Nafishabanu Abdulgafar Shaikh, Ahmedabad V. ITO, Ward-3(2)(8), Ahmedabad

ITA 1964/AHD/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8989 (ITAT-AHMEDABAD)
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 17-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OTHERS; S K DEV SR DR ITA NO AHD
• Assessee Lawyers: VARIS ISANI
• Keywords: Depreciation; Cost of acquisition; Fair market value; Valuation report; Competent authority

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO. 535/AHD/2018 / ASSESSMENT YEAR: 2013-14 SHRI ABDULLATIF ABDULRAZAK SHAIKH 2501, JAMADAR DEHIA MACHIWAD, NR. LAL SCHOOL SHAHPUR, AHMEDABAD. VS ITO, WARD-7(1)(5) AHMEDABAD. ./ ITA NO. 1964/AHD/2018 / ASSESSMENT YEAR: 2013-14 NAFISHABANU ABDULGAFAR SHAIKH OPP: EKTANAGAR TEKRA RAMOL GAM, RAMOL TAL. DASCROI AHMEDABAD. VS ITO, WARD-3(2)(8) AHMEDABAD. ./ ITA NO. 1974/AHD/2018 / ASSESSMENT YEAR: 2013-14 GULSHANBANU SABIRBHAI SHAIKH JAFAR ROW HOUSE NR.MADINA MASJID NAVAPURA, VATVA AHMEDABAD 382 440. VS ITO, WARD-3(2)(7) AHMEDABAD. ./ ITA NO. 1981/AHD/2018 / ASSESSMENT YEAR: 2013-14 ABDUL MUNAF A. SHAIKH OPP: EKTANAGAR TEKRA RAMOL GAM, RAMOL TAL. DASCROI AHMEDABAD. VS ITO, WARD-3(2)(6) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI VARIS ISANI, AR REVENUE BY : SHRI S.K. DEV, SR.DR ITA NO.535/AHD/2018 & 3 OTHERS - 2 - / DATE OF HEARING : 11/10/2018 /DATE OF PRONOUNCEMENT : 16 /10/2018 O R D E R PER BENCH: PRESENT FOUR APPEALS ARE FILED AT THE INSTANCE OF DIFFERENT ASSESSEES AGAINST ORDERS OF LD.CIT(A), AHMEDABAD DA TED 17.1.2018 AND 2.8.2018 PASSED FOR THE ASSTT.YEAR 2013-14. SINCE C OMMON ISSUE IS INVOLVED IN ALL THESE APPEALS, WE PROCEED TO ADJUDI CATE ALL THESE APPEALS BY THIS CONSOLIDATED ORDER. 2. SOLE ISSUE INVOLVED IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT THE REVENUE AUTHORITIES BELOW HAVE WRONGLY ADOPTED COST OF ACQUISITION OF LAND AS ON 1.4.1981 AT RS.26,14/- FOR DETERMINAT ION LONG TERM CAPITAL GAIN ARISING FROM THE SALE OF IMMOVABLE PROPERTY SI TUATED AT RAMSOL, AHMEDABAD. 3. FOR ADJUDICATION OF THIS ISSUE, FIRSTLY, WE SHAL L TAKE NOTE OF ORDER SHEET DATED 8.10.2018 VIDE WHICH WE HAVE RECORDED T HAT 16 PERSONS WERE OWNERS AND IN POSSESSION OF PROPERTY COMPRISED AT S URVEY NO.16/1, RAMSOL, TAL. AHMEDABAD, TP SCHEME NO.115, ADMEASURI NG AREA OF 16,997 SQ.METERS. THIS LAND WAS SOLD ON 11.10.2012 GIVING RISE TO CAPITAL GAIN IN THE HANDS OF VENDORS. DURING THE COURSE OF HEARING ON OUR DIRECTION, THE LD.COUNSEL FOR THE ASSESSEE COMPILED DETAILS IN TABULAR FORM EXHIBITING STATUS OF THE LITIGATION IN THE CASE OF CO-OWNERS. SUCH DETAILS READ AS UNDER: SR. NO. NAME OF ASSESSEE APPEAL NO. BEFORE CIT(A) STATUS ITA BEFORE THE ITAT FILED ON 1. ABDUL LATIF A. SHAIKH 60-CIT-VII DISMISSED ON 17.1.2018 535/AHD/2018 7.3.2018 2. ABDUL MUNAF A. 655-CIT-III DISMISSED 1981/AHD/2018 19.9.2018 ITA NO.535/AHD/2018 & 3 OTHERS - 3 - SHAIKH ON 2.8.2018 3. NAFISABANU A. SHAIKH 653- CIT- III DISMISSED ON 2.8.2018 1964/AHD/2018 17.9.2018 4. GULSHANBANU S. SHAIKH 466 & 482- CIT-III DISMISSED ON 2.8.2018 1974/AHD/2018 18.9.2018 5. HAFIZUNISHA A. SHAIKH 10928 X PENDING 6. FIROZABANU I. SAIYED 10586 X PENDING 7. RAZIYABANU M. SHAIKH 10591 X PENDING 8. FIRDOSHBANU A. SHAIKH 10578 X PENDING 9. MOHAMMADIRFAN A. SHAIKH 10947 X PENDING 10. MOHAMMAD SOHEB M. SHAIKH 10943 X PENDING 11. MOHAMMAD RAFIK FARUKI 10946 X PENDING 12 MOHAMMAD ARIF FARUKI 10944 X PENDING 4. A PERUSAL OF THE ABOVE WOULD INDICATE THAT DISPU TE IN THE CASE OF FOUR ASSESSEES TRAVELLED UPTO THE TRIBUNAL. APPEAL S OF ABDUL LATIF A. SHAIKH, ABDUL MUNAF A. SHAIKH, NAFISABANU A. SHAIKH AND GULSHANBANU S. SHAIKH WERE DISMISSED BY THE LD.CIT( A) ON 17.1.2018 AND 2.8.2018 BY SEPARATE ORDER. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. FOR THE FACILITY OF REFERENCE, WE TAKE UP THE FACT FROM THE CASE OF ABDUL LATIF A. SHAIKH. 6. THE ASSESSEE WAS HAVING 14.81% SHARES IN THE ABO VE LAND. HE CALCULATED LONG TERM CAPITAL GAIN AT RS.1,88,223/-. HE ADOPTED ACQUISITION COST AS ON 1.4.1981 AT RS.69,51,770/- O N THE STRENGTH OF REGISTRATION VALUERS REPORT. THE LD.AO REFERRED T HE ISSUE TO THE DVO FOR DETERMINING FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981, WHO DETERMINED SUCH VALUE AT RS.26,314/-. HE COMPUTED LONG TERM CAPITAL ITA NO.535/AHD/2018 & 3 OTHERS - 4 - GAIN AT RS.89,26,147/-. IN THIS CASE, THE AO HAS R EPRODUCED BOTH THE COMPUTATIONS ON PAGE NO.3 OF THE ASSESSMENT ORDER. IT READS AS UNDER: LONG TERM CAPITAL GAIN AS UNDER: SALE CONSIDERATION: 14.81 % OF RS. 6,05,00,000 = RS. 89,60,050/- (FINAL PLOT NO. 16/1, RAMOL, TALUKA AHME-DABAD) LESS: INDEXED COST OF ACQUISITION 6951770X852/100=59229080 = RS. 87,71,82 7/- SHARE 14.81% =8771827 CAPITAL GAIN = RS. 1,88,223/- TAXABLE LONG TERM CAPITAL GAIN RS. 1,88,223/- CONSIDERING THE VALUATION REPORT DATED 20/01/2015 S UBMITTED BY THE DISTRICT VALUATION OFFICER, THE FAIR MARKET VALUE FOR THIS PROPERTY AS ON 01/04/1981 IS DETERMINED AT RS. 26,314/- THE LONG TERM CAPITAL GAIN IN THE CASE OF ASSESSEE IS COMPUTED AS UNDER: SALE CONSIDERATION: 14.81 % OF RS. 6,05,00,000 = RS. 89,60,050/- (FINAL PLOT NO. 16/1, RAMOL, TALUKA AHMEDABAD) LESS: INDEXED COST OF ACQUISITION 26314X852/100 =RS. 2,24,195 = RS. 33 ,203/- SHARE 14.81% =RS. 33,203.27 CAPITAL GAIN = RS. 89,26,147/- LESS : ALREADY SHOWN AS LTCG IN YOUR RETURN OF INCO ME 1,88,223 UNDISCLOSED LONG TERM CAPITAL GAIN = RS 8737924 / ACCORDINGLY, AN AMOUNT OF RS. 87,37,9247- IS BEING ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD OF LONG TERM CAPITAL GAIN. PENALTY PROCEEDINGS U/S. 271(L)(C) OF THE ACT ARE BEING SEPARATELY INITIATED. 7. THUS DISPUTE BEFORE US IS, WHETHER CAPITAL GAIN IN THE HANDS OF VENDORS SHOULD BE DETERMINED ON THE BASIS OF DVOS REPORT DETERMINING VALUE OF THE PROPERTY AT RS.26,314/- AS ON 1.4.1981 FOR THE PURPOSE OF INDEXATION OR IT IS TO BE DETERMINED ON THE BASIS O F VALUE DETERMINED BY THE REGISTRATION VALUER AT RS.69,51,770/-. THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING DREW OUR ATTENTION TOWARDS R EPORT OF DVO AND SUBMITTED THAT THE LD.DVO HAS DETERMINED VALUE OF T HE PROPERTY AS ON 1.4.1981 ON THE BASIS OF SALE INSTANCE OF ADJOINING LAND, BUT INSTEAD OF TAKING AREA ADJACENT TO THE ASSESSEES LAND, THE DV O TOOK INTO ITA NO.535/AHD/2018 & 3 OTHERS - 5 - CONSIDERATION SALE INSTANCE OF SURVEY NOS.248 TO 25 0. THESE PIECES OF LAND ARE LOCATED AT FARAWAY PLACE FROM THE LAND OF THE ASSESSEE. HE POINTED OUT THAT GEOGRAPHICAL LOCATION OF THE LAND HAS BEEN NOTICED BY THE REGISTERED VALUER. HE POINTED OUT THAT THIS LA ND IS SITUATED JUST 200 SQ.FEETS DISTANCE FROM RING ROAD. HENCE, ITS POTEN TIAL IS FAR MORE THAN THE LAND CONSIDERED BY THE AO. HE EMPHASIZED THAT THE REPORT OF THE DVO OUGHT NOT TO BE RELIED UPON. 8. ON THE OTHER HAND, THE LD.DR SUBMITTED THAT REGI STERED VALUER HAS DETERMINED THE VALUE OF THE LAND ON THE BASIS OF APPRECIATION/DEPRECIATION IN RATE OF GOLD, WHICH IS NOT A VERY SCIENTIFIC FORMULA FOR DETERMINING THE VALUE OF THE LAND AT A PARTICULAR POINT. 9. WE HAVE DULY CONSIDERED THE ISSUE AND WE HAVE CA LLED FOR STATUS OF THE LITIGATIONS IN THE CASE OF OTHER CO-OWNERS. WE HAVE EXTRACTED ABOVE THE STATUS OF OTHER LITIGATIONS IN EARLIER PA RT OF THIS ORDER. IT REVEALS THAT APPEALS OF EIGHT MORE CO-OWNERS ARE PE NDING BEFORE THE LD.CIT(A), WHEREAS THE APPEALS OF FOUR ASSESSES HAV E BEEN DECIDED BY THE LD.CIT(A)-3 AS WELL AS LD.CIT(A)-7. WITH REGAR D TO OTHER CO-OWNERS, IT WAS SUBMITTED THAT NO ACTION WAS TAKEN AT THE EN D OF THE AO. WHATEVER VIEW IS BEING TAKEN FOR DETERMINING THE FA IR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 WOULD AMOUNT TO AN ADVA NCE AUTHORITY