S. Champakalatha, CHENNAI V. ITO, CHENNAI

ITA 2485/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7838 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 26-08-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRINIVASAN
• Keywords: Cost of acquisition; Fair market value

Judgement Text

, ( ) , IN THE INCOME TAX APPELLATE TRIBUNAL A (SMC) BENCH, CHENNAI , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER . /ITA NO.2485/MDS/2016 / ASSESSMENT YEAR : 2011-12 S. CHAMPAKALATHA, NO.14, BALAJI AVENUE, 1 ST STREET, T. NAGAR, CHENNAI 600 017. PAN AAEPC2729E ( /APPELLANT) V. THE INCOME-TAX OFFICER, BUSINESS WARD-1(1), CHENNAI- 34. RESPONDENT) / APPELLANT BY : SHRI S.SRINIVASAN, ADVOCATE / RESPONDENT BY : SHRI A.V.SREEKANTH, JCIT ! / DATE OF HEARING : 05.12.2016 '# ! / DATE OF PRONOUNCEMENT : 22.12.2016 ! / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 30 .03.2016. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- IT IS RESPECTFULLY SUBMITTED THAT THE RESPONDENT A UTHORITY FAILED TO APPRECIATE THAT THE ASSESSING OFFICER HAS ERRED IN, 1. RECKONING FAIR MARKET VALUE (FMV) OF LAND AS SAM E AS GUIDE LINE VALUE (GLV) AS OF 01.04.1981 IN FACE OF EVIDEN CE OBTAINED - - ITA 2485/16 2 FROM SUB REGISTRAR, COIMBATORE THAT ON 18.11.2010 T HE SALE TRANSACTION GOT REGISTERED AT PREVAILING MARKET PRI CE OF 2,65,60,000 AS AGAINST THE GUIDE LINE VALUE (GLV) O F 36,51,501 WHICH IS 7.27 TIMES GLV ADOPTED THAT APPLIES TILL D ATE. 2. NOT RECKONING THAT SAID PROPERTY BEING ON THE MA IN ARTERIAL ROAD IN COIMBATORE ITS FAIR MARKET VALUE IS FAR HIG HER THAN INTERIOR AREAS AT ALL TIMES. 3. NOT RECKONING THE PRACTICE OF FIXING GUIDE LINE VALUE (GLV) FOR STAMP DUTY PURPOSES AT A SUM FAR LOWER THAN FAIR MA RKET VALUE (FMV) AS [PROVED IN THIS CASE TO BE 7.27 TIME. 4. ASSUMING VALUE OF BUILDING IN USE AS A SURGICAL CLINIC /EYE HOSPITAL EVEN AS OF 01.04.1981, AT AN INAPPROPRIATE LOW VALUE OF 100 SQ.FT. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER HAS CONSIDERED THE INDEXED VALUE OF THE LAND AS ON 01.0 4.1981 AS 3,42,020/-, 1/8 TH SHARE OF ASSESSEE BEING 42,752/- AND DISALLOWED A SUM OF 1,18,758/- CLAIMED BY THE ASSESSEE TOWARDS REPAIRS/RENOVATION, AS NO DETAILS TO SUBSTA NTIATE THE SAME HAS BEEN PRODUCED. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). 4. BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS MAINLY AGGRIEVED BY THE ADOPTION OF THE GLV OF LAND - - ITA 2485/16 3 AS ON 1.4.1981 AT THE RATE OF 14,000/- PER CENT OF LAND, BY THE AO BASED ON INFORMATION OBTAINED FROM THE SUB-REGIS TRAR, COIMBATORE. THE ASSESSEE ALSO SUBMITTED THAT AS PE R THE INFORMATION OBTAINED FROM THE SUB-REGISTRAR, COIMBA TORE, BY THE AO, THE GLV OF LAND AS ON 18.11.2010 I.E. THE DATE OF SALE OF LAND IS 2,460/- PER SQ.FT. AND ON THIS BASIS, THE TOTAL LAN D VALUE WOULD ONLY BE 36,51,501/-. THE SALE DEED WAS REGISTERED FOR 2,65,50,000/-, WHICH ITSELF PROVES THAT THE FMV ON THE DATE OF SALE WAS 7.27 TIMES THE GLV. ON THIS BASIS, THE AS SESSEE ARGUED THAT THE VALUE OF THE LAND AS ON 1.4.1981 OU GHT TO BE ADOPTED AT 7.27 TIMES THE INDEXED VALUE ARRIVED AT ON THE BASIS OF GLV I.E. 42,752/- X 7.27, WHICH WORKS OUT TO 3,10,807/-, AS AGAINST 42,752/- ADOPTED BY THE AO. 4.1 FURTHER, THE ASSESSEE CONTENDED THAT WITH TH E FMV OF THE LAND AT 3,10,807/- ALONG WITH THE VALUE OF BUILDING ADOPTE D AT THE RATE OF 100/- PER SQ.FT., THE 1/8 TH SHARE OF BUILDING TAKEN AS 2,13,300/-, THE TOTAL VALUE OF THE PROPERTY AS ON 1.4.1981 COMES TO 5,24,107/-. THE INDEXED LONG TERM CAPITAL GAIN WOULD WORK OUT TO 27,97,643/-. CONSIDERING THE DEPOSIT OF - - ITA 2485/16 4 29,30,000/- MADE IN NRAI BY THE ASSESSEE, SHE IS EL IGIBLE FOR FULL EXEMPTION. 4.2 ACCORDING TO THE ASSESSEE, THE INCORRECT ASSUMP TION OF THE AO, WHEREBY HE HAS EQUATED THE GLV OF THE YEAR 1981 AS GIVEN BY THE SUB-REGISTRAR TO BE THE SAME AS FMV HA S THUS LED TO RECKONING THE LONG TERM CAPITAL GAINS AT 30,62,698/-, LEADING TO ADDITIONAL DEMAND TOWARDS CAPITAL GAIN O F THE DIFFERENCE OF 1,32,698/-. 5. ON APPEAL, THE CIT(APPEALS) OBSERVED THAT THE AO AS WELL AS THE ASSESSEE HAS ADOPTED THE SALE CONSIDERA TION OF LAND AS PER THE VALUE AT WHICH THE SALE DEED HAS BEEN RE GISTERED I.E. 2,65,50,000/- AND THE ASSESSEE HAS NOT DISPUTED TH E VALUE AT WHICH THE SALE CONSIDERATION HAS BEEN ADOPTED, THOU GH SHE CONTENDED IN THE GROUNDS OF APPEAL THAT BASED ON TH E GLV AS ON 18.11.2010 AS PER INFORMATION FURNISHED BY THE S UB- REGISTRAR, I.E. 2460/- PER SQ.FT., THE FMV WORKS OUT TO 7.27 TIMES THE GLV. 5.1 THE CIT(APPEALS) FURTHER OBSERVED THAT THE ASSE SSEE HAS ADOPTED AN ARBITRARY VALUE OF 21,60,000/- AS THE VALUE OF THE PROPERTY AS ON 1.4.1981. 1/8 TH SHARE OF THE SAME, I.E. HER SHARE, - - ITA 2485/16 5 HAS BEEN WORKED OUT AS 2,70,000/-. THE BASIS FOR ADOPTING THIS VALUE HAS NOT BEEN CLARIFIED /EXPLAINED. HENC E, ACCORDING TO THE CIT(APPEALS), THE AO HAS RIGHTLY REJECTED THIS VALUE AND HAS WRITTEN TO THE SUB-REGISTRAR, COIMBATORE IN ORDER T O ASCERTAIN THE GLV OF THE LAND AS ON 1.4.1981. ACCORDING TO T HE CIT(APPEALS), THE GLV IS BASED ON AUTHENTIC GOVERNM ENT RECORDS AND HENCE, THE ADOPTION OF THE GLV AS THE B ASIS FOR THE VALUE AS ON 1.4.1981 BY THE AO IS BASED ON A SOUND FOOTING AND IN AND AROUND 1981, THE REAL ESTATE VALUES WERE NOT FLUCTUATING/ESCALATING AS HIGHLY AS IN PRESENT TIME S, THE GLV WOULD BE A FAIR ESTIMATE OF THE FMV, AS ON 1.4.1981 . 5.2 THE CIT(APPEALS) FURTHER OBSERVED THAT THE ASSE SSEE WAS NOT AT ALL AGGRIEVED BY THE ADOPTION OF 7.27 TIMES THE GLV, AS FAR AS SALE CONSIDERATION OF THE LAND WAS CONCERNED AND HAD THE ASSESSEE BEEN AGGRIEVED BY THE ADOPTION OF THE SUM OF 2,65,50,000/- FOR THE TOTAL SALE VALUE OF THE LAND FOR SALE DEED PURPOSE, THE ASSESSEE COULD HAVE APPEALED AGAINST T HE SAME. THEREFORE, THE CIT(APPEALS) CONCLUDED THAT THE AO H AS RIGHTLY ADOPTED THE GLV OF 14,000/- PER CENT OF LAND AS THE BASIS FOR - - ITA 2485/16 6 ARRIVING AT THE COST OF ACQUISITION OF THE LAND. A GGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE, THE ASSESSEE CLAIMED THE VAL UE OF THE PROPERTY AS ON 1.4.1981 AT 21.6 LAKHS AND THE ASSESSEES 1/8 TH SHARE IN THAT PROPERTY WORKED OUT AT 2,70,000/-. THE AO REJECTED THAT CLAIM AND ADOPTED THE VALUE AS SUBMIT TED BY THE SUB-REGISTRAR. THE BASIS OF VALUATION GIVEN BY THE SUB- REGISTRAR WAS THAT OF GLV AND HE HAS NOT SHOWN THE EXACT GLV OF THAT PROPERTY. IN VIEW OF THIS, I AM REMITTING THIS ISSUE TO THE FILE OF AO TO BRING COMPARABLE CASES ON RECORD AND FIX THE VALUE OF THE PROPERTY AS ON 1.4.1981 BY ADOPTING THE VALU E OF COMPARABLE CASES. WITH THIS OBSERVATION, WE REMIT THIS ISSUE TO THE FILE OF THE AO. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 22 ND DECEMBER,2016 AT CHENNAI. SD/- ( $ % & ' ) ()*+,-*.//0*-12 ! 34566/7+8*+89:;<:- - - ITA 2485/16 7 $= /CHENNAI, >3 /DATED, THE 22 ND DECEMBER, 2016. K S SUNDARAM 3? @ABA /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. C2 /CIT(A) 4. C /CIT 5. ADE F /DR 6. EGH /GF.