Raosaheb Babasaheb Mangire, Solapur V. Income-tax Officer,

ITA 195/PUN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7249 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Additional evidence; Cost of acquisition; Fair market value; Valuation report; Capital receipt
• Section: 143(3); 50C; 154

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , ! ' # , % & BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.195/PUN/2014 ! ( ( / ASSESSMENT YEAR : 2008-09 RAOSAHEB BABASAHEB MANGIRE, 1819, KOREVES, AZAD CHOWK, AT-BARSI, DIST. SOLAPUR 413401. PAN : AIZPM 6591M . / APPELLANT V/S INCOME TAX OFFICER, WARD -2(3), SOLAPUR. . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI P.L. KUREEL ) / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) III, PUNE DT.28 .11.2013 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- / DATE OF HEARING : 02.01.2017 / DATE OF PRONOUNCEMENT: 13.01.2017 2 ITA NO.195/PUN/2014 AY.NO.2008-09 2.1 ASSESSEE IS AN INDIVIDUAL WHO ELECTRONICALLY FILED HIS RETUR N OF INCOME FOR A.Y. 2008-09 ON 28.07.2008 DECLARING CAPITAL GAINS OF RS.4,01,580/-. THE CASE WAS SELECTED FOR SCRUTINY AND TH EREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) VIDE ORDER DT.28.12.2 010 AND THE TOTAL TAXABLE INCOME WAS DETERMINED AT RS.1,81,70 ,880/- BY CONSIDERING TAXABLE LONG TERM CAPITAL GAINS AT RS.1,71,37,4 31/-. THEREAFTER AN ORDER U/S 154 OF THE ACT WAS PASSED ON 18.01.2011 AND THE TOTAL TAXABLE LONG TERM CAPITAL GAINS WAS DETERM INED AT RS.1,70,26,176/-. AGGRIEVED BY THE ORDER OF THE AO, ASSES SEE CARRIED THE MATTER BEFORE LD. CIT(A), WHO VIDE ORDER DT.28.1 1.2013 (IN APPEAL NO.PN/CIT(A)-III/ITO WD-2(3)/SOL/545/2010-11/561 ) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE O RDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN ADOPTING T HE VALUE OF NET CONSIDERATION AT RS.2,52,70,000/- AS AGAINST THE ACTUAL SALE CONSIDERATION AS PER THE AGREEMENT AND SUMMARILY DISREGARDING APPELLANTS CONTENTION IN THI S REGARD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE DEPARTMENTAL VALUATION OFFICER HAS ERRED I N ARRIVING AT THE FAIR MARKET VALUE OF THE PROPERTY BY NOT GIV ING SUFFICIENT OPPORTUNITY OF HEARING AND ALSO BY NOT C ONSIDERING VARIOUS LIMITATIONS UNDER WHICH APPELLANT HAS SOLD T HE LAND. SUBSEQUENTLY, ASSESSEE HAS ALSO PRAYED FOR ADMISSION OF T HE FOLLOWING ADDITIONAL GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN INVOKIN G THE PROVISIONS OF THE SEC.50C OF THE INCOME TAX ACT, 19 61, THE SUBSEQUENT EVENTS IN THE TRANSACTION CLEARLY REFLEC TS THAT APPELLANTS RIGHT IN THE LAND GOT VITIATED AND ULTI MATELY SAID RIGHT IS GIVEN UP BY YOUR APPELLANT THEREFORE THE A MOUNT RECEIVED IS MERELY A CAPITAL RECEIPT AND THEREFORE NOT COVERED BY RELEVANT PROVISIONS OF THE ACT. YOUR APPELLANT P RAYS FOR 3 ITA NO.195/PUN/2014 AY.NO.2008-09 SETTING ASIDE THE MATTER FOR FRESH VERIFICATION TO THE FILE OF LEARNED ASSESSING OFFICER IN THE INTEREST OF NATURA L JUSTICE. 3. WITH REGARD TO REQUEST FOR ADMISSION OF THE ADDITIONAL GROUND RAISED, IT WAS SUBMITTED THAT THE ADDITIONAL GROUND RAISED GOES TO THE ROOT OF THE MATTER WHEREIN AO HAS INVOKED SEC.50C OF THE ACT. IT IS ASSESSEES CONTENTION THAT BY VIRTUE OF SUBSEQUENT EVENTS, PROVISIONS OF SEC.50C OF THE ACT ARE NOT APPLICABLE. IT IS THEREFORE CONTENDED THAT THE GROUNDS BEING LEGAL GROUND , THE SAME MAY BE ADMITTED. LD. D.R. DID NOT SERIOUSLY OBJECT TO THE ADMISSION OF ADDITIONAL GROUND. CONSIDERING THE AFORESAID, THE ADDITIONA L GROUND RAISED BY ASSESSEE IS ADMITTED. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ASSESSEE HAD ALONG WITH SMT.JAIDEVI MALLIKARJUN WARA D HAD SOLD PROPERTY SITUATED AT CTS NO.1157 AND 1158, SADASIV PETH, PUNE ADMEASURING 878.77 SQ.MTRS AND 3572.08 SQ.MTRS TO U.K. ENTERPRISES FOR A CONSIDERATION OF RS.1,50,00,000/-. A O NOTED THAT THE PROPERTY ORIGINALLY BELONGED TO SMT. ANANDIBAI MAHAD EV VEERKAR (SHETE) AND ON HER DEATH SMT. TRIVENIBAI ANANT VEERKAR (SHETE) WHO WAS DAUGHTER-IN-LAW OF ANANDIBAI, BECAME THE O WNER OF THE PROPERTY. SMT. TRIVENIBAI ANANT VEERKAR WAS AUNT OF THE ASSESSEE AND HAD BEQUEATHED THE PROPERTY BY RE GISTERED WILL DT.16.12.1984 AMONGST RAOSAHEB BABASAHEB MANGIRE (ASS ESSEE), SMT. JAIDEVI MALLIKARJUN WARAD, SHRI YOGESH SUDHIR SOPAL AND SHRI MANOJ RATNAKAR ANDIKAR IN EQUAL SHARES I.E., 1/ 4 TH SHARE EACH. IT WAS ALSO NOTED THAT THE SHARES WERE UNDIVIDED A ND THE 4 ITA NO.195/PUN/2014 AY.NO.2008-09 DEMARCATION OF THE INDIVIDUAL SHARE OF EACH OWNER BY METES AND BOUNDS WAS NOT PRACTICALLY POSSIBLE. DURING THE YEAR, AS AGREED UPON BETWEEN UK ENTERPRISES, RAOSHEB MANGIRE AND SMT. J AIDEVI MALLIKARJUN WARAD, THE PROPERTY WAS SOLD FOR A CONSIDERATIO N OF RS.1,50,00,000/- (I.E., RS.75,00,000/- EACH) PLUS ONE PLOT EACH IN THE HOUSING SCHEME AT B BUILDING, KAKADE CITY, HIGANE, KARVE NAGAR, PUNE AT RS.10,34,700/- INCLUDING STAMP DUTY AND REGISTRATION EXPENSES. THUS ACCORDING TO ASSESSEE THE A GREED SALE PRICE FOR EACH 1/4 TH SHARE WAS RS.85,34,700 = (RS.75,00,000/- + RS.10,34,700/-) WITH A VIEW TO ARRIVE AT A CORRECT COST OF LAND AND THE CORRECT COST OF ACQUISITION AS ON 01.04.1981 THE MATT ER WAS REFERRED BY AO TO VALUATION OFFICER. THE VALUATION OFFICER DETERMINED THE FAIR MARKET VALUE OF LAND AT RS.2,52,70,000/- AS ON 21.04.2007 I.E., THE DATE OF SALE AND THE FAIR MARKET VALUE OF THE LAND (AS ON 01.04.1981) WAS DETERMINED AT RS.5,98,500/-. TH E AO TAKING INTO CONSIDERATION THE VALUATION AS DETERMINED BY T HE VALUATION OFFICER, DETERMINED THE TAXABLE CAPITAL GAINS AT RS.1,71,37,431/-. (THE VALUE WAS SUBSEQUENTLY CORRECTED TO RS.1,70,26,176/- VIDE ORDER PASSED U/S 154 OF THE ACT .) AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MAT TER BEFORE LD. CIT(A), WHO DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDIN G AS UNDER : 5. THE CRUX OF THE ISSUE TO BE DECIDED IN THIS APP EAL IS THE APPLICABILITY OF SEC. 50C AND THE RESULTANT VALUATI ON U/S 50C(2) IN RESPECT OF THE SALE OF PROPERTY BY THE AP PELLANT. THE STAMP DUTY VALUE IN RESPECT OF PROPERTY AT CTS NOS. 1157 AND 1158 WAS RS.2,62,00,000/- AS PER SALE DEED . THUS, THE DEEMED VALUE OF CONSIDERATION AS PER SEC. 50C 5 ITA NO.195/PUN/2014 AY.NO.2008-09 WORKS OUT AT RS. 2,62,00,000/-. WHILE THERE CAN BE NO DISPUTE THAT THE EXPRESSION FULL VALUE OF CONSIDER ATION USED IN SECTION 48 DOES NOT REFER TO MARKET VALUE B UT TO CONSIDERATION BARGAINED BY THE PARTIES, AS HAS BEEN HELD BY THE HON'BLE SUPREME COURT IN GEORGE HENDERSON & CO. 66 ITR 622 AND CIT VS SMT. NILOFER I. SINGH (2009) 176 TAXMAN 252, SECTION 50C HAS CREATED AN EXCEPTION TO THIS L EGAL POSITION. IT IS NOTEWORTHY THAT SECTION 50C OF THE INCOME TAX ACT, WAS BROUGHT INTO THE STATUTE W.E.F. 1.4.2003. THE PROVISIONS OF THIS SECTION HAVE BEEN EXPLAINED IN B OARDS CIRCULAR NO. 8/2002 DATED 27.8.2002, AS FOLLOWS : 37. COMPUTATION OF CAPITAL GAINS IN REAL ESTATE TRANSACTIONS 37.1 THE FINANCE ACT, 2002 HAS INSERTED A NEW SECTION 50C IN THE INCOME-TAX ACT TO MAKE A SPECIAL PROVISION FOR DETERMINING THE FULL VALUE OF CONSIDERATION IN CASES OF TRANSFER OF IMMOVABLE PROPERTY. 37.2 IT PROVIDES THAT WHERE THE CONSIDERATION DECLARED TO BE RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE S O ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION, AND CAPITAL GAINS SHALL BE COMPUTED ACCORDINGLY UNDER SECTION 48 OF THE INCOME - TAX ACT. 5.1. FROM THE ABOVE CIRCULAR AND FROM THE UNAMBIGUO US LANGUAGE OF THE PROVISIONS OF SEC. 50C, IT IS CLEAR THAT WHERE THE CONSIDERATION DECLARED TO BE RECEIVED OR ACCRUI NG FROM THE TRANSFER OF THE LAND IS LESS THAN THE STAMP DUT Y VALUE (AS IS THE FACT IN THIS CASE) THE STAMP DUTY VALUE SHAL L BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION, AND C APITAL GAINS ARE MANDATORILY TO BE COMPUTED ADOPTING THE S AID VALUE AS THE FULL VALUE OF CONSIDERATION FOR THE PU RPOSES OF SECTION 48. THE CONSTITUTIONAL VALIDITY OF SEC. 50C HAS BEEN UPHELD BY THE MADRAS HIGH COURT IN K.R. PALANISAMY VS UNION OF INDIA REPORTED IN 306 ITR 61 AND BY THE BO MBAY HIGH COURT IN THE CASE OF BHATIA NAGAR PREMISES CO- OPERATIVE SOCIETY LTD. VS UNION OF INDIA REPORTED I N 234 CTR 175 AND IT HAS BEEN HELD THAT EVEN THOUGH THE SECTI ON 50C APPLIES ONLY TO CAPITAL ASSET AND NOT TO TRADING AS SETS OR STOCK IN TRADE, THE SAME IS NOT DISCRIMINATORY OR V IOLATIVE OF ARTICLE 14 OF CONSTITUTION OF INDIA. THE TRANSACTIO N UNDER CONSIDERATION WAS ADMITTEDLY UNDERTAKEN IN THE PREV IOUS YEAR 2007-08, RELEVANT TO A.Y. 2008-09, WHICH IS WE LL AFTER THE PROVISIONS OF SECTION 50C CAME INTO FORCE. I H AVE THEREFORE, NO HESITATION IN HOLDING THAT THE ASSESS ING OFFICER HAS CORRECTLY INVOKED THE PROVISIONS OF SECTION 50C IN THE PRESENT CASE. 6 ITA NO.195/PUN/2014 AY.NO.2008-09 5.2. HAVING HELD THAT SECTION 50C IS APPLICABLE, WH AT REMAINS TO BE SEEN IS WHETHER THE PROVISION OF SUB- SEC. (2) TO SEC. 50C HAS BEEN CORRECTLY APPLIED OR NOT. IT IS S EEN FROM THE ASSESSMENT ORDER THAT THE APPELLANT HAS NOT DIS PUTED THE STAMP DUTY VALUATION BEFORE ANY AUTHORITY, COUR T OR HIGH COURT BUT HAS OBJECTED BEFORE THE ASSESSING OF FICER THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHO RITY EXCEEDS THE FAIR MARKET VALUE AS ON THE DATE OF TRA NSFER. IN SUCH A SITUATION, ALTHOUGH THE READING OF THE SEC. 50C(2) SHOWS THAT THE ASSESSING OFFICER MAY REFER THE VA LUATION OF THE CAPITAL ASSET TO THE DVO, THE COURTS HAVE HELD THAT WHERE ASSESSEE DISPUTES THE STAMP DUTY VALUATION, T HE ASSESSING OFFICER HAS TO NECESSARILY REFER THE MATT ER TO THE DVO. THESE INCLUDE PUNE ITAT DECISION IN KK NAG LTD VS ADDL.CIT 52 SOT 381, MUMBAI ITAT DECISIONS IN THE C ASES OF MRS. NANDITA KHOSLA VS ITO 46 SOT 90 (MUM) AND A JMAL FRAGRANCES AND FASHIONS (P) LTD. VS ACIT 34 SOT 57 (MUM), AND BANGALORE ITAT DECISION IN SMT. T.V. NAGASENA VS ITO 53 SOT 166 (BANG). FURTHER, IN THE RECENT DECISION DATED 22.07.2013, THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF S. MUTHURAJA VS CIT REPORTED IN 37 TAXMANN.COM 352 UPHELD THE ASSESSEES STAND THAT ONCE THE STAMP DUTY VALUA TION IS OBJECTED TO, THE ASSESSING OFFICER HAS TO REFER THE MATTER TO DVO U/S 50C(2). THE HIGH COURT HELD THAT NOT ONLY T HE ITO BUT ALSO THE APPELLATE FORUMS ERRED IN NOT ADVERTIN G TO SEC. 50C(2), WHEN SPECIFIC OBJECTION HAS BEEN MADE BY TH E ASSESSEE IN THE FOLLOWING WORDS :- WHEN SPECIFIC OBJECTION WAS MADE BY THE ASSESSEE AS TO THE ASSESSING OFFICER ADOPTING THE MARKET VAL UE, UNDER SECTION 50C(2), THE ASSESSING OFFICER OUGHT TO HAVE REFERRED THE VALUATION OF THE CAPITAL ASSET TO THE VALUATION OFFICER, WHEREAS THE AUTHORITIES BELOW REFERRED TO SECTION 5 0C(1) ALONE WITHOUT ADVERTING TO SECTION 50C(2). [PARA 5] A READING OF THE ORDER OF THE ASSESSING OFFICER SHOWS THAT HA VING FOUND SUCH AN OBJECTION, THE ASSESSING OFFICER COMM ITTED SERIOUS ERROR IN NOT ADVERTING TO SECTION 50C(2). T HE ERROR PROCEEDED THROUGHOUT BEFORE EVERY APPELLATE FORUM. THERE IS NO JUSTIFICATION IN THE ORDER OF THE TRIBUNAL TAKIN G THE VIEW THAT THERE IS NOTHING ON RECORD TO SHOW THAT THE AS SESSEE HAD DISPUTED THE SALE CONSIDERATION OF RS. 39,63,90 0 ADOPTED FOR THE PURPOSE OF STAMP DUTY FOR THE PURPO SES OF WORKING OUT CAPITAL GAINS. IN SUCH VIEW OF THE MATT ER, THE MATTER IS RESTORED TO THE FILES OF THE ASSESSING OF FICER TO WORK OUT CAPITAL GAINS BY INVOKING SECTION 50C(2). [PARA 6] 5.3. THEREFORE, THERE IS SEEN TO BE NO INFIRMITY IN THE ASSESSING OFFICERS ACTION IN REFERRING THE MATTER TO THE DVO U/S 50C(2) PARTICULARLY IN THE BACKGROUND THAT THE APPELLANT OBJECTED TO THE STAMP DUTY VALUATION DURING ASSESSM ENT PROCEEDINGS. HAVING HELD SO, THE QUESTION THAT ARIS ES IS THAT ONCE THE DVO HAS ARRIVED AT A PARTICULAR VALUATION, WHETHER THE ASSESSING OFFICER IS BOUND TO ACCEPT THAT VALUA TION OR IS OBLIGED TO ADOPT THE VALUE SAID TO BE RECEIVED AS P ER THE SALE DEED. IN THIS REGARD, IT IS SEEN THAT THE BOMBAY HI GH COURT IN THE CASE OF CIT VS. PRABHU STEEL INDUSTRIES LTD. REPORTED IN 36 TAXMANN.COM 393, HAS HELD THAT THE ASSESSING OFFICER 7 ITA NO.195/PUN/2014 AY.NO.2008-09 IS BOUND TO ACT IN CONFORMITY WITH THE VALUATION OF THE CAPITAL ASSETS AS ARRIVED AT BY THE DVO, REASON BEING THAT THE DVO IS AN INDEPENDENT AND STATUTORY FOR RESOLVING SUCH CONTROVERSIES. TO QUOTE FROM THE HIGH COURT ORDER : - IT IS APPARENT FROM SECTION 16A OF WEALTH-TAX ACT THAT THESE PROVISIONS MANDATE THAT AFTER THE ASSESSING O FFICER RECEIVES REPORT OF VALUATION OFFICER UNDER SECTION 50C, HE HAS TO ACT IN CONFORMITY WITH THE VALUATION OF THE CAPITAL ASSET WORKED OUT THEREIN. WHEN THESE PROVISIONS ARE LOOKED INTO, IT FOLLOWS THAT SUCH VALUATION OFFICER IS AN INDEPENDENT & DISTINCT STATUTORY FORUM FOR RESOLVING THE CONTROVERSY REGARDING DETER MINATION OF THE MARKET VALUE OF THE PROPERTY WITH ALL NECESS ARY POWERS; ITS ORDER OR REPORT IS MADE BINDING ON THE ASSESSING OFFICER AND, THUS, HE ENJOYS EQUIVALENT STATUS. 5.4. THEREFORE, IN VIEW OF THE DECISION OF THE JURI SDICTIONAL HIGH COURT ORDER, IT IS HELD THAT THERE IS NO INFIR MITY IN THE ASSESSING OFFICERS ACTION IN COMPUTING THE CAPITAL GAINS BASED ON THE FAIR MARKET VALUATION AS ON THE DATE O F SALE AS DETERMINED BY THE DVO. 5.5. THE APPELLANTS FIRST GROUND OF APPEAL IS T HAT PROPER OPPORTUNITY OF HEARING WAS NOT GIVEN BY THE DVO IN PASSING THE ORDER U/S 50C(2). IN THIS REGARD, IT IS SEEN TH AT THE MATTER WAS REFERRED TO THE DVO ON 02.11.2010 FOR DE RIVING THE FAIR MARKET VALUE OF THE PROPERTIES AS ON THE D ATE OF SALE I.E. AS ON 21.04.2007 AS WELL AS THE FAIR MARKET VA LUE AS ON 01.04.1981IN ORDER TO ARRIVE AT THE INDEXED COST OF ACQUISITION UNDER THE PROVISO TO SEC. 48(II). THE D VO ISSUED NOTICE TO THE APPELLANT TO SUBMIT CERTAIN RELEVANT DOCUMENTS BY 15.11.2010, WHICH HAS BEEN COMPILED WITH BY THE APPELLANT. SUBSEQUENTLY, THE PROPERTY WAS INSPECTED BY THE DVO IN THE PRESENCE OF APPELLANT AND HIS CHARTERED ACCOUNTANT. THE PRELIMINARY VALUATION REPORT WAS FOR WARDED TO THE APPELLANT BY THE DVO VIDE LETTER DATED 06.12 .2010 AND THE APPELLANT WAS ASKED TO STATE OBJECTIONS, IF ANY, BY 14.12.2010, WHICH WERE SO DONE BY THE APPELLANT ON THAT DATE. THE APPELLANTS OBJECTIONS ARE THAT SUFFICIEN T TIME WAS NOT GIVEN BY THE DVO, WHO TOOK TWO WEEKS FOR INSPEC TION AND ANOTHER THREE WEEKS FOR PREPARING THE PRELIMINA RY REPORT BUT THE APPELLANT WAS ONLY GIVEN ONE WEEKS TIME FOR RAISING OBJECTION. 5.6. I HAVE CONSIDERED THIS OBJECTION AND FIND THA T ALL THE OBJECTIONS RAISED BY THE APPELLANT VIDE LETTER DATE D 14.12.2010 HAVE BEEN DISCUSSED AND CONSIDERED WHILE EVALUATING THE MARKET VALUE OF THE PROPERTY AS ON T HE DATE OF SALE. FURTHER, THE DVO HAS ALSO DISCUSSED, IN GREAT DETAIL, WHY THE SALE INSTANCE RELIED UPON BY THE APPELLANT S REGISTERED VALUER IS NOT ACCEPTABLE. IN VIEW OF THE SAME, IT IS HELD THAT SUFFICIENT OPPORTUNITY WAS GIVEN BY THE D VO TO THE APPELLANT IN RAISING HIS OBJECTION TO THE PRELIMINAR Y REPORT AND EACH AND EVERY OBJECTION HAS BEEN ADDRESSED BY THE DVO. GROUND NO. 1 FAILS. 8 ITA NO.195/PUN/2014 AY.NO.2008-09 6. THE SECOND GROUND OF APPEAL RELATES TO THE SPECI FIC ISSUES, WHICH AS PER THE APPELLANT, THE LEARNED DVO HAS NOT CONSIDERED IN ARRIVING AT THE FAIR MARKET VALUE OF THE PROPERTY AND IS BEING CONSIDERED WITH THE THIRD GRO UND SINCE THE ISSUE RELATES TO THE MOST APPROPRIATE FAIR MARK ET VALUE OF THE PROPERTY. IN THIS REGARD, THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRABHU STEEL INDUSTRIES LTD. REPORT ED IN 36 TAXMANN.COM 393 HELD THAT IT WAS NECESSARY TO AFFOR D AND OPPORTUNITY OF BEING HEARD TO THE DISTRICT VALUATIO N OFFICER IN VIEW OF THE OBLIGATION CAST UPON THE APPELLATE AUTH ORITIES BY VIRTUE OF THE PROVISO OF SEC. 24(5) OF THE WEALTH T AX ACT, 1957 R.W.S. 50C(2) OF THE IT ACT. ACCORDINGLY, THE LEARNED DVO, SOLAPUR SHRI E.P. DHANE WAS REQUESTED TO BE PR ESENT AND WAS DULY HEARD ON THE VARIOUS OBJECTIONS RAISED BY THE APPELLANT ON 19.11.2013. THE FIRST OBJECTION IS THAT THE COMPARABLE SALE INSTANCES RELIED UPON BY THE DVO AR E NOT OF THE TENANTED PROPERTIES BUT THEY ARE FREEHOLD AND UNDER SELF- OCCUPATION OF THE OWNERS WITHOUT ANY ENCUMBRANCES, AS CAN BE SEEN FROM THEIR REGISTERED SALE DEED (COPIES OF WHICH HAVE BEEN SUPPLIED). I HAVE EXAMINED SALE DEED RELATING TO LAND & BUILDING AT CTS NO. 437/A/2, NARAYAN PETH, PUNE APPEARING AT SERIAL NO.1 AT PARA 4.1 SUPRA. THE PRO PERTY WAS SOLD IN THE YEAR 1936 BY SHRI VASANTRAO JAYWANT RAO BARVE TO SHRI DATTATRAY HARI DATE BUT ACTUALLY BELO NG TO THE JOINT UNDIVIDED FAMILY OF 03 BROTHERS NAMELY DATTAT RAY, GAJANAN AND KRISHNAJI DATE. THE PROPERTY WAS PARTIT IONED IN THE YEAR 1939, WHEREIN IT WAS ASSIGNED TO SHRI K RISHNAJI DATE, AND FOLLOWING HIS DEATH IN THE YEAR 1980, THE NAMES OF ALL HIS LEGAL HEIRS NAMELY THREE SONS AND FIVE D AUGHTERS WERE MUTATED IN THE PROPERTY REGISTER. THEREAFTER, THERE WAS AN ORAL SETTLEMENT BETWEEN THE VARIOUS MEMBERS OF T HE FAMILY, WHICH WAS REDUCED TO WRITING ON 08.07.1984. ALTHOUGH, THE SALE DEED MENTIONS THAT THE BUILDING ADMEASURING 2060 SQ.FT. IS IN THE PEACEFUL POSSESSI ON OF THE VENDORS, IT IS VERY APPARENT THAT ONLY PART OF THE PREMISES WAS IN OCCUPATION OF THE VENDORS AND THAT THE PROPE RTY WAS OTHERWISE IN THE POSSESSION OF OTHER TENANTS AND WA S YIELDING A MEAGRE INCOME TO BE ABLE TO SUPPORT THE FAMILY OF THE VENDOR (CLAUSES O AND P OF THE SALE DEED REFER) 6.1. COMING TO THE SECOND SALE INSTANCE, APPEARING AT SL NO. 2 OF THE TABLE, IT PERTAINS TO LAND AND BUILDING AT SURVEY NO. 139, NARAYANPETH REGISTERED VIDE DOCUMENT NO. 3719 DATED 18.06.2003. PERUSAL OF THE SALE DEED SHOWS THAT THE PROPERTY WAS PURCHASED BY SHRI JAYWANT JAGADE FROM ONE SHRI RAMCHANDRA MARUTI SHELKE IN 1985 AND TWO-STORE Y BUILDING ALONG WITH CAR PARK WAS CONSTRUCTED THEREO N. THE NAMES OF HIS LEGAL HEIRS WERE REGISTERED ON THE PRO PERTY CARD AFTER HIS DEATH ON 07.12.1996. ALTHOUGH THE SA LE DEED DOES NOT SPECIFICALLY MENTION THE FACT THAT THE BU ILDING IS TENANTED, THE DVO SHRI DHANE HAS ASSERTED THAT HIS JUNIOR ENGINEER HAS SPECIFICALLY REQUISITIONED AND BEEN PR OVIDED, THE SALE INSTANCES OF TENANTED PROPERTIES ONLY FROM THE O/O SUB-REGISTRAR, HAVELI-1. SO FAR AS THE THIRD SALE I NSTANCE IS CONCERNED, APPEARING AT THE SERIAL NO. 3 OF THE TAB LE, IT PERTAINS TO LAND AND BUILDING AT SURVEY NO. 540, 9 ITA NO.195/PUN/2014 AY.NO.2008-09 NARAYANPETH REGISTERED VIDE DOCUMENT NO. 901 DATED 22.03.2004. THE PROPERTY ORIGINALLY BELONGED TO SMT . KESARBAI BHANDARI AFTER WHOSE DEATH ON 15.07.1945, THE PROPERTY DEVOLVED UPON HER TWO DAUGHTERS SMT. RAMKUN WAR CHANDAK AND AYODHYABAI LAHOTI. THE PROPERTIES OF SM T. KESARBAI BHANDARI WERE DISTRIBUTED BETWEEN THE TWO SISTERS IN 1957 AND THIS PROPERTY WAS GIVEN AS THE SHARE OF SMT. RAMKUNWAR CHANDAK. PROPERTY AT SURVEY NO. 138B WAS GIVEN TO SMT. AYODHYABAI LAHOTI. HOWEVER, SMT. AYODHYABAI LAHOTIS NAME REMAINED TO BE REMOVED FRO M THE PROPERTY CARD, WHICH DISPUTE IS STILL PENDING AT TH E TIME OF SIGNING THE DEVELOPMENT AGREEMENT. THEREFORE, IT IS SEEN FROM THE REGISTERED SALE DEED ITSELF THAT THE PROPE RTY IS DISPUTED PROPERTY AND WAS JOINTLY HELD BY 08 CO-OWN ERS, WHO HAVE TOGETHER SOLD/TRANSFERRED THE PROPERTY TO THE DEVELOPER. THE LAST AND FOURTH SALE INSTANCE REFERR ED BY DVO, APPEARING AT SL. NO. 4 OF THE TABLE PERTAINS T O LAND AND BUILDING AT SURVEY NO. 273, NARAYANPETH, PUNE, REGI STERED BY DOCUMENT NO. 4023 ON 16.07.2004. AT THE TIME THA T THE PROPERTY WAS HANDED OVER TO M/S J.J. CONSTRUCTION F OR DEVELOPMENT PURPOSES, IT IS NOTICED THAT THERE WERE 8 TENANTS ON THE PROPERTY, WHO WERE PAYING RENT TO TH E OWNER SHRI N.B. LAHOTI. HOWEVER, SINCE THE RENT COLLECTED WAS VERY NEGLIGIBLE AND SHRI LAHOTI COULD NOT PAID CORPORATI ON CHARGES/TAXES OUT OF THE RENT SO COLLECTED, HE DECI DED TO HAND OVER THE PROPERTY TO M/S J.J. CONSTRUCTION FOR DEVELOPMENT. THE SALE DEED CLEARLY MENTIONED THAT M /S J.J. CONSTRUCTION WAS TO SETTLE COMPENSATION PAYABLE TO THE TENANTS. THEREFORE, IT CAN BE SEEN THAT THE APPELLA NTS OBJECTION THAT NONE OF THESE PROPERTIES ARE COMPARA BLE SALE INSTANCES SINCE THESE ARE NOT TENANTED PROPERTIES, IS NOT BORNE OUT FROM THE RECORD. IN EACH OF THESE SALE IN STANCES THE DEVELOPER HAS ENTERED INTO THE AGREEMENT, BEING FULLY AWARE THAT SELLER OF THE PROPERTY IS NOT IN COMPLET E PHYSICAL POSSESSION OF THE PROPERTIES. IN SOME OF THE CASES THE OWNERSHIP AS PER THE LAND RECORD IS ALSO DISPUTED A S DISCUSSED SUPRA WITH REFERENCE TO SALE INSTANCE NO. 3 (LAND AND BUILDING AT SURVEY NO. 540, NARAYANPETH). IN TH E PROPERTY REFERRED TO SL. NO. 1 (LAND & BUILDING AT CTS NO. 437/A/2, NARAYANPETH, PUNE) A PORTION OF THE PROPER TY ADMEASURING 70.90 SQ.M. HAS EVEN BEEN ACQUIRED BY T HE PMC FOR PARKING PURPOSES. THEREFORE, IT IS SEEN FRO M THE ABOVE DISCUSSION THAT ALL THE COMPARABLE SALE INSTA NCES RELIED UPON BY THE DVO ARE DISPUTED PROPERTIES OR T HEY HAVE TENANTS, WHOM THE BUILDER HAS UNDERTAKEN TO CLEAR A ND VACATE BEFORE DEVELOPING THE LAND. IT IS SHRI DHANE S CONTENTION THAT NORMALLY ONLY A COUPLE OF COMPARABL E SALE INSTANCES ARE CONSIDERED IN DERIVING THE MARKET VAL UE OF THE LAND BUT IN THE PRESENT CASE, SINCE MORE THAN TWO S ALE INSTANCES WERE AVAILABLE, HE HAS TAKEN INTO ACCOUNT ALL FOUR SALE INSTANCES SO THAT A REASONABLE FAIR MARKET VAL UE CAN BE ARRIVED AT. THE DVO HAS CONSIDERED THE APPELLANTS CONTENTION THAT THERE WERE NO BUYERS FOR THE CAPTIO NED PROPERTY WITH THE COUNTER THAT IN THE CONGESTED PAR T IN THE CITY OF PUNE, ALMOST ALL THE PROPERTIES ARE ENCUMBE RED WITH TENANTS OR LITIGATION WITH TENANTS. HOWEVER, DUE TO SCARCITY OF LAND IN THE CITY AREA, THESE PIECES OF LAND STIL L HAVE 10 ITA NO.195/PUN/2014 AY.NO.2008-09 NUMBER OF WILLING BUYERS AS CAN BE SEEN FROM THE SA LE INSTANCES CITED BY HIM HAVING SIMILAR CONDITIONS. 6.2. IT HAS ALSO BEEN CONTENDED BY WAY OF SECOND OBJECTION THAT THE DVO HAS NOT GIVEN DETAILED WORKING AS TO HOW HE HAS ARRIVED AT THE LAND VALUE OF RS.22,710/- PER SQ.M. THE DVOS VALUATION REPORT CLEARLY MENTIONS T HAT THE SAME HAS BEEN ARRIVED AT BY COMPARABLE SALE INSTANC ES METHOD. DURING THE COURSE OF APPELLATE PROCEEDINGS, SHRI DHANE EXPLAINED THAT THE LAND RATE HAS BEEN ADJUST ED FOR SUITABLE INFLATION/TIME FACTOR TO ARRIVE AT THE FAI R MARKET VALUE OF THE PROPERTY AS ON 21.04.2007, WHICH IS TH E DATE OF SALE BY THE APPELLANT. THE LAND RATE CALCULATION AS ON THE DATE OF VALUATION/DATE OF SALE I.E. 21.04.2007 HAS BEEN ARRIVED AT BY THE DVO AS UNDER : (I) SALE INSTANCE NO. 1 RATE 14758 ADD FOR TIME GAP OF 3 YEARS & 11 MONTHS AT 60% 8854.8 TOTAL 23612.8 ADD FOR LOCATION AT 20% 4722.56 TOTAL 28335.4 (II) SALE INSTANCE NO. 2 RATE 19934 ADD FOR TIME GAP OF 3 YEARS & 10 MONTHS AT 60% 11960.4 TOTAL 31894.4 ADD FOR LOCATION AT 15% 4784.16 TOTAL 36678.6 (III) SALE INSTANCE NO. 3 RATE 18100 ADD FOR TIME GAP OF 3 YEARS & 2 MONTHS AT 50% 9050 TOTAL 27150 ADD FOR LOCATION AT 15% 4072.5 TOTAL 31222.5 (IV) SALE INSTANCE NO. 4 RATE 15126 ADD FOR TIME GAP OF 3 YEARS & 9 MONTHS AT 43% 6504.18 TOTAL 21630.2 ADD FOR LOCATION AT 15% 3244.53 TOTAL 24874.7 AVERAGE RATE 30277.8 LESS FOR SIZE, UNDIVIDED SHARE & LITIGATIONS/DISPUTES WITH TENANTS AND TENANCY ENCUMBRANCES ETC AT 25% - 7569.45 22708.3 11 ITA NO.195/PUN/2014 AY.NO.2008-09 SAY RS. 22710/- 6.3. THE ABOVE WORKING MADE BY THE DVO, SOLAPUR S HOWS THAT THE AVERAGE RATE AS ADJUSTED BY TIME FACTOR, S IZE, TENANCY ENCUMBRANCES AND CO-OWNERSHIP HAS BEEN TAKE N INTO CONSIDERATION IN ARRIVING AT THE LAND RATE. TH E DVO HAS EXPLAINED THE REASONS THAT THE FAIR MARKET VALUE AD OPTED BY HIM, WHICH IS THE COMPARABLE SALE INSTANCE METHOD AFTER CONSIDERING ENCUMBRANCES, IS THE ONE THAT THE PROPE RTY WOULD FETCH OR THE PRUDENT BUYER WOULD OFFER IF PUT TO SALE IN AN OPEN MARKET. 6.4. HE HAS ALSO DISCUSSED WHY THE APPELLANTS REGI STERED VALUERS REPORT CANNOT BE RELIED UPON. THE APPELLAN T HAD RELIED UPON THE SALE INSTANCE OF A FLAT ADMEASURING 867 SQ.FT. AT SADASHIV PETH WHICH WAS SOLD ON 12.02.200 1, AS PER WHICH THE VALUER HAS WORKED OUT THE LAND RATE A T 1661 PER SQ.FT. THE APPELLANT HAS TAKEN THE GROSS RATE A T RS. 2820 PER SQ.FT. (AS PER SALE DEED), REDUCED COST OF STRU CTURE AT RS. 600/- AND BUILDERS PROFIT AT 20% AT RS.565/- TO ARR IVE AT THE LAND RATE OF RS.1661 PER SQ.FT. THEREAFTER, THE APP ELLANTS VALUER HAS DEDUCTED 50% FOR TENANTS TO ARRIVE AT TH E VALUE OF THE LAND AT RS.830.5 PER SQ.FT. AND SIMILARLY, ARRI VED AT THE GOVERNMENT RATE FOR STAMP DUTY PURPOSE AT RS.948 PE R SQ.FT. (BEING 50% OF THE GOVERNMENT RATE OF RS.1895 PER SQ .FT.). THE DVOS REPL TO THE APPELLANTS REGISTERED VALUERS R EPORT IS REPRODUCED HEREIN UNDER :- THE ASSESSEE HAS SUBMITTED THE REGISTERED VALUER S REPORT IN THE FORM O-1 BY ONE MR. SHEKHAR L. THITE, WHOSE REGISTERED NUMBER IS QUOTED AS CAT-A-22/1988. FIRST OF ALL THE SALE INSTANCES CITED BY YOU IS OF FLAT, WHICH IS NOT AT ALL COMPARABLE. FURTHER THE REGD. V ALUER HAS DEDUCTED THE COST OF CONSTRUCTION AND BUILDERS PROF IT RANDOMLY WITHOUT SUPPORTING DOCUMENTARY EVIDENCES. MOREOVER THE BUILDER CHARGES ON SALEABLE AREA WHICH IS 25% TO 30% MORE THAN THE ACTUAL BUILT UP AREA. THUS THE BUILT UP AREA EXCLUDING COMMON CIRCULATING AREA, BALCONY ARE A AND TERRACE AREA ETC. IT WORKS OUT TO 70% OF SALABLE AR EA. IN CITY AREA THE PERMISSIBLE FSI IS 2 OR MORE CONSIDERING F SI = 2, THE LAND AREA APPURTENANT TO THE FLAT WORKS OUT TO BE 35% OF THE SALABLE AREA AND THE LAND RATE WORKS OUT TO BE MUCH ON HIGHER SIDE (IN THIS CASE 1661X100/35 = 4756/- PER SQFT.) THE LOGIC OF DEDUCTION OF 50% FOR TENANTS IS TOTAL LY INCORRECT. AS PER RENT CONTROL ACT AT BEST THE TENA NTS RIGHT IS PROTECTED TO THE EQUIVALENT AREA IN HIS POSSESSION WHILE REDEVELOPING THE PROPERTY WITH REVISED STANDARD REN T. THE TENANTS CANNOT SHARE 50% OF THE CONSIDERATION. FURTHER HE STATES THAT THE AREA IN POSSESSION OF T HE TENANTS IN TOTAL IS 7500 SQFT. AND ADOPTED 50% RATE ON THE TOTAL AREA WHICH IS RANDOM AND UNACCEPTABLE. AS SUC H THE VALUERS REPORT CANNOT BE RELIED UPON. 12 ITA NO.195/PUN/2014 AY.NO.2008-09 AS REGARDS VALUE OF THE STRUCTURES, IT IS NOT INCL UDED IN THE FAIR MARKET VALUE, AS THE PRUDENT BUYER WILL DEMOLISH THE OLD STRUCTURE WHILE REDEVELOPING THE PROPERTY, AS IT HAS SUBSTANTIAL BALANCE POTENTIAL. IN VIEW OF THE ABOVE THE FAIR MARKET VALUE WORKED OUT, BASED ON SALE INSTANCES WITH SIMILAR CONDITION S IS JUST AND FAIR. 6.5. THE THIRD OBJECTION OF THE APPELLANT IS THAT IN HIS CASE, THE STRUCTURE OF THE BUILDING DOES NOT BELONG TO HIM, WHEREAS IT IS NOT KNOWN FROM THE SALE INSTANCE AS T O WHO BUILT THE STRUCTURE FURTHER IN THE APPELLANTS CASE , THE STRUCTURE IS VERY OLD (SOME OF IT CONSTRUCTED EVEN BEFORE THE YEAR 1950), SEMI-PERMANENT AND EVEN TEMPORARY, WHER EAS THE TYPE OF STRUCTURE IN THE INSTANCES OF SALE TAKE N BY DVO MAY NOT BE OF THIS TYPE. HOWEVER, AS CAN SEEN FROM THE ABOVE REMARKS OF THE DVO IN THE VALUATION REPORT, H E HAS NOT TAKEN THE COST OF THE OLD AND DEPRECIATED STRUC TURE IN THE FAIR MARKET VALUE FOR THE REASON THAT NORMALLY THE DEVELOPER OR PRUDENT BUYER WOULD DEMOLISH THE OLD STRUCTURE A T THE TIME OF DEVELOPMENT OF THE PROPERTY, WHICH WOULD AD D TO THE VALUE AND POTENTIAL OF THE PROPERTY. THEREFORE, THI S OBJECTION OF THE APPELLANT IS ALSO NOT CORRECT. 6.6. THE FOURTH OBJECTION IS THAT THE APPELLANTS PROPERTY IS LOCATED AT SADASHIV PETH, WHEREAS THE COMPARABLE SALE INSTANCES CITED BY THE DVO ARE AT NARAYAPETH, PUNE AND ARE THEREFORE IN DIFFERENT LOCATION. THE APPELLANT CONT ENDS THAT THOSE SALE INSTANCES ARE COMPARATIVELY BETTER LOCAT ED THAN THE APPELLANTS PLOT, WHICH IN A CONGESTED AREA. TH E TIME LAG BETWEEN THE COMPARABLE SALE INSTANCES RELIED UPON B Y THE DVO HAS ALSO BEEN QUESTIONED. THESE ARE ALSO NOT ACCEPTABLE OBJECTIONS, BEING FACTUALLY INCORRECT. T HERE IS NO DISPUTE WITH THE LEGAL PROPOSITION AS PER THE CASE LAWS RELIED UPON BY THE APPELLANT, THAT THE RATE OF SALE INSTANCES IN NEARBY LOCATION SHOULD BE CONSIDERED AND THAT SI TUATED FAR AWAY SHOULD BE IGNORED, WHILE DETERMINING THE F AIR MARKET VALUE OF THE PROPERTY. HOWEVER, IN THE APPEL LANTS CASE, IT IS SEEN THAT NARAYANPETH AND SADASHIV PETH ARE LOCATED ON OPPOSITE SIDES OF LAXMI ROAD IN PUNE CEN TRAL AREA AND SADASHIV PETH IS CONSIDERED A FAR MORE PRIME LO CATION THAN NARAYANPETH. IN FACT, THE VALUATION REPORT OF THE DVO SPECIFICALLY REFERS TO THE FACT THAT THE LOCATION O F THE FLAT CITED FOR COMPARABLE SALE INSTANCE IS FAR INFERIOR TO THE APPELLANTS PROPERTY, WHICH IS INCIDENTALLY LOCATED ON HATTI GA NPATI ROAD, OPPOSITE BHAVE HIGH SCHOOL IN SADASHIV PETH, PUNE AND THEREFORE, IS MORE CENTRALLY LOCATED THAN THE S ALE INSTANCE CITED. THEREFORE, IT HAS TO BE HELD THAT T HE DVO HAS CORRECTLY CONSIDERED THEM AS NEARBY LOCATIONS AND A DOPTED THE VALUE OF THE PROPERTIES AT THESE LOCATIONS FOR COMPARABLE SALE INSTANCES. SO FAR AS TIME GAP IS CONCERNED, TH E APPELLANTS REGISTERED VALUER IS HIMSELF RELYING ON THE SALE INSTANCE OF FEBRUARY 2001, WHICH IN FACT PREDATES T HE SALE INSTANCES OF THE YEARS 2003 AND 2004 TAKEN INTO CONSIDERATION BY THE DVO. 13 ITA NO.195/PUN/2014 AY.NO.2008-09 6.7 THE FIFTH AND THE FINAL OBJECTION IS THAT THE SALE INSTANCES THAT HAVE BEEN RELIED UPON BY THE DVO ARE VERY SMALL PORTIONS OF LAND ADMEASURING BETWEEN 100 TO 5 00 SQ.M., WHEREAS IN THE APPELLANTS CASE THE LAND INV OLVED IS MORE THAN 4450 SQ.M. IN TOTAL, WHICH IS ABOUT 9 TO 44 TIMES THE SIZE OF THE LAND RELIED UPON. THIS OBJECTION IS ALSO NOT ACCEPTABLE SINCE FIRSTLY, THE APPELLANT SHARE OUT O F THE TOTAL LAND OF AREA OF 4450 SQ.M. IS ONLY 1112 SQ.M. (BEIN G SHARE). SECONDLY, THE DVO SHRI DHANE HAS STATED THA T IN FACT, SMALLER PLOTS WOULD FETCH COMPARATIVELY LESS PRICE AS COMPARED TO LARGER SIZE PLOTS AS THAT GIVES THE DEV ELOPER MORE POTENTIAL TO DEVELOP THE LAND. WITH THE DP PLA N THAT IS ENVISAGED FOR PUNE CITY, DEVELOPERS TEND TO ACQUIRE LARGER CHUNKS OF LAND FROM OWNERS HAVING CONTIGUOUS PIECES OF LAND SO THAT THEY CAN DEVELOP CLUSTERS OF HOUSING. 6.8. THE APPELLANT IS RELYING UPON THE BOMBAY HIG H COURT ORDER IN THE CASE OF STATE OF MAHARASHTRA & OTHERS VS NANABHAI RATHOD & OTHERS( AIR 1989 BOMBAY 9) WHICH DECIDED A CASE OF COMPULSORY ACQUISITION OF LAND LO CATED WITHIN THE MUNICIPAL LIMITS OF GONDIA BY THE STATE GOVERNMENT OF MAHARASHTRA. IN THE FACTS OF THE CASE , SINCE THE LAND WAS UNDEVELOPED, LOCATED IN AN INACCESSIBL E AREA AND THE SOIL WAS UNSUITABLE FOR CONSTRUCTION, THE H IGH COURT HELD THAT THE DEVELOPMENT METHOD HAD TO BE ADOPTED FOR LARGE UNDEVELOPED LANDS. IT WAS THUS HELD WHERE TH ERE IS A LARGE AREA OF UNDEVELOPED LAND UNDER ACQUISITION , PROVISION HAS TO BE MADE FOR PROVISION HAS TO BE MADE FOR PRO VIDING THE MINIMUM AMENITIES OF TOWN LIFE SUCH AS WATER CONNECTION, WELL LAID-OUT ROADS, DRAINAGE FACILITY, ELECTRIC CONNECTIONS. ETC. THE PROCESS NECESSARY INVOLVES DE DUCTION OF THE COST OF FACTORS REQUIRED TO BRING THE UNDEVE LOPED LANDS ON A PAR WITH THE DEVELOPED LANDS ON A PAR WITH THE DEVELOPED LANDS. AN EXTENT 20PER CENT OF THE TOTAL LAND ACQUIRED IS NORMALLY TAKEN AS A REASONABLE DEDUCTIO N FOR THE SPACE REQUIRED FOR ROADS., BUT THE COST OF DEVE LOPMENT MAY RANGE FROM 20 TO 33 PER CENT SPENDING ON THE NA TURE OF THE LAND, ITS SITUATION AND THE STAGE OF DEVELOPMEN T., ETC. IN THE CIRCUMSTANCES OF THE PRESENT TO MAKE A DEDUCTIO N IT WOULD BE ONLY PROPER TO MAKE A DEDUCTION OF 25 PER CENT FROM THE VALUE OF THE LAND AS DEVELOPMENT COSTS. O N THE CONTRARY, THE APPELLANTS PLOT IS LOCATED IN A DEVE LOPED AREA WITHIN THE HEART OF PUNE CITY WITH PRIME POTENTIAL. THE FACTS OF THE CASE IN NANABHAI RATHODS CASE(SUPRA) CANNOT THEREFORE BE APPLIED TO THE FACTS OF THE PRESENT CA SE. 6.9. AS CAN BE SEEN FROM THE DISCUSSION IN THE PR ECEDING PARAGRAPHS, NONE OF THE OBJECTIONS RAISED BY THE AP PELLANT CAN BE SAID TO BE VALID OBJECTIONS. IN FACT, AS AGA INST THE STAMP DUTY RATE OF RS.2,62,00,000/- FIXED BY THE ST AMP VALUATION AUTHORITIES, THE DVO HAS ARRIVED AT A FMV OF RS. 2,52,70,000/- AFTER DULY CONSIDERING THE FACTS RELA TING TO CO- OWNERSHIP, TENANCY ENCUMBRANCES, SIZE AND LOCATION OF LAND. THE COMPARATIVE SALE INSTANCES ARE ALSO THOSE RELATING TO TENANTED AND DISPUTED PROPERTIES. IT IS ALSO NOT ED THAT THE KARNATAKA HIGH COURT IN V.C. RAMACHANDRAN VS CWT REPORTED IN 126 ITR 157, DISAGREED WITH THE PROPOSI TION THAT THE PRINCIPLE APPLICABLE FOR THE INTERPRETATION OF TAXING 14 ITA NO.195/PUN/2014 AY.NO.2008-09 STATUTE NAMELY THAT IF TWO OPINIONS/INTERPRETATIONS WERE AVAILABLE, THE ONE WHICH IS FAVOURABLE TO THE ASSES SEE SHOULD BE ADOPTED AND HELD THAT IF THERE ARE MORE T HAN ONE VALUATION OF THE SAME PROPERTY, THE ONE WHICH IS RE ASONABLE AND NEAREST TO THE CORRECT MARKET VALUE, HAVING DUE REGARD TO ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE ALONE SHOULD BE ACCEPTED EVEN IF THE SAID VALUATION IS A HIGHER VALUATION. HENCE, THERE CAN BE NO INFIRMITY IN THE ASSESSING OFFICERS ACTION IN ADOPTING THE DVOS REPORT U/S 5 0C(2). ACCORDINGLY, GROUND NOS. 2 AND 3 STAND DISMISSED . 7. UNNUMBERED GROUND OF APPEAL SAYS THAT APPELLANT BE ALLOWED TO ADD, AMEND, ALTER OR DELETE ANY GROUND O F APPEAL AT THE TIME OF APPELLATE PROCEEDINGS. NO SUCH OPTI ON HAS BEEN EXERCISED BY THE APPELLANT DURING THE APPELLAT E PROCEEDINGS. THEREFORE, IT IS CLEAR THAT THIS GROU ND OF APPEAL IS ACADEMIC IN NATURE AND NO DECISION IS REQUIRED I N RESPECT OF THIS GROUND OF APPEAL . FOR THE STATISTICAL PURPOSE, THIS SHOULD BE TAKEN TO BE DISMISSED GROUND OF APPEAL. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFOR E AO AND LD. CIT(A) AND SUBMITTED THAT THE PROVISIONS OF 50C ARE NOT APPLICABLE BECAUSE WHAT THE ASSESSEE HAD SOLD WAS HIS RIG HT IN THE LAND NOT THE LAND OR BUILDING. HE FURTHER SUBMITTED THAT TH OUGH THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SMT . JAYDEVI MALLIKARJUN WARAD (IN ITA NO.162/PN/2014 DT.16.09.2015) (IN THE CASE OF CO-OWNER) HAD GRANTED PARTIAL RELIEF TO THE ASSESS EE BUT THERE ARE CERTAIN EVENTS WHICH HAVE TAKEN PLACE SUBSEQ UENTLY AFTER THE PASSING OF ORDER IN THE CASE OF CO-OWNER AND THAT T HOSE EVENTS GO TO THE ROOT OF THE MATTER AND HAVE THE BEARING ON THE ISSUE IN APPEAL. HE THEREFORE SUBMITTED THAT THE ISSUE WILL NEED TO BE RE-LOOKED IN THE LIGHT OF THOSE EVENTS. THE SUBSEQUENT EVENTS AS PER LD.A.R. ARE THAT ASSESSEE ALONG WITH CO-OWNER JAIDEVI MALLIKAR JUN WARAD HAD ENTERED INTO A SALE DEED ON 21.04.2007 WITH U.K . 15 ITA NO.195/PUN/2014 AY.NO.2008-09 ENTERPRISES FOR SALE OF THEIR RESPECTIVE SHARE ON AS IS W HERE IS BASIS. ON 12.04.2007 ANOTHER LEGAL HEIR, MR. DILIP GANGADH AR SOPAL, FILED AN APPLICATION BEFORE CITY SURVEY OFFICER STATING THAT SMT. TRIVENIBAI ANANT VEERKAR HAS EXECUTED A CODICIL ON 16.12.1984 AND BEQUEATHED THE SHARE OF ASSESSEE IN FAVO UR OF MR. DILIP GANGADHAR SOPAL. BASED ON THE AFORESAID APPLICATION O F MR. DILIP SOPAL, CITY SURVEY OFFICER VIDE ORDER DT.30.04.2008 ADDED THE NAME OF MR. DILIP GANGADHAR SOPAL IN THE PLACE OF ASSESSEE IN THE REVENUE RECORDS. THEREAFTER, AGAINST THE AFORESAID ORDER ASSESSEE FILED APPEAL BEFORE DEPUTY DIRECTOR, CITY SURVEY, PUNE ON 23.08.2008 AND THE APPELLATE AUTHORITY VIDE ORDER DATED 10.09.2008 HAS GRANTED THE STAY. HE FURTHER SUBMITTED T HAT ASSESSEE HAD GIVEN POWER OF ATTORNEY DT.19.10.2012 TO U.K . ENTERPRISES FOR REPRESENTING THE MATTER IN APPEAL ON BEH ALF OF THE ASSESSEE. HE FURTHER SUBMITTED THAT USK VENTURES (ERST WHILE U.K. ENTERPRISES) HAS GIVEN TO ASSESSEE SURETY AND BOND DT.1 9.10.2012 FOR NOT CLAIMING ANY SALE PROCEEDS, COST ETC IN RESPECT OF SALE DEED DT.21.04.2007. HE FURTHER SUBMITTED THAT DILIP GANGADHAR SO PAL VIDE REGISTERED SALE DEED DATED 23.05.2011 HAD SOLD ABOV E PORTION OF LAND TO M/S. NATU DEVELOPERS. HE ALSO PLACED ON RECOR D THE COPY OF THE AFORESAID ORDERS AND REGISTERED SALE DEEDS IN THE PAPER BOOK. HE THEREFORE SUBMITTED THAT SINCE THE SUBSEQUENT EVENT AS DESCRIBED HEREINABOVE GO TO THE ROOT OF THE MATTER AN D SINCE THOSE WERE NOT BEFORE THE AO, IN THE LIGHT OF THESE DEVELOPMENTS THE MATTER BE RE-EXAMINED AND PRAYED THAT THE MATTER BE REMANDED TO AO FOR FRESH EXAMINATION. HE FURTHER ASSURED OF CO-OPERA TING BY FURNISHING ALL THE NECESSARY DOCUMENTS AS REQUIRED BY THE AO. LD. 16 ITA NO.195/PUN/2014 AY.NO.2008-09 D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF LD. CIT(A) AND DID NOT SERIOUSLY OBJECT TO THE PRAYER OF LD.A.R. OF REMANDIN G THE MATTER TO AO IN THE LIGHT OF DEVELOPMENTS STATED BY LD.A.R. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO COMPUTATION OF CAPITAL GAINS. BEFORE US LD.A.R. HAS SUBMITTED THAT CERTAIN MATERIAL DEVELOPMENTS HAD TAKEN PLACE LIKE BEQUEAT HING ASSESSEES SHARE IN LAND IN FAVOUR OF DILIP SOPAL, CITY SURVE Y OFFICER PASSING THE ORDER BY REPLACING THE NAME OF ASSESSE E WITH THAT OF DILIP SOPAL, ASSESSEE OBTAINING STAY AGAINST THE INC LUSION OF NAME OF DILIP SOPAL IN PLACE OF ASSESSEE AND DILIP SOPAL SUBSEQUENTLY SELLING THE PORTION OF LAND TO ANOTHER DEVELO PER. WE ARE OF THE VIEW THAT THE AFORESAID DEVELOPMENTS ARE MATE RIAL DEVELOPMENTS WHICH GOES TO THE ROOT OF THE MATTER AND THE ENTIRE ISSUE NEEDS TO BE RE-LOOKED INTO IN THE LIGHT OF THE AFORES AID DEVELOPMENTS. ASSESSEE HAS ALSO PLACED ON RECORD THE C OPY OF THE AFORESAID ORDERS, DOCUMENTS AS ADDITIONAL EVIDENCES. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS AND IN THE IN TERESTS OF JUSTICE, WE ARE OF THE VIEW THAT THE ISSUE NEEDS TO B E RE- EXAMINED. WE THEREFORE WITHOUT EXPRESSING ANY VIEWS ON T HE MERITS, SET ASIDE THE ISSUE TO THE FILE OF AO FOR DECIDING THE MATTER AFRESH IN VIEW OF THE AFORESAID DEVELOPMENTS. WE THUS, REST ORE THE ISSUE BACK TO THE FILE OF AO WITH A DIRECTION TO HIM TO DECID E THE ISSUE AFRESH AFTER CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE AND IN ACCORDANCE WITH THE LAW. NEEDLESS TO STATE THAT AO S HALL GRANT 17 ITA NO.195/PUN/2014 AY.NO.2008-09 ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PUR POSE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 13 TH DAY OF JANUARY, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER % / ACCOUNTANT MEMBER PUNE; ! DATED : 13 TH JANUARY, 2017. YAMINI ) * +',- .-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5 6. COMMISSIONER OF INCOME TAX-(APPEALS) III, PUNE COMMISSIONER OF INCOME TAX-IV, PUNE #$% &&'(, * '(, / DR, ITAT, B PUNE; %+, - / GUARD FILE )! / BY ORDER, //// // TRUE COPY // T // // // TRUE COPY // //TRUE COPY// . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.