PRIYA RANJAN PANDIT, NEW DELHI V. ACIT, CIRCLE- 33(1), NEW DELHI

ITA 2481/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3090 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 10-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Cost of acquisition; Fair market value; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.2481/DEL/2018 ASSESSMENT YEARS: 2014-15 PRIYA RANJAN PANDIT, 67, PASCHIMI MARG, GF, VASANT VIHAR, NEW DELHI. V. ACIT, CIRCLE-33(1), NEW DELHI. TAN/PAN: ANYPP 0259R (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P. C. YADAV, ADV. RESPONDENT BY: SHRI SURENDER PAL, SR.D.R. DATE OF HEARING: 19 12 2018 DATE OF PRONOUNCEMENT: 28 02 2019 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 31.01.2017 PASSED BY LD. CIT(APPEALS)-XI, NEW DELHI FOR THE QUANTUM OF ASSES SMENT PASSED U/S.143(3) FOR THE ASSESSMENT YEAR 2014-15. THE EFFECTIVE GROUND PRESSED BY THE LEARNED COUNSEL BEF ORE US IS ADDITION OF RS.83,80,455/- ON ACCOUNT OF DIFFERENCE IN COST OF ACQUISITION OF THE ASSET AS ON 01.04.1981 RELYING U PON THE REPORT OF DVO. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE IS AN INDIV IDUAL WHO HAD SOLD PROPERTY FOR A SALE CONSIDERATION OF RS.16 .35 CRORES DURING THE YEAR UNDER CONSIDERATION AND HAS CONSEQU ENTIALLY I.T.A. NO.2481/DEL/2018 2 DECLARED LONG TERM CAPITAL GAIN AND CLAIMED DEDUCTI ON U/S.54. THE PROPERTY UNDER CONSIDERATION WAS SITUAT ED AT 67, PASCHIM MARG, VASANT VIHAR, NEW DELHI WHICH BELONGE D TO SMT. VIDHYA WATI PANDIT, WHO VIDE HER WILL DATED 03 .01.1992 BEQUEATHED HER ENTIRE ONE HALF UNDIVIDED SHARE IN T HE SAID PROPERTY EQUALLY IN FAVOUR OF HER TWO HEIRS, NAMELY , SHRI PRIYA RANJAN PANDIT AND SHRI SHIV RANJAN PANDIT. THE ASSESS EES SHARE IN THE SAID PROPERTY CAME TO 25% OF THE UNDIV IDED SHARE. IN RESPONSE TO THE SHOW CAUSE NOTICE TO JUST IFY LONG TERM CAPITAL GAIN, ASSESSEE SUBMITTED THE VALUATION REPORT OF THE REGISTERED VALUER AND ALSO THE COST OF ACQUISIT ION OF ASSET AS ON 01.01.1981 WHICH WAS WORKED OUT AT RS.69,26,0 00/-. HOWEVER, THE ASSESSING OFFICER REFERRED THE MATTER TO THE DVO TO ASCERTAIN THE FAIR MARKET VALUE AS ON 28.11.2013 . AS PER THE REPORT, FMV AS ON 01.04.1981 WAS ESTIMATED AT RS.34,43,800/-. THE SAID DISPUTE WAS WITH REGARD TO THE COST OF ACQUISITION. ACCORDINGLY IN THE COMPUTATION OF C APITAL GAIN ADDITION OF RS.83,80,455/- WAS MADE AS PER THE WORK ING AT PAGE 3 OF THE ASSESSMENT ORDER. 3. BEFORE THE LD. CIT (A), ASSESSEE OBJECTED TO THE SAID VALUATION REPORT OF THE DVO AND SUBMITTED THAT THE VALUATION OF THE IMMOVABLE PROPERTY DONE BY THE VALUATION CEL L IS NOT CORRECT, BECAUSE NO COMPARABLE SALE INSTANCES HAVE BEEN GIVEN OR IDENTIFIED OF THE SAME LOCALITY AND CATENA OF OTHER OBJECTS HAVE BEEN RAISED WHICH HAS BEEN HIGHLIGHTED IN THE IMPUGNED APPELLATE ORDER FROM PAGES 4 TO 8. THE SUM AND SUBSTANCE OF THE ASSESSEES OBJECTION WAS THAT THE LD. DVO I.T.A. NO.2481/DEL/2018 3 HAS TAKEN THE RATE ON THE BASIS OF AVERAGE AUCTION PRICE OF THE PROPERTIES FOR A DIFFERENT AREA OF SAFDARJUNG WHEREA S ASSESSEES PROPERTY SITUATED AT VASANT VIHAR WHICH HAS BEEN CATEGORIZED AS A-CATEGORY COLONY WITH A HIGHER CI RCLE RATE WHEREAS SAFDARJUNG ENCLAVE WAS CATEGORIZED AS B-CAT EGORY WITH LOWER CIRCLE RATE. 4. LD. CIT(A) HELD THAT DVO HAS TAKEN INTO CONSIDER ATION ALL THE OBJECTIONS OF THE ASSESSEE, HOWEVER HE SENT THE ENTIRE SUBMISSION OF THE ASSESSEE TO THE ASSESSING OFFICER TO SEND HIS REMAND REPORT AND ALSO DIRECTED THE ASSESSING O FFICER TO CALL FOR THE COMMENTS OF THE DVO. ACCORDINGLY, ASSE SSING OFFICER HAS SUBMITTED THE REMAND REPORT VIDE LETTER DATED 08.08.2017 AFTER CALLING FOR THE COMMENTS OF THE DV O WITH RESPECT TO OBJECTIONS RAISED BY THE ASSESSEE. THE C OMMENT OF THE DVO READS AS UNDER: 3. IN ABSENCE OF THE REFERRED VALUATION REPORTS, N O COMMENTS CAN BE OFFERED. IT MA HOWEVER BE SAID THAT SAFDARJUNG A REA WAS MUCH MORE DEVELOPED THAN VASANT VIHAR DURING 1981. HENCE VALUATION OF A VASANT VIHAR PROPERTY CAN ONLY BE DONE ON CONSIDE RING THE LAND RATE LOWER THAN THE LAND RATE OF SAFDARJUNG PROPERT Y. 4. THE VALUATION OF THE PROPERTY HAS BEEN DONE AS PER GUIDELINES. IT HAS NOTHING TO DO WITH ANOTHER CASE AS REFERRED FOR SHANTI NIKETAN. THE FACTS AND CIRCUMSTANCES AT SHAN TI NIKETAN MIGHT HAVE BEEN DIFFERENT. MOREOVER, SHANTI NIKETAN WAS A MORE DEVELOPED AREA THAN VASANT VIHAR DURING 1981. FURTH ER COMMENTS MAY HOWEVER BE OFFERED ON RECEIPT OF THE REFERRED V ALUERS REPORT AMOUNTING TO RS.69,26,000/- 5. THIS ASPECT IS TO BE DECIDED BY THE COMPETENT I NCOME TAX I.T.A. NO.2481/DEL/2018 4 AUTHORITY. IT MAY HOWEVER BE SAID THAT NABHIS RATE S ARE NOTHING BUT COMPILATION OF DDAS AUCTION RATES BASED ON REA SONABLE ESTIMATION. THIS WAS A JOB ASSIGNED TO THE ASSESSOR S AS PER THE SUPREME COURT JUDGEMENT DATED 12.12.1984. 6. ONLY THE DDAS AUCTION RATES DURING 1981 HAVE B EEN ADOPTED FROM THE NABHIS COMPILATION. THE SAFDARJUN G RATES HAVE BEEN SUITABLY MODIFIED, KEEPING IN VIEW THE ADVANTAGES/DISADVANTAGES OF THE SPECIFIC PROPERTY U NDER VALUATION, SITUATED AT VASANT VIHAR. 7. IN ABSENCE OF THE RELEVANT PAPERS, NO COMMENTS C AN BE OFFERED. TO THE BEST OF THE KNOWLEDGE OF THIS OFFIC E AS OF NOW, NO VALUATION REPORT OF 33 POORVI MARG, VASANT VIHAR HA S BEEN ISSUED BY THIS OFFICE. 8. IN ABSENCE OF THE RELEVANT PAPERS AND REFERRED V ALUATION REPORT OF 33 POORVI MARG VASANT VIHAR, NO SPECIFIC COMMENTS CAN BE OFFERED. IT MAY HOWEVER BE SAID THAT DURING 1981, V ASANT VIHAR WAS NOT SO MUCH DEVELOPED. 9. WHILE SUMMARISING, IT IS TO BE SUBMITTED THAT I N THE VALUATION REPORT DATED 18.12.2016, DDAS AUCTION RATES OF 198 1 OF SAFDARJUNG AREA HAVE BEEN REDUCED BY MERE 10%. THER E IS NO DENYING THE FAGTRIHAT SAFDARJUNG AREA WAS MUCH MORE DEVELOPED THAN VASANT VIHAR DURING 1981. 5. LD. ASSESSING OFFICER IN HIS REMAND REPORT HAD A LSO DISTINGUISHED THE JUDGMENT RELIED UPON BY THE ASSES SEE ESPECIALLY IN THE CASE OF CIT VS. RAMAN KUMAR SURI AND RAJ KUMAR KHOSLA VS. ITO OF HON'BLE BOMBAY HIGH COURT W HEREIN IT WAS HELD THAT PRESCRIBED RATE IN NABHIS GUIDE C ANNOT BE SUBSTITUTED FOR THE VALUATION OF THE PROPERTY IN DE LHI DONE BY APPROVED VALUER. I.T.A. NO.2481/DEL/2018 5 6. LD. CIT(A) HAD REJECTED BOTH THE VALUATION REPOR T OF APPROVED VALUER BY THE ASSESSEE AND SUSTAINED THE V ALUATION REPORT OF THE DVO AND ACCORDINGLY THE ADDITION MADE BY THE ASSESSING OFFICER WAS SUSTAINED. 7. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THERE IS INHERENT INFIRMITY IN THE VALUATION O F THE DVO BECAUSE HE HAS TAKEN THE LAND RATE OF SAFDARJUNG AR EA AS PER THE NABHIS GUIDE WHICH CANNOT BE SAID TO BE APPLIC ABLE FOR VASANT VIHAR AREA WHICH IS A MUCH HIGHER CATEGORY C OLONY. THE DVO HAS TAKEN THE DDAS AUCTION RATES FOR VARIO US YEARS AND THE SAFDARJUNG RATES HAVE BEEN MODIFIED ACCORDI NGLY WHICH CANNOT BE SAID TO BE THE PROPER PARAMETER. FU RTHER, ONCE ASSESSEE HAS FILED THE APPROVED VALUER REPORT BEFORE THE ASSESSING OFFICER THEN SAME CANNOT BE SUBSTITUTED B Y THE DVOS REPORT OR CAN BE HELD TO BE NOT APPLICABLE. I N SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE FOLLOWING JU DGMENTS. S. NO. PARTICULAR 1. DCIT VS SHEETAL BHEL IN ITA NO.6444/DEL/2012:- TO S HOW THAT LAND COST OF 400 SQ YDS PLOT WAS TAKEN AT RS 80,63,610/- IN C BLOCK VASANT VIHAR. 2 CIT VS RAMAN KUMAR SURI- 255 CTR 0107:- FOR SHOWING THAT NABHI GUIDE LINE RATES ARE NOT RELEVANT FOR VA LUING THE PROPERTY UNDER INCOME TAX AND REPORT OF REGISTERED VALUER WOULD BE GIVEN CREDENCE- THE PROPERTY INVOLVED IN T HIS CASE WAS LOCATED AT SHANTI NIKETAN MUCH CLOSER TO THE ASSESSEES PROPERTY AND BELONGING TO SAME GROUP HOU SING SOCIETY. I.T.A. NO.2481/DEL/2018 6 3 MINA DEOGUN VS ITO- 117 TTJ 0121-REFERENCE TO THE P ROPERTY IN VASANT VIHAR HAS BEEN MADE. 4 RAJ KUMAR KHOSLA VS ITO - ITA NO-694/DEL/2010- IN T HIS CASE DVO HIMSELF HAS APPLIED RATE OF RS5000/- PER S Q MTR FOR A PROPERTY LOCATED AT PROVI MARG. 8. ON THE OTHER HAND, LEARNED DEPARTMENT REPRESENTA TIVE HAS STRONGLY RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(A) AND SUBMITTED THAT ALL THE OBJECTIO NS OF THE ASSESSEE HAS BEEN TAKEN NOTE OF BY THE DVO AND THUS REPORT OF THE DVO IS FAR MORE ACCEPTABLE. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON P ERUSAL OF THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDE RS, WE FIND THAT ASSESSING OFFICER HAS RECOMPUTED THE LONG TERM CAPITAL GAIN AT RS.10,84,67,878/- AS AGAINST RS.10,00,87,42 3/- SHOWN BY THE ASSESSEE. THE DIFFERENCE AMOUNT OF RS.83,80,455/- HAS BEEN ADDED SOLELY ON THE VALUATI ON OF THE PROPERTY AS ON 01.04.1981, AS THE ASSESSEE HAD SHOW N AT RS.69,26,000/-, WHEREAS THE DVO HAS REDUCED TO RS.34,43,800/- WHICH HAD THE EFFECT OF INDEXATION C OST. FROM THE PERUSAL OF THE DVOS REPORT, IT IS SEEN THAT HI S REPORT IS BASED ON AVERAGE AUCTION PRICE OF PROPERTY SITUATED IN SAFDARJUNG AREA DURING THE YEAR 1981-82 AFTER TAKING THE ADJUSTMENT FACTORS, HAS BEEN STATED RS.3128 PER SQ. METER, WHEREAS IT IS AN ADMITTED FACT THAT THE SAFDARJUNG L OCALITY HAS BEEN CATEGORIZED AS B-CATEGORY WHICH HAS A MUCH LOW ER CIRCLE RATE AS AGAINST VASANT VIHAR LOCALITY WHICH IS AN E NTIRELY A I.T.A. NO.2481/DEL/2018 7 DIFFERENT PLACE WHICH HAS BEEN CATEGORIZED AS A-CAT EGORY WITH A HIGHER CIRCLE RATE. THE CIRCLE RATES OF THE LAND ARE DECIDED BY THE AUTHORITIES TAKING INTO CONSIDERATION SEVERAL O THER FACTORS IN CATEGORIZING THE LOCALITY, WHICH IS AN IMPORTANT FACTOR IN VALUING THE PROPERTY. APART FROM THAT, THE ASSESSEE HAS ALSO HIGHLIGHTED THE ADJUSTMENT FACTOR RELATING TO LOCATI ON OF THE AREA IN WHICH PROPERTY OF THE ASSESSEE WAS SITUATED . FURTHER, LEARNED COUNSEL HAS POINTED OUT THAT ASSESSING OFFI CER HAS VALUED THE SIMILAR PROPERTY AT 33 POORVI MARG, VAS ANT VIHAR, WHICH MATTER TOO WAS REFERRED TO THE DVO, WHO HAS G IVEN THE FAIR MARKET VALUE OF THE PROPERTY AT VASANT VIHAR A S ON 1.4.1981 AT RS.5000 PER SQ. MTR. ONCE FOR THE SAME AREA HIGHER RATE HAS BEEN APPLIED BY THE DVO, THEN WE FI ND IT VERY DIFFICULT AS TO WHY RATE OF 3128 PER SQ. MTR. HAS B EEN ADOPTED BY THE DVO. IN THE CASE OF CIT VS RAMAN KUMAR SURI, 255 CTR 107, THE HON'BLE HIGH COURT HELD THAT NABHIS G UIDE TO THE HOUSE TAX CANNOT BE SUBSTITUTED FOR THE VALUATI ON AT NEW DELHI PROPERTY DONE BY THE VALUER FOR THE PURPOSE O F VALUATION OF THE PROPERTY. FURTHER COURT HAS HELD THAT EMPANE LLED REGISTERED VALUER OF THE INCOME TAX DEPARTMENT AND THE VALUATION DONE BY SUCH REGISTERED VALUER WOULD TAKE PRECEDENT OVER NABHIS GUIDE TO HOUSE TAX WHICH IS GENERALIZED GUIDE AND DOES NOT TAKE INTO ACCOUNT TH E PECULIAR FEATURES OF THE PROPERTY BEING VALUED. SIMILARLY, H ERE IN THIS CASE, ALSO ENTIRE BASIS OF THE DVO IS BASED ON THE VALUE GIVEN IN THE NABHIS GUIDE AND THEREAFTER, HE HAS MADE CE RTAIN ADJUSTMENT WHICH CANNOT BE SAID TO BE A PROPER FACT OR. I.T.A. NO.2481/DEL/2018 8 NABHIS RATES ARE NOTHING BUT MERELY COMPILATION OF DDAS AUCTION RATE BASED ON REASONABLE ESTIMATION AND IF HE IS APPLYING THE AUCTION RATE OF SAFDARJUNG AREA DURING THE YEAR 1981 WHICH CANNOT BE HELD TO BE APPLICABLE FOR THE LOCALITY OF VASANT VIHAR WHICH IS FAR MORE DEVELOPED AREA. IF T HE AUTHORITIES WHILE FIXING THE CIRCLE RATE FOR A PART ICULAR AREA HAS CATEGORIZED ANY AREA TO BE A A-CATEGORY, THEN IT CA NNOT BE COMPARED WITH THE AREA CATEGORIZED AS B-CATEGORY HA VING A LOWER CIRCLE RATE. THUS, THIS FACTOR ALONE VITIATES THE DVOS REPORT AND THE BASIS ADOPTED BY HIM. MOREOVER, IF A SSESSEE HAS FILED APPROVED VALUERS REPORT TAKING INTO CONS IDERATION VARIOUS FACTORS APPLICABLE FOR THE AREA OF VASANT V IHAR, THEN SAME DOES NOT LOSES HIS CREDENCE TO DVOS REPORT. I T HAS TO BE GIVEN A CREDIBLE IMPORTANCE AND IT CANNOT BE SAID T HAT THE DVOS REPORT SHOULD SUPERSEDE THE APPROVED VALUERS REPORT. EVEN, THE COMMENTS OF THE DVO ON THE REGISTERED VAL UER REPORT IS NOT ADVERTING TO THE POINT, AS TO WHY SAF DARJUNG RATE HAS BEEN APPLIED AT VASANT VIHAR. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE AND LOOKING TO THE FACT T HAT APPROVED VALUER HAVE GIVEN A REPORT ON THE BASIS OF WHICH ASSESSEE HAS ESTIMATED A FAIR MARKET VALUE OF THE P ROPERTY AS ON 1.4.1981, IS TO BE ACCEPTED. ACCORDINGLY, WE HOL D THAT THE VALUE OF THE PROPERTY AS ON 1-4-2018 HAS TO BE TAKE N AT RS.69,26,000/- AS DETERMINED BY THE REGISTERED VALU ER, AND THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFIC ER IS DIRECTED TO BE DELETED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. I.T.A. NO.2481/DEL/2018 9 ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2018. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH FEBRUARY, 2018 PKK