Sh. Maheshwari Industries, Mathura V. Addl. C.I.T., Range-3, Mathura

ITA 249/AGR/2012

• Counselvise Citation: 24920314 RSA 2012
• Duration Of Justice: 3 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-03-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 05-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BELU SINHA
• Assessee Lawyers: M M AGARWAL
• Keywords: Retrospective amendment; Fair market value; Valuation report

Judgement Text

I.T.A. NO.249/AGRA/2012 ASSESSMENT YEAR:2006-07 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE: SHRI G.C. GUPTA, VICE-PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.249/AGRA/2012 ASSESSMENT YEAR: 2006-07 SHRI MAHESHWARI INDUSTRIES, VS. ADDL. C.I.T., RANG E-3, 4, RAS BEHARI SADAN, MATHURA. HARI NIKUNJ XING, MATHURA. [PAN: AAHFS 7159 R] APPELLANT BY : SHRI M.M. AGARWAL, C.A. RESPONDENT BY : SMT. BELU SINHA, SR. D.R. DATE OF HEARING : 21.07.2015 DATE OF PRONOUNCEMENT : 24.07.2015 O R D E R THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YE AR 2006- 07 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). GRO UNDS OF APPEAL NOS.1 TO 3 OF THE ASSESSEE ARE AS UNDER : 1. BECAUSE ON DUE CONSIDERATION OF SUBMISSION MADE , PRECEDENTS CITED AND ALSO THE REMAND REPORT SUBMITT ED BY AO, THE CIT(APPEALS) HAS GROSSLY ERRED IN RELYIN G ON THE ORDER DATED 15.11.2011 PASSED BY THE COMMISSIONER O F INCOME TAX-1, AGRA (THE CIT) TO HOLD THAT THE AO HAD VALID JURISDICTION OVER THE APPELLANT TO ASSESS I T. 2. BECAUSE IN HOLDING SO, THE CIT(APPEALS) FURTHER ERRED IN PLACING RELIANCE ON SUCH ORDER DATED 15.11.2011, WHICH WAS NOT PLACED ON RECORD EITHER BY THE AO OR THE AP PELLANT OR WITHOUT CONFRONTING THE SAME TO THE APPELLANT. 3. BECAUSE, CIT(APPEALS) FAILED TO APPRECIATE THAT ORDER DATED 15.11.2011 ITSELF PASSED BY CIT VESTING JURIS DICTION I.T.A. NO.249/AGRA/2012 ASSESSMENT YEAR:2006-07 PAGE 2 OF 5 WITH THE AO WITH RETROSPECTIVE EFFECT WAS BEYOND HI S COMPETENCE, WITHOUT JURISDICTION, BAD IN LAW AND CO ULD NOT BE RELIED UPON. 2. LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRESSED TH ESE GROUNDS OF APPEAL OF THE ASSESSEE. THE SAME ARE ACC ORDINGLY DISMISSED. 3. GROUND NO.4 OF ASSESSEES APPEAL IS AS UNDER : 4. BECAUSE THE CIT(APPEALS) ERRED IN FACTS AS WELL AS IN LAW IN ASSUMING AND SUBSTITUTING THE COST OF ACQUIS ITION OF FACTORY LAND UNDER SECTION 55(2)(B) OF THE ACT AT R S.40,000 AGAINST THE CLAIM OF THE APPELLANT WHICH WAS SUPPOR TED BY REPORTS OF TWO REGISTERED VALUERS. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS ERRED IN ESTIMATING THE FAIR MARKET VALUE OF TH E FACTORY LAND AT RS.40,000/- AS ON 01.04.1981 ONLY ON THE BASIS OF D VOS REPORT AS AGAINST THE VALUE OF RS.5,20,000/- CLAIMED BY THE A SSESSEE. HE SUBMITTED THAT THE VALUATION OF RS.5,20,000/-, AS F AIR MARKET VALUE OF THE LAND, AS ON 01.04.1981, IS SUPPORTED BY THE VALUATION REPORT OF APPROVED VALUER, COPY FILED IN THE COMPILATION B Y THE ASSESSEE. HE SUBMITTED THAT AT THE STAGE OF APPELLATE PROCEED INGS BEFORE THE CIT(A), THE ASSESSEE AGAIN GOT FAIR MARKET VALUE OF THE LAND IN QUESTION AS ON 01.04.1981 FROM APPROVED VALUER WHO VALUED THE SAME AT RS.5,44,000/-. HE SUBMITTED THAT THE DVO HA S WRONGLY ESTIMATED FAIR MARKET VALUE OF THE LAND AT RS.40,00 0/- AS ON 01.04.1981 AND HAS QUOTED ONLY ONE INSTANCE OF SALE IN APRIL,1981, WHICH IS NOT RELEVANT AS THE SALE INSTANCE GIVEN BY THE DVO IN ITS REPORT PERTAINS TO LAND ALLOTMENT MADE BY THE GOVER NMENT OWNED CORPORATION RICCO. HE SUBMITTED THAT IT IS A MATT ER OF COMMON I.T.A. NO.249/AGRA/2012 ASSESSMENT YEAR:2006-07 PAGE 3 OF 5 KNOWLEDGE THAT FAIR MARKET VALUE OF THE FACTORY LAN D IS MANY TIMES MORE AS COMPARED TO THE RATE AT WHICH FACTORY PLOT IS ALLOTTED FOR ESTABLISHMENT OF THE INDUSTRIAL UNIT. THE SALE INST ANCE GIVEN BY DVO WAS, THEREFORE, UNCOMPARABLE. HE SUBMITTED TH AT THE ASSESSEE, A SENIOR CITIZEN OF OVER 80 YEARS OF AGE, IS BED RIDDEN. HE SUBMITTED THAT THE VALUATION OF THE ASSESSEE BEI NG SUPPORTED BY TWO APPROVED VALUERS, MAY BE ADOPTED. 5. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF TH E LD. COUNSEL FOR THE ASSESSEE. SHE SUBMITTED THAT THE VA LUATION REPORTS OF THE TWO APPROVED VALUERS WERE NOT SUPPORTED BY A NY SALE INSTANCE. SHE SUBMITTED THAT THE LAND IN QUESTION W AS PURCHASED BY THE ASSESSEE IN THE YEAR 1979 FOR RS.34,000/- ON LY. SHE REFERRED TO RELEVANT PORTION OF THE APPELLATE ORDER IN SUPPO RT OF THE CASE OF THE REVENUE. SHE RELIED ON THE ORDER OF THE CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND PERUSED THE ORDERS OF THE AO AND THE CIT(A), COPIES OF TWO VALUATION REPORTS PREPARED BY ASSESSEES APPROVED V ALUERS AND ALSO THE DVOS REPORT RELIED UPON BY THE DEPARTMENT . WE FIND THAT VALUATION IS ESSENTIALLY A MATTER OF ESTIMATE, BUT THE ESTIMATE HAS TO BE REASONABLY MADE IN A JUDICIOUS MANNER, TAKING INTO CONSIDERATION ALL THE RELEVANT MATERIAL AVAILABLE O N RECORD. IN THIS CASE, NO SALE INSTANCES COULD BE CITED BY THE PARTI ES. THE SALE INSTANCE REFERRED TO BY THE DVO IS DISTINGUISHABLE ON FACTS SINCE RELATES TO LAND ALLOTTED BY GOVERNMENT OWNED CORPOR ATION RICCO AND DOES NOT REPRESENT FAIR MARKET VALUE OF THE LAN D AND IS UN- COMPARABLE. IT IS A MATTER OF COMMON KNOWLEDGE THA T THE I.T.A. NO.249/AGRA/2012 ASSESSMENT YEAR:2006-07 PAGE 4 OF 5 GOVERNMENT ALLOTS FACTORY LAND FOR ESTABLISHMENT OF INDUSTRIAL UNIT AT SUBSIDISED RATES WITH CERTAIN CONDITIONS. THE FAIR MARKET VALUE OF THE LAND OF INDUSTRIAL UNITS MAY BE MANY FOLD AS CO MPARED TO THE ALLOTMENT RATE OF GOVERNMENT. THE APPROVED VALUERS OF THE ASSESSEE HAVE VALUED THE LAND IN QUESTION AT RS.5,2 0,000/- AND RS.5,44,000/- AS ON 01.04.1981. THE LAND IN QUESTIO N WAS PURCHASED BY THE ASSESSEE IN THE YEAR 1979 FOR RS.3 4,000/-. THE ASSESSEE HAS SOLD THE PROPERTY IN QUESTION AFTER CO NSTRUCTION FOR A SUM OF RS.65,00,000/- DURING THE RELEVANT PERIOD. T HE LAND IN QUESTION IS IN MIA PHASE-II, BASANI, JODHPUR AND AL L AMENITIES WERE AVAILABLE AT JODHPUR (RAJASTHAN) WHICH IS ONLY SEVEN KILOMETRES AWAY. THE LAND IN QUESTION WAS CONNECTED WITH CITY BUS SERVICE FROM THE CITY OF JODHPUR. THE LAND IS 50 ME TERS WIDE AND 80 METERS DEEP. THERE WAS NO RESTRICTION OF FLOOR SPAC E INDEX PERMISSIBLE AFTER LEAVING PRESCRIBED SET-BACKS. TAK ING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE INTO CONSIDERAT ION, WE ARE OF THE VIEW THAT THE ENDS OF JUSTICE SHALL BE MET IF F AIR MARKET VALUE OF THE LAND IN QUESTION IS DETERMINED AT RS.3,50,000/- AS ON 01.04.1981 AS AGAINST 5,20,000/- CLAIMED BY THE ASS ESSEE AND RS.40,000/- DETERMINED BY THE CIT(A) FOR THE PURPOS E OF COMPUTATION OF CAPITAL GAIN. ACCORDINGLY, GROUND NO .4 OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JULY, 2015. SD/- SD/- INTURI RAMA RAO G.C. GUPTA (ACCOUNTANT MEMBER) (VICE- PRESIDEN T) DATED: AGRA: 24 TH JULY, 2015 I.T.A. NO.249/AGRA/2012 ASSESSMENT YEAR:2006-07 PAGE 5 OF 5 *AKS/- COPIES TO: (1) THE APPELLANT (2) THE RESPOND ENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE(6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA