A.C.I.T., Circle-1, Gwalior V. Sh. Mahan Mohan Chhaparwal, Jaipur

ITA 395/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0575 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 9 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-05-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 13-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report; Assessment record
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.395/AGRA/2012 ASSESSMENT YEARS: 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, VS. SHRI MADA N MOHAN CHHAPARWAL, CIRCLE-1, GWALIOR. 201, GARDEN VIEW APARTMENT, C-39, TARUN MARG, TILAKNAGAR, JAIPUR. (PAN : ABNPC 7991 G). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : NONE DATE OF HEARING : 20.05.2013 DATE OF PRONOUNCEMENT : 24.05.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 17.05.2012 PASSED BY THE LD. CIT(A), GWALIOR FOR THE ASSESSMEN T YEARS 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT (APPEALS) HAS ERRED IN DELETING THE ADDITIO N OF RS.73,69,070/- (RS.35,37,126/- + RS.38,31,935/-) MADE ON ACCOUNT O F LONG TERM CAPITAL GAINS (LTCG) ON SALE OF LAND CEDED AND SHO P-LAND PORTION. 2 ITA NO.395/AGRA/2012 A.YS. 2009-10 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO COMPUTE THE LONG TERM CAPITAL GAIN (LTCG) ACCORDING TO REVISED COMPUTATIO N FILED BY THE ASSESSEE? 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVES INCOME FROM CAPITAL GAIN, HOUSE PROPERTY AND INTEREST. DURING THE ASSE SSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE SHOWN CAPITAL GAIN AS PER BOOKS OF ACCOUNT IN RESPECT OF CAPITAL GAIN ARRIVED ON LAND CEDED, SALE OF SHOPS. THE PROPERTY STATED TO BE SOLD HAD BEEN ACQUIRED BY THE ASSESSEE BEFORE 01.04.1981. T HE ASSESSEE ADOPTED VALUE OF PROPERTY @ RS.2,500/- PER SQ. METER TREATING THIS A S MARKET RATE OF THE PROPERTY AS ON 01.04.1981. THE A.O. ON THE BASIS OF INFORMATIO N COLLECTED FROM SUB-REGISTRAR TAKEN VALUE OF RS.130/- PER SQ. METER IN PLACE OF R S.2,500/- PER SQ. METER CLAIMED BY THE ASSESSEE. THE A.O. RECALCULATED THE LONG TE RM CAPITAL GAIN ACCORDINGLY. 4. THE CIT(A) DELETED THE ADDITION MADE BY THE A.O. AS UNDER :- (PAGE 10 & 11) 3.2 APPELLANTS SUBMISSIONS HAVE BEEN CONSIDERED C AREFULLY ALONG WITH THE ASSESSMENT ORDER. ASSESSMENT RECORDS HAVE ALSO BEEN PERUSED. AS PER THE AO, PROPERTIES IN THE AREA OF MLB ROAD HAVE BEEN PURCHASED/SOLD AT AN AVERAGE PRICE OF RS.90.50 PER SQ. METER DURING THE YEAR 1980-81 ON THE BASIS OF SUB-REGISTR ARS REPORT & THEREFORE APPLICATION OF RATE OF RS.130/- SQ. MT., IN PLACE OF RS.2,500/- PER SQ. MT., TO DETERMINE COST OF ACQUISITION IN 19 81 IS REASONABLE. APPELLANTS EXPLANATION AND DETAILED SUBMISSIONS HA VE THEREFORE BEEN FOUND NOT ACCEPTABLE BY SOLELY RELYING ON SUB-REGIS TRARS INFORMATION 3 ITA NO.395/AGRA/2012 A.YS. 2009-10 WHO HAS BEEN HELD TO BE THE ONLY GOVT. AUTHORITY HA VING RIGHT OF PROPER VALUATION OF THE LAND & PROPERTIES. A.O. HA S NOT MADE ANY COMMENTS WHATSOEVER REGARDING REGD. VALUERS VALUAT ION REPORT SUBMITTED BY THE APPELLANT ON THE BASIS OF WHICH RA TE OF RS.2,500/- PER SQ. MT. BEEN TAKEN NOR THE FACT OF DISTINCTION BETW EEN THE APPELLANTS PROPERTY IN NATURE, LOCATION, SIZE ETC. VIS--VIS O THER PROPERTIES BEEN DISPUTED BY THE AO. IT IS A CONFIRMED FACT THAT D URING YEAR 1980-81 AS PER RECORDS OF SUB-REGISTRAR, GWALIOR, THERE WER E NO PRESCRIBED GUIDELINES IN PLACE TO DETERMINE FAIR MARKET VALUE OF PROPERTIES IN QUESTION. THIS IS EVIDENT FROM REPLY DT. 01.05.201 2 ISSUED BY SUB- REGISTRAR IN RESPONSE TO RTI APPLICATION DT. 07.04. 2012 FILED BY APPELLANTS AR. FURTHER, VIDE LETTER DATED 26.12.20 11, O/O. SUB- REGISTRAR HAS ONLY SENT PHOTOCOPY OF INDEX REGISTER MAINTAINED BY THEM IN RESPECT OF SOME PROPERTIES SOLD DURING THE YEAR 1981-82 GIVING DETAILS LIKE BRIEF DESCRIPTION OF THE PROPER TY, ITS ADDRESS, AREA & SALE VALUE ETC. A.O. HAS RELIED HEAVILY & SOLELY ON THIS INFORMATION WITHOUT BRINGING ANY ADVERSE MATERIAL ON RECORD BEF ORE REJECTING APPELLANTS SUBMISSIONS. THE QUOTED PROPERTY TRANS ACTIONS ARE ONLY MUTUALLY AGREED UPON VALUATION OF CONCERNED BUT DIF FERENT AND DISTINCT PROPERTIES VIS--VIS APPELLANTS COMMERCIA L PROPERTIES, AS DETERMINED BY RESPECTIVE BUYERS & SELLERS. THESE A RE NOT EVEN RATES FIXED BY REGISTERING AUTHORITY FOR PURPOSES OF STAM P VALUE FIXATION AS IS EVIDENT FROM HUGE VARIATION IN THE PRICES (FROM RS.11.50 TO 347.20 PER SQ. MT.). IT IS A SETTLED LEGAL POSITION THAT RATES FIXED FOR COLLECTION OF STAMP DUTY CANNOT BE EQUATED AS FMV. THERE IS N O PROVISION UNDER THE CHAPTER RELATING TO CAPITAL GAINS WHICH STATES THAT CIRCLE RATE SHALL BE TREATED AS COST OF ACQUISITION. IT HAS BEEN HEL D BY JURISDICTIONAL HONBLE ITAT, AGRA IN CASE OF PYARE MOHAN MATHUR HU F VS. ITO IN ITA NO.471/AGRA/2009 THAT CIRCLE RATES ARE NOTIFIED BY THE STATE GOVERNMENT FOR LEVY OF STAMP DUTY FOR REGISTRATION OF SALE DEEDS. THE CIRCLE RATES ARE DEEMED TO BE FULL VALUE OF CONSIDE RATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER U/S 50C. BUT THIS SECTION NOWHERE STATES THAT CIRCLE RATES AS NOTIFIED WILL BE THE FA IR MARKET VALUE. THE TRIBUNAL HELD THAT IN VIEW OF THE PROVISIONS OF SEC TION 55A ONCE THE ASSESSEE HAS SUBMITTED THE NECESSARY EVIDENCE BY WA Y OF VALUATION REPORT MADE BY THE REGISTERED VALUER, THE ONUS GETS SHIFTED ON THE AO TO CONTRADICT THE REPORT OF THE REGISTERED VALUER. THE REGISTERED VALUATION OFFICER IS A TECHNICAL EXPERT AND THE OPI NION OF AN EXPERT CANNOT BE THROWN OUT WITHOUT BRINGING ANY MATERIAL TO THE CONTRARY ON 4 ITA NO.395/AGRA/2012 A.YS. 2009-10 RECORD. IN CASE A.O. IS NOT AGREEABLE WITH THE REP ORT OF THE REGISTERED VALUER, HE IS DUTY BOUND TO REFER THE MATTER TO THE DVO FOR DETERMINING THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 WHICH HE FAILED TO DO SO. FURTHER, LOCATIONAL POSITION O F LAND CREATES THE FMV DIFFERENT FROM OTHERS. SECTION 55(2)(B) OF THE IT ACT ALLOWS AN OPTION TO THE APPELLANT TO ADOPT THE FMV OF THE PRO PERTY AS ON 01.04.1981. THE EVIDENCE GIVEN BY THE APPELLANT SH OWING HIS ADVANTAGEOUS POSITION VIS--VIS OTHER PROPERTIES SO LD DURING THE YEAR HAS NOT BEEN CHALLENGED BY THE A.O. TO BE LACKING I N BONAFIDES. A.O. HAS NOT MADE ANY ADVERSE COMMENTS ON THE VALUATION REPORT OF REGISTERED VALUER NOR HAS REFERRED THE MATTER TO TH E DVO, IF REGISTERED VALUER REPORT SUBMITTED BY THE APPELLANT IS NOT FOU ND ACCEPTABLE, DESPITE THERE BEING A SPECIFIC REQUEST MADE BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN VIEW OF FACTS ABOVE AND AFTER PERUSAL OF SUBMISS ION AND RECORDS, A.O. IS NOT FOUND JUSTIFIED IN MAKING ADDI TION TO LONG TERM CAPITAL GAIN AS PER AVERAGE COST OF ACQUISITION DET ERMINED AS PER SUB- REGISTRAR INFORMATION ONLY BASED ON PURCHASE/SALE O F SOME DISTINGUISHABLE PROPERTIES DURING THE YEAR 1981-82. ACCORDINGLY, THE SAME IS, HEREBY, DELETED. 5. THE SECOND GROUND OF APPEAL IS AGAINST THE ORDER OF CIT(A) CORRECTING THE TYPOGRAPHICAL MISTAKE. 6. NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND PROCEED TO DECIDE THE APPEAL ON MERIT. 5 ITA NO.395/AGRA/2012 A.YS. 2009-10 8. AS REGARDS THE FIRST GROUND OF APPEAL, WE NOTICE THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AFTER A DETAILED DISCUSSION. THE CIT(A) HAS FOLLOWED THE ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF PYARE MOHAN MATHUR HUF VS. ITO IN ITA NO.471/AGRA/2009. THE CIT(A) HAS RIGHTLY HELD THAT THE A.O. WAS NOT CORRECT IN MAKING THE ADDITION OF LONG TERM CAPITAL GAIN AS PE R AVERAGE COST OF ACQUISITION DETERMINED AS PER SUB-REGISTRAR INFORMATION. THE R EVENUE HAS FAILED TO POINT OUT ANY CONTRARY MATERIAL TO THE FINDING OF CIT(A). IN THE LIGHT OF THE FACT, WE CONFIRM THE ORDER OF CIT(A) ON THE ISSUE. 9. AS REGARDS THE SECOND GROUND, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AS THE CIT(A) HAS RIGHTLY CORRECTED THE TYPO GRAPHICAL MISTAKE. THE RELEVANT FINDING OF CIT(A) IS REPRODUCED AS UNDER : - (PAGE NO.12) THE A.O. HAS NOT ACCEPTED THE APPELLANTS SUBMISSI ONS ON THE BASIS OF ANY ADVERSE COGENT MATERIAL ON RECORD. RE SPECTIVE SALE DEEDS & BOOKS OF ACCOUNTS OF THE APPELLANT HAVE BEEN ACCE PTED BY THE A.O. WHICH GIVE THE CORRECT POSITION. THE TYPOGRAPHICAL MISTAKE HAS RESULTED IN COMPUTATION OF LONG TERM CAPITAL GAIN O N THESE PROPERTIES DURING WRONG FINANCIAL/ASSESSMENT YEARS. THE FACT THAT BY ACCEPTING APPELLANTS SUBMISSIONS HIS ASSESSED INCOME SHALL B E LOWER THAN HIS RETURN INCOME DOES NOT ACT AS A BAR/DETERRENT FOR C OMPUTING ACTUAL AND CORRECT INCOME IN VIEW OF PROVISIONS OF SEC. 14 3(3)(III) & 143(4)(B) R/W EXPLANATION TO AMENDMENT TO SECTION 1 43(3) MADE VIDE FINANCE ACT, 1998 AND CBDT CIRCULAR NO.549 DT. 31.1 0.1989, WHEREBY A.O. IS ENTITLED TO DETERMINE THE QUANTUM O F REFUND ALSO IN A REGULAR ASSESSMENT MADE U/S 143(3) OF THE IT ACT, M EANING THEREBY THAT ASSESSED INCOME CAN BE LOWER THAN THE RETURNED INCOME. 6 ITA NO.395/AGRA/2012 A.YS. 2009-10 IN VIEW OF ABOVE, A.O. IS, HEREBY, DIRECTED TO COMP UTE APPELLANTS TOTAL INCOME AS PER HIS REVISED COMPUTATION & AS PE R PROVISIONS OF THE ACT WHILE GIVING EFFECT TO THIS APPEAL ORDER. 10. THE CIT(A) HELD THAT THERE WAS A TYPOGRAPHICAL MISTAKE DUE TO WHICH EXTRA CAPITAL GAIN WAS ASSESSED BY THE A.O. WE NOTICE TH AT THE CIT(A) HAS RIGHTLY CORRECTED THE APPARENT MISTAKE FOR WHICH HE HAD THE CO-TERMINUS POWER OF A.O. ALSO. IN THE LIGHT OF THE FACT, WE DO NOT FIND ANY ERROR IN THE ORDER OF CIT(A). ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY