The Azad Nakodar Bus Service (P) Ltd., Jalandhar V. The Assistant Commissioner of Income Tax, Jalandhar

ITA 424/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8675 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 16-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKARDR
• Assessee Lawyers: Y K SUD
• Keywords: Cost of acquisition; Fair market value; Valuation report
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: (CIRCUIT BENCH AT JALANDHAR) BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER, AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.424/ASR/2016 (ASSESSMENT YEAR-2010-11) THE AZAD NAKODAR BUS SERVICE (P) LTD. G.T. ROAD, JALANDHAR. PAN NO.AADCA8627K (ASSESSEE) VS .. ACIT-CIRCLE III JALANDHAR. (REVENUE) ASSESSEE BY SHRI . Y. K. SUD, AR. REVENUE BY SHRI BHAWANI SHANKAR,DR. ORDER PER, A. D. JAIN, JUDICIAL MEMBER: THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR-2 010-11, AGAINST THE LD. CIT(A)S ACTION IN CONFIRMING THE ADDITION OF RS.38 ,59,815/- IN THE LONG TERM CAPITAL GAINS DECLARED BY THE ASSESSEE. 2. THE FACTS OF THE CASE ARE THAT ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PASSENGER BUS TRANSPORTATION, IN PUNJAB FOR THE LAS T 67 YEARS. THE ACIT, WHILE DATE OF HEARING 20.01.2017 DATE OF PRONOUNCEMENT 27 .03.2017 I.T.A NO.424/ASR/2016 2 FINALIZING THE ASSESSMENT U/S 143(3), MADE THE ADDI TION IN THE COMPUTATION OF LTCG AMOUNTING TO RS.36,59,815/- ON SALE OF PROPERT Y SITUATED AT 26 POLICE LINES ROAD JALANDHAR, BY REDUCING THE MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 FROM RS.20,000/- PER MARLA TO RS.9,950/-PER MARLA. THIS ACTION OF THE AO HAD BEEN CHALLENGED BY THE ASSESSEE BY WAY OF FILING AN APPE AL BEFORE THE LD. CIT(A)-2, JALANDHAR. BUT THE LD. CIT(A) DISMISSED THE ASSESSE ES APPEAL. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION MADE BY THE AO AMOUNTING TO RS.38,59,815/- IN THE L ONG TERM CAPITAL GAINS DECLARED BY THE ASSESSEE. 2. THAT WHILE SUSTAINING THE ADDITION BOTH THE CI T(A) & AO FAILED TO APPRECIATE THAT THE COST OF ACQUISITION AS ON 1.4.8 1 WAS SUPPORTED BY THE WELL REASONED VALUATION REPORT OF THE GOVT. APPROVED REGD. VALUER. 3. THAT CIT(A) & AO FAILED TO APPRECIATE AND DISP OSE OFF THE OBJECTIONS MADE BY THE ASSESSEE IN RESPECT OF THE V ALUATION MADE BY THE DVO AS ON 1.4.81 AMOUNTING TO RS.9,950/ - PER MARLA AGAINST THE VALUATION OF RS.20000/- PER MARLA MADE BY THE REGD. VALUER. 4. THAT BOTH THE CIT(A) & AO FAILED TO APPRECIATE THE VALUATION REPORT BY DVO SUFFERED FROM VARIOUS DEFECTS POINTED OUT BY THE I.T.A NO.424/ASR/2016 3 ASSESSEE WHICH WERE NOT MET BY THE DVO. HENCE THE D VO REPORT COULD NOT HAVE BEEN RELIED UPON. 5. THAT BOTH CIT(A) & AO FAILED TO VISIT THE SITE S OF THE PROPERTIES DESPITE THE SPECIFIC REQUEST MADE BY THE ASSESSEE. HENCE THE FINDINGS OF BOTH THE AUTHORITIES ARE FACTUALLY INCO RRECT. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION WRONGLY MADE. 5. THE LD. DR RELIED ON THE IMPUGNED ORDER. 6. THE LD. CIT(A), WHILE UPHOLDING THE ADDITION, HE LD AS FOLLOWS: 5.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHIL E MAKING THE IMPUGNED ADDITION. I HAVE ALSO CONSIDERE D WRITTEN SUBMISSIONS FILED BY THE ASSESSEE THROUGH H IS LEARNED AR VIDE LETTER DATED 07.07.2016. I HAVE FUR THER CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED U PON BY THE ASSESSEE DURING ASSESSMENT AS WELL AS APPELL ATE PROCEEDINGS. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT THE ASSESSEE HAS ADVANCED ALMOST SIMILAR ARGUMENTS DURING APPELLATE PROCEEDINGS AS WERE ADVANCED DURING ASSESSMENT PROCEEDINGS. APART FROM THIS, THE ASSESSEE HAS REL IED ON CERTAIN CASE LAWS, THE PARTICULARS OF WHICH HAVE BE EN MENTIONED IN THE WRITTEN SUBMISSIONS. AFTER CAREFUL LY I.T.A NO.424/ASR/2016 4 EXAMINING THE SUBMISSIONS OF THE ASSESSEE, I AM OF THE OPINION THAT THE ASSESSEE HAS ABSOLUTELY FAILED TO ESTABLISH EVEN DURING APPELLATE PROCEEDINGS THAT TH E PROPERTY OF THE ASSESSEE WILL FETCH MORE RATE AS ON 01.04.1981 FROM THE PROPERTY SITUATED AT 17, POLICE LINES ROAD, JALANDHAR. WHEN CONFRONTED, THE GOVERNMENT APPROVED VALUER HAS CHANGED HIS STAND WITH REGARD T O THE LOCATION OF THE PROPERTY TO JUSTIFY HIS VALUATION R EPORT. IN MY OPINION, THE GOVERNMENT APPROVED VALUER HAS ALSO LIED IN HIS REPORT THAT HE COULD NOT GET ANY COMPAR ABLE SALE INSTANCE ON THE POLICE LINES ROAD, JALANDHAR, WHEREAS HE HAS QUOTED SALE INSTANCE AT POLICE LINES ROAD, JALANDHAR WHILE VALUING PROPERTY OF ANOTHER PERSON/ASSESSEE. FROM THIS, IT IS CLEAR THAT THE VA LUATION REPORT GIVEN BY THE GOVERNMENT APPROVED VALUER IS N OT BASED ON ACTUAL FACTS AND APPEARS TO HAVE BEEN GIVE N ON INCORRECT FACTS. I AM ALSO OF THE OPINION THAT THE GOVERNMENT APPROVED VALUER HAS FAILED TO DISCHARGE HIS DUTY BEING A APPROVED VALUER. MOREOVER, HE COULD NO T SUPPORT HIS VALUATION REPORT WITH AUTHENTIC DOCUMEN TARY EVIDENCE WHICH SHOULD HAVE BEEN IN HIS POSSESSION W HILE VALUING THE PROPERLY OF THE ASSESSEE. IT HAS ALSO B EEN NOTICED THAT THE PROPERTY AT 17 POLICE LINES ROAD, JALANDHAR HAS FETCHED MERE MARKET VALUE THAT THE PROPERTY OF ASSESSEE INSPITE OF THE FACT THAT THE P ROPERTY I.T.A NO.424/ASR/2016 5 OF THE ASSESSEE IS SITUATED ON THE G.T. ROAD. THE OBSERVATIONS OF THE GOVERNMENT APPROVED VALUER THAT THE PROPERTY OF THE ASSESSEE WILL FETCH HIGHER RATE THAN THE OTHER PROPERTIES SITUATED AT POLICE LINES ROAD, JALANDHAR AS ON 01.04.1981 IS FACTUALLY INCORRECT A S THE PROPERTY AT 17 POLICE LINES ROAD, JALANDHAR WHICH I S ALSO NOT EVEN ON THE G.T. ROAD HAS BEEN SOLD AT A M UCH HIGHER RATE THAN THE PROPERTY OF THE ASSESSEE. SIMI LAR SHOULD BE THE POSITION AS ON 01.04.1981. IT HAS ALS O BEEN NOTICED THAT THE ASSESSING OFFICER HAS DEALT WITH E ACH AND EVERY OBJECTION OF THE ASSESSEE AS WELL AS OF GOVERNMENT APPROVED VALUER WHILE COMPLETING THE ASSESSMENT AND I DO NOT FIND ANY VALID REASON TO IN TERFERE WITH THE ADDITION MADE. IT HAS FURTHER BEEN NOTICED THAT AS PER SALE DEED, THE PROPERTY OF THE ASSESSEE WAS ALSO A RESIDENTIAL PROPERTY AS ON 01.04.1981 INSPITE OF TH E FACT THAT IT IS LOCATED ON G.T. ROAD AND WAS NOT A COMME RCIAL PROPERTY AT THE RELEVANT TIME. I AM ALSO OF THE OPI NION THAT THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE HAVE NO APPLICATION IN THE CASE OF THE ASS ESSEE AS THE FACTS OF THE CASE OF THE ASSESSEE ARE ENTIRE LY DIFFERENT FROM THE FACTS OF THE CASE OF THE ASSESSE E. I AM ALSO OF THE OPINION THAT PROPERTIES LOCATED AT NAKO DAR ROAD ARE COMPARABLE TO THE PROPERTIES LOCATED AT G. T. ROAD AS BOTH THE LOCALITIES ARE EQUALLY DEVELOPED. UNDER I.T.A NO.424/ASR/2016 6 SUCH CIRCUMSTANCES, THE ACTION OF THE ASSESSING OFF ICER IN MAKING ADDITION OF RS.36,59,815/- ON ACCOUNT OF UNDISCLOSED LONG TERM CAPITAL GAINS EARNED BY THE ASSESSEE COMPANY ON THE SALE OF PLOT/PROPERTY SITUA TED AT 26, POLICE LINE ROAD, JALANDHAR CANNOT BE SAID TO B E UNJUSTIFIED. 5.3 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CIRCUMSTANCES OF THE CASE. I AM OF THE OPINION THAT THE ASSESSING OFFICER IS FULLY JUSTIFIED IN MAKING ADDI TION, OF RS.36,59,815/- ON ACCOUNT OF UNDISCLOSED LONG TERM CAPITAL GAINS EARNED BY THE ASSESSEE COMPANY ON THE SALE OF PLOT/PROPERTY SITUATED AT 26, POLICE LINE R OAD, JALANDHAR. THE ADDITION OF RS.36,59,815/- MADE BY T HE ASSESSING OFFICER IN THIS CASE IS, THEREFORE, UPHEL D. IN THE RESULT, GROUNDS NO. 1 TO 5 OF APPEAL TAKEN BY THE A SSESSEE ARE DISMISSED. 7. IT IS SEEN THAT THE ASSESSEE HAD FURNISHED A REP ORT OF GOVT. APPROVED VALUER SH. B.K. SINGHAL DATED 18.09.2009 CERTIFYING THAT T HE FAIR MARKET VALUE OF LAND AS ON 01.04.1981 AT RS.20,000/- PER MARLA ALONGWITH TH E COPY OF REGISTRIES ENGLISH TRANSLATION OF PROPERTY SITUATED AT CENTRAL TOWN ON WHICH HE RELIED UPON. THE SAME IS AVAILABLE AT PAGE NO. 7 TO 115 OF THE PAPER BOOK . THE AO SUMMONED THE I.T.A NO.424/ASR/2016 7 APPROVED VALUER SH. B.K. SINGHAL U/S 131(1) OF THE INCOME TAX ACT TO APPEAR AND PRODUCE THE RELEVANT DOCUMENTS ON THE BASIS OF WHIC H VALUATION REPORT HAD BEEN PREPARED BY HIM FOR THE PROPERTY. IN RESPONSE TO TH IS SH. B.K. SINGHAL APPEARED BEFORE HER ON 12.10.2012 AND AFTER GIVING PRIMA FAC IE REPLIES TO THE QUERIES OF THE AO SOUGHT TIME TO FILE THE DETAILED REPLY. HE AGAIN APPROVED AND FILED HIS REPLY WHICH IS REPRODUCED ON PAGE 4 OF ASSESSMENT ORDER. FROM THE REPLY OF THE REGISTERED VALUER SH B.K. SINGHAL, IT EMERGE THAT: I. THE PLOT OF THE ASSESSEE TOUCHES THE G.T. ROAD I N THE POLICE LINE SCHEME AND NO WHERE TOUCHES THE POLICE LINES R OAD. REFER TO LAYOUT PLAN PAGE 66 OF THE PAPER BOOK. II. THE PLOT OF THE ASSESSEE MEASURING 99.9 MARLA MARIAS IS 3 SIDES OPEN PLOT AND FRONT IS LOCATED ON THE G.T. RO AD AND IT NOWHERE TOUCHES THE POLICE LINE ROAD AS APPARENT FROM LAYOU T PLAN PAGE 66 OF PAPER BOOK. THE G.T. ROAD IS HIGHLY COMMERCIAL AREA AND POLICE LINE ROAD IS DEVELOPED IN PAST 10-15 YEARS OF TIME. HENC E WHILE MAKING THE VALUATION THE VALUE OF G.T. ROAD WAS CONSIDERED AND NOT POLICE LINE ROAD. 8. THE AO AGAIN SUMMONED THE VALUER U/S 131 ON 19 .11.2012 TO PROVIDE CERTAIN INFORMATION WHICH IS MENTIONED IN PARA 4.3 OF THE ASSESSMENT ORDER. I.T.A NO.424/ASR/2016 8 ON PAGE 6 OF THE ASSESSMENT ORDER THE SUBMISSIONS O F THE REGD. VALUER WERE AGAIN RECORDED. THE GIST OF HIS SUBMISSIONS ARE AS UNDER: I. THE G.T. ROAD ON WHICH THE PLOT OF THE ASSESSEE IS LOCATED IS THE MOST COMMERCIAL PLACE AND IS DEVELOPED SINCE LONG. IT PASSES THROUGH THE HEART OF THE CITY. II. DETAILS OF VARIOUS COMMERCIAL CENTRE DETAI LS LOCATED WITHIN 100 METERS HAVE BEEN GIVEN. THE COMPARISON IS MADE WITH THE POLICE LINE ROAD THAT IN 1981 ONE SIDE WAS RESIDENTIAL HOUSES A ND ON THE OTHER SIDE WERE SHABBY MOTOR WORKSHOPS WERE EXISTING. III. FURTHER HE SUPPORTED HIS VALUATION BY W ORKING OUT THE VALUATION OF THE PLOT IN REVERSE DIRECTION BY APPLY ING THE COST INDEX IN PROVIDED IN THE INCOME TAX ACT AND RULES AND BY THA T METHOD THE PRICE PER MARLA AS ON 1.4.1981 WORKED OUT AT 58700/ - AGAINST RS.20,000/- ADOPTED BY THE REGD. VALUER. 9. DESPITE THESE CLARIFICATIONS AND THE VALID ISS UES POINTED BY THE REGD. VALUER IN SUPPORT OF HIS VALUATION REPORT THE AO RE FERRED THE MATTER TO THE DVO. THE DVO ISSUED A SHOW CAUSE NOTICE AT 2.1.2013 (PAPER BOOK PAGE 16) FOR ADOPTING A VALUATION OF RS.9,950/- AND INVI TED OBJECTIONS FROM THE ASSESSEE. THE ASSESSEE FILED ITS OBJECTIONS VIDE LE TTER DATED 10.1.2013. A COPY OF THE OBJECTIONS IS ENCLOSED AT PAGE NO. 32 O F PAPER BOOK. ALONGWITH I.T.A NO.424/ASR/2016 9 THIS OBJECTION LETTER, THE ASSESSEE FILED THE VARIO US SALES INSTANCES WHERE THE LAND HAS BEEN REGISTERED AT THE PRICE OF RS.10,800/ -RS.17,500/-, RS.20,170/- DESPITE THE FACT THAT THESE PROPERTIES WERE LOCATED FAR AWAY FROM THE PROPERTY OF THE ASSESSEE. THE COPY OF SALE DEEDS ARE ANNEXED ON PAGE 34 TO 52 OF PAPER BOOK ALONGWITH ENGLISH TRANSLATION. 10. THE OBJECTIONS OF THE ASSESSEE TO THE PROPO SED VALUATION ARE VITAL AND THE COUNSEL DREW THE ATTENTION OF THE BENCH ON PAGE 32 OF THE BOOK. 11. DESPITE THESE OBJECTIONS THE DVO DISPOSED OF THE SAME BY A NON SPEAKING LETTER DATED 14.01.2013 (PAPER BOOK PAGE 5 5 AND 56) AND ON THE SAME DAY MADE THE VALUATION OF THE PROPERTY AT RS.9 950/- PER MARLA. 12. THE ASSESSEE POINTED OUT THE DEFECTS IN THE R EPORT OF DVO VIDE ITS LETTER DATED 25.01.2013 (PAPER BOOK PAGE 58 & 59) WHICH HA VE BEEN REPRODUCED BY THE AO ON PAGE 8 & 9 OF THE ASSESSMENT ORDER. IN THIS LETTER THE ASSESSEE HAD CHALLENGED THE ACTION OF DVO IN DISPOSING OF TH E OBJECTIONS BY WAY OF NON-SPEAKING ORDER AND REQUESTED THE AO TO VISIT TH E SITE. THE ASSESSEE AFTER RECEIVING THE COPY OF THE REGISTRATION DEEDS RELIED UPON BY THE DVO FILED ITS OBJECTIONS VIDE LETTER DATED 30.1.2013 (PAPER BOOK PAGE 60 & 61) WHICH HAS BEEN REPRODUCED BY THE AO AT PAGE 9 OF THE ASSESSME NT ORDER. I.T.A NO.424/ASR/2016 10 THE MOST IMPORTANT AND RELEVANT OBJECTION OF THE AS SESSEE WAS THAT DVO WAS RELYING ON THE SALE INSTANCES OF PROPERTIES LOC ATED IN LINK COLONY AND NAKODAR ROAD JALANDHAR WHICH HAS NO COMPARISON WITH THE PROPERTY OF THE ASSESSEE SITUATED AT G.T. ROAD. FURTHER, ANOTHER IM PORTANT ISSUE WAS THAT WHEN THE DVO HIMSELF HAD AGREED TO THE VALUE OF RS. 10000/- PER MARLA IN RESIDENTIAL PROPERTY LOCATED AT NAKODAR ROAD, HOW H E COULD OBJECT TO THE VALUE OF RS. 20000/- PER MARLA ON THE COMMERCIAL PR OPERTY LOCATED AT G.T. ROAD WHICH IS A COMMERCIAL HUB. 13. THE ACIT REQUIRED THE ASSESSEE TO FILE THE RE JOINDER TO THE REPLY OF DVO WHICH WAS FILED BEFORE THE AO VIDE LETTER DATED 5.2.2013, BUT DESPITE THE CLEAR MISTAKES POINTED OUT BY THE ASSESSEE, THE AO IGNORED THE SAME AND ALSO AO BRUSHED ASIDE THE SUBMISSION OF THE ASSESSE E THAT FROM THE COLLECTORATE RATE AS ON 1.4.2007, WHICH WAS RS. 2.5 0 LACS PER MARLA, IF THE BACKWARD WORKING OF COST INDEX IS DONE AS PER WORKI NG ON PAGE 64-65 OF THE PAPER BOOK, THE COST AS ON 1.4.1981 WORKS OUT TO RS .45,371/-. 14. THE ASSESSEE MADE THE SUBMISSIONS BEFORE THE CI T(A) WHICH ARE AT PAGES 1 TO 6 OF THE PAPER BOOK AND REPRODUCED BY TH E CIT(A) AT PAGE 15 OF HIS ORDER. I.T.A NO.424/ASR/2016 11 15. THE LD. CIT(A) HAS FAILED TO CONSIDER THAT THE VALUE AS ON 1.4.1981 AT RS. 20,000/- PER MARLA WAS DULY SUPPORTED BY THE REPORT OF GOVT. APPROVED REGISTERED VALUER SH. B.K. SINGHAL WHO HAD NOT ONLY GIVEN A DETAILED REPORT BUT ALSO APPEARED BEFORE THE ACIT FOR GIVING THE VA RIOUS CLARIFICATIONS. 16. BOTH THE AO AND THE CIT(A) AND THE DVO IGNORE D THE LOCATION PLAN OF THE PROPERTY OF THE ASSESSEE WHICH IS AT PAPER BOOK PAGE 66 WHICH CLEARLY SHOWS THAT THE PLOT OF THE ASSESSEE WAS 3 SIDE OPEN LOCATED ON THE G.T. ROAD AND DESPITE THE REQUEST BY THE ASSESSEE TO BOTH THE AUTHORITIES TO PERSONALLY VISIT THE SIDE, BOTH OF THEM FAILED TO DO SO. 17. THE DVO, WHILE PREPARING THE REPORT OF VALUAT ION, IGNORED ALL THE OBJECTIONS OF THE ASSESSEE AND ON THE BASIS OF THE SALE DEEDS AND ON THE BASIS OF SOME RESIDENTIAL PROPERTIES LOCATED AT NAKODAR R OAD, WHICH HAVE NO COMPARISON WITH THE PROPERTY LOCATED AT G.T. ROAD, PREPARED A VALUATION REPORT WHICH IS NOT SUSTAINABLE. 18. THE DVO, ALTHOUGH HE AGREED THAT THE PROPERTY OF THE ASSESSEE IS LOCATED ON G.T. ROAD WHICH IS A COMMERCIAL HUB HE E RRONEOUSLY COMPARED HIS SALES INSTANCES SITUATED AT NAKODAR ROAD BY GIV ING A FINDING THAT NAKODAR ROAD IS ALSO ON THE MAIN HIGHWAY, WHEREAS N AKODAR ROAD ONLY I.T.A NO.424/ASR/2016 12 CONNECTS NAKODAR TEHSIL TO JALANDHAR, WHEREAS G.T. ROAD CONNECTS KOLKATA TO PESHAWAR. 19. THE DVO HAS FURTHER STATED THAT ASSESSEE IS R ELYING UPON THE SALE INSTANCES OF 3.12.1982, 31.1.1984, 1.2.1984 AND 15. 4.1983, WHICH ARE OF A PERIOD LATER THAN 1.4.1981 AND HENCE CANNOT BE COMP ARABLE. HE CLEARLY OVERLOOKED THE SUBMISSIONS OF THE ASSESSEE THAT PUN JAB WAS PASSING THROUGH THE TERRORISM PERIOD IN THE YEARS 1982,1983,1984, W HEN THE PROPERTIES WERE AT ROCK BOTTOM PRICE AND IN JUNE 1984 OPERATION BLU E STAR TOOK PLACE AND THE PRIME MINISTER MR. GANDHI WAS ASSASSINATED IN N OVEMBER 1984, HENCE, THE PRICE OF LAND IN YEARS 1982, 1983,1984 WERE LOW ER THAN VALUE PREVAILING ON 1.4.1981. 20. BOTH THE AO & CIT(A) FAILED TO APPRECIATE THE PRIME LOCATION OF THE PLOT OF THE ASSESSEE, WHICH WAS 3 SIDE OPEN FACING THE MAIN G.T. ROAD AND WITHIN THE 100 METERS WHERE THE FOLLOWING COMMERCIA L ESTABLISHMENT ARE LOCATED: I. P.S. JAIN MOTORS SHOW ROOM & TATA TRUCKS & BUSHE S II. BAJAJ SCOOTER SHOWROOM OF P.S. JAIN MOT ORS I.T.A NO.424/ASR/2016 13 III. AVI MOTORS, FIAT CAR SHOWROOM IV. BANKS & INSURANCE COMPANIES SUCH AS PB. & SIND BANK AND UNITED INDIA INSURANCE CO. LTD. V. NARINDER CINEMA VI. KINGS HOTEL VII. MAIN BUS STAND OF JALANDHAR 21. THE CIT(A) FAILED TO APPLY HIS MIND TO THE FOLL OWING JUDGMENTS OF THE ITAT WHICH THE ASSESSEE RELIED UPON IN THIS REGARD: R.VIDHYADHARAN (DECD) BY LR. SMT. SANTHADHARAN VS. DCIT 155 TTJ (COCH) 10 0 22. FOR THE PURPOSE OF ESTIMATING THE FAIR MARKET V ALUE AS ON 1ST APRIL 1981 THE LOCALITY IN WHICH THE LAND IS SITUATED, TH E ACCESSIBILITY TO INFRASTRUCTURE FACILITIES, COMPARATIVE SALE INSTANC ES IN THE LOCALITY, POTENTIALLY FOR FUTURE DEVELOPMENT DISTANCE BETWEEN THE LAND AN D THE BUS STAND, RAILWAY STATION, AIRPORT, ETC., HAVE TO BE TAKEN INTO CONSI DERATION. THE AO WAS NOT JUSTIFIED IN TAKING FAIR MARKET VALUE AS FIXED BY T HE GOVERNMENT TO GUIDE THE SUB REGISTRAR AS THE SOLD BASIS FOR TAKING THE FAIR MARKET VALUE AS ON 1ST APRIL 1981.(COPY ENCLOSED) I.T.A NO.424/ASR/2016 14 23. THEN, IT REMAINS UNDISPUTED THAT WHERE COLLEC TRATE RATE WAS NOT AVAILABLE OR SALE INSTANCES WERE ALSO NOT AVAILABLE , THE BACKWARD WORKING FROM THE YEAR WHERE COLLECTRATE RATE IS AVAILABLE C AN BE MADE ON THE BASIS OF COST INDEXED RATES PROVIDED IN THE INCOME TAX RULES TO WORK OUT THE VALUE AS ON 1.4.1981. THE VALUATION WAS WORKED OUT BY THE ASSESSEE AND THE AO SIMPLY BRUSHED ASIDE THIS METHOD WITHOUT ASSIGNING ANY REASON. BEFORE THE CIT(A) IN SUPPORT OF THIS CONTENTION OF THE ASSESSE E THE ASSESSEE RELIED ON THE THIRD MEMBER JUDGMENT OF THE ITAT AGRA BENCH. I N JALANDHAR COLD STORAGE VS ACIT, 133 TTJ (AGRA) (TM) 278, WHEREIN, THE BENCH HAS HELD THAT MARKET RATE OF AGRICULTURAL LAND CANNOT BE MAD E THE BASIS FOR ASCERTAINING THE FAIR MARKET VALUE OF COMMERCIAL LA ND FOR COMPUTATION OF CAPITAL GAINS; AND THAT THE FAIR MARKET VALUE OF TH E LAND AS ON 1 ST APRIL 1981, ESTIMATED BY THE ASSESSEE BY APPLYING THE COST INFL ATION INDEX TO THE SALE VALUE OF LAND FOR STAMP DUTY PURPOSES IN THE REVERS E ORDER IS SUSTAINABLE. THE CIT(A) RATHER THAN FOLLOWING THE SAID JUDGMENT, WHI CH WAS BINDING ON HIM, GAVE A FINDING THAT THE JUDGMENT IS DISTINGUISHABLE . I.T.A NO.424/ASR/2016 15 24. IN VIEW OF THE ABOVE, FINDING MERIT THEREIN, TH E GRIEVANCE RAISED BY THE ASSESSEE IS FOUND TO BE JUSTIFIED. IT IS ACCEPTED A S SUCH. THE ORDER UNDER APPEAL IS REVERSED. THE ADDITION IS DELETED. 25. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 /03/2017. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 27/03/2017 *AKV* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT BY ORDER AR/SR.P.S./P.S.