FOR THE REMAINING EIGHT ASSESSEES WHOSE APPEALS ARE PEN DING BEFORE THE LD.CIT(A). THIS VIEW COULD BE AN EXPARTE VIEW QUA THEM. WE CAN BE EXPOSED TO SOME CONTRADICTION ALSO DEPENDING UPON T HE NATURE OF EVIDENCE SUBMITTED BY EACH ASSESSEE IN THE APPEALS PENDING BEFORE THE LD.CIT(A). IT IS ALSO PERTINENT TO OBSERVE THAT VA LUE DETERMINED BY THE LD.DVO AT RS.26,314/- BY ADOPTING THE RATE AT 1.55 PER SQ.METER APPEARS ITA NO.535/AHD/2018 & 3 OTHERS - 6 - TO BE ON THE LOWER SIDE. HE HAS NOT TAKEN INTO CON SIDERATION THE SALE INSTANCE OF ADJOINING AREA. RATHER, SALE DEEDS OF FAR AWAY KASARAT NUMBERS HAVE BEEN CONSIDERED. THE GEOGRAPHICAL LOC ATION OF THE LAND SOLD BY THE ASSESSEE IS ABUTTING TO THE RING ROAD, HENCE, IT HAS MORE POTENTIAL VALUE. THE DVO SHOULD ALSO ASCERTAIN CIR CLE RATE NOTIFIED BY THE STAMP DUTY VALUATION AUTHORITY FOR THE PURPOSE OF THIS LAND IN HIS AREA. HE COULD MAKE A REVERSE CALCULATION ON THE B ASIS OF THOSE CIRCLE RATES. THE METHOD DESCRIBED BY THE REGISTERED VALU ER IS ALSO NOT SUCH AN ABSURD METHOD WHICH CAN BE BRUSHED ASIDE OUTRIGHTLY . THEREFORE, CONSIDERING ALL THESE ASPECTS, WE DEEM IT APPROPRIA TE TO SET ASIDE THE IMPUGNED ORDERS OF THE LD.CIT(A), AND REMIT THIS IS SUE BACK TO THE FILE OF THE LD.CIT(A) WITH A DIRECTION THAT THE LD.CIT(A) S HALL CALL FOR A REMAND REPORT AND AGAIN MAKE REFERENCE TO THE DVO FOR DETE RMINING FAIR MARKET VALUE OF THE PROPERTY. THE LD.DVO SHOULD LAY HIS H AND ON THE SALE INSTANCE OF EXACTLY SIMILAR LAND OR NEARBY LANDS. IF NOT AVAILABLE, THEN HE WOULD TAKE INTO CONSIDERATION OTHER CIRCUMSTANTIAL EVIDENCE. THE ASSESSEES ARE DIRECTED TO COOPERATE WITH THE DVO AN D SUBMIT NECESSARY DETAILS AS WELL AS THEIR OBJECTIONS, IF ANY, ON THE FORMATION OF OPINION. AFTER OBTAINING THIS REPORT, THE LD.CIT(A) SHOULD D ECIDE THE APPEALS. IT WILL BE APPRECIATED IF ON THE APPLICATION OF THE AS SESSEE, THE LD. COMPETENT AUTHORITY WOULD TRANSFER ALL THESE APPEAL S TO THE LD.CIT(A)-X, BEFORE WHOM A LARGE NUMBER OF APPEALS ON THE ISSUE ARE PENDING, WHICH WOULD AVOID EXPRESSION OF CONTRADICTORY VIEWS ON TH E COMMON ISSUE. THE ASSESSEE WILL FILE AN APPLICATION BEFORE THE CO MPETENT AUTHORITY IN THIS REGARD. ITA NO.535/AHD/2018 & 3 OTHERS - 7 - OBSERVATION MADE BY US WILL NOT IMPAIR OR INJURE T HE CASE OF THE ASSESSEE AND WILL NOT CAUSE ANY PREJUDICE/EXPLANATI ON OF THE ASSESSEE. THE LD.CIT(A) WOULD DECIDE ALL THE APPEALS IN ACCOR DANCE WITH LAW. 10. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2018. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER