GITANJALI BAGCHI, MUMBAI V. ITO 19(1)(8), MUMBAI

ITA 350/MUM/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0780 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 04-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Fair market value; Valuation report

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 350 /MUM/ 2012 ( / ASSESSMENT YEAR : 2005 - 06 SMT. GITANJALI BAGCHI, 600, LEELA KUNJ, 6 TH FLOOR, 13 TH ROAD, KHAR (W), MUMBAI - 400 052 / VS. THE INCOME TAX OFFICER - 19(1)(3), PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400 012 ./ ./ PAN/GIR NO. : AACPC 9633K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: MS AARTI VISSANJI / RESPONDENT BY : MS. AMRITA SINGH / DATE OF HEARING : 0 4 . 0 6 .2015 / DATE OF PRONOUNCEMENT : 0 4 .0 6 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 22 , MUMBAI DT. 1 0. 10 .201 1 PERTAINING TO ASSESSMENT YEAR 200 5 - 0 6 . 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE FAIR MARKET VALUE AS ON 1.4.1981 SHOULD BE AS ADOPTE D BY THE ASSESSEE BASED ON THE VALUATION REPORT. ITA. NO. 350/M/2012 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SOLD RESIDENTIAL HOUSE FOR RS. 67,50,000/ - . THE AO FURTHER FOUND THAT THE ASSESSEE HAS EARNED CAPITAL GAIN OF RS. 29,47,500/ - AND A DEDUCTION WAS CLAIMED U/S. 54EC OF THE ACT FOR INVESTMENT IN RURAL ELECTRIFICATION BOND. THE AO OBSERVED THAT THE ASSESSEE HAS TAKEN FAIR MARKET VALUE AS ON 1.4.1981 AT RS. 7,70,000/ - WHICH WAS INDEXED AND THE INDEX COST OF ACQUISITION WAS ARRIVED AT RS. 37,29,600/ - . THE AO PROCEEDED BY MAKING ENQUI RIES IN RESPECT OF THE FAIR MARKET VALUE DURING THE PERIOD 1980 - 81. THE ENQUIRIES WERE MADE FROM THE SOCIETY AND AS PER THE DETAILS MADE AVAILABLE THE AVERAGE PER SQ. FT WAS TAKEN AT RS. 164 / - PER SQ. FT. THE AO COMPARED WITH THIS RATE ADOPTED BY THE ASS ESSEE AT RS. 736/ - PER SQ. FT. THE ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM. THE ASSESSEE FILED A DETAILED REPLY STATING THAT THE VALUE ADOPTED IS BASED ON THE VALUATION REPORT OF A GOVERNMENT APPROVED VALUER. HOWEVER, THIS SUBMISSION OF THE ASSESSEE WA S DISMISSED BY THE AO WHO COMPLETED THE ASSESSMENT BY TAKING THE FAIR MARKET VALUE AS ON 1.4.1981 AT RS. 164 / - PER SQ.FT AS AGAINST RS. 736 / - PER SQ. FT ADOPTED BY THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITH OUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUBMITTED THAT THE BASIS ADOPTED BY THE AO IS NOT ACCORDING TO THE PROVISIONS OF THE LAW INASMUCH AS THE AO HAS ADOPTED THE VALUE FOR THE FINANCIAL YEAR 1980 - 81 WHEREAS THE COST O F ACQUISITION HAS TO BE TAKEN AS ON 1.4.1981. THE LD. COUNSEL FURTHER STATED THAT THE ASSESSEE HAS BASED ITS FAIR MARKET VALUE SUPPORTED BY THE VALUATION REPORT OF A GOVERNMENT APPROVED VALUER. THE LD. COUNSEL FURTHER STATED THAT ON SIMILAR SET OF FACTS, THE ITA. NO. 350/M/2012 3 TRIBUNAL IN ITA NOS. 6685/M/10 AND 4110/M/02 HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUBMITTED THAT THE AO HAS MADE ENQUIRIES FROM THE SOCIETY ITSELF AND ON THE BASIS OF SUCH ENQUIRY, THE FMV AS ON 1.4.1981 HAS BEEN ADOPTED. 7. HAVING HEARD THE RIVAL SUBMISSIONS, WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISIONS OF THE TRIBUNAL BROUGHT TO OUR NOTICE. IT IS AN UNDISPUTED FACT THAT THE FMV ADOPTED BY THE ASSESSEE IS BASED ON THE REPORT OF THE GOVERNMENT APPROVED VALUER. THE AO HAS NOWHERE MENTIONED THAT THE RATE ADOPTED BY THE VALUER IS NOT CORRECT. IT IS ALSO SEEN THAT THE AO HAS NOT BROUGHT ANYTHING CONTRADICTORY TO THE VALUATION REPORT. IN OUR CONSIDERED OPINION , IF THE AO WAS NOT SATISFIED WITH THE VALUATION OF THE GOVERNMENT APPROVED VALUER, HE SH OULD HAVE REFERRED THE MATTER TO THE DVO WHICH HE HAS NOT. CONSIDERING THE DECISIONS OF THE TRIBUNAL (SUPRA), IN OUR CONSIDERED OPINION, THE VALUATION SUPPORTED BY A GOVERNMENT APPROVED VALUER SHOULD BE ADOPTED. WE, THEREFORE, SET ASIDE THE FINDINGS OF T HE LD. CIT(A) AND DIRECT THE AO TO COMPUTE THE CAPITAL GAINS AS RETURN ED BY THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 4 TH JUNE , 2015 SD/ - SD/ - ( JOGINDER SING H ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 4 TH JUNE , 2015 . . ./ RJ , SR. PS ITA. NO. 350/M/2012 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI