 2019 JPV '#1232 /COPY TO: 1. & / APPELLANT 2. #$& /RESPONDENT 3. 4 ) ( /CIT(A) 4. 4 /CIT 5. 2# /DR 6. 7 /GF