Mrs.Sudha Ramachandran, Cochin V. DCIT, Cochin

ITA 384/COCH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69052 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 05-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K K JOHN
• Assessee Lawyers: KURIEN THOMAS
• Keywords: Fair market value; Valuation report

Judgement Text

1 ITA NO. 384/COCH/2013 SP 64-COCH-2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 384/COCH/2013 (ASSESSMENT YEAR 2006-07) & S.P. NO.64/COCH/2013 (ARISING OUT OF I.T.A NO. 384/COCH/2013) (ASSESSMENT YEAR 2006-07) MRS. SUDHA RAMACHANDRAN VS DY.CIT, CIR.2(2) ROHINI, APPAPARAMBATH COLONY ERNAKULAM CHITTOR ROAD, ERNAKULAM KOCHI 682 011 PAN : ACPPR1770H (APPELLANT / APPLICANT) (RESPONDENT) APPELLANT BY : SHRI KURIEN THOMAS RESPONDENT BY : SHRI K.K. JOHN DATE OF HEARING : 11-11-2013 DATE OF PRONOUNCEMENT : 22-11-2013 O R D E R PER N.R.S. GANESAN (JM) THE ASSESSEE FILED THE PRESENT APPEAL CHALLENGING THE ORDER OF THE CIT(A)-II, KOCHI DATED 22-03-2013 FOR THE ASSESSMEN T YEAR 2006-07. 2 ITA NO. 384/COCH/2013 SP 64-COCH-2013 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DETER MINATION OF FAIR MARKET VALUE AS ON 01-04-1981 FOR COMPUTING THE CAP ITAL GAIN. 3. SHRI KURIEN THOMAS, THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ASSESSEE HAS ESTIMATED THE FAIR MARKET VALUE ON THE BASIS OF THE VALUATION REPORT AT RS.2 LAKHS PER CENT. HOWEVER, THE ASSESSING OFFICER ADOPTED THE SAME AT RS.75,000 PER CENT. THE LD.COU NSEL SUBMITTED THAT THE FAIR MARKET VALUE IS A PRICE THAT MAY BE AGREED BETWEEN A WILLING PURCHASER AND A WILLING SELLER. THE VALUATION OFFI CER, ACCORDING TO THE LD.COUNSEL, HAS TAKEN INTO CONSIDERATION ALL THE FA CTS WHICH ARE NECESSARY FOR CONSIDERATION OF THE FAIR MARKET VALUE AND FIXE D THE FAIR MARKET VALUE AT RS.2 LAKHS. WHEN IT WAS POINTED OUT TO THE LD.COUN SEL FOR THE ASSESSEE THAT THE ASSESSING OFFICER HAS TAKEN INTO CONSIDERA TION THE COMPARATIVE SALE DEED DURING THE RELEVANT PERIOD, THE LD.REPRES ENTATIVE SUBMITTED THAT THE COMPARATIVE CASES REFERRED TO BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS NOT OF THE LOCALITY WHERE THE ASSESSEE HAD HER PROPERTY, THEREFORE, THAT IS NOT R ELEVANT. ON A QUERY FROM THE BENCH, WHAT WOULD BE THE REASONABLE VALUE AS ON 01-04-1981, THE LD.REPRESENTATIVE VERY FAIRLY CONCEDED THAT THE REASONABLE VALUE WOULD BE APPROXIMATELY RS.1,50,000 PER CENT AS ON 01-04-1 981. 3 ITA NO. 384/COCH/2013 SP 64-COCH-2013 4. WE HEARD SHRI K.K. JOHN, THE LD.DR ALSO. ACCORD ING TO THE LD.DR, THE PROPERTY WAS LOCATED AT BANERJI ROAD WHICH IS N EARER TO M.G. ROAD. IN 1981, ACCORDING TO THE LD.DR, ONLY M.G. ROAD WAS IN EXISTENCE AND ALL OTHER AREAS WERE RECLAIMED FROM THE BACKWATERS. TH EREFORE, VALUE FIXED BY THE ASSESSING OFFICER AT RS.75,000 PER SQ.FT. IS VERY REASONABLE; IT DOES NOT REQUIRE ANY INTERFERENCE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHT LY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, FAIR MARKET VALUE IS N OTHING BUT A PRICE THAT MAY BE AGREED BETWEEN A WILLING PURCHASER AND A WIL LING SELLER. THE FAIR MARKET VALUE IS NOT A CONSTANT FIGURE. IT MAY DIFF ER DEPENDING UPON THE CIRCUMSTANCES AND FACTORS WHICH ARE NECESSARILY TO BE CONSIDERED. IT IS WELL SETTLED PRINCIPLES OF LAW THAT THE FAIR MARKET VALUE WOULD DEPEND UPON VARIOUS FACTORS SUCH AS LOCATION OF THE PROPERTY, E XTENT OF THE PROPERTY, INFRASTRUCTURES AVAILABLE AROUND THE LOCALITY, ACCE SS TO THE INFRASTRUCTURE FROM THE LAND IN QUESTION, THE GUIDELINE VALUE FIXE D BY THE GOVERNMENT FOR SALE OF THE PROPERTY, COMMERCIAL IMPORTANCE, ETC.. IN THIS CASE, THE ASSESSING OFFICER HAS TAKEN ONLY SOME COMPARATIVE C ASES FROM THE REGISTERED SALE DEEDS WHICH ARE CLAIMED TO BE NEARE R TO THE VICINITY. THE OTHER FACTORS SUCH AS AVAILABLE INFRASTRUCTURE, ACC ESS TO THE INFRASTRUCTURE, 4 ITA NO. 384/COCH/2013 SP 64-COCH-2013 COMMERCIAL IMPORTANCE ETC. WERE NOT TAKEN INTO CONS IDERATION. IT IS AN ADMITTED FACT THAT BANERJI ROAD IS NEARER TO M.G. R OAD. M.G. ROAD IS A VERY IMPORTANT COMMERCIAL AREA EVEN IN THE YEAR 198 1. THEREFORE, BANERJI ROAD WHICH IS NEARER TO M.G. ROAD HAS ITS OWN COMME RCIAL VALUE AND HAD ACCESS TO THE INFRASTRUCTURE AND COMMERCIAL ESTABLI SHMENTS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE FAIR MARKET VALUE FIXED BY THE ASSESSING OFFICER AT RS.75,000 IS VERY LOW. AT THE VERY SAME TIME, THE FAIR MARKET VALUE FIXED BY THE VALUATION OFFICER AT RS.2 LAKHS PER CENT IS VERY HIGH AND HE HAS NOT TAKEN INTO CONSIDERATION THE FA CTORS WHICH ARE REFERRED ABOVE WHILE FIXING THE VALUE AT RS.2 LAKHS. THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT AFTER TAKING INTO CONSIDERA TION THE COMMERCIAL IMPORTANCE OF THE PROPERTY AND THE INFRASTRUCTURES AVAILABLE IN THE VICINITY, THE ENDS OF JUSTICE WOULD BE MET IF THE FAIR MARKET VALUE OF THE PROPERTY IS ADOPTED AT RS.1,50,000 PER CENT AS ON 01-04-1981. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ESTIMATI NG THE VALUE OF THE PROPERTY AS ON 01-04-1981 AT RS.1,50,000 WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ESTIMATE THE FAIR MARKET VALUE AS ON 01-04- 1981 AT RS.1,50,000 PER CENT AND COMPUTE THE CAPITA L GAIN ACCORDINGLY. 5 ITA NO. 384/COCH/2013 SP 64-COCH-2013 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. CONSEQUENTLY, THE STAY PETITION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND NOVEMBER, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 22 ND NOVEMBER, 2013 PK/- COPY TO: 1. MRS. SUDHA RAMACHANDRAN, ROHINI, APPAPARAMBATH C OLONY, CHITTOR ROAD, ERNAKULAM, KOCHI 682 011 2. DY.CIT, CIR.2(2), ERNAKULAM 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-II, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH