Shri Abdul Zafar, Saharanpur V. ITO, Saharanpur

ITA 3600/DEL/2009

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9945 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 04-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 18-08-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Cost of acquisition; Fair market value; Valuation report
• Section: 54B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3600/DEL./2009 (ASSESSMENT YEAR : 2005-06) LATE SHRI ABDUL ZAFAR, VS. ITO, DEOBAND, THROUGH L/H SMT. SULTANA BEGUM, DISTT. SAHARANPUR . MOHALLA TAKAN, DISTT. SAHARANPUR. (PAN : AKMPB4842B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANKIT GUPTA, ADVOCATE REVENUE BY : MS. Y. KAKKAR, DR DATE OF HEARING : 04.03.2015 DATE OF PRONOUNCEMENT : 10.04.2015 ORDER PER G.C. GUPTA, VICE PRESIDENT : THIS APPEAL FILED BY THE ASSESSEE FOR THE ASSESSME NT YEAR 2005-06 IS DIRECTED AGAINST THE ORDER OF THE CIT (APPEALS). 2. THE GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UND ER :- 1. THAT THE LEARNED CIT (APPEALS), MZR WAS TOTALLY INCORRECT AND UNJUSTIFIED IN CONFIRMING THE ADDITIO N MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN AT RS.9,90,500.00 . 2. THAT THE LEARNED CIT (APPEALS), MZR WAS TOTALLY INCORRECT IN ADOPTING COST OF ACQUISITION OF AGRICU LTURE LAND AT RS.100.00 PER METER AS AGAINST THE COST OF ACQUISIT ION AS SHOWN ITA NO.3600/DEL./2009 2 BY THE ASSESSEE AT RS.126.58 PER METER, WHICH WAS A CTUAL MARKET VALUE AS ON 01.04.1981. 3. THAT THE LEARNED CIT (APPEALS), MZR WAS TOTALLY INCORRECT AND UNJUSTIFIED IS NOT ACCEPTING THE DEDU CTION U/S 54B, WHILE THE ASSESSEE APPELLANT HAS DEPOSITED THE SALE AMOUNT IN BANK ACCOUNT. 4. THAT THE ADDITION OF RS.9,90,500.00 AS CONFIRMED IS HIGHLY ARBITRARY, UNJUSTIFIED AND AGAINST THE FACTS OF THE CASE. 5. THAT THE LEARNED CIT (APPEALS), MZR WAS TOTALLY INCORRECT AND UNJUSTIFIED IS NOT ACCEPTING THE CONT ENTS NO.1 TO 4 OF AFFIDAVIT OF DATED 13.03.2009, ENCLOSED AS ANNEX URE A. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENTITLED TO RELIEF U/S 54B OF THE INCOME-TAX ACT, 1961 AS THE A SSESSEE HAS DEPOSITED SALE PROCEEDS OF THE AGRICULTURAL LAND IN THE BANK ACCOUNT. HE SUBMITTED THAT ALTHOUGH DUE TO WRONG ADVICE OF THE BANK, THE ASSESSEE COULD NOT DEPOSIT THE SALE PROCEEDS OF AGRICULTURAL LAND IN T HE SPECIFIED BANK ACCOUNT, BUT THE ASSESSEE HAS DEPOSITED THE AMOUNT OF SALE PROCEEDS IN HIS SAVING BANK ACCOUNT AND THEREAFTER, HAS PURCHASED A GRICULTURAL LAND ON 16.11.2006 I.E. WITHIN THE STIPULATED PERIOD UNDER THE PROVISIONS OF THE ACT. HE SUBMITTED THAT THE TECHNICAL MISTAKE OF NOT DEPO SITING THE SALE PROCEEDS IN THE SPECIFIED BANK ACCOUNT WAS DUE TO THE ADVICE GIVEN BY THE BANK OFFICER AND A CERTIFICATE TO THIS EFFECT FROM THE B ANK HAS BEEN FILED IN THE COMPILATION FILED BEFORE THE TRIBUNAL. HE RELIED O N THE DECISION OF HYDERABAD TRIBUNAL IN ITO VS. SMT. DHARAM SHOBA RAN I IN ITA NO.302/HYD/2014 DATED 18.06.2014 IN SUPPORT OF THE CASE OF THE ASSESSEE. ITA NO.3600/DEL./2009 3 4. THE LD. DR HAS OPPOSED THE SUBMISSIONS OF THE LD . COUNSEL FOR THE ASSESSEE. SHE SUBMITTED THAT IN ORDER TO CLAIM EXE MPTION, THE ASSESSEE HAS TO DEPOSIT THE SALE PROCEEDS OF THE LAND IN SPECIFI ED BANK ACCOUNT ONLY AND NOT IN HIS SAVING BANK ACCOUNT AND THERE IS A CLEAR VIOLATION OF THE PROVISIONS OF THE ACT, IN PARTICULAR THE PROVISIONS OF SECTION 54B OF THE ACT AND ACCORDINGLY, THE EXEMPTION U/S 54B OF THE ACT W AS RIGHTLY DENIED BY THE REVENUE AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND HAVE PERUSED THE ORDER OF THE AO AND CIT (A). THE BASIC FACTS OF THE CASE ARE NOT IN DISPUTE. THE ASSESSEE HAS FAILED TO DEPOSIT SALE PROCEEDS OF THE LAND IN QUESTION IN THE SPECIFIED BANK ACCOUNT AND, THER EFORE, IN OUR VIEW, HAS NOT FULFILLED THE REQUIREMENT OF THE PROVISIONS OF SECTION 54B OF THE ACT AND ACCORDINGLY, WE HOLD THAT THE ASSESSEE IS NOT E NTITLED TO EXEMPTION FROM CAPITAL GAINS TAX UNDER THE PROVISIONS OF SECT ION 54B OF THE ACT AND THE ORDER OF THE CIT (A) ON THIS ISSUE IS CONFIRMED . 6. THE ONLY OTHER ISSUE RAISED IN THE GROUNDS OF AP PEAL OF THE ASSESSEE IS REGARDING THE MERITS OF THE CASE. THE LD. COUNS EL FOR THE ASSESSEE SUBMITTED THAT THE LAND WAS AGRICULTURAL IN NATURE AND THE CIRCLE RATE OF THE LAND WAS RS.1,100/- PER SQ.MTR. AT THE RELEVANT TIM E. THE ASSESSEE HAS SOLD THE SAME AT RS.641.17 PER SQ.MTR. THE ASSESSEE HAS CLAIMED THAT THE AREA RATE WAS TOO HIGH AS COMPARED TO THE ACTUAL MARKET RATE OF THE LAND AND HAS PLEADED THAT THERE WERE CERTAIN DEFICIENCIES IN THE LAND OF THE ASSESSEE ITA NO.3600/DEL./2009 4 WHICH JUSTIFIES THE LAND SOLD AT RS.641.17 PER SQ.M TR. HE SUBMITTED THAT THE DVO IN HIS REPORT DATED 26.12.2007 HAS ACCEPTED THA T THERE WERE NUMBER OF DEFICIENCIES IN THE LAND OF THE ASSESSEE AND HAS ACCORDINGLY ADOPTED THE LAND RATE OF RS.770/- PER SQ.MTR. AS AGAINST RS.1,1 00/- PER SQ.MTR. AS PER CIRCLE RATE OF THE AREA. HE REFERRED TO THE ASSESS EES APPROVED VALUER REPORT, A COPY OF WHICH HAS BEEN FILED IN THE COMPILATION B EFORE THE TRIBUNAL. 7. LD. DR HAS OPPOSED THE SUBMISSIONS OF THE LD. CO UNSEL FOR THE ASSESSEE. SHE REFERRED TO FIRST PAGE OF THE ASSESS EES APPROVED VALUATION REPORT WHEREIN AGAINST COLUMN 5, THE LAND HAS BEEN SHOWN AS RESIDENTIAL LAND AND NOT AGRICULTURAL LAND. IN COLUMN 8 THERE OF, THE PROPERTY HAS BEEN SHOWN BY THE ASSESSEES VALUER AS SITUATED IN RESI DENTIAL AREA. SHE SUBMITTED THAT THE AO IN HIS ORDER HAS GIVEN SALE I NSTANCES TO SHOW THAT THE AREA RATE WAS JUSTIFIED. SHE RELIED ON THE ORDER O F THE AO AND CIT (A). 8. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDE R SUBMITTED THAT THE SALE INSTANCES REFERRED TO BY THE AO RELATE TO THE LAND RATE AT THE TIME OF PURCHASE OF THE PROPERTY AND DOES NOT PERTAIN TO TH E PERIOD OF SALE OF THE SAID LAND. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE ORDER OF THE AO AND CIT (A). WE FIND THAT THE DEPARTMENTAL VALUATION OFFICER HAS HIMSELF REJECTED THE AREA RATE NOTIFIED FOR THE REL EVANT LAND TRANSFERRED BY THE ASSESSEE. THE DVO IN HIS REPORT DATED 26.12.20 07 HAS ALLOWED A REBATE OF 30% I.E. RS.330/- PER SQ.MTR. OUT OF THE CIRCLE RATE AND HAS RECORDED THAT ITA NO.3600/DEL./2009 5 THE REASON FOR REBATE IS DUE TO THE FACT THAT THE L AND SOLD WAS PART OF AGRICULTURAL LAND. THE APPROACH THEREOF WAS THROUG H KATCHA ROAD, THE OTHER SIDE ENTRANCE WAS BLOCKED BY THE COMPOUND WALL FOR WHICH LITIGATION WAS GOING ON IN THE COURT OF CIVIL JUDGE, DEOBAND, THE PLOT WAS LOW LYING, THE AREA OF THE PLOT WAS LARGE AND THERE WAS AN OPEN NA LLAH FLOWING ON ONE SIDE OF THE PROPERTY. WE FIND THAT CONSIDERING THE DEFI CIENCIES IN THE LAND OF THE ASSESSEE AS NARRATED BY THE DVO HIMSELF AND ALSO TH E FACT THAT THE ASSESSEES APPROVED VALUER IN HIS VALUATION REPORT HAS CITED 6 SALE INSTANCES OF THE AREA AND HAS ADOPTED THE AVERAGE THEREOF FOR ARRIVING AT THE FAIR MARKET VALUE OF THE LAND, WE HOLD THAT IT SHALL BE REASONABLE TO ADOPT THE LAND RATE AT RS.700/- (RUPEES SEVEN HUNDRED) PER SQ .MTR. AS AGAINST THE LAND RATE OF RS.770/- PER SQ.MTR. DETERMINED BY THE DVO AND THE AO IS DIRECTED TO WORK OUT THE CAPITAL GAINS IN THE TRANS FER OF PROPERTY ACCORDINGLY. THE GROUNDS OF THE APPEAL ARE ACCORDI NGLY PARTLY ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 10 TH DAY OF APRIL, 2015. SD/- SD/- (B.C. MEENA) (G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DATED THE 10 TH DAY OF APRIL, 2015 TS ITA NO.3600/DEL./2009 6 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MUZAFFARNAGAR. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.