ITO, CHENNAI V. A.Jagannathan, Coimbatore

ITA 345/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5750 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: V DEE
• Keywords: Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , !, # $% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ ITA NO.345/MDS/2017 & C.O. NO.42/MDS/2017 (IN I.T.A. NO.345/MDS/2017) ( )( / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, NON CORPORATE WARD - 2(5), 63-A, RACE COURSE ROAD, COIMBATORE. V. SHRI A. JAGANNATHAN, 50A, PALANISAMY STREET, NO.2, SAI BABA COLONY, K.K. PUDUR, COIMBATORE 641 038. PAN : ADAPJ 9812 G (+,/ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) +, - . / APPELLANT BY : SHRI N. MADHAVAN, ADDL.CIT /0+, - . / RESPONDENT BY : SHRI V. DEEPAN RAJ KRISHNA, ADV OCATE 1 - 2# / DATE OF HEARING : 04.12.2017 3 ) - 2# / DATE OF PRONOUNCEMENT : 07.12.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -2, COIMBA TORE, DATED 31.10.2016, FOR THE ASSESSMENT YEAR 2009-10, DELETI NG THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME-TAX AC T, 1961 (IN SHORT 'THE ACT'). THE ASSESSEE HAS ALSO FILED CROSS-OBJE CTION IN RESPECT OF 2 I.T.A. NO.345/MDS/17 C.O. NO.42/MDS/17 THE SAME ORDER OF THE CIT(APPEALS). THEREFORE, WE HEARD BOTH, THE APPEAL AND THE CROSS-OBJECTION TOGETHER AND DISPOSI NG OF THE SAME BY THIS COMMON ORDER. 2. THERE WAS A DELAY OF 7 DAYS IN FILING THIS APPEA L BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR COND ONATION OF DELAY. WE HAVE HEARD THE LD. D.R. AND THE LD.COUNS EL FOR THE ASSESSEE. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE C ONDONE THE DELAY AND ADMIT THE APPEAL. 3. SHRI N. MADHAVAN, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE ASSESSING OFFICER DETERMINED THE TAXABLE INCOME AT 53,61,894/- AFTER ADDING THE CAPITAL GAINS TO THE E XTENT OF 51,35,203/-. THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE GROUND THAT THE FAIR MA RKET VALUE AS ON 01.04.1981 WAS CLAIMED WITHOUT ANY SUPPORTING EVIDE NCE. ACCORDING TO THE LD. D.R., THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 HAS TO BE ESTIMATED FOR THE PURPOSE O F DETERMINING THE COST OF THE ASSET. SINCE THE ASSESSEE HAS TAKE N THE FAIR MARKET VALUE AS ON 01.04.1981 WITHOUT ANY MATERIAL ON RECO RD, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS 3 I.T.A. NO.345/MDS/17 C.O. NO.42/MDS/17 FURNISHED INACCURATE PARTICULARS OF HIS INCOME, THE REFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN DELETING THE PENAL TY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE AC T. 4. ON THE CONTRARY, SHRI V. DEEPAN RAJ KRISHNA, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ESTIMATION OF FAIR MARKET VALUE MAY DIFFER FROM PERSON TO PERSON, THEREFORE, IT MAY NOT BE THE SAME. THERE WAS SOME DIFFERENCE IN THE ESTIMATION MADE BY THE ASSESSEE AND THAT OF THE ASSESSING OFFICER, THEREFORE, ACCOR DING TO THE LD. COUNSEL, THAT MAY NOT BE CONSTRUED THAT THE ASSESSE E HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. ACCORDING TO THE LD. COUNSEL, THE VALUE AS ON 01.04.1981 HAS TO BE ESTIMATED ON T HE BASIS OF MATERIAL AVAILABLE ON RECORD. HENCE, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY PARTICULARS OF INCOME OR FURNISHED ANY INACCURATE PARTICULARS OF INCOME. THEREFORE, ACCOR DING TO THE LD. COUNSEL, THE CIT(APPEALS) HAS RIGHTLY DELETED THE P ENALTY BY PLACING RELIANCE ON THE DECISION OF THIS BENCH OF THE TRIBU NAL IN ACIT V. N. MEENAKSHI (2009) 125 TTJ 0856 AND THE JUDGMENT OF B OMBAY HIGH COURT IN CIT V. FORTUNE HOTELS AND ESTATES (P) LTD. (2014) 52 TAXMANN.COM 330. 4 I.T.A. NO.345/MDS/17 C.O. NO.42/MDS/17 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ISSUE ARISES FOR CONSIDERATION IS ESTIMATION OF FAIR MARKET VALUE AS ON 01.04.1981. THE ASSESSEE APPEAR S TO HAVE FAILED TO PRODUCE EVIDENCES FOR ADOPTION OF FAIR MA RKET VALUE CLAIMED BY HIM FOR THE PURPOSE OF DETERMINING THE F AIR MARKET VALUE AS ON 01.04.1981. IT IS A WELL SETTLED PRINCIPLES OF LAW THAT FAIR MARKET VALUE IS NOTHING BUT A PRICE THAT WOULD BE A GREED BETWEEN THE WILLING PURCHASER AND WILLING SELLER. THEREFOR E, FAIR MARKET VALUE IS NOT A CONSTANT FIGURE. IT MAY DIFFER DEPENDING UPON VARIOUS FACTORS SUCH AS DEMAND IN THE MARKET, NECESSITY OF SELLER TO SELL THE PROPERTY, LOCATION / AREA IN WHICH THE PROPERTY IS SITUATED, INFRASTRUCTURE FACILITIES AVAILABLE AROUND THE LOCA TION, ACCESS TO THE INFRASTRUCTURE FACILITIES, ETC. THEREFORE, AS RIGH TLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, ESTIMATION HAS TO BE M ADE AS ON 01.04.1981 ON THE BASIS OF MATERIAL AVAILABLE ON RE CORD. ESTIMATION MAY DIFFER FROM PERSON TO PERSON, THEREFORE, THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT MERELY BECAUSE THERE WAS A DIFFERENCE BETWEEN THE FAIR MARKET VALUE ESTIMATED BY THE ASSE SSEE AND THAT OF THE ASSESSING OFFICER, IT CANNOT BE SAID THAT TH E ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. TH IS TRIBUNAL IS OF 5 I.T.A. NO.345/MDS/17 C.O. NO.42/MDS/17 THE CONSIDERED OPINION THAT ESTIMATION OF FAIR MARK ET VALUE AS ON 01.04.1981 ALWAYS REMAINS TO BE ESTIMATION, THEREFO RE, ON SUCH REASONING, IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THEREFORE, THE C IT(APPEALS) HAS RIGHTLY DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. HENCE, THIS TRIBUNAL DOES NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 6. THE ASSESSEE HAS FILED CROSS-OBJECTION ONLY TO S UPPORT THE ORDER OF THE CIT(APPEALS). THEREFORE, THE CROSS-OB JECTION BECOMES INFRUCTUOUS. 7. IN THE RESULT, BOTH, THE APPEAL AND THE CROSS-OB JECTION STAND DISMISSED. ORDER PRONOUNCED ON 7 TH DECEMBER, 2017 AT CHENNAI. SD/- SD/- ( ! ) ( . . . ) (SANJAY ARORA) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 7 TH DECEMBER, 2017. KRI. 6 I.T.A. NO.345/MDS/17 C.O. NO.42/MDS/17 - /267 87)2 /COPY TO: 1. +, /APPELLANT 2. /0+, /RESPONDENT 3. 1 92 () /CIT(A)-2, COIMBATORE 4. PRINCIPAL CIT-1, COIMBATORE 5. 7: /2 /DR 6. ;( < /GF.