Jainand Narayanan, CHENNAI V. ITO, CHENNAI

ITA 224/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4447 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 24-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M M BHUSARI
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Cost of acquisition; Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 224/MDS/2017 / ASSESSMENT YEAR : 2012-13 SHRI JAINAND NARAYANAN, C/O. V. VIVEK ANAND, 43, SWATHI COURT, FLAT C&D, VIJAYRAGHAVA ROAD, T. NAGAR, CHENNAI 600 017. PAN: AKBPN1589L V. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION WARD 2(1), CHENNAI 34. ( ! /APPELLANT) ( '# ! /RESPONDENT) ! $ /APPELLANT BY : SHRI B. RAMAKRISHNAN, CA '# ! $ /RESPONDENT BY : SHRI M.M. BHUSARI, C IT $ /DATE OF HEARING : 26.04.2017 $ /DATE OF PRONOUNCEMENT : 31.05.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-16, CHENNA I DATED 26.09.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2012 -13. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DETERMINATION OF FAIR MARKET VALUE (FMV) AS ON 01.04.1982 FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. 2 I.T.A. NO. 224/MDS/2017 2. THERE WAS A DELAY OF 52 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF DELAY. WE HAVE HEARD THE LD. REPRESENTATIVE FOR TH E ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE. WE FIND THAT T HERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE T HE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEA L. 3. SHRI B. RAMAKRISHNAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ADOPTED THE COST OF ACQUISITION AT RS.8,93,982/- AS ON 01.04.1981 AND CLAIMED INDEXED COST OF ACQUISITION AT RS.35,08,950/-. THE SUB-REGISTRAR, M YLAPORE INFORMED THE ASSESSING OFFICER THAT THE GUIDELINE VALUE OF T HE PROPERTY AS ON 01.04.1981 WAS RS.22,000/- PER GROUND. THE AO AGAIN REFERRED THE MATTER TO THE DEPARTMENT VALUATION OFFICER WHO VALU ED THE PROPERTY AT RS.2,07,527/- AS ON 01.04.1981. REFERRING TO THE A SSESSMENT ORDER MORE PARTICULARLY PAGE 2, THE LD. REPRESENTATIVE FO R THE ASSESSEE SUBMITTED THAT THE JOINT SUB-REGISTRAR-I, CENTRAL C HENNAI BY HIS LETTER DATED 06.03.2015 INFORMED THE ASSESSEE THAT THE GUI DELINE VALUE OF THE PROPERTY AS ON 01.04.1981 WAS RS.80,000/- PER G ROUND. THEREFORE THE VALUE ADOPTED BY THE DEPARTMENT VALUATION OFFIC ER AT RS.22,000/- PER GROUND AS GIVEN BY THE JOINT SUB-REGISTRAR-I, C ENTRAL CHENNAI IS NOT CORRECT. THE AO BY REJECTING THE EXPLANATION O F THE ASSESSEE 3 I.T.A. NO. 224/MDS/2017 COMPUTED THE FMV AS ON 01.04.1981 AT RS.2,07,527/- B Y ADOPTING THE VALUE OF THE LAND AT RS.22,000/- PER GROUND. ACCOR DING TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) WITHOUT EXAMINING T HE MATERIAL ON RECORD CONFIRMED THE ORDER OF THE AO. 4. ON THE CONTRARY, SHRI M.M. BHUSARI, THE LD. DEPA RTMENTAL REPRESENTATIVE SUBMITTED THAT THE SUB-REGISTRAR BY LETTER DATED 29.12.2014 INFORMED THE AO THAT THE VALUE OF THE PR OPERTY AS ON 01.04.1981 IS RS.22,000/- PER GROUND. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE GUIDELINE VALUE OF T HE PROPERTY AS ON 01.04.1981 WAS RS.80,000/- PER GROUND. THE AO HAS A DOPTED RS.22,000/- PER GROUND, ESTIMATED THE FMV AT RS.2,07 ,527/-. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) CONFIRMED T HE ORDER OF THE AO BY ADOPTING THE FMV AS ON 01.04.1981 AT RS.22,000 /- PER GROUND. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD . DR, THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE AO. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO BY PLACING RELIANCE ON THE LETTER OF THE SUB-REGISTRAR, MYLAPORE DATED 29.12.2014, ADOPTED THE VALUE OF THE PROPERTY AS ON 01.04.1981 AS RS.22,000/- PER GROUND. THE ASSESSEE APPEARS TO HAVE COLLECTED INFO RMATION UNDER RIGHT TO INFORMATION FROM JOINT SUB-REGISTRAR-I, CE NTRAL CHENNAI. THE 4 I.T.A. NO. 224/MDS/2017 JOINT SUB-REGISTRAR-I, CENTRAL CHENNAI BY HIS LETTE R DATED 06.03.2015 INFORMED THE ASSESSEE THAT THE VALUE OF THE PROPERT Y AS ON 01.04.1981 IS RS.80,000/- PER GROUND. NOW, THERE ARE TWO GUID ELINE VALUES ONE GIVEN BY SUB-REGISTRAR, MYLAPORE AND THE OTHER GIVE N BY THE JOINT SUB-REGISTRAR-I, CENTRAL CHENNAI. AS PER THE LETTE R OF SUB-REGISTRAR, MYLAPORE, THE GUIDELINE VALUE OF THE PROPERTY AS ON 01.04.1981 WAS RS.22,000/- PER GROUND. HOWEVER, BY LETTER DATED 0 6.03.2015 BY JOINT SUB-REGISTRAR-I, CENTRAL CHENNAI, THE GUIDELINE VAL UE WAS RS.80,000/- PER GROUND. NO COMPARATIVE SALE TRANSACTION WAS FI LED BY THE ASSESSEE. THE AO ALSO HAS NOT TAKEN ANY PAIN IN COL LECTING THE COMPARABLE SALE TRANSACTION DURING THE RELEVANT PER IOD. 6. FAIR MARKET VALUE (FMV) IS NOTHING BUT A PRICE THA T MAY BE AGREED BETWEEN A WILLING PURCHASER AND WILLING SELL ER. THE FMV CANNOT BE A CONSTANT FIGURE. IT MAY CHANGE DEPENDI NG UPON VARIOUS FACTORS, SUCH AS THE LOCATION OF THE PROPERTY, AREA OF THE PROPERTY, INFRASTRUCTURE FACILITIES AVAILABLE IN AND AROUND T HE PROPERTY, POTENTIAL FOR FUTURE DEVELOPMENT ETC. THE GUIDELINE VALUE IS ONE OF THE FACTORS TO BE CONSIDERED FOR THE PURPOSE OF ESTIMATING THE FMV. GUIDELINE VALUE MAY NOT REFLECT THE FMV OR THE MARKET VALUE IN ALL C ASES. FMV IS FOR GUIDING THE SUB-REGISTRAR TO ARRIVE AT THE MARKET V ALUE FOR THE PURPOSE OF COLLECTING STAMP DUTY AT THE TIME OF REGISTERING THE DOCUMENTS. THEREFORE PLACING RELIANCE ONLY ON THE GUIDELINE VAL UE PRESCRIBED BY 5 I.T.A. NO. 224/MDS/2017 THE STATE REGISTERING AUTHORITIES MAY NOT BE JUSTIF IED IN ARRIVING AT THE FMV. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT BY TAKING IN TO CONSIDERATION OF THE LOCALITY OF THE PROPERTY, POTE NTIAL FOR FUTURE DEVELOPMENT, INFRASTRUCTURE FACILITIES IN AND AROUN D THE PROPERTY AND THE GUIDELINE VALUE OF THE STATE REGISTRATION DEPAR TMENT, FMV CAN BE SAFELY ESTIMATED AT RS.1,10,000/- PER GROUND. ACCO RDINGLY, ORDERS OF BOTH THE LOWER AUTHORITIES ARE MODIFIED AND THE AO IS DIRECTED TO TAKE RS.1,10,000/- PER GROUND AS ON 01.04.1981 AND THERE AFTER DETERMINE THE CAPITAL GAIN IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON 31 ST MAY, 2017 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESA N) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 31 ST MAY, 2017. JR. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. !' /DR 6. #$ /GF