TAHER SALEH CASSIM, MUMBAI V. ITO WD-17(3)(4), MUMBAI

ITA 4010/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2875 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 01-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D G
• Assessee Lawyers: CHETAN KARIA
• Keywords: Cost of acquisition; Fair market value; Valuation report; Set aside
• Section: 142(1); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI SHAMIM YAHYA (AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 4010 /MUM/2017 ASSESSMENT Y EAR: 2013 - 14 TAHER SALEH CASSIM, FLAT NO. 30, 4 TH FLOOR, OWNERS COURT, STRAND CINEMA ROAD, COLABA, MUMBAI - 400005 PAN: AABPC9055A VS. THE INCOME TAX OFFICER, WARD 17(3)(4), R. NO. 123, 1 ST FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI CHETAN KARIA ( A R ) REVENUE BY : D.G. PANSARI (D R ) DATE OF HEARING: 01/02/2019 DATE OF PRONOUNCEMENT: 30 / 04 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 01.03.2017 PASSED BY THE COMMISSIONE R OF INCOME TAX (APPEALS) - 28 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2013 - 14 , WHEREBY THE LD. CIT(A) HAS DISMISSED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDUAL , FILE ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS.1,57,230/ - SINCE THE RETURN WAS P ROCESSED U/S 143(2 ), THE AO ISSUED NOTICE U/S 142(1) OF THE ACT. IN RESPONSE THEREOF THE AUTHORIZED REPRESENTATIVE (AR) APPEAR ED BEFORE THE AO AND ALSO SUBMITTED THE DETAILS. IT WAS NOTICED THAT ASSESSEE HAD SOLD ONE RESIDENTIAL FLAT FOR A TOTAL CONSIDERATION OF RS.3 . 25 CRORES AND AFTER CLAIMING INDEX ED COST OF RS. 1.35 CRORES, DECLARED 2 ITA NO. 4010 / MUM/2017 ASSESSMENT YEAR: 2013 - 14 LONG TERM CAPITAL GAIN OF RS. 1.92 CRORES, WHICH WAS EXEMPT U/S 54 OF THE ACT. IT WAS SEEN THAT THE PROPERTY WAS PURCHASED FOR RS.2,00,000/ - VIDE AGREEMENT DATED 25.01.1980 . SINCE THE ASSESSEE HAD CLAIMED THE VALUE OF T HE PROPERTY AS ON 01.04.1981 AT RS. 15,90,579/ - , THE AO ASKED THE ASSESSEE TO EXPLAIN THE BASIS OF VALUATION . THE AR SUBMITTED COPY OF VALUATION REPORT PREPARE BY A N AUTHORIZED/ REGISTERED V ALU ER WHO HAD DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY AT R S. 15,90,579/ - . REJECTING THE CONTENTION OF THE ASSESSEE, AO REFERRED THE MATTER T O DISTRICT VALUATION OFFICER (DV O) TO DETERMINE THE VAL UE OF PROPERTY AS ON 01.04.1981. THE VALUATION OFFICER DETERMINED THE FAIR MARKET VALUE OF PROPERTY AS ON 01.04.1981 AT RS.6,36,850/ - . A CCORDINGLY AO DETERMINED THE LONG TERM CAPITAL GAIN OF THE ASSESSEE AT RS.61,68,738/ - . IN THE FIRST APPEAL, THE LD. CIT(A) AFFIRMED THE ACTION OF THE. THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE SAID ORDER. 3 . THE ASSESSEE HA S CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A ) ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ACTION OF THE ASSESSING OFFICER OF ADOPTING COST OF ACQUISITION OF PROPERTY BEING MARKET VA LUE AS ON 01.04.1981 AT RS. 6,36,850/ - AS AGAINST VALUE OF ADOPTED BY ASSESSEE AT RS. 15,90,579/ - . 2. THE APPELLANT PRAYS THAT: I) THE ADDITION MADE TO THE LONG TERM CAPITAL GAINS BE DELETED AND THE CAPITAL GAINS DECLARED BY THE ASSESSEE BE RESTORED. II) PERSONAL H EARING MAY BE GRANTED III) ANY OTHER RELIEF YOUR HONOURS MAY DEEM FIT. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF AO OF ADOPTING COST OF ACQUISITION OF PROPERTY AS ON 01.04.1981 AT RS. 6 ,36,850/ - AS AGAINST THE VALUE ADOPTED BY THE ASSESSEE AT RS. 15,19,579/ - . THE LD. COUNSEL CONTENDED THAT THE VALUATION 3 ITA NO. 4010 / MUM/2017 ASSESSMENT YEAR: 2013 - 14 REPORT ADOPTED BY THE AUTHORITIES BELOW DOES NOT REFLECT THE ACTUAL MARKET VALUE OF THE PROPERTY AS THE SAME IS SITUATED IN A HIGH CLASS LOCALITY WITH ALL CIVIC AMENITIES ON THE MAIN COLABA CAUSEWAY WHICH HAS BEEN AN OLD SHOPPING ARCADE. THE LD. COUNSEL FURTHER CONTENDED THAT THE COMPARABLE INSTANCES OF SALE CITED BY THE DVO ARE AT THE DISTANCE OF TWO KILOMETERS FROM THE PROPERTY OF THE ASS ESSEE. THEREFORE, THE VALUATION REPORT RELIED ON BY THE AUTHORITIES BELOW IS NO RELIABLE, WHEREAS THE VALUATION REPORT SUBMITTED BY THE ASSESSEE IS AUTHENTIC AND RELIABLE BEING BASED ON RELEVANT DATA . 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) RELYING ON THE ORDER PASSED BY THE LD. CIT(A) SUBMITTED THAT SINCE THE DVO HAS PROPERLY VALUED THE PROPERTY IN QUESTION , THE LD. CIT(A) HAS AFFIRMED THE ACTION OF AO OF REJECTING VALUATION REPORT SUBMITTED BY THE ASSESSEE. 6. WE HAVE HEARD THE RI VAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF RIVAL CONTENTIONS OF THE PARTIES. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS WRONGLY UPHELD THE ACTION OF AO OF REJECTING THE VALUATION REPORT FURNISHED BY THE ASSESSEE. AS CO NTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSISTA NT VALUATION OFFICER (AVO) HAS CITED THE COMPARABLE INSTANCES OF PROPERTY LOCATED AT CUFFE PRADE , WHICH WERE UNDER A PHASE OF DEVELOPMENT IN THE YEAR 1981 . SIMILARLY, THE LD. COUNSEL POINTED OUT THAT THE COMPARABLE INSTANCES TAKEN BY THE DVO PERTAIN TO THE YEAR 1978 AND 1980 WHEREAS THE VALUE OF THE PROPERTY WAS TO BE ASCERTAINED AS ON 01.04.1981 . WE FURTHER NOTICE THAT THE ASSESSEE HAS OBJECTED THE VALUE PROPOSED TO BE ADOPTED BY THE VALUATION OFFICER ON THE GROUND THAT THE VALUATION DOES NOT REFLECT THE ACTUAL MARKET VALUE OF THE PROPERTY. WE FURTHER NOTICED THAT THE ASSESSEE HA S OBTAINED THE VALUATION REPORT FROM M/S. NANAVATI INDUSTRIAL CONSULTANT, A REPUTED FIRM OF CHARTERED ENGINEERS . ADMITTEDLY T HE PROPERTY OF THE ASSESSEE IS SITUATED IN A PRIME LOCALITY ON THE MAIN COLABA C AUSEWAY . UNDER THESE CIRCUMSTANCES, THE VALUATION REPORT OF DVO ON THE BASIS OF THE COMPARABLE INSTANCES OF THE PROPERTIES WHICH ARE AT THE DISTANCE OF 4 ITA NO. 4010 / MUM/2017 ASSESSMENT YEAR: 2013 - 14 MORE THAN 2 KMS . FROM TH E PROPERTY OF THE ASSESSEE CANNOT BE ADOPTED AS THE AUTHENTIC REPORT . THE DVO SHOULD HAVE TAKEN THE INSTANCES OF SALE FROM THE SAME LOCALITY PERTAINING TO THE YEAR 1981 OR PRECEDING YEAR. IN OUR CONSIDERED VIEW, THE VALUE OF THE PROPERTY IN QUESTION CANNOT BE COMPARED WITH THE VALUE OF PROPERTY WHICH IS 2 KM S AWAY FROM THE SAID PROPERTY. AS POINTED OUT BY THE LD. COUNSEL THE DVO HAS TAKEN THE SALE INSTANCE S PERTAINING TO THE YEAR 1978 . WE ARE OF THE VIEW THAT IN ORDER TO ASCERTAIN THE ACTUAL VALUE OF THE PR OPERTY AS ON 01.04.1981, THE DVO SHOULD HAVE TAKEN THE INSTANCES OF SALE IN THE YEAR 1981 OR AT THE MOST IN THE YEAR 1980. THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT CONSIDERING THE AFORESAID DEFECTS IN THE VALUATION REPORT FURNISHED BY THE DVO. WE ARE THEREFORE , OF THE CONSIDERED OPINION THAT THE ASSESSEE SHOULD GET AN OPPORTUNITY TO REBUT THE VALUATION REPORT RELIED UPON BY THE AUTHORITIES BELOW. WE THEREFORE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND SEND THE ISSUE BACK TO THE AO FOR DETE RMINING THE LONG TERM CAPITAL GAIN AFRESH AFTER AFFORDING A REASONABLE OPPORTUNITY TO THE ASSESSEE TO REBUT THE VALUATION REPORT OBTAINED FROM THE DVO. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2013 - 2014 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH . APRIL , 2019 . SD/ - SD/ - ( SHAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 30 / 0 4 / 201 9 SUBHANKAR SAMANTA, PS / COPY OF TH E ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 5 ITA NO. 4010 / MUM/2017 ASSESSMENT YEAR: 2013 - 14 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBA I