The DCIT, Circle-7, Ahmedabad V. Shri Vinod Harilal Mehta, Ahmedabad

ITA 2945/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0735 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JIGAR M PATEL HEARING CONCLUD
• Keywords: Fair market value; Valuation report

Judgement Text

I.T.A. NO.: 2 945 /AHD/201 3 ASSESSMENT YEARS: 20 0 9 - 10 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] I.T.A. NO. : 2 945 /AHD/201 3 ASSESSMENT YEAR S: 20 0 9 - 10 DY. COMMISSIONER OF INCOME TAX, CIRCLE - 7 , AHMEDABAD. ..... ............APPELLANT VS VINOD HARILAL MEHTA, , .. ...........RESPONDENT 10, RUDRAPRAKASH BUNG A LOW, B/H. RAJPATH CLUB, S.G. HIGHWAY, AHMEDAB A D. [A CRPM 2007 L ] APPEARANCES BY PRASOON KABRA, FOR THE APPELLANT JIGAR M. PATEL FOR THE RESPONDENT HEARING CONCLUDED ON: 29 /0 8 / 2 0 16 ORDER PRONOUNCED ON : 30 /08/ 20 16 O R D E R PER PRAMOD KUMAR , AM: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 5 TH SEPTEMBER, 2013, PASSED BY THE L EARNED CIT(A) , FOR THE ASSESSMENT YEAR 2 0 0 9 - 10, ON THE FOLLOWING GROUND S : - I) THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS ON REDUCING THE LTCG OF RS.1,94,85,764/ - BY REJECTING THE VALUATION REPORT OF THE DEPARTMENTAL VALUATION CELL AND ADOPTING THE VALUATION REPORT OF THE REGD. VALUER. II) T HE ID.CIT(A) HAS FURTHER ERRED IN LAW AND ON FACTS IN INTERPRETING THE GLARING PROVISIONS OF SECTION 55A OF THE I.T. ACT READ WITH PARALLEL PROVISIONS OF SECTION 16A AND OPERATIVE PROVISION OF SECTION 16A(6) MAKING THE COMPULSION ON THE PART OF THE A.O. TO ADOPT THE VALUATION REPORT OF THE DEPARTMENTAL VALUATION OFFICER. III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPHELD THE I.T.A. NO.: 2 945 /AHD/201 3 ASSESSMENT YEARS: 20 0 9 - 10 PAGE 2 OF 4 ORDER OF THE ASSESSING OFFICER ENHANCING THE LTCG. IV) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. TO ADJUDICATE ON THIS APPEAL , ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SOLD 2,846 SQ. Y ARD S LAND FOR A CONSIDERATION OF RS.11,38, 40,000/ - ON 23.06.2008. THE FAIR MARKET VALUE , AS ON 01.04.1981, OF THIS PROPERTY WAS TAKEN AT RS.73,47,200/ - . HOWEV ER , AS THE ASSESSING OFFICER WAS NOT SATISFIED WITH THIS VALUATION, ON THE BASIS OF REGISTERED V ALUER S REPORT , HE REFERRED THE MATTER TO THE DVO IN VIEW OF PROVISIONS OF SECTION 55A(B)(II) OF THE INCOME TAX ACT, 1961 . BASED ON THE DVO S REPORT SO OBTAI NED, THE ASSESSING OFFICER RECOMPUTED THE CAPITAL GAINS AND ADOPTED RS.39,99,130/ - AS FAIR MARKET VALUE OF LAND AS ON 01.04.1981, AS AGAINST RS.73,47,200/ - ADOPTED BY THE ASSESSEE . AGGRIEVED , ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEANED CIT(A) WHO REVERSED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING INTER ALIA, THAT, I AM INCLINED WITH THE SUBMISSION OF APPELLANT THAT AMENDMENT MADE BY THE FINANCE BILL 2012 WITH PROSPECTIVE EFFECT FROM 1 ST JULY 2012 WHERE IN CLAUSE (A) OF SECTION 55A, FOR THE WO R D IS LESS THAN ITS FAIR MARKET VALUE IS REPLACED WITH IS AT VARIANCE WITH ITS FAIR MARKET VALUE WITH CLEAR NO T ES ON CLAUSE (ALREADY DISCUSSED ABOVE) JUSTIFY AND SUBSTANTIATE APPELLANT CONTENTION THAT A . O . CANNOT SUBSTITUTE U/S . 55A(A) OR 55A(B) OF TH E ACT, THE VALUE PROVIDED BY DVO FOR THE PROPERTY A S ON 01/04/81 IF THE APPELLANT SUBMITTED THE GOV T . APPROVED VALUER REPORT FOR ADOPTION OF SUCH VALUE IN HIS COMPUTATION OF CAPITAL GAIN. THE ASSESSING OFFIC E R IS AGGRIEVED AND IS IN APPEAL BEFORE U S. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. I.T.A. NO.: 2 945 /AHD/201 3 ASSESSMENT YEARS: 20 0 9 - 10 PAGE 3 OF 4 4. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY HON BLE GUJARAT HIGH COURT S JUDGEMENT IN THE CA SE OF CIT VS. G AURANGINI BEN S . SHOD H AN [(2014) 367 ITR 238 (GUJ)] WHEREIN THEIR LORDSHIPS HAVE, INTER ALIA, OBSERVED AS FOLLOWS : - 15. COMING TO THE QUESTION OF REFERENCE TO DVO FOR ASCERTAINING THE FAIR MARKET VALUE AS ON 1.4.1981 ALSO, WE FIND THAT SUC H REFERENCE WAS NOT COMPETENT. WE HAVE NOTICED THAT PRIOR TO THE AMENDMENT IN SECTION 55A WITH EFFECT FROM 1.7.2012 IN A CASE, THE VALUE OF THE ASSET CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MADE BY THE REGISTERED VALUER, IF THE ASSESSING OFFICER WAS OF THE OPINION THAT THE VALUE SO CLAIMED WAS LESS THAN ITS FAIR MARKET VALUE AS ON 1.4.1981. IT WOULD NOT BE THE CASE OF THE ASSESSING OFFICER THAT THE VALUE OF THE ASSET SHOWN AS ON 1.4.1981 WAS LESS THAN THE FAIR MARKET VALUE. SUCH CLAUSE, T HEREFORE, AS IT STOOD AT THE RELEVANT TIME, HAD NO APPLICATION TO THE VALUATION AS ON 1.4.1981. WE ARE CONSCIOUS THAT WITH EFFECT FROM 1.7.2012, THE EXPRESSION NOW USED IN CLAUSE (A) OF SECTION 55A IS 'IS AT VARIANCE WITH ITS FAIR MARKET VALUE'. THE SITUAT ION MAY, THEREFORE, BE DIFFERENT AFTER 1.7.2012. WE ARE, HOWEVER, CONCERNED WITH THE PERIOD PRIOR TH ERETO. CLAUSE (B) OF SECTION 55 A IS IN TWO PARTS AND PERMITS A REFERENCE TO DVO IF THE ASSESSING OFFICER IS OF THE OPINION THAT (I) THE FAIR MARKET VALUE OF THE ASSET EXCEEDS THE VALUE OF THE ASSET SO CLAIMED BY THE ASSESSEE BY MORE THAN SUCH PERCENTAGE OF THE VALUE OF THE ASSET SO CLAIMED OR BY MORE THAN SUCH AMOUNT AS MAY BE PRESCRIBED IN THIS BEHALF; OR (II) THAT HAVING REGARD TO THE NATURE OF THE ASSET AN D OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY SO TO DO. SUB - CLAUSE (I) OF CLAUSE (B) ALSO FOR THE SAME REASONS RECORDED ABOVE, WOULD HAVE NO BEA R ING ON THE FAIR MARKET VALUE AS ON 1.4.1981. THE ASSESSING OFFICER HAD NOT RESORTED TO SUB - CL AUSE(II) OF CLAU SE (B). IN ANY CASE, CLAUSE (B) WOULD APPLY WHERE CLAUSE(A) DOES NOT APPLY SINCE IT STARTS WITH THE EXPRESSION 'IN ANY OTHER CASE'. IN OTHER WORDS IF ASSESSEE HAS RELIED UPON A REGISTE RED VALUER'S REPORT, ASSESSING OFFICER CAN PROCEED ONLY UNDER CLAUSE (A ) AND CLAUSE (B) WOULD NOT BE APPLICABLE. 5. R ESPECTFULLY FOLLOWING VIEWS OF HON BLE JURISDICTIONAL HIGH COURT, AS ABOVE, WE CONFIRM THE RELIEF GRANTED BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MAT T ER. 6. IN THE RESULT, THE APPEAL IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF AUGUST, 2016. SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 30 TH DAY OF AUGUST ,2016 . I.T.A. NO.: 2 945 /AHD/201 3 ASSESSMENT YEARS: 20 0 9 - 10 PAGE 4 OF 4 COPIES TO : ( 1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD