The DCIT, Circle-9, Ahmedabad V. Shri Dipakbhai Shankarlal Contractor, Ahmedabad

ITA 284/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85794 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S N DIVETIA
• Keywords: Fair market value; Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M. ) I.T. A. NO. 284/AHD/2011 (ASSESSM ENT YEAR: 2007-08) THE D.C.I.T., CIRCLE-9, AHMEDABAD V/S SHRI DIPAKBHAI SHANKARLAL CONTRACTOR, SANSKRIT, VAKIL FARM, OPP: VIKRAM NAGAR, BOPAL, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ABRPM4098A APPELLANT BY : SHRI B.L. YADAV, SR. D.R. RESPONDENT BY : SHRI S.N. DIVETIA, A.R. ( )/ ORDER DATE OF HEARING :16-03-2015 DATE OF PRONOUNCEMENT : 20 -03-2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-XV, AHMEDABAD DATED 20.12.2010 FOR A.Y. 2007-08. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE PROPRIETOR O F M/S. D.S. FINANCE CORPORATION AND DREAMLAND PARTY PLOT. ASSESSEE FILE D HIS RETURN OF INCOME FOR A.Y. 2007-08 ON 28.03.2008 DECLARING TOTAL LOSS OF RS. 30,43,280/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE A SSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 30.12.2009 AN D THE TOTAL INCOME WAS ITA NO 284/A HD/2011 . A.Y. 2007-0 8 2 DETERMINED AT RS. 1,02,22,030/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 20.12.2010 ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY T HE AFORESAID ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS;- 1. THE ID. COMMISSIONER OF INCOME-TAX (A)-XV, AHMEDA BAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.70,16,582/-MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL GAIN (LTCG) ON SALE OF OPEN LAND ON THE BASIS OF DVOS REPORT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME- TAX (A)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDE R OF THE ASSESSING OFFICER. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE ID. C OMMISSIONER OF INCOME-TAX(A)-XV, AHMEDABAD. MAY BE SET-ASIDE AND THAT OF THE ASSESSI NG OFFICER BE RESTORED. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NO TICED THAT ASSESSEE HAS SOLD A PLOT OF LAND AT VEJALPUR WHICH WAS ACQUIRED BY HIS FATHER IN 1975 AND BY A WILL OF 1982 LEFT THE PROPERTY EQUALLY TO HIS SON AND DAUGHTER IN LAW. ON HIS DEMISE IN 1995, THE PROPERTY DEVOLVED ON THE AS SESSEE AND HIS WIFE. FOR THE PURPOSE OF CALCULATION OF CAPITAL GAIN ASSESSEE CONSIDERED THE VALUE OF THE LAND AS ON 1.04.1981 TO ARRIVE AT THE COST OF A CQUISITION. A.O NOTED THAT FOR THE PURPOSE OF VALUATION OF PROPERTY AS ON 1.04 .1981, ASSESSEE HAD RELIED ON THE REPORT OF A REGISTERED VALUER WHO HAD VALUED THE LAND AT RS. 25,10,000/-. ON PERUSING THE VALUATION REPORT, A.O NOTICED THAT VALUER HAD ALLOWED A PREMIUM OF 65% ON ACCOUNT OF PROXIMATELY OF THE PLOT TO S.G. HIGHWAY. A.O WAS OF THE VIEW THAT THE PREMIUM CONSI DERED BY THE VALUER WAS ON A HIGHER SIDE BECAUSE IN 1981 S.G. HIGHWAY W AS PROBABLY WAS ONLY A CONCEPT AND THE S.G. HIGHWAY WAS NOT DEVELOPED IN 1981. HE WAS THEREFORE OF THE VIEW THAT VALUER HAD RELIED ON EXT RANEOUS FACTORS WHICH HAS INFLUENCED HIS VALUATION THEREFORE THE MATTER OF VA LUATION OF LAND WAS REFERRED TO DVO. A.O NOTED THAT THE DVO VIDE HIS RE PORT DATED 30.12.2009 ITA NO 284/A HD/2011 . A.Y. 2007-0 8 3 DETERMINED THE VALUE OF THE PROPERTY AS ON 1.04.198 1 AT RS. 44,265/- AS AGAINST RS. 25,10,000/- WORKED OUT BY THE REGISTERE D VALUED. HE THEREFORE AFTER CONSIDERING THE VALUATION REPORT, WORKED OUT THE ASSESSEES SHARE OF LONG TERM CAPITAL GAIN AT RS. 1,54,84,045/- AND AFT ER GIVING THE CREDIT OF THE VALUE SHOWN BY THE ASSESSEE MADE AN ADDITION OF RS. 70,16,582/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 5.DURING THE COURSE OF APPELLATE PROCEEDINGS IT WAS ARGUED THAT SALE CONSIDERATION WAS NOT DOUBTED BY THE AO THAT ACCORDING TO THE A.O THE VALUE OF LAND AS ON 1.4.81 WAS LESS THAN WHAT WAS CALCULATED BY THE APPELLANT FOR THE P URPOSE OF TAKING OUT LTCG. VIDE WRITTEN SUBMISSION DATED 28.6.2010 THE ID.AR D REW THE ATTENTION OF THIS OFFICE TOWARDS THE PROVISIONS OF SECTION 55A AND ARGUED TH AT SUCH A REFERENCE CAN BE MADE BY THE AO ONLY WHEN THE VALUE DECLARED BY THE APPELLAN T IN THE AO'S VIEW IS LESS THAN THE FAIR MARKET VALUE OF THE AS ON 1.4.81 .FOLLOWING PO INTS WERE MADE: '12 (A) IN THIS CASE THE VALUE CLAIMED BY THE ASSES SEE IN ACCORDANCE WITH THE ESTIMATE MADE BY A REGISTERED VALUER IS AT RS.25,10,000. (B) AND THE VALUE ESTIMATED BY THE DVO IN HIS ORDER U/S.55A IS AT RS.44,265 (C) THE VALUE ESTIMATED BY DVO IS NOT HIGHER THAN T HE VALUE ESTIMATED BY THE APPELLANT AS PER GOVERNMENT APPROVED VALUER'S REPORT. THEREFORE THE ASSESSING OFFICER CANNOT TAKE VALUE AS PER DVO VALUATION REPORT U/S.55A OF THE AC T AND THE ASSESSING OFFICER HAS TO TAKE THE VALUE ESTIMATED BY YOUR APPELLANT IN ACCOR DANCE WITH THE SECTION 55A OF THE ACT.' THROUGH POINT 13 OF THE ABOVE SUBMISSION SEVERAL DE CISIONS WERE RELIED UPON. DURING THE COURSE OF APPELLATE PROCEEDINGS THE ID, AR RELIED H EAVILY UPON THE DECISION ;OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF HIRABEN J.AYANTIL AL SHAH VS. ITO 310 ITR 31 (2009) (GUJ.). IT IS SEEN THAT THE HON'BLE GUJARAT HIGH COURT DECI SION IN THE CASE OF HIRABEN JAYANTILAL SHAH VS. ITO 310 ITR 31(2009) (GUI.) IS APPLICABLE IN THE CASE OF THE APPELLANT, WHEREIN IT WAS HELD:- ITA NO 284/A HD/2011 . A.Y. 2007-0 8 4 'THE ESTIMATED VALUE PROPOSED BY THE DVO IS SHOWN A T RS.3,97,000 WHICH.IS LESS THAN THE FAIR MARKET VALUE SHOWN BY THE ASSESSEE AS ON 1 ST APRIL, 1981. THEREFORE CL.(A) OF S.55A CANNOT BE MADE APPLICABLE. CLAUSE (B) OF S.55A CAN BE INVOKED ONLY IN ANY OTHER CASE NAMELY WHEN THE VALUE OF THE ASSET CLAIMED BY THE A SSESSEE IS NOT SUPPORTED BY AN ESTIMATE MADE BY A REGISTERED VALUER. IN THE CONCLUSION HON'BLE HIGH COURT STATED AS UNDE R:- CONCLUSION: REFERENCE MADE BY AO UNDER S, 55A TO DVO ON 26 TH APRIL 1996, FOR DETERMINING THE VALUE OF PROPERTY AS ON 1 ST APRIL, 1981 AND ON THE DATE OF SALE WAS WITHOUT JU RISDICTION FOR THE REASONS THAT RETURN WAS FILED BY ASSESSEE ONLY ON 27 TH AUG., 1996, VALUE OF PROPERTY AS ON 1 ST APRIL 1981, AS DECLARED BY ASSESSEE SUPPORTED BY E STIMATE OF REGISTERED VALUER WAS HIGHER THAN THAT ESTIMATED BY DVO AND NO OPINION WA S FORMED BY THE AO THAT THE FAIR MARKET VALUE AS CLAIMED BY ASSESSEE WAS REQUIRED TO BE DISTURBED BECAUSE PRESCRIBED PARAMETERS WERE FULFILLED.' 7. AFTER GOING THROUGH FACTS OF THIS THE AO IS DIRE CTED TO DELETE THE ADDITION AS HON'BLE GUJARAT HIGH COURT DECISION - 310 ITR 31 - IS DIREC TLY APPLICABLE IN THE APPELLANT'S AS MENTIONED IN PARA 6 ABOVE. THE VALUE OF THE PROPERT Y WAS DECLARED AS PER REGISTERED VALUER'S REPORT BY THE APPELLANT AND THE VALUE ESTI MATED BY THE DVO WAS LESS THAN THAT DECLARED BY THE APPELLANT, THEREFORE 310 ITR 31 IS APPLICABLE. 8.IN THE RESULT THE APPEAL IS ALLOWED. 5. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REV ENUE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE LD. CIT(A) A ND SUPPORTED HER ORDER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE GRANTING THE RELIEF TO T HE ASSESSEE HAD RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE C ASE OF HIRABEN JAYANTILAL ITA NO 284/A HD/2011 . A.Y. 2007-0 8 5 SHAH VS. ITO 310 ITR 31 (GUJ) AND HAD HELD THAT THE RATIO OF THE AFORESAID DECISION WAS DIRECTLY APPLICABLE TO THE CASE OF ASS ESSEE. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING DECISION NOR C OULD CONTROVERT THE FINDINGS OF LD. CIT(A). IN VIEW OF THE AFORESAID FA CTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 20 - 03 - 2015. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD