Leslie Pereira, Trivandrum V. Asst.Director of Income tax, Trivandrum

ITA 268/COCH/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7471 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 22-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2010
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: IVAN JOSEPH
• Keywords: Capital asset; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND SANJAY AROR A, AM I.T.A NO. 268/COCH/2010 ASSESSMENT YEAR:2006-07 LESLIE PEREIRA, 26/2187, DILKUSHA, GENERAL HOSPITAL ROAD, TRIVANDRUM-695001. [PAN: AICPP 3650M] VS. THE ASSISTANT DIRECTOR OF INCOME- TAX, (INTERNATIONAL TAXATION), TRIVANDRUM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI IVAN JOSEPH, CA REVENUE BY MS. S. VIJAYAPRABHA, JR. DR DATE OF HEARING 22/11/2011 DATE OF PRONOUNCEMENT 25/01/2012 O R D E R PER SANJAY ARORA, AM: THIS APPEAL BY THE ASSESSEE AGITATES THE APPELLATE ORDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIVANDRUM (CIT(A) FOR SH ORT) DATED 11-03-2010 IN ITS CASE FOR THE ASSESSMENT YEAR (A.Y.) 2006-07. 2. THE ONLY ISSUE ARISING IN THE APPEAL IS THE FAIR MARKET VALUE (FMV) OF 38.5 CENTS OF THE ASSESSEES LAND IN VANCHIYOOR VILLAGE, FALLING UNDER SURVEY NO. 2126/1/2, AS ON 01- 04-1981. THE SAID ASSESSMENT IS FOR THE PURPOSE OF DETERMINATION OF CAPITAL GAINS ARISING ON ITS TRANSFER DURING THE RELEVANT PREVIOUS YEAR, HAVING BEEN SOLD FOR ` 50 LAKHS. WHILE THE ASSESSEE CLAIMS IT TO BE AT ` 15,000/- PER CENT, LEADING TO AN INDEXED COST FOR T HE CURRENT YEAR AT ` 28,70,175/-, THE REVENUE CLAIMS IT TO BE AT ` 6000/- PER CENT, WORKING OUT THE INDEXED COST AT ` 11,48,070/-. THE TAXABLE CAPITAL GAINS, HOWEVER, W ORKS ONLY TO ` 3,51,930/- IN VIEW OF THE ASSESSEE BEING ELIGIBLE F OR EXEMPTION U/S. 54EC OF THE INCOME- I.T.A. NO.268 /COCH/2010 LESLIE PEREIRA VS. ADIT (IT) TRIVANDRUM 2 TAX ACT, 1961 ('THE ACT', HEREINAFTER) IN RESPECT O F INVESTMENT IN NABARD BONDS ON 31- 10-2005 AT ` 35 LAKHS. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL ON RECORD. 3.1 THE BASIS OF THE ASSESSEES CLAIM IS THREE SALE INSTANCES REPORTED ON THE BASIS OF THE DATA COLLECTED FROM THE SUB-REGISTRARS OFFICE (REF ER PAGE 2 OF THE ASSESSMENT ORDER): SL. NO. SURVEY NO. VILLAGE DATE QUANTITY @ IN ( `/CENT) REMARKS/DOCUMENTS 1. 2121 VANCHIYOOR 13.7.1981 3 11,000 VOL. 623/PG.455 2. 2132 N.A. (*) 23.8.1981 6 15,000 VOL.588/PGS.349-352 3. 2149 N.A. 27.8.1980 6.2 15,000 VOL. 578/PG. 595 (*) NOT AVAILABLE ON RECORD. THE BASIS OF THE REVENUES CLAIM, ON THE OTHER HAND , IS A SALE TRANSACTION, THE DETAILS OF WHICH ARE AS UNDER:- SL. NO. SURVEY NO. VILLAGE DATE QUANTITY @ IN ( `/CENT) REMARKS/DOCUMENTS 4. 2147/1 N.A. 1981 6 6,000 - 3.2 THE DATA AFORESAID, WHICH FORMS THE BASIS OF THE RESPECTIVE CLAIMS OF THE OPPOSING PARTIES, IS NOT DENIED OR DISPUTED. ALSO, ADMITTED LY, NO SALE TRANSACTION QUA LAND FALLING UNDER SURVEY NO. 2126 IN VANCHIYOOR VILLAGE DURING THE YEAR 1981, HAS BEEN BROUGHT ON RECORD BY EITHER SIDE, PERHAPS FOR THE REASON OF TH ERE BEING NONE. THERE IS CLEARLY A WIDE DIFFERENCE IN THE REPORTED SALE TRANSACTIONS, ALL O F WHICH ARE FOR LAND SIZES FALLING IN THE SAME RANGE, THOUGH MUCH SMALLER THAN THAT SOLD BY T HE ASSESSEE. THE QUESTION OR THE ISSUE THUS BOILS DOWN TO IDENTIFYING WHICH OF THEM IS MORE RELEVANT, I.E., THE RELATIVE RELEVANCY OF THE REPORTED TRANSACTIONS. ALL THE TRA NSACTIONS, APPROXIMATING IN TIME THE CUT OFF DATE (01/4/1981), HOWEVER, REVEAL NO DISCERNIBL E TREND OR PATTERN WITH REFERENCE TO TIME. THE ONLY OTHER CRITERIA (WHICH IS EVEN OTHERW ISE VERY RELEVANT), IN RESPECT TO WHICH THE RELEVANCY FACTOR CAN BE ASSESSED OR EVALUATED, IS THE PROXIMITY IN DISTANCE, AS THE PHYSICAL PROXIMITY WITH THE LAND SOLD WOULD MAKE IT THAT MUCH MORE COMPARABLE. ON THIS I.T.A. NO.268 /COCH/2010 LESLIE PEREIRA VS. ADIT (IT) TRIVANDRUM 3 PARAMETER, WE FIND THE TRANSACTION REPORTED AT SL. NO. 1 OF THE TABLE (AT PARA 3.1 ABOVE), BEING LOCATED IN VANCHIYOOR VILLAGE, I.E., THE SAME VILLAGE IN WHICH THE CAPITAL ASSET UNDER REFERENCE FALLS, AS BEING THE MOST COMPARABLE . NO OTHER COMPARABLE FACTOR HAS BEEN BROUGHT TO OUR NOTICE OR ON RECORD BY EITHER SIDE. WE, ACCORDINGLY, IN THE ABSENCE OF ANY OTHER INDICA, UNHESITATINGLY DIRECT FOR THE ADOPTIO N OF THE FMV OF THE CAPITAL ASSET AT ` 11,000/- PER CENT. EVEN THOUGH THE ASSESSEE HAS CO MPUTED THE CAPITAL GAINS BY ADOPTING THE FMV AT ` 15,000/- PER CENT, CLEARLY, THE FMV OF ` 11,000/- PER CENT WOULD TRANSLATE INTO A NIL CAPITAL GAINS IN VIEW OF THE EXEMPTION E XIGIBLE U/S. 54EC. IN FACT, THE ASSESSEES GROUND NOS. 3 & 4 ARE ONLY TO THIS EFFEC T. THE ASSESSEE, THUS, SUCCEEDS. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: JANUARY, 2012 GJ COPY TO: 1. LESLIE PEREIRA, 26/2187, DILKUSHA, GENERAL HOSPI TAL ROAD, TRIVANDRUM-695001. 2. THE ASSISTANT DIRECTOR OF INCOME-TAX, (INTERNAT IONAL TAXATION), TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) ITAT, COCHIN BENCH