ITO, BIKANER V. Shri Jitender Kumar Kochar, BIKANER

ITA 28/JODH/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3115 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R H GOHEL
• Assessee Lawyers: GAUTAM BAIDH
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Rule of consistency; Cost of acquisition; Valuation report
• Section: 50C; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.28 /JODH/2013 ASSESSMENT YEAR : 2009-10 PAN: ACMPK 5831 B THE ITO VS. SHRI JITENDER KUMAR KOCHAR WARD- 1 (2) GYAN VILASH, JAIL ROAD BIKANER BIKANER (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA JA IN & SHRI GAUTAM BAIDH DEPARTMENT BY : SHRI R.H. GOHEL DATE OF HEARING : 12-06-2013 DATE OF PRONOUNCEMENT : 13-06-2013 ORDER PER HARI OM MARATHA, JM THIS APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), BIKANER, DATED 07-11-2012. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS REGARD ING THE DETERMINATION OF COST OF ACQUISITION OF THE CAPITAL ASSET AS ON 01-04-1981. 2.1 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL , FILED HIS RETURN OF INCOME (ROI), FOR THE ASSESSMENT YEAR 200 9-10, ON 19-03-2010 DECLARING INCOME OF RS. 3,90,510/-. THE ASSESSEE DERIVED INCOME FROM IN TEREST THE ASSESSEE HAS DISCLOSED A LOSS UNDER THE HEAD LONG TERM CAPITAL GAIN OF RS. 1,00,287/-. THE ASSESSEE WAS THE 1/4 TH CO-OWNER IN A JOINT IMMOVEABLE PROPERTY. HE HAD SOL D THIS PROPERTY ALONGWITH THREE OTHER MEMBERS OF HIS FAMILY VIDE FOUR SALE-DEEDS REGISTER ED ON 19-04-2008 WITH DOCUMENT NUMBERS 2008004089 TO 2008004092, HAVING FACE VALUE (OF CONSIDERATION) OF RS. 8,94,240/-, 1,42,80,000/-, 56,82,150/- AND 1,40,00,000/- TOTALL ING TO RS. 3,48,56,390/-. THIS LAND IS SITUATED AT GANGASHAHAR AREA, MALION KA MOHALLA, CH ANDMAL JI KA BAGH, BIKANER. THE ASSESSEE HAS TAKEN THE COST OF THIS LAND AT RS. 1 ,04,79,400/- (RS.1,02,89,499/- AS THE COST OF THE LAND AND RS. 1,89,900/- AS THE COST OF THE BUIL DING). ON ENQUIRIES, THE ASSESSING OFFICER FOUND THAT THE COST OF THE LAND FOR THIS PURPOSE IS TO BE DETERMINED ON THE BASIS OF DLC RATES AS PRESCRIBED BY THE LOCAL AUTHORITY FROM TIME TO T IME. THE SUB-REGISTRAR, BIKANER, GAVE DLC RATES, WHICH WERE IMPLEMENTED W.E.F. 30-06-1993, IN RESPECT OF GANGASHAR AREA, MALIYON KA MOHALLA, AS ON 30-06-1993, AS UNDER:- FOR RESIDENTIAL ON MAIN ROAD RS. 545/- (3X3 SQ. GAJ) RESIDENTIAL AWAY FROM ROAD RS. 435/- (3X3 SQ. G AJ) 2.2 ACCORDINGLY , THE ASSESSING OFFICER HAS CALCULA TED THE COST OF ACQUISITION OF THE LAND IN QUESTION, AS ON 01-04-1981, AS UNDER:- A SALE OF LAND DURING F.Y. 2008-09 COST OF ACQUISITION 01.04.1981 INDEXATION COST DURING F.Y. 2008-09 DOCUMENT NO. 2008004089 LOCATION FOR RATE PURPOSE RESIDENTIAL ON MAIN ROAD AREA OF LAND 6624 SQ. FT. 6624 SQ. FT. . DLC RATE 135/- SQ.FT. 17.10 SQ. FT SUB-REGISTRAR RATE 8,94,240/- 1,13,270/- 6,59,231/- B SALE OF LAND COST OF ACQUISITION 01.04.1981 INDEXATION COST DURING F.Y. 2008-09 DOCUMENT NO. 2008004090 LOCATION FOR RATE PURPOSE RESIDENTIAL AWAY FROM ROAD AREA OF LAND 160785.61 (SQ.FT.) 160785.61 (SQ. FT.) DLC RATE 120/ -SQ.FT. 13. 65/- (SQ. FT) SUB-REGISTRAR RATE 2,02,40,145 (INCLUDING CONSTRUCTION VALUE RS. 7,45,872/-) 21,94,724/- 1,27,73,291 C SALE OF LAND DURING F.Y.2008-09 COST OF ACQUISITION 01.04.1981 INDEXATION COST DURING F.Y. 2008-09 DOCUMENT NO. 2008004091 LOCATION FOR RATE PURPOSE RESIDENTIAL ON MAIN ROAD AREA OF LAND 32850 (SQ. FT.) 32850 (SQ. FT.) DLC RATE 135/- SQ. FT. 17.10/- (SQ.FT.) SUB-REGISTRAR RATE 56,82,150/- 5,61,735/- 32,69,297 D SALE OF LAND DURING F.Y.08-09 COST OF ACQUISITION 01.04.1981 TNDEXATION COST DURING F.Y. 2008- 09 DOCUMENT NO. 2008004092 LOCATION FOR RATE PURPOSE RESIDENTIAL AWAY FROM ROAD AREA OF LAND 278121.80 (SQ. FT.) 278121.80 (SQ. FT.) DLC RATE 120/ -SQ. FT. 13.65/- (SQ.FT.) SUB-REGISTRAR RATE 3,35,71,41 6/- (INCLUDING CONSTRUCTION VALUE RS. 1,96,800/-) 37,96,363/- 2,20,94,832 COMPUTATION OF LONG TERM CAPITAL GAIN S.NO. VALUE ADOPTED BY SUB- REGISTRAR FOR DLC RATE DURING F.Y. 08-09 INDEXATION CO >R DURING F.Y 9B-09 DIFFERENCE FOR 50C A 8,94,240/- 6,59,231/- 2,35,009/- B 2,02,40,145/- 1,27,73,291/- 74,66,854/- C 56,82,150/- 32,69,297/- 24,12,853/- 4 D 3,35,71,416/- 2,20,94,832/- 1,14,76,5847- BUILDING 11,05,218/- TOTAL 6,03,87, 951 / - 3,99,01 ; 869/- 2,04,86,082/- SHARE OF SH. JINENDER KUMAR KOCHAR (1/4) TOTAL COST OF ACQUISITION WITH BUILDING SALE CONSIDERATION CAPITAL GAIN A+B+C+D 3,99,01,869/- 6,03,87,951 2,04,86,0827-. 1/4 SHARE 99,75,4677- 1,50,96,987 51,21,520/- CONSIDERING THE ABOVE FACTS, LONG TERM CAPITAL GAIN FOR THE YEAR UNDER CONSIDERATION MAY BE ASSESSED AS ABOVE AGAINS T THE DECLARING LONG TERM CAPITAL GAIN/ LOSS OF (-) RS.1,00,287/-. YOU M AY FILE YOUR EXPLANATION IN THIS REGARD ON 14.12.2011, FAILURE TO WHICH YOUR CA SE WILL BE DECIDED ON MERITS. A NOTICE U/S 142(1) IS ENCLOSED HEREWITH. ' 4) IN RESPONSE TO WHICH, THE ASSESSEE FILED AN APP LICATION ON 14.12.2011 WITH THE REQUEST FOR ADJOURNMENT OF HEAR ING, HENCE, THE CASE WAS ADJOURN FOR 21.12.2011, ON 21.12.2011, THE ASSESSEE AGAIN FILED APPLICATION FOR ADJOURNMENT OF HEARING AND CASE WAS RE-FIXED FOR HE ARING ON 26.12.2011. BUT, ON THE STIPULATED DATE OF HEARING I.E. 26.12.2011, NEI THER THE ASSESSEE APPEARED NOR FILED ANY APPLICATION FOR ADJOURNMENT. IT IS WORTHW HILE TO MENTION HERE THAT A/R OF THE ASSESSEE APPEARED AT THE FAG END OF THE MONT H DECEMBER I.E. ON 28,12.2011 AND FILED A FILED A WRITTEN SUBMISSION, STARTING AS UNDER:- 'AS REGARDS THE CALCULATION OF CAPITAL GAIN, U>C H AVE ALREADY FILED THE DETAILS ALONG WITH VALUER'S VALUATION REPORT AS ON 01.04.1981 GIVING ALL PARTICULARS. BUT IN YOUR LETTER DATED 07.12.2011. Y OU HAVE GIVEN A CALCULATION CHART SHOWING DIFFERENT RATES. SO THIS RESPECT I WOULD LIKE TO MAKE MY OBJECTIONS AS UNDER:- (A) FIRST OF ALL YOU HAVE SHOWN THE DLC RATE AS ON 30.0 6.1993 AS UNDER:- 1. RESIDENTIAL ON MAIN ROAD RS. 545/- (3X3 SQ. GAJ )2. RESIDENTIAL AWAY FROM MAIN ROAD RS. 435/- (3X3 SQ. GA) SIR AS BIKANER SQ. YARD (GAJ) COMPRISES OF2'X 2' NO T 3'X 3', THIS CAN BE VERIFIED FROM THE REGISTRAR OFFICE. THE VERY BAS IS ON WHICH YOU HAVE TAKEN VALUATION IS WRONG. 5 (B) SECONDLY YOU HAVE TAKEN THE DLC RATE OF 30.06.1 933 AS BASE RATE AND DEDUCTED 10% EACH YEAR UPTO 01.04.1981. SIR BY WHICH METHOD YOU HAVE TAKEN THIS COURSE.IN WLIICH ACT OR CIRCULAR TI NS METHOD HAS BEEN PROVIDED OF IT. ACT. PLEASE LET ME KNOW, SO I CAN S TUDY THE SAME AND FILE MY REPLY ACCORDINGLY. IF YOU HAVE TAKEN THIS COURSE OF METHOD FROM ANY OTHER ACT SAY MUNCIPAHTY OR LAND & BUILDINGACT, SO LET ME KNOIR, SO AS TO ENLIGHTEN MY KNOWLEDGE AND FURNISH THE REPLY IN LIGHT OF THAT - MY NEXT POINT OF CONTENTION IS THAT WHEN THE ASSESSEE HAS FURNISHED THE VALUATION REPORT OF APPROVED VALUER IN SUPPORT OF OUR CALCULATION AND RATE, THE ASSESSEE HAS FULFILLED HIS ONUS AND IT IS THE DEPARTMENT'S ONUS TO GIVE VALID REASON AND GROUNDS ON WINCH THEY DIFF ER FROM VALUER'S REPORT. MOREOVER THE DEPARTMENT SHOULD HAVE CALLED THE VALUER AND EXAMINE INS STATE MENT RECORDED AT THE TUNE. BUT SIR, YOU HAVE NO DONE ANY OF THE THINGS. SIMPLY YOU HAVE TAKEN CALCULATION METHOD OF RATE ARBITRARILY AND WI THOUT ANY BASIS OF NATURAL LAW AND JUSTICE. (D) SIR, I HAVE FILED MY ALL THE REPLIES AND SUPP ORTING DOCUMENTS ON THE DATE OF HEARING ON 07.09.2011, SINCE THE LAS T THREE MONTHS. NO QUARRY OR HEARING DATE WAS FIXED. ONE TIME MORNING ON 07.12.2011, YOU ARE ISSUING A LETTER AND FURNISHING THE FOLLOWI NG ABOVE STATED CALCULATION ALONG WITH A LINE THAT YOU HAVE BEEN GI VEN SUFFICIENT OPPORTUNITIES. THIS SHOWS THE MIND OF THE DEPT. SIR YOU ARE PREDET ERMINED TO FRAME THE ASSESSMENT NOT AS PER LAW BUT ON YOUR OWN VIEWS AND ARBITRARILY. IF YOU HAVE THIS METHOD OF CALCULATION IN YOUR MIND WHY YOU HAVE NOT FURNISHED THE SAME EARLIER GIVING AD EQUATE TIME TO REPLY. THE UNDERSIGNED WAS OUT OF BIKANER FOR 10 DAYS AND AFTER RETURNING FELL ILL, SO NO PROPER REPLY CAN BE SUBMI TTED IN HASTE. HOWEVER I AM SUBMITTING MY OBJECTION TO THE METHOD OF CALCULA TION.' 5) THE ABOVE ARGUMENTS OF THE ASSESSEE HAVE BEEN CONSIDERED CAREFULLY, WHICH ARE DE-VOID OF FORCE BECAUSE I) THE DLC RATES WERE FIXED BY THE REGISTRAR OFFICE, BIKANER VIDE LETTER NO.CB/G.P./93/1331 DATED 15.07.1993 IN THE STANDARD MEASUREMENT I.E.(3X3 GAJ). HOWEVER, THE VALUE WAS CALCULATED IN 'SQUARE FEET' ON THE BASIS OF RATE OF ( 3 X 3 GAJ). IT IS PERTINENT TO N OTE HERE THAT THE SUB- REGISTER HAS TAKEN THE MEASUREMENT OF LAND IN 'SQUA RE FEET' AND CHARGED STAMP DUTY ACCORDINGLY. II) FOR DETERMINATION OF VALUES AS ON 01.04.1981, A METHOD, WHICH IS PREVALENT IN THE REVENUE DEPARTMENT OF THE STATE, I S APPLIED IN ORDER TO ARRIVE AT THE CORRECT VALUE AS ON 01.04.1981. III) ON PERUSAL OF VALUATION REPORT DATED 22.06.200 6, WHICH WAS FURNISHED BY THE ASSESSEE ON 07.07.2011, IT WAS NOT ICED THAT THE 6 APPROVED VALUER HAS MENTIONED THE ADDRESS OF THE VA LUED PROPERTY, AS UNDER.- 'ON GANGASAHAR SUJANDESAR MAIN ROAD, BIKANER'. IT WAS ALSO MENTIONED BY VALUER THAT THAT THIS LAND WA S USED FOR 'COMMERCIAL PURPOSE' I.E. FOR MANUFACTURING BRICKS I.E. DIGGING EARTH AND PREPARING BRICKS BY HEATING IN KILNS BY CONTINU OUS PROCESS. THE ADDRESS OF THE PROPERTY IN QUESTION, WHICH WAS REGISTERED BY THE SUB-REGISTRAR, BIKANER AS ON 19.04.2008 IS A S UNDER:- GANGASAHAR AREA, MALIO KA MOHALLA CHANDMAL JI KA BA GH, IT WAS MENTIONED IN THE DOCUMENTS REGARDING THE NAT URE OF PROPERTY AS, 'RESIDENCE ON MAIN ROAD', 'RESIDENCE A WAY FROM ROAD', 'RESIDENCE ON MAIN ROAD' AND 'RESIDENCE AWAY FROM R OAD.' FORM THE ABOVE FACTS, IT IS CLEAR THAT THE 'VALUATI ON REPORT' FURNISHED BY HE ASSESSEE IS NOT RELEVANT, THEREFORE , NO COGNIZANCE WAS TAKEN ON THIS ACCOUNT. 2.3 ACCORDINGLY , THE ASSESSING OFFICER HAS DETERM INED THE CAPITAL GAIN ON THE 1/4 TH SHARE OF THIS ASSESSEE AT RS. 51,71,773/- AND HAS A DDED THIS SUM TO HIS TOTAL INCOME OF THE YEAR. 2.4 AS AGAINST THE ABOVE, WHILE DECIDING THE APPEAL OF THE ASSESSEE, THE LD. CIT(A) HAS MODIFIED THE CAPITAL GAINS IN THE FAVOUR OF THE ASS ESSEE. THE REVENUE IS AGGRIEVED AND HAS FILED THIS SECOND APPEAL. 2.5 BEFORE US, BOTH THE PARTIES REITERATED THEIR OR IGINAL STAND. THE LD. DR ARGUED THAT THE LD. CIT(A) HAS RELIED ON THE PREVAILING RA TES OF 1993, 2008 AND 2009 AND HAS WORKED OUT THE BASIS OF COST OF ACQUISITION BY REDU CING 5.49% PER ANNUM FROM THE DLC RATES AVAILABLE FOR THE YEAR 1993, BUT HAS NOT SPEC IFICALLY MENTIONED THE AUTHENTIC YEARWISE DLC RATES FROM 1993 UPTO 2009 ON WHICH AVERAGE RATE HAS BEEN APPLIED FOR DETERMINING THE PERCENTAGE AT 5.49%. ACCORDING TO HIM, THE ASSESSIN G OFFICER HAS APPLIED A METHOD PREVALENT IN THE DEPARTMENT OF REVENUE OF THE STATE OF RAJASTHAN, FOR DETERMINING THE COST OF ACQUISITION AS ON 01-04-1981. HE HAS STATED THAT THE REVENUE RATES HAVE BEEN REVISED (INCREASED) FROM TIME TO TIME. TO SUBSTANTIATE THE ABOVE CONTENTION, THE LD. DR INVITED OUR ATTENTION TOWARDS A CHART CONTAINED IN A PAPER MARK ED AS ANNEXURE A WHICH WAS PRODUCED 7 BEFORE US DURING THE HEARING OF THE APPEAL. IT WAS ARGUED THAT DLC RATES WERE INCREASED FROM 5% TO 122% SINCE THE YEAR 1993. HE HAS JUSTIFI ED THE ADOPTION OF RATE OF 10% AT THE RELEVANT TIME, FOR THE DETERMINATION OF COST OF ACQ UISITION AS ON 01-04-1981. ACCORDING TO HIM, THE AVERAGE INCREASE IN THE DLC RATES FROM 199 3, 2008 AND 2009 ON THE MAIN ROAD COMES TO RS. 14.19% (212.81/15) AND SIDE ROAD COME S TO 13.69% (205.28/15). HE HAS SPECIFICALLY MENTIONED THAT THE REPORT OF REGISTERE D VALUER FURNISHED BY THE ASSESSEE HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER AS WE LL AS BY LD. CIT(A). 2.6 PER CONTRA LD. AR HAS MAINLY RELIED ON THE ORDE R OF THE LD. CIT(A). HE HAS FURTHER SUBMITTED THAT THE REPORT OF THE REGISTERED VALUER, BEING AN EXPERT OPINION, IS MORE RELIABLE, BUT, HE HAS ALSO CONCEDED THAT THE AUTHORITIES BELO W HAVE NOT RELIED ON THIS REPORT. HOWEVER, HE HAS ACCEPTED THE ACTION OF LD. CIT(A) AS SATISFA CTORY. HE HAS STATED THAT THE ASSESSING OFFICER HAS NOT DISTURBED SIMILAR CLAIMS MADE BY TH E OTHER CO-OWNERS. 2.7 AFTER CIRCUMSPECTING THE RIVAL SUBMISSIONS IN T HE LIGHT OF OBTAINING FACTS OF THE CASE VIS--VIS THE ORDERS OF THE AUTHO RITIES BELOW, WE ARE OF THE CONSIDERED OPINION THAT NO INTERFERENCE IS CALLED FOR IN THE IMPUGNED FINDING. THE ASSESSING OFFICER HAS NOT DISTURBED THE CALCULATION OF LONG TERM CAPI TAL GAIN /LOSS MADE ON SIMILAR LINES BY THE OTHER CO-OWNERS WHO ARE THE ASSESEE'S FAMILY-ME MBERS. THIS IS A GOOD GROUND WHICH IS BASED ON THE PRINCIPLE OF CONSISTENCY AND PARITY. B E THAT AS IT MAY, THE ASSESSING OFFICER HAS NOT GIVEN ANY BASIS OF ADOPTION OF THE RATE OF DEDUCTION AT 10% PER ANNUM FROM THE DLC RATES OF THE YEAR 1993. THIS SEEMS TO BE A CLEA R CASE OF ESTIMATION. AS AGAINST THE SAME, THE LD. CIT(A) HAS DETAILED THE DLC RATES OF 1993, 2008 AND 2009, AND TO THEM ENHANCEMENT PER SQUARE YARD HAS BEEN WORKED OUT. IN 15 YEARS, THE YEARWISE INCREASE HAS BEEN CALCULATED AT 5.49% PER ANNUM PER SQUARE YARD, AND FOR DETERMINING THE COST OF ACQUISITION FOR THE YEAR 1981 REDUCTION BY 5.49% PE R ANNUM FROM THE DLC RATES AVAILABLE FOR THE YEAR 1993 HAS BEEN CORRECTED DONE. WE DONT FIND ANY FALLACY IN THIS FINDING OF LD. CIT(A). WE HAVE NOT FOUND ANY SUCH VARIATION IN THE DESCRIPTION OF THE SITUATION OF THIS 8 PROPERTY AS HAS BEEN CANVASSED BY LD. DR. RATHER, W E ARE CONVINCED THAT THE RATE PER SQUARE FT. AS HAS BEEN CONSIDERED BY THE LD. CIT(A) IS THE CORRECT PROCEDURE. ACCORDINGLY, WE CONFIRM THE IMPUGNED FINDING OF LD. CIT(A) AND CANN OT ALLOW THIS APPEAL OF THE REVENUE 2.8 IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13- 06-2013.) SD/- SD/- (R.C. SHARMA) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH JUNE, 2013 MISHRA COPY TO:- 1.THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE LD. CIT(A) 5. THE DR 6. THE GUARD FILE ASSISTANT REGISTRAR ITAT, JODHPUR