Naginbhai Prahladbhai Patel, Ahmedabad V. ITO, Ward-5(2)(3), Ahmedabad

ITA 2217/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5963 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Assessee Lawyers: S N SOPARKAR
• Keywords: Value adopted by valuation officer; Principle of natural justice; Fair market value; Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I SUDHANSHU SRIVASTAVA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER NAGINBHAI PRAHLADBHAI PATEL, 13, MOTI PARK SOCIETY, SATELLITE ROAD, AHMEDABAD PAN: AAVPP9660L (APPELLANT) VS THE IT O , WARD - 5 ( 2)(3 ) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI SANTOSH KARNANI , SR. D . R. ASSESSEE BY: SHRI S.N. SOPARKAR , A.R. DATE OF HEARING : 28 - 06 - 2 019 DATE OF PRONOUNCEMENT : 31 - 07 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2013 - 14 , ARI SES FROM ORDER OF THE CIT(A) - 5, AHMEDABAD DATED 08 - 08 - 2 017 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1.1 THE O RDER PASSED U/S.250 PASSED ON 08.08.2017 FOR A.Y.2013 - 14 BY CIT(A) - 5, ABAD, UPHOLDING THE ADDITION OF RS.21,13,956/ - TOWARDS LTCG ON SALE OF LAND IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY E RRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE EXPLANATIONS FURNISHED AND THE EVIDENCE PRODUCED BY THE APPELLANT. THOUGH WRITTEN I T A NO . 2217 / A HD/20 17 A SS ESSMENT YEAR 2013 - 14 I.T.A NO. 2217 /AHD/20 17 A.Y. 2013 - 14 PAGE NO NAGINBH AI PRAHLADBHAI PATEL VS. IT O 2 SUBMISSION, VALUERS REPORT WITH COMMENTS ETC. WERE FILED, THE SAME HAVE BEEN COMPLETELY IGNORED BY CIT(A ). 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN CONFIRMING THE LAND RATE OF RS.32 PER SQM. AS FMV AS ON 01.04.1981. 2.2 THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE VALUATION OF LAND DETERMINED BY DVO WAS GROSSLY CONTRARY TO THE WELL - ESTABLISHED PRINCIPLES OF VALUATION AS WELL AS THE FACTS OF THE PUC. 2.3 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE ID. CIT(A) HAS GRIEVOUSLY ERRED IN CONFIRMING THE LAND RATE OF RS.32 PER SQM. AS FMV AS ON 01.04.1981. THE LD CIT(A) AS WELL AS DVO OUGHT NOT HAVE REJECTED THE REGISTERED VALUER'S REPORT WITHOUT GIVING GOOD AND SUFFICIENT REASONS. 3.1 THE ID. CIT(A) HAS FAILED TO APPRECIATE THAT THE ENTIRE REFERENCE OF VALUATION AS ON 01.04.1981 TO DVO WAS ILLEGAL AND UNLAWFUL . IT IS THEREFORE PRAYED THAT THE ADDITION OF RS.15,81,973/ - MADE BY THE AO SHOULD BE DELETED. 3 . GROUND NOS. 1.1 AND 1.2 ARE OF GENERAL NATURE WHICH DO NOT REQUIRE ANY ADJUDICATION, THEREFORE , THE SAME ARE DISMISSED. 4 . ALL OTHER GROUND NOS. 2 .1 TO 3.1 ARE PERTAINED TO THE COMMON ISSUE DETERMINING THE VALUATION OF LAND AS ON 1 ST APRIL, 1981, THEREFORE, ALL THESE GROUNDS OF APPEAL ARE ADJUDICATED TOGETHER BY THIS COMMON ORDER. 5 . THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLARING INCOME OF RS. 2 , 23 ,0 90/ - WAS FILED ON 5 TH DEC , 2013. THE CASE WAS SUBJECT TO SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 2 ND SEP, 2014. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CONSTRUCTION/LABOUR WORK . D URING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SOLD JOINTLY OWNED LAND PROPERTY IN WHICH ASSESSEE WAS HAVING 1/22 SHARE LOCATED AT AHMEDABAD ON 12 TH FEB, 2013 FOR RS. 4.2 CRORES AS PER SALE DEED EXECUTED. THE ASSESSEE HAS RECEIVED ITS SHARE OF RS. 16 ,75,002/ - . THE ASSESSEE HAS CLAIMED FAIR MARKET VALUE AS ON 1 ST APRIL, 1981 AT RS. 49 , 93 , 829/ - AS PER REPORT OF THE REGISTERED VALUER. THE ASSESSEE HAS SHOWN CAPITAL LOSS AT RS. - 99220/ - AFTER CLAIMING INDEXED COST OF RS. 17 , 74 , 222/ - AS ASSESSEE S SHA RE. THE ASSESSING OFFICER OBSERVED THAT THE VALUE ADOPTED BY THE ASSESSEE AS PER I.T.A NO. 2217 /AHD/20 17 A.Y. 2013 - 14 PAGE NO NAGINBH AI PRAHLADBHAI PATEL VS. IT O 3 VALUATION REPORT OF THE REGISTERED VALUER A S ON 01 - 04 - 1981 WAS ON HIGHER SID E. T HE RE FORE, THE ASSESSING OFFICER HAS REFERRED THE CASE TO THE DISTRICT VALUATION OFFICER FOR DETE RMINING THE FAIR MARKET VALUE OF THE SOLD PROPERTY AS ON 01 - 04 - 1981. THE ASSESSING OFFICER STATED THAT DISTRICT VALUATION OFFICER, AHMEDABAD HAS REPORTED V IDE LETTER DATED 18 TH MARCH, 2016 THAT ASSESSEE WAS NOT EXTEND ING CO - OPERATION TO CARRY OUT INSPECTI ON OF THE IMPUGNED PROPERTY AND SCRUTINY OF THE DOCUMENTS RELATED TO THE SOLD PROPERTY. THE ASSESSING OFFICER HAS ALSO PRODUCED THE SCANNED COPY OF THE AFORESAID LETTER OF DISTRICT VALUATION OFFICER AT PAGE NO. 2 OF THE ASSESSMENT ORDER REQUESTING THAT TH E ASSESSEE MAY BE DIRECTED TO CO - OPERATE WITH THE VALUATION OFFICER. B ECAUSE OF NON - COOPERATION OF THE ASSESSEE, THE DIST RICT VALUATION OFFICER HAS ALSO REFERRED IN THE SAID LETTER THAT AS PER THE INFORMATION AVAILABLE , THE RATE OF AGRICULTURAL LAND AS ON 01 - 04 - 1981 IN THE AREA WHERE THE SOLD PROPERTY WAS LOCATED WAS IN THE RANGE OF RS. 30 TO 40 PER SQ. METER. THE VALUATION OFFICER HAS ALSO MENTIONED IN THE LETTER THAT VALUATION REPORT WILL BE ISSUED AS EARLY AS POSSIBLE ON THE CO - OPERATION OF ASSESSEE. THEREAFTER , THE ASSESSING OFFICER HAS ALSO ISSUED SHOW CAUSE NOTICE/ CLARIFICATION LETTER TO THE ASSESSEE TO CO - OPERAT E IN THE VALUATION PROCEEDINGS. THE ASSESSEE WAS AL SO SHOW CAUSED AS TO WHY VALUE OF LAND SHOULD NOT BE TAKEN CONSIDERING THE RATE OF RS . 35/ - PER SQ. MT . ON THE BASIS OF INFORMATION RECEIVED FROM T H E DVO AS PREVAILING RATE OF LAND IN THAT AREA WHERE THE LAND IS SITUATED AS ON 01 - 04 - 1981. THE ASSESSING OFFICER STATED THAT ASSESSEE HAS NOT MADE ANY COMPLIANCE TO THE SHOW CAUSE NOTICE AND T HE DVO COULD NOT COMPLETE THE VALUATION PROCEEDINGS BE C A US E OF NO - COOPERATION EXTENDED BY THE ASSESSEE . T HEREFORE , AFTER ADOPTING THE VALUE OF THE SOLD LAND @ RS. 35 PER SQ. MT ., THE ASSESSING OFFICER HAS COMPUTED LONG TERM CAPITAL GAIN TO BE I.T.A NO. 2217 /AHD/20 17 A.Y. 2013 - 14 PAGE NO NAGINBH AI PRAHLADBHAI PATEL VS. IT O 4 TAXED IN TH E HAND OF THE ASSESSEE ON THE SALE OF THE AFORESAID LAND AT RS. 15 , 81 , 973/ - . 6. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSSESSEE. 7. DURING THE COURSE OF APPELLATE PROCEEDI NGS BEFORE US, THE LD. COUNSEL HAS SUBMITTED PAPER BOOK CONTAINING COPIES OF DOCUMENTS AND INFORMATION FURNISHED BEFORE THE ASSESSING OFFICER AND LD. CIT(A) DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS. THE LD. COUNSEL HAS CONTEND ED THAT THE DECISION OF LD. CIT(A) IS NOT JUSTIFIED AS THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT WITHOUT VALUATION REPORT OF THE DVO, THEREFORE , THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT CORRECT. ON THE OTHER HAND, LD. DEPARTMENTAL REP RESENTATIVE HAS VEHEMENTLY CONTENDED THAT THE ASSESSEE HAS NOT EXTENDED CO - OPERATION TO THE DISTRICT VALUATION OFFICER DURING THE COURSE OF VALUATION PROCEEDINGS . HE HAS ALSO REFERRED VARIOUS PAG ES OF THE ASSESSMENT ORDER DEMONSTRATING THAT IN SPITE OF GI VING A NUMBER OF OPPORTUNITIES , THE ASSESSEE HAS NOT CO - OPERATED WITH THE DVO FOR TIMELY COMPLETION OF VALUATION PROCEEDINGS. THEREFORE, BECAUSE OF UN NECESSARY DELAY OCCURRED ON T H E PART OF THE ASSESSEE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT AFTER CONSIDERING THE PREVAILING RATE OF SALE INSTANCES OF LAND IN THE SAME AREA AS PER THE INFORMATION AVAILABLE WITH T HE DVO. THE LD. DEPARTMENTAL REPRESENTATIVE HAS PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER AND LD. CIT(A). I.T.A NO. 2217 /AHD/20 17 A.Y. 2013 - 14 PAGE NO NAGINBH AI PRAHLADBHAI PATEL VS. IT O 5 8 . WE HAVE HE ARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESSING O FFICER NOTICED THAT ASSESSEE H AD SOLD LAND LOCATED AT AMBALI N EAR PRL COMMERCIAL/RING ROAD ON 12 TH FEB, 2013 JOINTLY WITH OTHER FOR A TOTAL CONSIDERATI ON OF R S. 4.02 CRORES OUT OF WHICH THE ASSESSEE HAS RECEIVED RS. 16,75,000/ - . ASSESSEE HAS TAKEN FAIR MARKET VALUE AS ON 01 - 04 - 1981 AT RS. 667 PER SQ. MT . AS PER REGISTERED VALUATION S REPORT. HOWEVER, THE ASSESSING OFFICER HAS REFERRED THE VALUATION OF THE SOLD PROPERTY TO THE DVO AF T ER CONSIDERING THAT REGISTERED VALUER H AS TAKEN THE RATE OF LAND AS ON 01 - 04 - 1981 ON HIGHER SIDE. DURING T HE COUR S E OF ASSESSMENT YEAR, THE DVO REPORTED THE ASSESSING OFFICER THAT ASSES S EE HAS NOT BEEN EXTENDING CO - OPERATIO N TO COMPLETE THE VALUATION PROCESS OF THE IMPUGNED PROPERTY. IN THIS REGARD, THE ASSESSING OFFICER HAS ALSO DIRECTED THE ASSESSEE TO EXTEND FULL CO - OPERATION TO THE DVO TO CARRY OUT THE VALUATION OF THE PROPERTY. THE ASSESSING OFFICER HAS ALSO REPORTED THE CONTENTS OF THE LET T ER OF THE DVO IN THE ASSESSMENT ORDER STATING THAT DETAILED INSPECTION OF THE PROPERTY AND SCRUTINY OF COMPLETE DOCUMENT WAS PENDING ON ACCOUNT OF NON - COOPERATION OF THE ASSESSEE AND HIS AUTHORIZ ED REPRESENTATIVE . THE DVO HAS ALSO SHARE D THE INFORMATION WITH THE ASSESSING OFFICER THAT THE PREVAILING RATE OF AGRICULTURAL LAND AS ON 01 - 04 - 1981 IN VILLAGE AMBALI WERE IN THE RANGE OF R S. 30 TO 40 SQ. MT. UNDER THE CIRCUMSTANCES, THE ASSESSING OFFICER HAS AD OPTED THE RATE QUOTED BY T H E DVO AND ASSESS THE LONG TERM CAPITAL GAIN IN THE HAND OF THE ASSESSEE AT RS. 15 , 81 , 973/ - . IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS CLEAR THAT ASSESSEE HAS NOT EXTENDED PROPER CO - OPERATION TO THE DVO DURING THE PROCESS OF VALUATION OF THE IMPUGNED PROPERTY AND THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT WITHOUT REFERRING THE ACTUAL VALUATION REPORT OF THE DISTRICT VALUATION OFFICER. W E I.T.A NO. 2217 /AHD/20 17 A.Y. 2013 - 14 PAGE NO NAGINBH AI PRAHLADBHAI PATEL VS. IT O 6 CONSIDER THAT BOTH THE S IDE S ASSESSEE AND ASSESSING OFFICER WERE AT FAULT. THE ASSESSEE HAS UNNEC ESSARILY DELAYED THE PROCESS OF VALUATION BY NOT EXTENDING CO - OPERATION TO T HE DVO AND AS A RESULT THE ASSESSING OFFICER HAS MADE PROVISION AL VALUATION OF THE PROPERTY AS PER R AT E SUGGESTED BY THE DVO PREVAILING AS ON 01 - 04 - 1981 IN THE VILLAGE WHERE THE LA ND WAS LOCATED . CONSIDERING THE ABOVE CITED PECULIAR CIRCUMSTANCES IN ORDER TO ADJUDICATE THE ISSUE IN THE INSTANT APPEAL ON MERIT, WE ARE OF THE CONSIDERED OPINION THAT IT WILL BE APPROPRIATE TO RESTORE THIS CASE TO THE FILE OF ASSESSING OFFICER FOR DE CIDING THE ISSUE IN APPEAL DE - NOVO ON THE BASIS OF REPORT OF THE DISTRICT VALUATION REPORT OFFICER AND AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. ACCORDINGLY, THE MATTER IS RESTORED TO THE FILE OF ASSESSING OFFICER AS DIRECTED ABOVE. THEREFORE , THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 31 - 07 - 201 9 SD/ - SD/ - ( SUDHANSHU SRIVASTAVA ) ( AMARJIT S INGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 31 /07 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 2217 /AHD/20 17 A.Y. 2013 - 14 PAGE NO NAGINBH AI PRAHLADBHAI PATEL VS. IT O 7 BY ORDER/ , / ,