ACIT, Pondicherry V. Shri V.Kesava Reddy, Pondicherry

ITA 335/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5047 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Fair market value; Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH B : CHENNAI [BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER] I.T.A.NO.332/MDS/2011 ASSESSMENT YEAR : 2007-08 SHRI V. KESAVA REDDY 10, MURUGAN KOIL STREET THIRUVANDAR KOIL VILLAGE PONDICHERRY 605 102 VS THE ACIT CIRCLE I PONDICHERRY [PAN - AAQPK6243F] (APPELLANT) (RESPONDENT) I.T.A.NO.335/MDS/2011 ASSESSMENT YEAR : 2007-08 THE ACIT CIRCLE I PONDICHERRY VS SHRI V. KESAVA REDDY 10, MURUGAN KOIL STREET THIRUVANDAR KOIL VILLAGE PONDICHERRY 605 102 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B. RAMAKRISHNAN DEPARTMENT BY : SHRI P.B. SEKARAN O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THESE CROSS APPEALS ARE DIRECTED AGAINST TH E ORDER OF THE LD. CIT(A), CHENNAI, DATED 30.11.2010, FOR ASSESSMENT Y EAR 2007-08. ITA 332 & 335/11 :- 2 -: 2. AT THE OUTSET OF THE HEARING, IT WAS NOTICED THAT THE THERE WAS A DELAY OF SIX DAYS IN FILING THE APPEAL BY THE ASSES SEE. THE ASSESSEE HAS FILED A CONDONATION PETITION SUPPORTED BY AN A FFIDAVIT SHOWING THE REASONS FOR THE DELAY. AFTER CONSIDERING THE SUB MISSIONS OF THE LD.AR AND THE DOCUMENTS AVAILABLE ON RECORD, WE CONDONE T HE DELAY OF SIX DAYS AND ADMIT THE APPEAL FILED BY THE ASSESSEE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 AD MITTING TOTAL INCOME OF ` 37,79,930/-. THE REGULAR ASSESSMENT WAS FRAMED U/ S 143(3) AT A TOTAL INCOME OF ` 1,33,23,540/-. THIS TAXABLE INCOME HAS BEEN ARRIVED BY THE ASSESSING OFFICER BY MAKING AN ADDITION OF ` 1,28,58,532/- BY ADOPTING ` 59,151/- AS THE MARKET VALUE FOR THE ENTIRE LAND MEASURING 9.99 ACRES TRANSACTED. IN FI RST APPEAL, DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD.AR OF T HE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAD ADOPTED TH E FAIR MARKET VALUE FROM A SALE INSTANCE THAT TOOK PLACE IN THE YEAR 19 85 AND FURTHER USING DIMINISHING METHOD ON THE BASIS OF INFORMATION OBTA INED FROM THE OFFICE OF SUB-COLLECTOR(REVENUE), SOUTH VILLIANUR, PONDICHERRY. THE ASSESSEE HAD OBJECTED TO THIS METHOD ADOPTED BY THE ASSESSING OFFICER EVEN DURING ASSESSMENT PROCEEDINGS. THE ASSESSEE H AD FILED VAOS CERTIFICATE BEFORE THE ASSESSING OFFICER BUT THE SA ME WAS NOT ITA 332 & 335/11 :- 3 -: CONSIDERED WHILE ARRIVING AT THE FAIR MARKET VALUE OF THE PROPERTY. THE LAND BEING SITUATED AT DIFFERENT PLACES AROUND THE VILLAGE, THE CASE OF THE ASSESSEE IS THAT ALL THE PIECES OF LAND WOULD N OT HAVE THE SAME AND SIMILAR VALUE AND THE SAME CAN DIFFER FROM ONE PIECE OF LAND TO ANOTHER DEPENDING ON THE VARIOUS FACTORS LIKE APPRO ACH, FERTILITY, IRRIGATION FACILITIES, FENCING, LEVLLING, ETC. THE ASSESSING OFFICER HAS RELIED ON THE GUIDELINE VALUE INDICATED BY THE STAM P VALUATION AUTHORITY(SVA). THE OBJECTION OF THE ASSESSEE IS T HAT THE SVAS GUIDELINE VALUE CANNOT BE TAKEN AS FINAL EVIDENCE W HICH CAN CONCLUDE THE MATTER REGARDING FAIR MARKET VALUE OF THE LAND. BEFORE THE LD. CIT(A), THE LD.AR HAS FURNISHED VALUATION REPORT FR OM A CHARTERED ENGINEER, WHO HAS VALUED THE PROPERTY AT ` 1.60 LAKHS PER ACRE AND A COPY OF THE SALE DEED REGISTERED IN THE MONTH OF OC TOBER 1985 IN RESPECT OF THE PROPERTY SITUATED AT THIRUVANDAR KO IL VILALGE, IN SUPPORT OF ASSESSEES CONTENTION. ON THE BASIS OF THE ABOVE, THE PER ACRE COST WORKED OUT TO ` 55,000/-. AS AGAINST THIS, THE ASSESSING OFFICER HAS ADOPTED ` 59,151/- PER ACRE FOR THE ENTIRE 9.99 ACRES OF LAND WHICH IS ABYSMALLY LOW AND NOT ACCEPTABLE. FINALLY, THE LD. CIT(A) HAS ESTIMATED THE VALUE AT ` .1.25 LAKHS PER ACRE ON THE BASIS OF REGISTERED VALUERS REPORT AND THE SALE DEED(SUPRA) FOR ADOPTING THE ITA 332 & 335/11 :- 4 -: FAIR MARKET VALUE AS ON 1.4.1981. NOW, BOTH THE PA RTIES ARE AGGRIEVED. 4. THE ASSESSEE WANTS THAT THE FAIR MARKET VALUE AS ON 1.4.1981 SHOULD BE TAKEN AT ` 1.90 LAKHS PER ACRE AS HAS BEEN CLAIMED BY THE ASSESSEE AS AGAINST ` 1.25 LAKHS PER ACRE ADOPTED BY THE LD. CIT(A). ACCORDING TO THE DEPARTMENT, THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 SHOULD BE ADOPTED AT ` 59,151/- PER ACRE FOR THE ENTIRE LAND OF 9.99 ACRES. THE LD. CIT(A) HAS TAKEN A MID DLE PATH BY IGNORING ADOPTION OF ` 59,151/- AS FAIR MARKET VALUE OF THE ENTIRE PROPER TY AS ON 1.4.1981 AS AGAINST WHICH THE ASSESSEE HAS ADOPTED THE SAME AT ` 1.90 LAKHS PER ACRES AS ON 1.4.1981. THE ACT OF TH E ASSESSING OFFICER IS NOT AT ALL JUSTIFIED KEEPING IN VIEW THE REGISTE RED VALUERS REPORT AND THE EVIDENCE OF SALE, A COPY OF WHICH WAS PRODUCED EXHIBITING THE HIGHER FAIR MARKET VALUE. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED OPINION THAT THE MIDDLE PATH TAKEN BY THE LD. CIT(A ) AT ` 1.25 LAKHS PER ACRE AS ON 1.4.1981 SEEMS TO BE QUITE JUSTIFIED AND NO INTERFERENCE IS CALLED FOR. SUBSEQUENTLY, WE DISMISS BOTH THE A PPEALS OF THE ASSESSEE AS WELL AS OF THE REVENUE. TERM CAPITAL GAIN ITA 332 & 335/11 :- 5 -: 6. IN THE RESULT, THE CROSS APPEALS, FILED BY THE ASS ESSEE AND THE REVENUE STAND DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT O N 24.5.2011. SD/- SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 24 TH MAY, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR