ACIT, Circle-14(1), Hyd, Hyderabad V. Amina Khatoon, Hyd, Hyderabad

ITA 36/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6227 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 15-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 12-01-2016
• Court: TRIBUNAL
• Department Lawyers: MINI CHANDRAN
• Assessee Lawyers: C P RAMASWAMI
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Fair market value
• Section: 143(3); 50C

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1435/HYD/2015 ASSESSMENT YEAR: 2008-09 SMT AMINA KHATOON, HYDERABAD PAN AHZPK1747J VS. THE DY CIT CIRCLE 14(1) HYDERABAD (APPELLANT) (RESPONDENT) ITA NO. 36/HYD/2016 ASSESSMENT YEAR: 2008-09 THE DY CIT CIRCLE 14(1) HYDERABAD VS. SMT AMINA KHATOON, HYDERABAD PAN AHZPK1747J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.P. RAMASWAMI REVENUE BY : SMT MINI CHANDRAN DATE OF HEARING : 15-12-2016 DATE OF PRONOUNCEMENT : 25-01-2017 ORDER PER P. MADHAVI DEVI, J.M.: BOTH THE ABOVE APPEALS ARE CROSS APPEALS; FOR THE ASSESSMENT YEAR 2008-09, FILED BY THE ASSESSEE AS W ELL AS THE REVENUE AGAINST THE ORDER OF THE CIT(A)-6, HYDE RABAD, DATED 30-10-2015 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, HAS SOLD TWO PROPERTIES ADMEASURING 2,3 22 SQ. YARDS AND 1,548 SQ. YARDS OF LAND LOCATED AT DOOR NO. 1-8- 2 ITA NO. 1435 & 36/HYD/2015 SMT. AMINA KHATOON, HYDERABAD. 557, BAKARAM, CHIKKADPALLI, HYDERABAD, DURING THE RELEVANT YEAR UNDER CONSIDERATION FOR A CONSIDERATI ON OF RS. 11,38,00,000/-. THE ASSESSEE FILED HER RETURN OF I NCOME AND REPORTED LONG TERM CAPITAL GAINS OF RS. 1,36,3 6,694/-. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S 147 OF THE ACT, THE ASSESSING OFFICER OBSERVED THAT THE SR O VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER WAS RS. 12,56,80,000. THE ASSESSING OFFICER THEREFORE, APP LIED THE PROVISIONS OF SECTION 50C OF THE ACT AND ADOPTED TH E SALE CONSIDERATION AT RS. 12.57 CRORES. THEREAFTER HE O BSERVED THAT THE PROPERTY WAS ACQUIRED PRIOR TO 01-04-1981 AND THEREFORE, HE ENQUIRED ABOUT THE SRO VALUE AS ON 01 -04- 1981 AND ADOPTED THE SAME I.E. RS. 150 PER SQ. YARD AS THE FAIR MARKET VALUE (FMV) OF THE PROPERTY AS ON 01-04 -1981, AS AGAINST THE VALUE ADOPTED BY THE ASSESSEE AT RS. 1,800 PER SQ. YARD AS FMV AS ON 01-04-1981, ON THE BASIS OF THE REPORT OF A REGISTERED VALUER. THE ASSESSING OFFIC ER REJECTED THE RATE ADOPTED BY THE ASSESSEE ON THE GR OUND THAT NO COMPARATIVE INSTANCES OF THE SALE IN THE NEIGHBOURHOOD WERE GIVEN BY THE ASSESSEE. AGGRIEVE D BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APP EAL BEFORE THE CIT(A). 3. THE CIT(A) DIRECTED THE FMV AS ON 01-04-1981 TO BE ADOPTED AT RS. 1,200 PER SQ. YARD. THE ASSESSEE FU RTHER APPEALED TO THE ITAT AND THE ITAT HOLDING THAT SRO VALUE AS ON 01-04-1981 CANNOT BE ADOPTED AS THE VALUE WAS NOT REVISED AFTER 1976 TILL 1995, REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO RECONSIDER THE ISSUE AN D 3 ITA NO. 1435 & 36/HYD/2015 SMT. AMINA KHATOON, HYDERABAD. RECOMPUTE THE VALUE AS ON 01-04-1981, AFTER CONSIDE RING THE GUIDELINES ISSUED BY THE TRIBUNAL IN THE CASE O F ASHWIN JOSHI IN ITA NO. 1428 AND 1424 OF 2014. CONSEQUENT THERETO, THE ASSESSMENT WAS RE DONE BY THE ASSESSIN G OFFICER BY REFERRING THE MATTER TO THE DVO FOR VALU ATION OF THE PROPERTY. THE DVO SUBMITTED HIS REPORT BY VALU EING THE FMV OF THE PROPERTY AT RS. 437 PER SQ. YARD AS ON 01- 04-1981. THE ASSESSEE OBJECTED TO SUCH VALUATION W HICH WAS FORWARDED BY THE ASSESSING OFFICER TO THE DVO B UT SINCE THE COMMENTS FROM THE DVO WERE NOT RECEIVED B Y THE ASSESSING OFFICER BEFORE 31-03-2015, WHICH WAS THE LAST DATE FOR THE ASSESSMENT TO BE COMPLETED, THE ASSES SING OFFICER ADOPTED RS. 437 PER SQ. YARD AS THE FMV AS ON 01-04-1981 AND COMPUTED LONG TERM CAPITAL GAINS ACCORDINGLY. AGGRIEVED, THE ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A), WHO AFTER CONSIDERING THE EARLIER ORDER OF THE CIT(A) HAS ARRIVED AT RS. 1200 PER SQ. YARD AS FMV AS ON 01-04-1981. THE ASSESSEE IS AGAIN IN APP EAL BEFORE US. 4. IN THE ASSESSEES APPEAL, THE GROUNDS RAISED ARE THAT THE FMV OF THE PROPERTY AS REPORTED BY THE ASSESSEE ON THE BASIS OF THE REGISTERED VALUERS REPORT(RVR) AT RS. 1,800 PER SQ. YARD SHOULD BE ADOPTED WHEREAS THE REVENUES AP PEAL IS AGAINST THE DIRECTIONS OF THE CIT(A) TO ADOPT RS . 1,200 PER SQ. YARD AS FMV AS ON 01-04-1981. THUS, IN BOT H THE APPEALS, THE ONLY ISSUE IS THE MARKET VALUE OR FMV OF THE PROPERTY AS ON 01-04-1981. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE REPORT OF THE REGISTERED V ALUER, 4 ITA NO. 1435 & 36/HYD/2015 SMT. AMINA KHATOON, HYDERABAD. WHILE THE LD. DR SUPPORTED THE ORDER OF THE ASSESSI NG OFFICER. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT UNDISPUTEDLY THE P ROPERTY IS A COMMERCIAL PROPERTY LOCATED ON MAIN ROAD AT RT C CROSS ROADS. 6. THE CIT(A) HAS TAKEN INTO CONSIDERATION THE INST ANCES OF THE SALE OF PROPERTY AT S.D. ROAD, SECUNDERABAD AT RS. 1,200 PER SQ. YARD AND ALSO THE PROPERTY AT ABIDS W HICH WAS AT RS. 1,380 PER SQ. YARD WHICH WERE ACCEPTED A S FMV AS ON 01-04-1981 BY THE ITAT IN THE RELEVANT CASES TO ADOPT 1,200 PER SQ. YARD AS THE FMV FOR LAND AT RTC CROSS ROADS. THE CIT(A) HAS CLEARLY BROUGHT OUT THE REAS ONS AS TO WHY DVOS REPORT CANNOT BE ACCEPTED AND THE LD. DR, EXCEPT FOR THE RELIANCE UPON THE DVO REPORT, HAS FI LED TO REBUT WITH ANY SUBSTANTIAL EVIDENCE AS TO WHY THE O RDER OF THE CIT(A) IS NOT SUSTAINABLE. THE DVO HAD ADOPTED STRIP METHOD FOR ARRIVING AT THE FMV AS ON 01-04-1981, WH EREAS HE HAS ADOPTED DEVELOPMENT METHOD FOR ARRIVING AT T HE FMV ON THE DATE OF TRANSFER. AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, THE DVO CANNOT ADOPT TWO DIFFERENT METHODS FOR THE VALUATION OF THE SAME PRO PERTY ON TWO DIFFERENT DATES. THEREFORE, THE VALUE ADOPTED BY THE DVO CANNOT BE ACCEPTED. ACCORDING TO THE LD. COUN SEL FOR THE ASSESSEE, IF THE DEVELOPMENT METHOD IS ADOPTED FOR VALUE OF THE PROPERTY AS ON 01-04-1981, THE VALUE WOULD BE AROUND 12,484 PER SQ. YARD WHICH WAS MUCH MORE T HAN 5 ITA NO. 1435 & 36/HYD/2015 SMT. AMINA KHATOON, HYDERABAD. RS. 1,800 PER SQ. YARD ADOPTED BY THE ASSESSEE. TH EREFORE, ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, RS. 1,800 PER SQ. YARD IS A VERY REASONABLE VALUE ADOPTED BY THE ASSESSEE. WE FIND THAT THERE WERE SOME SALE INSTAN CES THOUGH NOT IN THE IMMEDIATE LOCALITY OF THE PROPERT Y OF THE ASSESSEE, WHICH HAVE BEEN CONSIDERED BY THE CIT(A) I.E AT SECUNDERABAD AND AT ABIDS. THE PROPERTY AT SECUNDE RABAD IS DEFINITELY VERY FAR FROM THE ASSESSEES PROPERTY AS COMPARED TO THE PROPERTY AT ABIDS. IT IS NOT KNOWN AS TO LOCATION OF THE PROPERTY AT ABIDS WHETHER IT WAS ON THE MAIN ROAD OR IT WAS AT ONE OF THE INNER ROADS. THE REFORE, THERE CANNOT BE ANY HARD AND FAST RULE THAT VALUE OF THE PROPERTY AT RTC CROSS ROADS ON THE MAIN ROAD SHOULD BE EQUAL TO OR LESS THAN THE VALUE OF THE PROPERTY AT ABIDS UNLESS IT IS ALSO LOCATIONALLY SIMILAR. THE CIT(A) HAS BROUGHT OUT THAT THE TRIBUNAL IN THE CASE OF K. PRA TAP REDDY HAS APPROVED THE VALUE OF LAND LOCATED AT S.D . ROAD SECUNDERABAD TO BE 1,200 PER SQ. YARD AND IN THE CA SE OF O. VIJAYA AND OTHERS, THE FMV OF THE PROPERTY IN A BIDS AT RS. 1380 PER SQ. YARD. THE ASSESSEES PROPERTY IS LOCATED IN RTC X-ROADS I.E SOMEWHERE BETWEEN THESE TWO LOCA LITIES BUT IS CLOSER TO ABIDS. FURTHER, THE EXTENT OF LAND OF ASSESSEES PROPERTY IS QUITE LARGE AND THEREFORE DE FINITELY IS LIKELY TO FETCH HIGHER PRICE THAN SMALL PIECES OF L AND, THEREFORE, WE ARE OF THE OPINION THAT THE FMV OF AS SESSEES PROPERTY AS ON 01-04-1981 CAN BE ADOPTED AT RS. 135 0 PER SQ. YARD. THE ASSESSING OFFICER IS DIRECTED TO REC OMPUTE THE LONG TERM CAPITAL GAINS ACCORDINGLY HENCE, THE ASSESSEES APPEAL IS PARTLY ALLOWED AND THE REVENUE S APPEAL IS DISMISSED. 6 ITA NO. 1435 & 36/HYD/2015 SMT. AMINA KHATOON, HYDERABAD. 7. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED AND THE REVENUES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY , 2017. SD/- SD/- (B.RAMAKOTAIAH) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 25 TH JANUARY, 2017 KRK 1) SMT AMINA KHATOON, C/O DR. C.P. RAMASWAMI, FLAT NO . 102 & 103, GITANJALI APTS., PLOT NO. 108, SRINAGAR COLONY, HYDERABAD 5000 073. 2) DCIT, CIRCLE 14(1), HYDERABAD 3) CIT(A) -VI, HYDERABAD 4) PCIT-6, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 6) GUARD FILE