ACIT, Muzaffarnagar V. Sh. Sunil Nirwal, Shamli

ITA 350/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1267 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 10-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 23-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S VIRK
• Keywords: Cost of acquisition; Fair market value

Judgement Text

ITA NO. 350/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 350/DEL/2012 A.Y. : 2008-09 ACIT, CIRCLE - 1, MUZAFFARNAGAR VS. SH. SUNIL NIRWAL, S/O LATE SH. HARVEER SINGH, NAI MANDI, MAZRA ROAD, SHAMLI (PAN: AIGPK-2492-L) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. ANKIT GUPTA, ADV. DEPARTMENT BY : SH. G.S. VIRK, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), NEW DELHI D ATED 20.9.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED READ AS UNDER:- I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW BY TAKING THE ACQUISITION VALUE OF LAND SOLD ON THE BASIS OF VALUE TAKEN BY ASSESSEE AND IGNORING THE FACT THAT THE LAND WAS ACTUALLY NOT SITUATED IN THE HAR IJAN BASTI. ITA NO. 350/DEL/2012 2 II) THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( A) IS SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORE D. 3. IN THIS CASE DURING THE COURSE OF ASSESSMENT PROC EEDINGS, IT WAS GATHERED BY THE A.O. THAT DURING THE YEAR UNDER CON SIDERATION THERE WAS NO OTHER INCOME EXCEPT FROM SALE OF PLOTS OF LAN D. THE ASSESSEE AFTER PLOTTING THE LAND, SOLD 27 PLOTS. FROM THE DET AILS OF SALE DEEDS EXECUTED FOR A.Y.2007-08 IT WAS GATHERED BY THE A.O . THAT THE ASSESSEE WAS HAVING HALF SHARE IN LAND MEASURING 6868.56 SQ. MT. OR SAY 8211.4 SQ. YDS. DURING THE COURSE OF ASSESSMENT PROCEEDING THE A.O. REQUIRED THE ASSESSEE TO FURNISH THE DETAILS OF LAND INCLUDI NG AREA OF LAND. IN RESPONSE IT WAS SUBMITTED BY THE ASSESSEE THAT THE L AND WAS LOCATED IN MOHALLA BARKHANDI, TEHSIL SHAMLI, DISTRICT MUZAFFARNA GAR. THE ASSESSEE HAD SHOWN COST OF ACQUISITION AS ON 01-04-1981 @ RS .150/- PER SQ. YD. IT WAS FURTHER SUBMITTED THAT THE RATE HAD BEEN APPL IED AS PREVAILING AS ON 0104-1981. TO VERIFY THE FAIR MARKET VALUE AND L OCATION OF MOHALLA PANSARIYAN AND HARIJAN BASTI SITUATED AT SHAMLI, THE A.O. DEPUTED I.T.I. TO MAKE SPOT ENQUIRIES. THE FAIR MARKET RATE WAS OBT AINED BY THE A.O. FROM ADM (FINANCE), MUZAFFARNAGAR. AS PER THE REPORT O F THE I.T.I. MOHALLA PANSARIAN WAS ADJACENT TO HARIJAN BASTI. IT WAS ALSO REPORTED THAT THERE WAS NO AGRICULTURAL ACTIVITY IN THE PREC EDING 6 - 7 YEARS. THE A.O. AFTER EXAMINATION OF THE DETAILS OF MARKET RATE FURNISHED BY ADM (FINANCE), MUZAFFARNAGAR GATHERED THAT THE RATE OF R S.35/- PER SQ.YD. WAS PREVAILING AS ON 01-04-1981 FOR THE AREA SITUAT ED IN AND AROUND HARIJAN BASTI. THUS THE A.O. INFERRED THAT THE SAME RATE WOULD BE APPLICABLE TO MOHALLA PANSARIAN. IT WAS HELD BY THE A .O. THAT THE ASSESSEE HAD OVER ESTIMATED THE COST OF ACQUISITION AS ON 01-04-1981 IN ORDER TO REDUCE CAPITAL GAIN. IT WAS CONTENDED B Y THE ASSESSEE THAT RATE AS APPLIED IN THE COMPUTATION OF CAPITAL GAIN A T RATE OF RS.150/- ITA NO. 350/DEL/2012 3 PER SQ. YD. BE TAKEN INTO CONSIDERATION. HOWEVER, T HE A.O. REJECTED THE SUBMISSIONS MADE BY THE APPELLANT AND HELD THAT THE ASSESSEE HAD FAILED TO JUSTIFY THE CLAIMED RATE OF COST OF ACQUIS ITION AT RS.150/-. THE A.O. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANC ES OF THE CASE WORKED OUT CAPITAL GAIN TAKING COST OF ACQUISITION AS ON 01-04-1981 AT RS.35/- PER SQ. YD. WHICH RESULTED IN ADDITION OF R S.53,87,515/- TO THE INCOME OF THE ASSESSEE. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) CONSIDERED THE SUBMISSIONS. LD. COMMISSIONER OF INCO ME TAX (A) NOTED THAT THE ASSESSING OFFICER ON THE BASIS OF T HE REPORT OF INCOME TAX INSPECTOR THAT MOHALLA PANASARIYAN WAS ADJACENT TO HARIJAN BASTI, SHAMLI AND ALSO AS PER THE DETAILS OF CIRCLE RATE FU RNISHED BY ADM(FINANCE), MUZAFFARNAGAR APPLIED CIRCLE RATE OF ` 3 5/- TO DETERMINE COST OF ACQUISITION AS ON 1.4.1981 AND ACCORDINGLY ASSESSED THE LONG TERM CAPITAL GAIN ON SALE OF PLOTS OF LAND AT ` 53,8 7,715/-. LD. COMMISSIONER OF INCOME TAX (A) HELD THAT THE ACTION OF THE ASSESSING OFFICER WAS NOT TENABLE FOR THE FOLLOWING REASONS: - I) AS PER COPY OF PURCHASE DEED, THE LAND IS SITU ATED IN MOHALLA BARKHANDI, TEHSIL SHAMLI NEAR KISAN DEGREE COLLEGE, SHAMLI. THE APPELLANT HAS FILED CERTIFICAT E FROM NAGAR PALIKA, SHAMLI DATED 30-11-2010 AND ALSO REPOR T FROM LAND REVENUE INSPECTOR, SHAMLI DATED 23-12-2010 STA TING THEREIN THAT ALL KHATTA NOS. OF THE SAID PROPERTY L IE WITHIN MUNICIPAL LIMITS. THE APPELLANT HAS ALSO FILED COPY O F 'SAZRA' WHICH REVEALS THAT THE IMPUGNED PROPERTY IS SITUATED ADJACENT TO MOHALLA PANSARIAN AND HARIJAN BASTI. HOWE VER IN ITA NO. 350/DEL/2012 4 NO WAY, THE PROPERTY IS THE PART OF HARIJAN BASTI, S HAMLI AS REPORTED BY THE I.T.I. (II) EVEN IF FOR THE SAKE OF PRESUMPTION IT IS CONS IDERED THAT THE LAND IS SITUATED VERY NEAR TO HARIJAN BASTI WHERE S OCIALLY BACKWARD CLASS OF PEOPLE LIVE THE CIRCLE RATES OF S UCH LAND CANNOT BE APPLIED TO LAND OWNED BY GENERAL CATEGORY BECAUSE THE CENTRAL GOVERNMENT AND STATE GOVERNMENTS HAVE ANNOUNCED SEVERAL PROGRAMMES TO UPLIFT SUCH CLA SS OF SOCIETY AND TO PROVIDE EASY HOMES TO SUCH PEOPLE, T HE GOVERNMENT HAS KEPT CIRCLE RATES AT A VERY LOW FIGUR E TO ALLOW RELIEF ON STAMP DUTY. IN ANY CASE RATE CANNOT BE APPLIED TO THE APPELLANT'S LAND WHICH IS ADMITTEDLY NOT SITUATED IN SPECIFIED AREA (HARIJAN BASTL) AND THE A PPELLANT ADMITTEDLY DOES NOT BELONG TO THE SCHEDULE CASTE. (III) IF THE OTHER CO-OWNER SH. CHANDRAVEER SINGH HAD ADOPTED CIRC E RATE AT RS.35/- PER SQ. YD. AS ON 01-04-1981 IT IS FOR HIM TO EXPLAIN UNDER WHAT CIRCUMSTANCES THE SAID RA TE WAS APPLIED AND THE SAME CANNOT BE MADE THE BASIS OF WO RKING OUT LONG TERM CAPITAL GAIN IN THE APPELLANT'S CASE. (IV) AS PER CIRCLE RATE FIXED BY STATE GOVERNMENT FOR STAMP DUTY PURPOSES THE AREA FALLING FROM VIJAY CINEMA TO KISAN DEGREE COLLEGE IS AT RS. 250/- PER SQ. YD. THE APPELLANT H AS ADOPTED RATE OF RS. 150/-PER SQ. YD. WHICH IS IN AN Y ,CASE IS HELD NOMINAL AND REASONABLE. (V) THE APPELLANT HAS FILED A COPY OF SALE DEED DA TED 24-12-1981 IN THE CASE OF SH. SHYAM LAL SELLING HIS PROPERTY ITA NO. 350/DEL/2012 5 AT MOHALLA BARKHANDI LOHARI GATE WHICH SHOWS CIRCLE RATE OF RS.250/- PER SQ . YD. WAS APPLIED. (VI) THE PERUSAL OF SALE DEEDS OF THE LAND IN QUE STION SHOWS THAT THE SALE DEED IS REGISTERED FOR PLOTS OF LAND SITUA TED IN MOHALLA BARKHANDI/PANSARIYAN AND NOT HARIJAN BASTI. 4.1 CONSIDERING THE ABOVE, LD. COMMISSIONER OF INCOME TAX (A) OBSERVED THAT UNLESS THE ASSESSING OFFICER IS ABLE TO CONTROVERT SO MANY DOCUMENTARY EVIDENCES PLACED BY THE ASSESSEE ON RECORD; IT WOULD NOT BE PROPER TO SUSTAIN LONG TERM CAPITAL GAI N WORKED OUT BY THE A.O. LD. COMMISSIONER OF INCOME TAX (A) HELD THAT ASSESSING OFFICER WAS LEGALLY AND FACTUALLY INCORRECT TO WOR KOUT THE LONG TERM CAPITAL BY ADOPTING COST OF ACQUISITION AS ON 01-0 4-1981 AT RS.35/- AND WORK OUT LONG TERM CAPITAL GAIN AT RS. 53,92,830/-. ACCORDINGLY, HE DIRECTED TO RE-COMPUTE LONG TERM CAPITAL GAIN ON THE BASIS OF COST OF ACQUISITION SHOWN BY THE ASSESSEE AT THE RATE OF RS . 150/-PER SQ.YD. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT I N THIS CASE THE ASSESSEE HAS PRODUCED SUFFICIENT DOCUMENTARY EVIDENC E TO PROVE THAT THE COST OF ACQUISITION AS ON 1.4.1981 SHOULD BE ` 150/- PER SQYD.. ASSESSEE HAS SUBMITTED IN THIS REGARD A CERTIFICATE FROM NAGAR PALIKA AND REPORT FROM LAND REVENUE INSPECTOR, COPY OF SAJR A, COPY OF PURCHASE DEED, DETAILS OF CIRCLE RATE FIXED BY TH E STATE GOVERNENT. THESE DOCUMENTS COGENTLY PROVE THAT THE ASSESSEES CONTENTION THAT RATE OF ACQUISITION SHOULD BE ADOPTED AS ` 150/- PE R SQYD. IS PROVED. SINCE ASSESSEE HAS SUBMITTED SO MANY DOCUMENTARY EVIDE NCE, THE ONUS HAS SHIFTED FROM THE ASSESSEE TO THE ASSESSING OFFICER. BUT THE ITA NO. 350/DEL/2012 6 ASSESSING OFFICER HAS NOT DISCHARGED HIS ONUS TO S HOW ANY DISCREPANCY/ FALSITY IN SUCH EVIDENCE. UNDER THE CIRCUMSTANCES, WE DO NO FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMIS SIONER OF INCOME TAX (A), ACCORDINGLY, WE UPHOLD THE SAME. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/01/2013. SD/- SD/- [ [[ [A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 15/01/2013 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES