SHRI RAM BALLABH RAWAT, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 19/JPR/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9873 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 03-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: M L BORAD
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Salary income; Cost of acquisition; Reasonable cause; Fair market value; Valuation report; Right to appeal
• Section: 50C; 133(6); 54; 37; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 19/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2011-12 SHRI RAM BALLABH RAWAT 4 TH FLOOR, HALDIA HOUSE JOHARI BAZAR, JAIPUR CUKE VS. THE ITO, WARD 5(4), NCRB, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABLPR1815Q VIHYKFKHZ@ APPELLA NT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI M. L. BORAD (ADVOCATE) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K. C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/09/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 04/12/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT (A)-2, JAIPUR DATED 30.10.2017 FOR ASSESSMENT YEAR 2011-12 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APP EAL:- 1. THAT THE LEARNED COMMISSIONER (APPEALS) ERRED I N SUSTAINING ADDITION OF RS. 27,08,092/- [INCOME DECL ARED IN THE RETURN OF INCOME UNDER THE HEAD LONG TERM CAPITAL G AIN AT A LOSS OF RS. 3,73,800/- + POSITIVE INCOME ASSESSED BY THE AO IN THE IMPUGNED ASSESSMENT UNDER THE HEAD LONG TERM CAPITA L GAIN AT RS. 23,34,292/-] MADE BY THE AO UNDER THE HEAD LON G TERM CAPITAL GAIN BY ASSESSING INCOME UNDER THE HEAD LO NG TERM ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 2 CAPITAL GAIN AT RS. 23,34,292/- AS AGAINST LOSS OF RS. 3,73,800/- DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME UN DER THE HEAD LONG TERM CAPITAL GAIN, WHICH SUSTAINING OF ADDITIO N OF RS. 27,08,092/- UNDER THE HEAD LONG TERM CAPITAL GAIN I S MOST ARBITRARY, UNJUST, UNTENABLE AND BAD IN FACT AND IN LAW AND IN THE ALTERNATIVE IT IS HIGHLY EXCESSIVE W.R.T FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE SUSTAINING BY THE LEARNED COMMISSIONER (APPEALS) VALUE OF THE SOLD PROPERTY AT RS. 92,80,201/- AS ADOPTED BY THE AO U/S 50C AS AGAINST APPARENT SALE CONSIDERATION OF RS. 75,00,000/- IS U NJUSTIFIED AND NOT MAINTAINABLE IN LAW AND IN THE ALTERNATIVE EXCE SSIVE. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE UPHOLDING BY THE LEARNED COMMISSIONER (APPEALS) COST OF ACQUI SITION OF THE LAND AT RS. 38,500/- AS AGAINST COST OF ACQUISITION ADOPTED BY THE APPELLANT AT RS. 5,80,000/- IN THE RETURN OF INCOME WHILE WORKING OUT LONG TERM CAPITAL GAIN IS HIGHLY UNJUSTIFIED AN D IN THE ALTERNATIVE VERY LOW. 4. THAT THE LEARNED COMMISSIONER (APPEALS) ERRED IN SUSTAINING ADDITION OF RS. 36,000/- MADE BY THE AO UNDER THE HEAD SALARY INCOME BY TAKING THE INCOME FROM SALARY AT RS. 1,80,000/- AS AGAINST THE CORRECT INCOME OF SALARY AT RS. 1,44,000/- AS DECLARED BY THE ASSESSEE IN THE RETUR N OF INCOME, WHICH SUSTENANCE OF ADDITION OF RS. 36,000/- UNDER THE HEAD SALARY INCOME IS UNJUST AND IN THE ALTERNATIVE EX CESSIVE. 2. GROUND NO. 1 IS GENERAL IN NATURE AND DOES NOT R EQUIRE A SEPARATE ADJUDICATION. ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 3 3. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED CON SIDERATION OF DEEMED SALE CONSIDERATION U/S 50C AS AGAINST SALE C ONSIDERATION OF RS. 75,00,000/- AS PER THE REGISTERED SALE DEED. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO SOUGHT INFORMATION F ROM SUB-REGISTRAR REGARDING THE VALUE TAKEN FOR THE PURPOSE OF STAMP DUTY PURPOSES. THE REGISTRAR VIDE HIS LETTER DATED 24.12.2013 SUBMITTE D A COPY OF CONVEYANCE DEED WHEREIN THE VALUE HAS BEEN TAKEN AT RS. 92,80,201. THEREFORE, THE ASSESSEE WAS ASKED BY THE AO TO SHOW CAUSE AS TO WHY THE SALE CONSIDERATION TO THE EXTENT OF 50% OF HIS SHARE IN PROPERTY AMOUNTING TO RS. 46,49,100/- SHOULD NOT BE TAKEN FO R THE PURPOSE OF COMPUTING THE CAPITAL GAINS AND ALONG WITH THE SHOW CAUSE NOTICE, A COPY OF THE ORDER OF SUB-REGISTRAR WAS ALSO PROVIDE D TO THE ASSESSEE ALONG WITH NOTICE U/S 54 OF THE STAMP ACT. IN RESPO NSE, THE ASSESSEE VIDE HIS SUBMISSION DATED 13.02.2014 REFERRING TO T HE NOTICE ISSUED U/S 54 OF THE STAMP ACT SUBMITTED THAT THE MATTER OF A DOPTING HIGHER VALUATION IS PENDING BEFORE THE SUB-REGISTRAR AND A NOTICE CANNOT BECOME A GOOD BASIS OF ADOPTING HIGHER VALUATION UN TIL A FORMAL ORDER BY THE REGISTERING AUTHORITY. THE ASSESSEE FURTHER SUBMITTED THAT EVEN AFTER PASSING OF THE REVISED ORDER BY THE REGISTERI NG AUTHORITY, THE EFFECTED PARTIES ARE GIVEN RIGHT OF APPEAL. IN OTHE R WORDS, UNTIL THE REVISED ORDER AS WELL AS ORDER OF APPELLATE AUTHORI TIES IS FINALIZED THE VALUE ALREADY ADOPTED BY THE REGISTERING AUTHORITY AT THE TIME OF REGISTERING OF SALE DEED SHOULD NOT BE CHANGED. THE SUBMISSIONS SO FILED BY THE ASSESSEE WERE NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER. AS PER THE ASSESSING OFFICER, THE ASSESSE E HAS NOT SUBMITTED ANY DOCUMENT IN SUPPORT OF HIS CONTENTION THAT THE MATTER OF ADOPTING HIGHER VALUATION IS PENDING BEFORE THE SUB-REGISTRA R. ACCORDINGLY, THE ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 4 AO ADOPTED SALE CONSIDERATION OF RS. 92,80,201/- AS PER PROVISIONS OF SECTION 50C AS AGAINST SALE CONSIDERATION OF RS. 75 ,00,000/- SHOWN BY THE ASSESSEE. ON APPEAL, LD. CIT(A) CONFIRMED THE S AID POSITION TAKEN BY THE AO REGARDING APPLICATION OF SECTION 50C OF T HE ACT. 5. DURING THE COURSE OF HEARING, THE LD AR REITERA TED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. THE LD. AR SUBM ITTED THAT THE NOTICE GIVEN BY REGISTERING AUTHORITY FOR ADOPTING HIGHER VALUATION THAN WHAT IS MENTIONED IN THE SALE DEED CANNOT BECOME A VALID BA SIS OF ADOPTING HIGHER VALUATION UNTIL A FORMAL ORDER IS PASSED BY THE REGISTERING AUTHORITY. IT WAS SUBMITTED THAT THE THE LD. CIT(A) FURTHER FAILED TO APPRECIATE THAT EVEN AFTER PASSING OF THE REVISED O RDER BY THE REGISTERING AUTHORITY, THE EFFECTED PARTIES ARE GIV EN RIGHT OF APPEAL UNDER THE LAW AND UNTIL THE REVISED ORDER AS WELL A S APPELLATE ORDER, IF ANY, ARE FINALIZED THE VALUE ALREADY ADOPTED BY THE REGISTERING AUTHORITY AT THE TIME OF REGISTRATION OF SALE DEED CANNOT BE CHANGED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. AS PER REGISTERED SALE DEED D ATED 12.01.2011, THE SALE CONSIDERATION HAS BEEN STATED AS RS 75,00,000 AND AT THE SAME VALUE, THE PROPERTY HAS BEEN REGISTERED AND THE STA MP DUTY HAS BEEN PAID WHICH HAS BEEN TAKEN AS A BASIS FOR DECLARING SALES CONSIDERATION BY THE ASSESSEE. HOWEVER, AS PER SUB-REGISTRAR LET TER DATED 24.12.2013, VALUE AS PER CONVEYANCE DEED IS RS 92,8 0,201 AND A COPY OF CONVEYANCE DEED ALONG WITH COPY OF ORDER OF THE SUB-REGISTRAR WAS SHARED WITH AO. AT THE SAME TIME, THERE IS A REFERE NCE OF NOTICE ISSUED UNDER 54 OF THE STAMP ACT IN THE SAID COMMUNICATION OF THE SUB- REGISTRAR. RELYING SOLELY ON THE SAID NOTICE, THE CONTENTION OF THE ASSESSEE IS THAT THE HIGHER STAMP VALUE HAS NOT BEE N FINALIZED BASIS THE NOTICE ISSUED UNDER SECTION 54 OF THE STAMP ACT AND IT COULD BE SUBJECT ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 5 MATTER OF APPEAL AND TILL SUCH TIME, SUCH HIGHER VA LUE HAS NOT BEEN FINALIZED, THE SAME CANNOT BE ACCEPTED FOR SECTION 50C PURPOSES. THE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTATION IN SUPPORT OF THE FACT THAT SUCH HIGH ER VALUATION SO ADOPTED BY THE REGISTERING AUTHORITY HAS BEEN CHALL ENGED IN APPEAL. THE COPY OF CONVEYANCE DEED, THE ORDER OF THE SUB-REGIS TRAR, THE NOTICE UNDER SECTION 54 OF THE STAMP ACT AND THE STATUS OF ANY APPEAL BEING PREFERRED AGAINST THE SAID ORDER ARE NOT BROUGHT ON RECORD BY EITHER OF THE PARTIES. IN ABSENCE OF ADEQUATE MATERIAL ON RE CORD, WE ARE THEREFORE UNABLE TO TAKE A VIEW IN THE MATTER. AT THE SAME TIME, WE NOTE THAT THERE ARE ADEQUATE PROVISIONS IN TERMS OF SECTION 155(15) OF THE ACT WHICH TAKE CARE AND ADDRESSES THE SITUATION IN SUCH FACT PATTERN WHICH READS AS UNDER: (15) WHERE IN THE ASSESSMENT FOR ANY YEAR, A CAPIT AL GAIN ARISING FROM THE TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUIL DING OR BOTH, IS COMPUTED BY TAKING THE FULL VALUE OF THE CONSIDERAT ION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER TO BE THE VALU E ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURP OSE OF PAYMENT OF STAMP DUTY IN ACCORDANCE WITH SUB-SECTION (1) OF SE CTION 50C, AND SUBSEQUENTLY SUCH VALUE IS REVISED IN ANY APPEAL OR REVISION OR REFERENCE REFERRED TO IN CLAUSE (B) OF SUB-SECTION (2) OF THAT SECTION, THE ASSESSING OFFICER SHALL AMEND THE ORDER OF ASSESSME NT SO AS TO COMPUTE THE CAPITAL GAIN BY TAKING THE FULL VALUE OF THE CO NSIDERATION TO BE THE VALUE AS SO REVISED IN SUCH APPEAL OR REVISION OR R EFERENCE; AND THE PROVISIONS OF SECTION 154 SHALL, SO FAR AS MAY BE, APPLY THERETO, AND THE PERIOD OF FOUR YEARS SHALL BE RECKONED FROM THE END OF THE PREVIOUS YEAR IN WHICH THE ORDER REVISING THE VALUE WAS PASSED IN THAT APPEAL OR REVISION OR REFERENCE. ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 6 THE MATTER IS ACCORDINGLY SET-ASIDE TO THE FILE OF THE AO TO EXAMINE THE SAME A FRESH AFTER SEEKING REQUISITE INFORMATION FR OM THE SUB-REGISTRAR AUTHORITY REGARDING THE FINAL VALUE SO DETERMINED I N RESPECT OF IMPUNGED PROPERTY AND DECIDE AS PER LAW TAKING INTO CONSIDERATION THE ABOVE DISCUSSIONS. IN THE RESULT, THE GROUND IS AL LOWED FOR STATISTICAL PURPOSES. 7. IN RESPECT OF GROUND NO. 2, THE ASSESSEE HAS CHA LLENGED THE COST OF ACQUISITION OF THE LAND TAKEN BY THE AO AT RS. 3 8,500/- AS AGAINST COST OF ACQUISITION TAKEN BY THE APPELLANT AS RS. 5 ,80,000/- IN THE RETURN OF INCOME WHILE WORKING OUT LONG TERM CAPITAL GAINS ON SALE OF PROPERTY SITUATED AT B-8, RAGHUNATH COLONY, NEAR GALTA GATE, JAIPUR WHICH WAS JOINTLY OWNED BY THE ASSESSEE ALONG WITH HIS BROTHE R. THE ASSESSEE HAS TAKEN THE VALUATION AS ON 01.04.1981 BASED ON REGIS TERED VALUERS REPORT WHEREAS THE ASSESSING OFFICER HAS CONSIDERED THE COST OF THE ACQUISITION BASED ON THE PURCHASE DEED DATED 17.04. 1980 RELATING TO THE IMPUNGED PROPERTY WHEREIN THE PURCHASE CONSIDER ATION HAS BEEN SHOWN AT RS 35,000/- AND GIVING BENEFIT OF 10% APPR ECIATION FOR COST OF ACQUISITION, THE AO HAS CONSIDERED RS. 38,500/- AS THE COST OF ACQUISITION. AS PER THE ASSESSING OFFICER, THE INF ORMATION WAS CALLED FROM THE ASSESSEES REGISTERED VALUER U/S 133(6) AN D HE HAS SUBMITTED THAT NO DOCUMENT/PURCHASE DEED WAS PROVIDED BY THE ASSESSEE. FURTHER, THE ASSESSING OFFICER OBSERVED THAT THE PR OPERTY IS A RESIDENTIAL PROPERTY AS ALSO EVIDENCED BY THE SALE DEED DATED 1 7.04.1980 WHEREIN THE REGISTRAR HAS TREATED THE SAME AS RESIDENTIAL H OUSE WHEREAS THE VALUER HAS TAKEN COMMERCIAL RATE WHILE VALUING THE SAID PROPERTY. ON APPEAL, THE LD. CIT(A) HAS CONFIRMED THE SAID ADDIT ION AND NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 8. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED AS UNDER:- ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 7 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE SUSTENANCE OF ADDITION OF RS.27,08,092/- [INCOME DECLARED IN THE RETURN OF INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN AT A LOSS OF RS.3,73,800/- + POSITIVE INCOME ASSESSED BY THE AO IN THE IMPUGNED ASSESSMENT UNDER THE HEAD LONG TERM CAPITAL GAIN AT RS.23,34,292/-] BY THE LEARNED COMMISSIONER(APPEALS) UNDER THE HEAD 'LONG TERM CAP ITAL GAIN' BY ASSESSING INCOME UNDER THE HEAD LONG TERM CAPITAL G AIN AT RS.23,34,292/- AS AGAINST LOSS OF RS.3,73,800/- DEC LARED BY THE ASSESSEE IN THE RETURN OF INCOME IS UNJUSTIFIED AND IN THE ALTERNATIVE EXCESSIVE. 2. THAT BEFORE MAKING THE ABOVE ADDITION THE LEARNE D CIT(A) FAILED TO APPRECIATE THAT THE REASON OF INCREASE IN VALUE OF THE LAND FROM APPARENT PURCHASE CONSIDERATION OF RS.35,000/- AS A GREED IN FEBRUARY 1978 TO RS.5,49,780/- AS ON 01.04.1981 IS ON ACCOUN T OF APPRECIATION IN VALUE OF THE LAND BETWEEN FEBRUARY 1978 TO 31-3-198 1. THIS APPRECIATION IN VALUE IS MAINLY ATTRIBUTED TO THE F ACTS THAT IN THE YEAR 1980 CONSTRUCTION OF HUNDREDS OF SHOPS OVER THE LAN D OF SURAJPOLE ANAJ MANDI, WHICH IS IN IMMEDIATE VICINITY OF THE IMPUGN ED PROPERTY, WERE STARTED. ON ACCOUNT OF CONSTRUCTION OF SHOPS HAVING STARTED IN SURAJPOLE ANAJ MANDI, ASSESSEES LAND ACQUIRED COMMERCIAL VAL UE. IT IS NORMAL PHENOMENA THAT COMMERCIAL PROPERTY HAS A HIGHER VAL UE IN COMPARISON TO RESIDENTIAL ONE AND SO IS THE CASE IN RELATION T O THE ABOVE MENTIONED LAND. IN VIEW OF THIS, THE FAIR MARKET VALUE SHOWN BY ASSESSEE AS ON 01.04.1981 IS THUS IN QUITE CONSONANCE AND RATHER A S PER THE VALUATION MADE BY THE GOVERNMENT APPROVED VALUER. A COPY OF T HIS VALUATION REPORT FORMS PART OF THE PAPER BOOK BEING FILED SIM ULTANEOUSLY AND SEPARATELY. ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 8 3 THAT THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATE D THAT THE INCOME DECLARED UNDER LTCG AT A LOSS OF RS.3,73,800 /- AS PER WORKING GIVEN HEREUNDER WAS QUITE IN ORDER AND IT SHOULD HA VE BEEN ACCEPTED AS IT IS. WORKING OF LONG TERM CAPITAL GAIN IS AS UNDER: SALE CONSIDERATION RS. 37,50,000/- LESS: 1.VALUE OF THE COMPLETE HOUSE PROPERTY AS ON 01.04.1981AS PER THE VALUATION MADE BY THE REGISTERED VALUER (COPY OF VALUATION REPORT ENC LOSED) AT RS.11,60,000 AND ASSESSEE'S HALF SHARE COMES AT RS.5,80,000) 5,80,000 2. INDEXED COST 41,23,800 RS. 41, 23,800/- LONG TERM CAPITAL GAIN (L OSS) RS. 3,73,800/- 4. THAT THE LEARNED CIT(A) ERRED IN NOT TAKING INTO CONSIDERATION FOLLOWING SUPPORTING PAPERS/DOCUMENTS/INFORMATION B EFORE SUSTAINING THE ADDITION OF RS. 27,08,092/-. I. THAT THE LAND IN QUESTION WAS PURCHASED BY THE A SSESSEE BEFORE THE YEAR 1981 AND IN THE YEAR 1981 AND UPTO THE YEA R 1981, NO DLC RATES WERE PUBLISHED BY THE GOVERNMENT. II. THAT IN THE ASSESSMENT ORDER THE A.O. HAS MENTI ONED THAT THE PROPERTY IN QUESTION WAS PURCHASED BY THE ASSES SEE AND HIS BROTHER JOINTLY ON 17.04.1980. IT IS RESPECTFULLY S UBMITTED THAT THIS OBSERVATION OF THE A.O. IS NOT CORRECT. THE FACTUAL POSITION IS THAT THE PROPERTY IN QUESTION WAS AGREED TO BE PURCHASED BY THE ASSESSEE FROM THE SELLER AS BACK AS ON FEBRUARY 197 8 FOR ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 9 RS.35,000/-. THIS FACT OF PURCHASING THE PROPERTY I N FEBRUARY 1978 IS VERY MUCH CORROBORATED FROM THE RECITAL MENTIONE D AT PAGE 2 OF THE SALE DEED REGISTERED ON 17.04.1980. III THAT IN JAIPUR PROPERTY DEALERS STARTED FORMING HOUSING CO-OPERATIVE SOCIETIES IN THE YEAR 1976 FOR ACQUIRI NG THE LANDS IN THE NAME OF HOUSING CO-OPERATIVE SOCIETIES AND THER EAFTER ALLOTTING THE SAME TO ITS MEMBERS. IN THE BEGINNING OF THE YEAR 1978 I.E. IN FEBRUARY 1978 WHEN THIS BUSINESS OF PR OPERTY WAS IN ITS INCEPTION THE ASSESSEE AND HIS BROTHER JOINTLY PURCHASED THE ABOVE LAND AT COMPARATIVELY LOW RATES I.E. FOR RS.3 5,000/-. IN THE LATER PART OF THE YEAR 1978 AND IN THE YEAR 1979 TH ERE CAME A SUDDEN BOOM IN PROPERTY MARKET AND PRICES OF LAND W HICH WERE VERY LOW IN THE YEARS PRIOR TO 1978 SHOT UP TO 15 T O 20 TIMES WHAT IT WAS IN 1977-78. IT IS ONE OF THE MAIN REASO NS OF HIGH INCREASE IN THE VALUE OF THE LAND AS ON 01.04.1981. IV THAT THE PLOT AREA OF THE SOLD PROPERTY IS VERY LARGE I.E. 1078 SQ.MTR. AS AGAINST NORMAL SIZES OF PLOTS RANGI NG FROM 200 SQ.MTRS TO 450 SQ.MTRS. MOREOVER IT IS SITUATED VER Y CLOSE TO FAMOUS AND VERY BIG SURAJPOLE ANAJ MANDI IN THE HEA RT OF JAIPUR CITY. ON ACCOUNT OF THIS SITUATION, IT IS OF COMMER CIAL VALUE AND AS SUCH, ITS VALUE HAS TO BE VERY HIGH AS COMPARED TO OTHER PLOTS OF LAND OF NORMAL SIZE IN THE IMMEDIATE VICINITY. V. THAT THE FACT OF ASSESSEE'S LAND BEING OF COMMER CIAL CHARACTER AND COMMERCIALLY IMPORTANT IS FORTIFIED FROM THE NA RRATION OF PAST HISTORY GIVEN IN THE REGISTERED SALE DEED ITSELF AS TO HOW THE SELLER ACQUIRED THE LAND IN QUESTION AS GIVEN IN PAGE 1 AN D PAGE 2 OF THE ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 10 REGISTERED SALE DEED WHEREBY THE ABOVE MENTIONED HO USE PROPERTY WAS SOLD. FROM THE PERUSAL OF FACTS GIVEN IN THE SA LE DEED IT CLEARLY COMES OUT THAT EARLIER TO JOINTLY PURCHASE OF THE L AND BY THE ASSESSEE AND HIS BROTHER, THE LAND IN QUESTION WAS ORIGINALL Y PURCHASED BY A PARTNERSHIP FIRM, NAMED M/S. KHANDELWAL LANDS VIDE REGISTERED SALE DEED REGISTERED IN THE OFFICE OF SUB-REGISTRAR JAIP UR AT SERIAL NO.3794 AND BOOK NO.1 ON 26.12.1970. FOR ONE REASON OR THE OTHER THIS PARTNERSHIP FIRM KHANDELWAL LANDS GOT DISSOLVE D ON 02.12.1975. ON DISSOLUTION OF THE PARTNERSHIP FIRM KHANDELWAL L ANDS, THE ABOVE MENTIONED PLOT NO. B-8, RAGHUNATH COLONY JAIPUR CAM E INTO THE SHARE OF THE SELLER SHRI ASHOK KUMAR SON OF SHRI GOPINATH JI GUPTA, JAIPUR. VI THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED A VALUATION REPORT OF REGISTERED VALUER. THE REGISTER ED VALUER HAS CLEARLY CERTIFIED AND TAKEN THE FAIR MARKET VALUE OF THE TO TAL LAND AS ON 01.04.1981 AT RS.5,49,780/-. IN ALL HUMBLENESS IT I S SUBMITTED THAT THE VALUATION GIVEN BY THE APPROVED VALUER SHOULD HAVE BEEN TAKEN ON FACE VALUE AND INDEXED COST OF LAND SHOULD HAVE BEEN TAK EN ON THE BASIS OF VALUATION MADE BY THE APPROVED VALUER. TAKING OF LE SSER VALUE THAN THE VALUE TAKEN BY THE APPROVED VALUER FOR VALUATION PU RPOSES IS NOT JUSTIFIED UNDER ANY CIRCUMSTANCE AND UNDER ANY LAW. VII THAT IN ABOVE REGARD IT IS FURTHER SUBMITTED TH AT THE VALUATION OF A LAND DEPENDS ON MANY FACTORS INCLUDING ITS SIZE, SITUATION, WIDTH OF THE ROAD, LIVING STANDARDS OF THE LOCALITY, PUBLIC FACILITIES LIKE LIGHT, WATER, SANITATION, ROADS, COMMERCIAL USE ETC. VIII THAT THE OTHER REASON IN APPRECIATION OF THE VALUE OF THE SOLD PROPERTY IS ATTRIBUTED TO THE FACT THAT THE PLOT AREA OF THE PURCHASED PROPERTY IS 1078 SQ MTR, AND IT IS AN IDEAL SIZE OF A GOOD ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 11 RESIDENTIAL/COMMERCIAL PLOT. MOREOVER THE SOLD HOUS E PROPERTY IS VERY CLOSE AND IN IMMEDIATE VICINITY OF SURAJPOLE ANAJ M ANDI WHICH CAME INTO EXISTENCE AT THAT TIME I.E. DURING 1978 TO 1980. TH E SOLD HOUSE PROPERTY BEING IN IMMEDIATE VICINITY OF NEWLY DEVELOPED COMM ERCIAL AREA, NAMELY, SURAJ POLE ANAJ MANDI THE VALUE OF SOLD HOU SE PROPERTY INCREASED BY LEAPS AND BOUNDS IN THE PERIOD 1978 TO MARCH 1981. IX. THAT IT IS AN ESTABLISHED FACT THAT A LAND HAVI NG COMMERCIAL VALUE HAS VERY HIGH VALUE THAN A RESIDENTIAL ONE AND IN V IEW OF THIS, THE FAIR MARKET VALUE TAKEN BY THE GOVERNMENT APPROVED VALUE R AS ON 01.04.1981 AT RS.5,49,780/- OF THE SOLD LAND CANNOT BE TERMED EXORBITANT BY ANY CANON OF LAW. THE LEARNED AO ALSO FAILED TO TAKE INTO CONSIDERATION THE FACT THAT THE LAND IN QUESTI ON ACQUIRED A CHARACTER OF COMMERCIAL VALUE ON ACCOUNT OF DEVELOP MENT OF A BUSINESS AREA SURAJPOLE ANAZ MANDI IN ITS IMMEDIATE VICINITY AT RS.5,49,780/- IS QUITE IN ORDER. 9. THE LD AR FURTHER REFERS TO PROVISIONS OF SEC.55 (2)(B)(I) AND SEC.55A OF THE I.T. ACT, 1961, WHICH READS AS UNDER : SECTION 55(2)(B)(I) OF THE INCOME TAX ACT, 1961 FOR THE PURPOSES OF SECTIONS 48 AND 49, 'COST OF AC QUISITION' IN RELATION TO ANY OTHER CAPITAL ASSET MEANS 'WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BEFORE THE 1 ST DAY OF APRIL, 1981 MEANS THE COST OF ACQUISITION OF THE ASSET TO THE ASSESSEE OR THE FAIR MARKET VALUE OF THE ASSET AS ON THE 1 ST DAY OF APRIL, 1981, AT THE OPTION OF THE ASSESSEE; SECTION 55A OF THE INCOME TAX ACT, 1961 ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 12 'WITH A VIEW TO ASCERTAINING THE FAIR MARKET VALUE OF A CAPITAL ASSET FOR THE PURPOSES OF THIS CHAPTER, THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER (A) IN A CASE WHERE THE VALUE OF THE ASSET AS CLAIM ED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MADE BY A REGIST ERED VALUER, IF THE [ASSESSING] OFFICER IS OF OPINION THAT THE VALUE SO CLAIMED IS LESS THAN ITS FAIR MARKET VALUE; (B) IN ANY OTHER CASES, IF THE ASSESSING OFFICER IS OF OPINION- I) THAT THE FAIR MARKET VALUE OF THE ASSET EXCEE DS THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE BY MORE THAN SUCH PERCENTAGE OF THE VALUE OF THE ASSET AS SO CLAIMED OR BY MORE THA N SUCH AMOUNT AS MAY BE PRESCRIBED IN THIS BEHALF; OR II) THAT HAVING REGARD TO THE NATURE OF THE ASSE T AND OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY SO TO DO, AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISION S OF SUB-SECTION (2),(3),(4),(5) AND (6) OF SECTION 16A, CLAUSES (HA ) AND (I) OF SUB- SECTION (1) AND SUB-SECTIONS (3A) AND (4) OF SECTIO N 23, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SEC TION 37 OF THE WEALTH-TAX ACT, 1957(27 OF 1957), SHALL WITH THE NE CESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFIC ER UNDER SUB- SECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION IN THIS SECTION, 'VALUATION OFFICER' HAS THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH -TAX ACT, 1957 IT WAS SUBMITTED BY THE LD AR THAT FROM READING THE ABOVE SECTIONS 55(2)(B)(I) AND 55A, IT CLEARLY TRANSPIRES THAT THE CONCEPT OF FAIR ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 13 MARKET VALUE FOR THE PURPOSE OF CHAPTER-IV OF THE A CT PERTAINING TO COMPUTATION OF INCOME FROM CAPITAL GAIN CAN BE FOUN D UNDER SECTION 55(2)(B)(I) OF THE ACT, WHERE UNDER, AN ASS ESSEE HAS THE OPTION TO TAKE THE ACTUAL COST OF THE ACQUISITION O F THE ASSET OR THE FAIR MARKET VALUE OF THE ASSET ON THE 1.4.1981 FOR THE PURPOSE OF SECTIONS 48 AND 49 OF THE ACT. IN OTHER WORDS, FOR ARRIVING AT THE TAXABLE FIGURE OF CAPITAL GAIN WHILE DEDUCTING THE COST OF ACQUISITION FROM THE SALE CONSIDERATION, AN ASSESSEE MAY EITHER ADOPT THE FIGURE OF COST OF ACQUISITION ACTUALLY INCURRED OR THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4. 1981 AT HIS OPTION . IT WAS FURTHER SUBMITTED BY THE LD AR THAT IN THE I NSTANT CASE, THE REFERENCE BY THE AO TO THE VALUATION OFFICER U/S.55 A FOR VALUATION OF FAIR MARKET VALUE OF THE PROPERTY AS ON 1 ST APRIL, 1981 COULD NOT HAVE BEEN MADE FOR THE REASON THAT THE VALUE OF THE ASSE T AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MAD E BY REGISTERED VALUER AND THE AO WAS DUTY BOUND TO ADOPT THE VALUA TION REPORT GIVEN BY THE GOVERNMENT APPROVED VALUER. THIS VALUA TION REPORT OF THE GOVERNMENT APPROVED VALUER STOOD ALREADY FILED WITH THE AO. MOREOVER THE VALUATION MADE BY THE GOVERNMENT APPRO VED VALUER IS ALSO NOT LESS THAN FAIR MARKET VALUE TAKEN BY THE A SSESSING OFFICER. THERE IS A CONSENSUS OF JUDICIAL OPINION THAT REFER ENCE TO THE DEPARTMENTAL VALUATION OFFICER CAN ONLY BE MADE IN CASES WHERE THE VALUE OF THE CAPITAL ASSET SHOWN BY THE ASSESSEE IS LESS THAN ITS FAIR MARKET VALUE AS ON 1 ST APRIL, 1981. BUT IN ASSESSEE'S CASE IT IS MUCH MORE THAN THE FAIR MARKET VALUE ESTIMATED BY THE AO . IT WAS FURTHER SUBMITTED THAT REFERENCE FOR THE VAL UATION OF THE CAPITAL ASSET COULD HAVE BEEN MADE TO THE VALUATION OFFICER BY THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCE EDINGS ONLY. THE ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 14 FACTUAL POSITION IN THIS CASE IS THAT THE ASSESSING OFFICER HAS NOT MADE ANY REFERENCE TO THE VALUATION OFFICER IN REGA RD TO ASSESSEE'S CASE. MOREOVER IN THE PRESENT CASE ASSESSMENT ORDER HAS ALREADY BEEN PASSED AND FIRST APPELLATE AUTHORITY, NAMELY, COMMISSIONER (APPEALS) HAS ALSO PASSED THE ORDER AND THE ASSESSE E IS IN APPEAL AGAINST THIS ORDER PASSED BY THE COMMISSIONER (APPE ALS) BEFORE THE TRIBUNAL. IN SUPPORT, RELIANCE WAS PLACED ON THE DE CISION OF HON'BLE GAUHATI HIGH COURT IN THE CASE OF BHOLA NATH MAJUMD AR VS. ITO AND OTHERS REPORTED IN (1996) 221 ITR 608. 10. THE LD DR IS HEARD WHO HAS RELIED ON THE FINDIN GS OF THE LOWER AUTHORITIES. FURTHER, HE REFERRED TO THE FINDINGS OF THE LD CIT(A) WHICH ARE CONTAINED AT PARA 2.3 OF HER ORDER WHICH IS REP RODUCED AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD SHOWN A LONG-TERM CAPITAL LOSS OF RS. 3,73,800/- ON HIS HALF SHARE OF PROPERTY AT RAGHUNATH COLONY, JAIPUR SOLD FOR RS. 75 LAKHS AS PER THE REGISTERED SALE DEED. THE AO NOTED THAT THE COST OF ACQUISITION HAS BEEN SHOWN AT RS. 11.60 LACS WHICH INCLUDED RS. 5,49,780/- FOR COST OF LAND WHEREAS AS PER THE PURC HASE DEED DATED 17/04/1980 THE PLOT WAS PURCHASED FOR RS. 35,000/- ON 17/04/1980 THAT IS WITHIN A PERIOD OF 11 MONTHS THE COST OF ACQUI SITION HAS ENHANCED FROM RS. 35,000/- TO RS. 5,49,780/-. IN SUPPORT OF THE ACQUISITION COST, THE VALUATION REPORT OF AN APPROVED VALUER HAD BEEN FILED IN WHICH THE AO NOTED THAT WHILE THE PROPERTY IS RECORDED AS RESIDENTIAL BUT COMMERCIAL RATES HAVE BEEN TAKEN FOR THE PURPOSE OF VALUATION. THE AO AFTER DISCUSSING IN DETAIL AND AS PER THE FOLLOW ING REASONS: ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 15 '(I) THE ASSESSEE'S CONTENTION THAT THE AGREEMENT T O PURCHASE BY THE ASSESSEE WAS MADE IN FEB. 78 AND THE SALE DEED REGI STERED ON 17.4.1980. NOWHERE IN THE DEED DATED 17.4.1980 IT H AS BEEN MENTIONED BY THE REGISTRAR THAT THE AGREEMENT WAS MADE ON FEB . 78. WITHOUT ANY EVIDENCE THE ASSESSEE MAY SHOW THE PURCHASE PRIOR T O 17.4.1980 ANY TIME. FURTHER THE REGISTRAR HAS ALSO TAKEN THE VALU E AT RS. 35,000/- AS ON 17.4.1980. (II) AS PER INFORMATION CALLED FROM THE REGISTER ED VALUER UNDER SEC. 133(6) REGARDING THE VALUE, HE VIDE HIS LETTER DATE D 10.01.2014 HAS STATED THAT NO DOCUMENT/PURCHASE DEED WAS PROVIDED BY THE ASSESSEE REGARDING VALUATION OF THE SAID PROPERTY. THEREFORE , THE VALUE OF LAND ADOPTED BY THE REGISTERED VALUER IS NOT ACCEPTABLE. (III) AS REGARDS, THE PROPERTY IN QUESTION WHETHER THE RESIDENTIAL OR COMMERCIAL, AS PER THE ADDRESS OF THE PROPERTY AND AS PER SALE DEED DATED 17.4 1980 THE REGISTRAR HAS TREATED THE SAME AS RESIDENTIAL. THE REGISTERED VALUER TAKEN THE RATE OF COMMERCIAL @ 53 6/- SQ.MTR. IN ABSENCE OF ANY DOCUMENTS PROVIDED BY THE ASSESSEE. AS PER LAND RATES OF VARIOUS AREAS IN JAIPUR 1 AS ROVI E YT E REGISTERED VALUER, AS ON 1.4.1981 FOR THE LOCATION RAMGANJ BAZAR TO GALTA GA TE, WHEREAS THE PROPERTY WAS AN AGRICULTURAL PLOT SITUATED AT RAGHU NATH COLONY WHICH IS SITUATED OUTSIDE GALTA GATE AND FAR AWAY I.E. 500-6 00 MTRS. FROM GALTA GATE AND WAS AN UNDEVELOPED AREA AT THAT TIME.' AND AFTER GIVING A BENEFIT OF 10% APPRECIATION HAS TAKEN THE COST OF ACQUISITION AT RS. 38,500/-. FURTHER AS REGARDS APPLICABILITY OF PROVISIONS OF S ECTION 50C, THE AR SUBMITTED THAT THE MATTER OF ADOPTING HIGHER VALUAT ION WAS PENDING BEFORE THE SUB REGISTRAR AND THE AO AFTER APPLYING THE PROVISIONS OF ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 16 SECTION 50C AND VALUE OF ACQUISITION AS ABOVE, ARRI VED AT LONG-TERM CAPITAL GAINS OF THE SHARE OF THE ASSESSEE AT RS. 2 3,34,292/-. IN THE PRESENT PROCEEDINGS, THE AUTHORIZED REPRESEN TATIVE REITERATED THE SUBMISSIONS AS MADE IN THE ASSESSMENT PROCEEDIN GS. IT IS SEEN THAT AS PER THE PURCHASE DEED DATED 17/04/1980 THE PLOT WAS PURCHASED FOR RS. 35,000/-. THE APPROVED VALUERS RE PORT WHICH HAS VALUED THE SAME PLOT AT RS. 5,49,780/- WITHIN A PER IOD OF 11 1 / 2 MONTHS HAS NOT GIVEN ANY DETAILS OR REASONS. FURTHE R, NO DETAILS FURNISHED BY THE REGISTERED VALUER FOR INFORMATION CALLED FOR BY THE AO UNDER SECTION 133(6) IN THIS REGARD. THE PROPERT Y IS RESIDENTIAL AS PER THE VALUERS REPORT, HOWEVER HE HAS APPLIED C OMMERCIAL RATES WITHOUT SUPPLYING ANY JUSTIFICATION. IT WAS ALSO SUBMITTED IN THE PRESENT PROCEEDINGS TH AT THE LAND WAS ORIGINALLY ALLOTTED TO M/S KHANDELWAL LANDS AND AS THE FIRM GOT DISSOLVED IT WAS ALLOTTED TO THE PARTNERS, THIS BY ITSELF DOES NOT MAKE THE LAND AS COMMERCIAL. RATHER IN THE PURC HASE DEED IT IS RECORDED ON PAGE 4 PARA 2 AS FOLLOWS: BL IYKWV ESA [KM~MK GS O IHNS DH RJQ DK GS O UKYS D S IKL GS VR% EKFY;R HKH FO; NZO; LS VF/KD UGHA GS FURTHER, CONSIDERING THE PLEA OF THE AUTHORIZED REP RESENTATIVE, A 10% INCREASE HAS ALREADY BEEN GRANTED BY THE ASSESS ING OFFICER IN THE COST OF CONSTRUCTION. IN VIEW OF THE DISCUSSION AS ABOVE, THE COST OF ACQUISITION HAS BEEN CORRECTLY ARRIVED AT B Y THE AO AS WELL AS APPLICATION OF SECTION 50C AND THE LONG-TERM CAP ITAL GAIN ARRIVED AT BY THE AO ARE CONFIRMED. GROUND OF APPEAL IS DIS MISSED. ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 17 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, ON PERUSAL OF THE PU RCHASE DEED DATED 17.04.1980, THE RECITAL TALKS ABOUT VERBAL AGREEMEN T TO PURCHASE THE IMPUNGED PROPERTY IN FEBRUARY 1978 AND AN ADVANCE O F RS 500 HAS BEEN SHOWN AS PAID. HOWEVER, THE SAID RECITAL ALON E NOWHERE LEADS TO A CONCLUSION THAT THE ASSESSEE HAS ACTUAL PURCHASED THE PROPERTY IN FEBRUARY 1978. THE REASON FOR THE SAME IS TWO-FOLD . FIRSTLY, THE ASSESSEE HAS ONLY PAID AN AMOUNT OF RS 500 AS AGAIN ST THE FINAL SALE CONSIDERATION OF RS 35,000 AND IT IS UNBELIEVABLE B Y ANY STANDARD THAT A PERSON WILL HANDOVER HIS PROPERTY ON MERE RECEIPT O F RS 500 AS AGAINST THE STATED CONSIDERATION OF RS 35,000 AS FINALLY AG REED. SECONDLY, AS PER THE SALE DEED, THE POSSESSION OVER THE PROPERTY WAS HANDED OVER BY THE SELLER TO THE ASSESSEE ON THE DATE OF EXECUT ION OF THE SALE DEED THAT IS, ON 17.04.1980 AND NOT AT ANY TIME PRIOR TO THE EXECUTION OF THE SALE DEED. THEREFORE, WE ARE UNABLE TO ACCEDE TO TH E CONTENTION OF THE LD AR THAT THE PROPERTY WAS TRANSFERRED AND PURCHAS ED BY THE ASSESSEE IN YEAR 1978 AND NOT IN THE YEAR 1980. THE SALE DEE D DATED 17.04.1980 IS THE ONLY CREDIBLE EVIDENCE ON RECORD AND THE ASS ESSEE HAS THUS ACQUIRED THE PROPERTY IN APRIL 1980 AND NOT AT ANYT IME PRIOR TO THAT DATE. 12. HAVING SAID THAT, IN TERMS OF SECTION 55(2)(B) (I), WHERE THE PROPERTY HAS BEEN ACQUIRED PRIOR TO 1.4.1981, THERE IS NO DISPUTE THAT COST OF ACQUISITION SHALL BE DETERMINED BASED ON AC TUAL COST OF ACQUISITION TO THE ASSESSEE OR THE FAIR MARKET VALU E AS ON 1.4.1981 AT THE OPTION OF THE ASSESSEE. WHERE THE ASSESSEE EXE RCISES SUCH AN OPTION OF TAKING THE FAIR MARKET VALUE, HE HAS TO S UBSTANTIATE THE SAME WITH CREDIBLE VERIFIABLE EVIDENCE AND THE ONUS IS C LEARLY ON THE ASSESSEE TO DEMONSTRATE THE SAME WITH ADEQUATE DOCUMENTATION IN TERMS OF ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 18 CONTEMPORARIOUS THIRD PARTY SALE TRANSACTIONS. IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAS SUBMITTED A VALUATION RE PORT IN SUPPORT OF ITS CLAIM OF FAIR MARKET VALUE AS ON 1.4.1981. ON PERU SAL OF SUCH VALUATION REPORT, IT IS NOTED THAT THE VALUER HAS SURVEYED AN D VALUED THE PROPERTY ON 15.5.2011. THE DESCRIPTION OF THE PROPERTY HAS B EEN SHOWN AS RESIDENTIAL SITUATED IN A RESIDENTIAL AREA WHICH IS OCCUPIED BY THE OWNER. THE LAND VALUE HAS BEEN TAKEN AT THE RATE OF RS 510 PER SQ METER FOR LAND MEASURING 1078 SQM VALUED AT RS 549,780. AS PE R AO, THE SAID RATE OF LAND HAS BEEN TAKEN AS THAT OF COMMERCIAL L AND AND NOT THAT OF RESIDENTIAL PIECE OF LAND. IN ORDER TO VERIFY THE SAME, THE VALUER WAS ISSUED NOTICE U/S 133(6) AND IN RESPONSE, HE SUBMIT TED THAT NO DOCUMENT/PURCHASE DEED WAS PROVIDED BY THE ASSESSEE REGARDING VALUATION OF LAND AND HE HAS TAKEN THE LAND RATE BA SIS THE COMMERCIAL LAND RATES OF VARIOUS AREAS IN JAIPUR CITY FOR THE LOCATION RAMGANG BAZAR TO GALTA GATE. FURTHER, WHAT THOSE LAND RATES ARE, THERE IS NO DATA WHICH HAS BEEN SHOWN AS FORMING PART OF THE VALUATI ON REPORT. WE THEREFORE FIND SERIOUS DEFICIENCY IN THE APPROACH O F THE VALUER. FIRSTLY, WHERE HE HAS HIMSELF DESCRIBED THE PROPERTY AS RESI DENTIAL LOCATED IN A RESIDENTIAL AREA AND OCCUPIED BY THE ASSESSEE FOR O WN RESIDENCE AND NOT RENTED OUT, A FACT NOT BEEN DISPUTED EVEN BEFOR E US, THAT ON BASIS, HE HAS CONSIDERED THE COMMERCIAL LAND RATE. SECOND LY, WHAT STOPPED THE ASSESSEE WHO HAS APPOINTED THE VALUER IN SHARIN G A COPY OF THE REGISTERED PURCHASE DEED WITH THE VALUER. THIS SHO WS THE CONDUCT OF THE ASSESSEE AND HIS INTENTION OF SEEKING A VALUATI ON REPORT WHICH SUPPORTS HIS CASE OF A HIGHER VALUE INSTEAD OF DETE RMINING A FAIR MARKET VALUE WHICH IS THE MANDATE OF LAW. THEREFORE, WE A RE OF THE CONSIDERED VIEW THAT THE LOWER AUTHORITIES HAVE RIGHTLY REJECT ED THE VALUATION REPORT AND DO NOT AGREE WITH THE CONTENTION OF THE LD AR T HAT THE AO COULD NOT HAVE REJECTED THE VALUATION REPORT AND OUGHT TO HAV E ACCEPTED THE ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 19 SAME. THE APPROACH OF THE AO HAS HOWEVER BEEN FOUN D ACCEPTABLE TO US. TO OUR MIND, HE HAS TAKEN A SOUND BASIS OF TAK ING THE VALUE AS PER ACTUAL PURCHASE DEED DATED 17.04.1980 AND TAKING AN AVERAGE APPRECIATION IN THE VALUE OF PROPERTY @ 10% PER ANN UM, DETERMINED THE FAIR MARKET VALUE AT RS 38,500. IN THE RESULT, THE GROUND NO. 3 OF THE ASSESSEES APPEAL IS HEREBY DISMISSED. 13. IN GROUND NO. 4, THE ASSESSEE HAS CHALLENGED TH E SUSTENANCE OF ADDITION OF RS. 36,000/- MADE BY THE AO UNDER THE H EAD SALARY WHEREIN THE INCOME WAS TAKEN AT RS. 1,80,000/- AS AGAINST INCOME OF RS. 1,44,000/- AS DECLARED BY THE ASSESSEE. THE LD. CIT(A) HAS STATED THAT AS PER THE SALARY CERTIFICATE ISSUED BY THE FI RM WHICH IS REFLECTING SALARY OF RS. 15,000 PER MONTH PAID TO THE ASSESSEE , THE ADDITION WAS MADE BY THE ASSESSING OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS, IT WAS FURTHER SUBMITTED THAT THE ACCO UNTANT HAS WRONGLY MENTIONED THE SALARY FIGURE AND FRESH SALARY CERTIF ICATE WAS SUBMITTED DURING THE APPELLATE PROCEEDINGS. HOWEVER, THE SAME WAS REJECTED BY THE LD. CIT(A) IN ABSENCE OF SHOWING OF REASONABLE CAUSE FOR NOT SUBMITTING THE SAME BEFORE ASSESSING OFFICER. 14. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE CORRECT FACTS OF THE CASE ARE THAT THE TOTAL SALARY OF THE ASSESSEE DURING THE PERIOD 1.4.10 TO 31.3.2011 WAS RS.1,44,000/- CA LCULATED @ RS.12,000/- P.M. HOWEVER FOR THE PERIOD 1.4.11 TO 3 0.3.2012, THE SALARY WAS RS.1,80,000/- CALCULATED @ RS.15,000/- P.M. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE T O FILE A SALARY CERTIFICATE FOR THE YEAR 2011-12. THE ASSESSEE IN T URN TOLD HIS ACCOUNTANT TO PREPARE A SALARY CERTIFICATE FOR 2011 -12. THAT WHILE PREPARING SALARY CERTIFICATE, THE ACCOUNTANT MISTAK ENLY TOOK THE SALARY ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 20 FIGURES OF FINANCIAL YEAR 2011-12 (RELEVANT TO ASSE SSMENT YEAR 2012-13) INSTEAD OF FINANCIAL YEAR 2010-11 RELEVANT TO ASSES SMENT YEAR 2011-12. IT IS FURTHER SUBMITTED THAT WHEN IT WAS TOLD TO TH E ACCOUNTANT THAT HEARING OF FINANCIAL YEAR 2011-12 IS GOING ON AND Y OU PREPARED A CERTIFICATE FOR THE YEAR 2011-12 FOR SUBMITTING IT TO THE INCOME TAX AUTHORITIES, HE PREPARED A SALARY CERTIFICATE FOR R S.1,80,000/- @ RS.15,000/- WHICH WAS IN FACT WAS SALARY OF FINANCI AL YEAR 2011-12 AND NOT OF FINANCIAL YEAR 2010-11. IN FACT, TOTAL SALAR Y OF ASSESSEE IN THE PREVIOUS YEAR RELEVANT A.Y. 2011-12 IS RS. 1,44,000 /- AND NOT RS.1,80,000/-. THE MISTAKE OCCURRED ON ACCOUNT OF W RONG UNDERSTANDING BY THE ACCOUNTANT AND NOT THOROUGHLY GOING THROUGH IT BY THE DIRECTORS WHILE PUTTING THEIR SIGNATURES IS VERY MUCH REGRETTED. IT IS RESPECTFULLY SUBMITTED THAT THIS BEING A TYPOGRA PHICAL ERROR, THE SAME MAY KINDLY BE IGNORED AND ADDITION OF RS.36,000/-MA Y KINDLY BE DELETED. A COPY OF CORRECT SALARY CERTIFICATE FOR T HE PREVIOUS YEAR RELEVANT TO A.Y. 2011-12 WAS DULY FILED WITH THE LE ARNED CIT(A) AND A COPY THEREOF FORMS PART OF THE PAPER BOOK BEING FIL ED SIMULTANEOUSLY AND SEPARATELY WHICH MAY BE CONSIDERED. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. THE LD AR HAS CONTENDED THAT THE SALARY FOR THE IMPUNGED YEAR IS RS 144,000 AND SALARY FOR THE NEXT YEAR IS RS 180,000 AND BY MISTAKE, SALARY CERTIFICATE FOR THE NEXT YEA R HAS BEEN SUBMITTED DURING THE ASSESSMENT PROCEEDINGS, HOWEVER A CORREC T CERTIFICATE HAS BEEN SUBMITTED DURING THE APPELLATE PROCEEDINGS. T HE AO IS DIRECTED TO VERIFY THE SALARY CERTIFICATES WITH THE RETURN OF I NCOME AND WHERE THE SAME IS FOUND IN ORDER, ALLOW THE NECESSARY RELIEF TO THE ASSESSEE. IN THE RESULT, THE GROUND OF APPEAL IS ALLOWED WITH AB OVE DIRECTIONS. ITA NO. 19/JP/2018 SHRI RAM BALLABH RAWAT, JAIPUR VS. ITO, WARD 5(4), NCRB, JAIPUR 21 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04/12/20 18. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04/12/2018 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAM BALLABH RAWAT, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 5(4), NCRB, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 19/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR