Smt. Saroj Prakash Baldota, Pune V. ITO, Ward 3(1), Pune

ITA 427/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76329 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 13-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Cost of acquisition; Fair market value; Valuation report
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 427/PN/2013 (ASSESSMENT YEAR 2005-06 ) SMT. SAROJ PRAKASH BALDOTA, FLAT NO.6, S.NO.93, A-1, DHANLAXMI APARTMENT, SENAPATI BAPAT ROAD, PUNE-411016 PAN NO.AAPPB 8963L .. APPELLANT VS. ITO, WARD-3(1), PUNE .. RESPONDENT ASSESSEE BY : SHRI SUNIL PATHAK & SHRI NIKHIL PATHAK REVENUE BY : SHRI P. L. PATHADE DATE OF HEARING : 26-03-2014 DATE OF PRONOUNCEMENT : 27-03-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 12-10-2012 OF THE CIT(A)-II, PUNE RELATING TO ASSES SMENT YEAR 2005-06. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 28-10-2005 DECLARING TOTAL INCOME OF RS.1,15,69,390/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE ASSESSEE HAS SHOWN LONG TERM CAPI TAL GAIN OF RS.99,01,097/- ON SALE OF LAND AND THE CALCULATION OF LONG TERM CAPITAL GAIN GIVEN BY THE ASSESSEE IN THE RETURN IS AS UNDER : 2 SALE PRICE/CONSIDERATION RS.1,32,50,000/- AS PER DEVELOPMENT AGREEMENT DATED 05-04-2004 DEVELOPMENT RIGHTS GIVEN TO M/S. HAPPY VALLEY DEVELOPERS AREA OF LAND 2 ACRE 26 GUNTHAS. LAND ORIGINALLY ACQUIRED PRIOR TO 01-04-1981 FAIR MARKET RATE AS ON 01-04-1981 RS.2,00,000 PER ACRE LESS : AS PER FAIR MARKET RATE AS ON 01-04-1981 FAIR MARKET RATE OF LAND RS.5,30,000/- INDEXED PRICE 530000 X 480 = RS.25,44,000 100 BETTERMENT EXPENSES INCURRED BDA CHARGES, N.A. CHARES, LABOUR PROCESSING FEES, NOC FOR WATER LINE RS.8,04,903/- RS.33 ,48,903/- LONG TERM CAPITAL GAIN ... RS.99,01,097 2.1 FROM THE VARIOUS DETAILS FURNISHED BY THE ASSES SEE HE OBSERVED THAT ASSESSEE HAS TAKEN THE FAIR MARKET RATE OF THE LAN D AS ON 01-04-1981 AT RS.2 LAKHS PER ACRE. HE, THEREFORE, ASKED THE ASSESSEE TO GIVE THE BASIS ON WHICH VALUATION AS ON 01-04-81 HAS BEEN TAKEN. THE ASSES SEE SUBMITTED THAT THE VALUE OF THIS PROPERTY, I.E. LAND BEARING SURVEY NO .8, THAROHALLI WAS TAKEN ON THE BASIS OF THE VALUATION REPORT DATED 15-05-20 05 OF A GOVERNMENT APPROVED VALUER SHRI A.P. JAYARAM. THE ASSESSEE FI LED A COPY OF SUCH VALUATION REPORT GIVEN BY THE VALUER. THE ASSESSIN G OFFICER ASKED THE ASSESSEE AS TO WHY THE VALUATION REPORT GIVEN BY TH E APPROVED VALUER SHOULD NOT BE REJECTED SINCE THE REASON FOR WHICH THE REGI STERED VALUER SHRI A.P. JAYARAM ADOPTED THE FAIR MARKET VALUE AT RS.2 LAKHS PER ACRE IS DOUBLE THE VALUE OF THE COMPARABLE TRANSACTION OF AGRICULTURAL LAND WHICH WAS REGISTERED IN 1981 IN THE AREA AND WHICH HAS SUBSTANTIAL EVIDE NTIARY VALUE. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE THE ASSESSING OFFICER HELD THAT THE VALUE OF RS. 2 LAKHS PER ACRE AS ON 01-04- 81 CANNOT BE ACCEPTED BECAUSE OF THE FOLLOWING REASONS: 3 A. THE VALUATION OF THE LAND HAS TO BE DONE WITH RESPECT TO THE CIRCUMSTANCES EXISTED AS ON 1-4-1981 AND NOT FOR TH E PRESENT FACILITIES AVAILABLE THERE. ASSESSEES SUBMISSION T HAT THE LAND HAS BECOME SEMI-URBAN LAND AND FULLY IRRIGATED ETC HAS NO RELEVANCE BECAUSE THE SAME WAS NOT THE CASE 25 YEAR BACK. B. THE VALUER HAS VISITED ONLY THE CONCERNED SITE I.E. ONLY THE LAND OF THE ASSESSEE AND HE HAS ASSUMED THE CHARACT ERISTICS OF THE COMPARABLE LAND AS PER HIS KNOWLEDGE AND NOT AS PER THE ACTUAL SITE INSPECTION. C. THE VALUER HAS ONLY GIVEN THE FAVOURABLE CHARAC TERISTICS OF THE ASSESSEE'S LAND BUT THESE CHARACTERISTICS LIKE WATER PUMPS, WELLS, ETC MAY ALSO BE AVAILABLE WITH THE COMPARABLE LAND AT UTTARAHALLI VILLAGE. D. THE ONLY CLEAR-CUT COMPARABLE INSTANCE GIVEN BY THE VALUER IN HIS REPORT IS OF SALE OF LAND AT UTTARAHALLI VIL LAGE BANGALORE WHICH HAS BEEN OBTAINED FROM THE RECORDS OF THE SUB -REGISTRAR BANGALORE SOUTH. THEREFORE, THIS IS THE ONLY DOCUMEN T WHICH HAS SUBSTANTIAL EVIDENTIARY VALUE FOR MAKING THE COMPAR ISON OF PRICES AS ON 1-4-1981. HE ACCORDINGLY HELD THAT THE PRICE OF LAND SOLD BY THE ASSESSEE AS ON 01-04- 81 SHOULD BE TAKEN AT RS.1 LAKH PER ACRE AND NOT RS .2 LAKHS PER ACRE AS TAKEN BY THE ASSESSEE. 3. THE ASSESSEE CHALLENGED THE ORDER BEFORE THE LD. CIT(A). HOWEVER, THE LD.CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPLA NATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OFF ICER BY OBSERVING AS UNDER : 5.1 HOWEVER, ON GOING THROUGH THE MATERIAL ON RECO RD IT IS SEEN THAT THE LAND SOLD AT BANGALORE HAD SEVERAL CO-OWNERS OF THE BA LDOTA FAMILY AND THE APPELLANT WAS ALSO ONE OF THE THEM AND THE VALUATION REPORT HAS BEEN PREPARED BY THE SAME VALUER WHO HAD PREPARED THE VALUATION RE PORT OF KANTILAL BALDOTA I.E. SHRI A.P. JAYARAM. THE ASSESSING OFFICER HAS RELIED UPON THE ASSESSMENT COMPLETED IN THE CASE OF KANTILAL BALDOTA AS THE SAME WAS STATED TO HAVE BEEN ACCEPTED BY THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO NOT ED THAT THE ASSESSING OFFICER I.E. THE ADDL. CIT, RANGE-3, PUNE, IN KANTILAL BALDOTA'S CASE HAD CITED VARIOUS REASONS IN SUPPORT OF THE ADOPTION OF RAT E OF RS. 1 LAC PER ACRE AS ON 01.04.1981 AND THE SAME VALUER HAD SUBMITTED SIMILA R REPORT IN THE CASES OF THE CO-OWNERS. THE APPELLANT HAS ALSO FILED THE ASSESSMENT ORDER AS WELL AS THE APPELLATE ORDER IN THE CASE OF KANTILAL BALDOTA FOR A.Y. 2005-06. IT IS NOTICED THAT THE ASSESSING OFFICER OF KANTILAL BALDOTA HAS POIN TED OUT SPECIFIC REASONS BEFORE REJECTING THE ESTIMATION OF THE FAIR MARKET VALUE AS ON 01.04.1981 IN PARA 4.2 OF THE ORDER WHICH ARE REPRODUCED HEREIN BELOW: 4 1. THE VALUATION OF THE LAND HAD TO BE DONE WITH RE SPECT TO THE CIRCUMSTANCES EXISTED AS ON 1.4.1981 AND NOT FOR THE PRESENT FACILIT IES AVAILABLE THERE. ASSESSEES SUBMISSION THAT THE LAND HAS BECOME SEMI-URBAN LAND AND FULLY IRRIGATED ETC. HAS NO RELEVANCE BECAUSE THE SAME WAS NO T THE CASE 25 YEARS BACK. 2. THE VALUER HAS VISITED ONLY THE CONCERNED SITE I.E. ONLY THE LAND OF THE ASSESSEE AND HE HAS ASSUMED THE CHARACTERISTICS OF THE COMPARABLE LAND AS PER THE KNOWLEDGE AND NOT AS PER THE ACTUAL SITE INSPECTION. 3. THE VALUER HAS ONLY GIVEN THE FAVOURABLE CHARACTE RISTICS OF THE ASSESSEE'S LAND BUT THESE CHARACTERISTICS LIKE WATER PUMPS, WELLS ETC. MAY ALSO BE AVAILABLE WITH THE COMPARABLE LAND AT UTTARAHALLI VILLAGE. 4. THE ONLY CLEAR-CUT COMPARABLE INSTANCE GIVEN BY T HE VALUER IN HIS REPORT IS OF SALE OF LAND AT UTTARAHALLI VILLAGE BANGALORE WHICH HAS BEEN OBTAINED FROM THE RECORDS OF THE SUB-REGISTRAR BANGALORE SOUTH. THEREFO RE, THIS IS THE ONLY DOCUMENT WHICH HAS SUBSTANTIAL EVIDENTIARY VALUE FOR MAKING THE COMPARISON OF PRICES AS ON 1.4.1981. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT (A)-II , PUNE WHO IN THE APPELLATE ORDER NO.PN/CIT(A)-II/ADDL.CIT R-3/330/07 -08 DATED 30.08.2010 HAS HELD AS UNDER WHILE CONFIRMING THE ADOPTION OF TH E FAIR MARKET VALUE OF RS. 1 LAC PER ACRE BY THE ASSESSING OFFICER : ' 3.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND MAT ERIAL AVAILABLE ON RECORD. HAVING CONSIDERED THE REASONS GIV EN BY THE A.O. FOR ADOPTING THE VALUE AT RS. 1 LAKH PER ACRE ON THE BASI S OF THE ONLY SALE INSTANCE AVAILABLE IN THE VICINITY, WHICH IS BY WAY OF A DULY REGISTERED SALE TRANSACTION IN AGRICULTURAL LAND IN UTTARA HALLI VILLAGE, IT IS HELD THAT THE RATE OF RS. 1 LAKH PER ACRE TAKEN FOR THE VALUE OF LAND WAS PROPER AND NO INTERFERENCE IS CALLED FOR. ALSO, THE CONDITION OF THE LAND DURING THE VISIT IN THE YEAR 2005 LIKE BEING SEMI URBAN LAND AND FULLY IRRIGATED WITH GOOD WATER BEING AVAILABLE FOR THE PARTICULAR PIECE OF LAND CANNOT BE RELIED UPON SINCE THIS MAY NOT BE THE CASE IN 1981. FURTHER, THE ADOPTION OF A RATE OF RS. 2 L AKHS STRAIGHTAWAY BY THE APPROVED VALUER, BY TAKING A 100% APPRECIATION OVER AN AVAILABLE SALE INSTANCE OF ADJACENT VILLAGE IS TOTALLY ADHOC. ACCORD INGLY, THE RE-COMPUTATION OF CAPITAL GAIN BY THE A.O. BY ADOPTING VALUE AT RS. 1 LAKHS PER ACRE IS HEREBY UPHELD AND THE GROUNDS OF APPEAL NOS. 1 AND 2 ARE, T HEREFORE, DISMISSED.' 5.2 THE REASON FOR WHICH THE REGISTERED VALUER SHRI A.P. JAYARAM ADOPTED THE FAIR MARKET VALUE AT RS. 2 LACS PER ACRE WHICH IS DOUBLE THE VALUE OF THE COMPARABLE LAND TRANSACTION OF AGRICULTURAL LAND WH ICH WAS REGISTERED IN 1981 IN THE AREA AND WHICH HAD SUBSTANTIAL, EVIDENTIA RY VALUE IS APPARENTLY NOT VERY CLEAR AND REASONABLE. EVEN IN THE ASSESSMENT COMPLETED IN THE CASE OF MRS. PUSHPA BALDOTA, THE ASSESSING OFFICER HAD NOT ACC EPTED THE VALUATION REPORT AS IT WAS NOTED THAT THE VALUER HAD VISITED THE LAND ONLY ON 15.05.2005 AND BY THAT TIME THE ASSESSEE 'HAD ALREADY F ORMED THE LAYOUT. THE ASSESSING OFFICER HAD IN THAT CASE ALSO NOTED, THAT T HE ASSESSEE WAS NOT DECLARING ANY AGRICULTURAL INCOME IN THE EARLIER YE ARS WHICH COULD HAVE JUSTIFIED THE PLEA TAKEN BY THE REGISTERED VALUER THA T THE LAND POSSESSED BY THE ASSESSEE WAS FERTILE AND A FRUIT GARDEN. THE CIT (AP PEALS)-II, BANGALORE IN THAT CASE ALSO HAD CONFIRMED THE FAIR MARKET VALUE OF THE LAND ADOPTED BY THE ASSESSING OFFICER AND WHICH WAS ACCEPTED BY THE ASSESSEE. EV EN THE ASSESSING OFFICER IN THE CASE OF KANTILAL BALDOTA HAD AD OPTED THE FAIR MARKET VALUE AT RS. 1 LAC AFTER BRINGING ON RECORD THE NECE SSARY FACT AND HAD SUBSTANTIATED THE VALUE ADOPTED BY PASSING A REASONED OR DER WHICH WAS FINALLY ACCEPTED BY SHRI KANTILAL BALDOTA. THUS, THE ISSUE AS RAISED BY THE 5 APPELLANT HAS ALMOST REACHED A FINALITY IN WAY AND TH E SAME CAN BE CONSIDERED TO BE A SETTLED ISSUE. 5.3 SO FAR AS THE ISSUE OF TAKING A VIEW FAVOURABLE TO THE ASSESSEE IS CONCERNED, THE FACTS AS AVAILABLE ON RECORD INDICATE FACTUAL ASPECT AND NOT A LEGAL ASPECT OF A MATTER. THE PRINCIPLE OF BENEFICIA L INTERPRETATION WOULD APPLY ONLY IN A CASE WHERE THE COURT IS IN DOUBT ABOU T THE TRUE SCOPE AND AMBIT OF THE PROVISIONS OF THE LAW OR FINDS TWO EQUALL Y REASONABLE INTERPRETATIONS WHICH IS NOT THE ISSUE IN THE PRESENT C ASE THIS BEING A FACTUAL ISSUE AND NOT A LEGAL CASE. IN THE PRESENT CASE THE VALU E OF RS. 1 LAC PER ACRE ADOPTED BY THE ASSESSING OFFICER HAS BEEN CONFIRMED BY M Y LD. PREDECESSOR CIT (APPEALS)-II AND ACCEPTED BY THE ASSESSEE AND, THERE FORE, THE SAME IS BEING FOLLOWED IN THIS CASE IN VIEW OF CONSISTENCY AND THE FACTS AND CIRCUMSTANCES OF THE CASE. THE CASE LAWS RELIED UPON ARE ON A TOTALLY DIFFERENT CONTEXT AND FACTS HENCE NOT APPLICABLE TO THE CASE ON HAND. 5.4 IN VIEW OF THE ABOVE FACTS, THE DISALLOWANCE OF D EDUCTION U/S 48 OF RS. 87 LACS BY THE ASSESSING OFFICER IS UPHELD AND THE GROUN DS OF APPEAL NO. 3 AND 4 RAISED BY THE APPELLANT ARE LIABLE TO BE DISMISSED. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE TO EACH OTHER : ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE REASST. U/S. 147 WITHOUT APPRECIATING THAT THE REOPENING U/S. 148 WAS NOT VA LID AND HENCE, THE REASST. BE DECLARED NULL AND VOID. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ASSESSE E SUBMITS THE FOLLOWING GROUNDS - 2] THE LEARNED C1T(A) ERRED IN CONFIRMING THE ADDITION OF RS.87 LAKHS MADE BY THE LEARNED A.O. IN RESPECT OF LONG TERM CA PITAL GAINS ON SALE OF LAND. 3] THE LEARNED C1T(A) WAS NOT JUSTIFIED IN UPHOL DING THE ACTION OF THE LEARNED A.O. IN ESTIMATING THE FAIR MARKET VALUE OF ASSESSEE'S LAND AS ON 01.04.1981 AT RS.1 LAC PER ACRE AS AGAINST THE FAIR MARKET VALUE OF RS.2 LACS PER ACRE CLAIMED BY THE ASSESSEE AS A DEDUCTION U/S 48. 4] THE LEARNED C1T(A) ERRED IN CONFIRMING THE VALUATION OF THE LAND OF THE ASSESSEE AT RS. 1 LAKH PER ACRE BY HOLDING THAT : A. THE ISSUE IN RESPECT OF VALUATION OF LAND HAD REAC HED FINALITY BY WAY OF THE ORDER OF C1T(A) IN THE CASE OF SHRI KANTILAL BALDOTA , ONE OF THE CO-OWNERS OF ASSESSEE'S LAND, AS THE SAID ORDER WAS ACCEPTED BY SHRI BALDOTA. B. EVEN IN THE CASE OF SMT, PUSHPA BALDOTA, ONE OF TH E CO-OWNERS OF THE ASSESSEE'S LAND, THE VALUATION CLAIMED BY THE ASSESSEE AT RS. 2 LACS WAS NOT ACCEPTED BY THE LEARNED CIT(A) AND HENCE, THE VALUA TION CLAIMED BY THE ASSESSEE WAS NOT JUSTIFIED. 4.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT - 6 A. THE ASSESSEE'S VALUATION WAS SUPPORTED BY THE REGISTERE D VALUER'S REPORT AND THE SAME COULD NOT BE REJECTED BY MAKING AN ESTIM ATE ON PRESUMPTION. B. JUST BECAUSE THE OTHER CO OWNER SHRI KANTILAL BALD OTA HAD ACCEPTED IN HIS CASE THE FMV OF RS. 1 LAKH PER ACRE, IT CANNOT BE HEL D TO BE THE CORRECT VALUATION AND THE SAME WAS NOT BINDING ON THE ASSESSEE. C. IN THE CASE OF ANOTHER CO OWNER SMT. PUSHPA BALDO TA, THE DEPT. HAD ESTIMATED THE FMV AT RS.1.5 LAKH PER ACRE WHICH CLEAR LY IMPLIED THAT THE FMV OF RS.L LAKH PER ACRE WAS NOT JUSTIFIED. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ASSESSEE SUBM ITS THE FOLLOWING GROUNDS : 5] THE LEARNED CIT(A) ERRED IN REJECTING THE CLAIM OF THE ASSESSEE THAT WHEN TWO VIEWS ARE POSSIBLE, THE ONE FAVOURABLE TO THE ASSESSEE MAY BE ADOPTED AND THEREFORE, THE VALUE OF LAND AT RS. 1.5 LACS PER ACRE AS ESTIMATED IN THE CASE OF SMT. PUSHPA BALDOTA MAY BE ADOPTED AS A GAINST THE VALUE OF RS. 1 LACS ESTIMATED IN THE CASE OF SHRI KANTILAL BALDOTA. 5.1] THE LEARNED CIT(A) ERRED IN HOLDING THAT TH E ABOVE RULE OF BENEFICIAL INTERPRETATION IS APPLICABLE ONLY IN CASE OF INTERPRE TATION OF PROVISIONS OF LAW AND NOT TO FACTUAL ISSUES AND HENCE, THE VALUATION OF LAND AT RS. 2 LACS PER ACRE IS JUSTIFIED. 5. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE DID NOT PRESS GROUND OF APPEAL NO.1 RELATING TO THE VALIDITY OF R E-OPENING U/S.148. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION FOR T HE SAME. ACCORDINGLY, GROUND OF APPEAL NO.1 IS DISMISSED AS NOT PRESSED . 6. SO FAR AS THE OTHER GROUNDS ARE CONCERNED THE LD . COUNSEL FOR THE ASSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER AND THE CIT(A) SUBMITTED THAT THE LAND BELONGING TO THE ASSESSEE IS ROAD FACING LAND AND, THEREFORE, IT HAS GOT BETTER MARKET VALUE. HE SUBMITTED THAT THE LD.CIT(A) WHILE UPHOLDING THE AC TION OF THE ASSESSING OFFICER HAS RELIED ON THE DECISION OF HIS PREDECESS OR IN THE CASE OF SHRI KANTILAL BALDOTA WHEREIN THE LD.CIT(A) HAD UPHELD T HE COMPUTATION OF CAPITAL GAIN BY THE ASSESSING OFFICER BY ADOPTING V ALUE AT RS.1 LAKH PER ACRE. HE SUBMITTED THAT DUE TO CERTAIN REASONS THE CO-OWN ER SHRI KANTILAL BALDOTA 7 HAS NOT FILED ANY APPEAL BEFORE THE TRIBUNAL. REFE RRING TO THE ORDER OF THE ADDL. CIT, RANGE-3 BANGALORE IN THE CASE OF SMT. PU SHPA BALDOTA, ANOTHER CO-OWNER, HE SUBMITTED THAT THE VALUE HAS BEEN TAKE N AT RS.1.50 LAKHS AGAINST RS.2 LAKHS PER ACRE AS ON 01-04-81. 6.1 REFERRING TO THE DECISION OF THE AGRA BENCH OF THE TRIBUNAL IN THE CASE OF PYARE MOHAN MATHUR (HUF) VS. ITO REPORTED IN 46 SOT 315 (AGRA) HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HA S HELD THAT ONCE THE ASSESSEE HAS SUBMITTED THE NECESSARY EVIDENCE BY WA Y OF VALUATION REPORT MADE BY THE REGISTERED VALUER, ONUS GETS SHIFTED ON THE ASSESSING OFFICER TO CONTRADICT THE REPORT OF THE REGISTERED VALUER. WH ERE ASSESSING OFFICER DISAGREES WITH THE REPORT OF THE REGISTERED VALUER, HE WAS DUTY BOUND TO REFER THE MATTER TO THE DVO FOR DETERMINING THE FAIR MARK ET VALUE OF THE LAND AS ON 01-04-81 WHICH HE FAILED TO DO. ACCORDINGLY, THE T RIBUNAL DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE CAPITAL GAIN AF TER TAKING FAIR MARKET VALUE OF THE LAND AS ON 01-04-81 AS CLAIMED BY THE ASSESSEE. HE SUBMITTED THAT WHEN THE ASSESSEE HAS SUBMITTED THE VALUATION REPORT, THE ASSESSING OFFICER HAS TO REFER THE MATTER TO THE DVO, IN CASE , HE DOES NOT AGREE WITH THE REPORT OF THE REGISTERED VALUER. SINCE THE ASS ESSING OFFICER IN THE PRESENT CASE HAS NOT REFERRED THE MATTER TO THE DVO, THEREF ORE, HE WAS BOUND TO ACCEPT THE FAIR MARKET VALUE AS ON 01-04-81 AS ADOP TED BY THE ASSESSEE. REFERRING TO THE DECISION OF THE HONBLE MADHYA PRA DESH HIGH COURT IN THE CASE OF CIT VS. RAGHUNATH SINGH THAKUR REPORTED IN 304 ITR 268 HE SUBMITTED THAT THE HONBLE HIGH COURT IN A WEALTH T AX MATTER HAS HELD THAT THE ASSESSING OFFICER IS BOUND TO MAKE REFERENCE TO THE VALUATION OFFICER WHERE HE DISAGREES WITH THE VALUATION OF ASSESSEE M ADE THROUGH A REGISTERED 8 VALUER. HE SUBMITTED THAT THE HONBLE HIGH COURT W HILE TAKING THE ABOVE VIEW HAS FOLLOWED ITS OWN DECISION IN THE CASE OF RAJPAL OSWAL VS. CWT REPORTED IN 171 ITR 489. REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF PODDAR CEMENT REPORTED IN 226 ITR 225 HE SUBMITTED THAT WHEN TWO VIEWS ARE POSSIBLE THE VIEW WHICH IS IN FAVOUR OF THE ASSESSEE HAS TO BE ACCEPTED. HE ACCORDINGLY SUBMITTED THA T THE VALUE ADOPTED BY THE ASSESSEE AS ON 01-04-81 AT RS.2 LAKHS PER ACRE SHOU LD BE ACCEPTED. IN HIS ALTERNATE CONTENTION, HE SUBMITTED THAT THE VALUE A DOPTED BY THE ASSESSING OFFICER OF BANGALORE IN THE CASE OF ONE OF THE CO-O WNER SMT. PUSHPA BALDOTA AT RS.1,50 LAKHS MAY BE ADOPTED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THE ONLY DISPUTE TO B E DECIDED IN THE INSTANT CASE IS AS TO THE VALUE OF THE LAND TO BE ADOPTED AS ON 01-04-81. ACCORDING TO THE ASSESSEE, THE SAME HAS TO BE TAKEN AT RS.2 LAKHS PE R ACRE IN VIEW OF THE VALUE ADOPTED BY THE REGISTERED VALUER. ACCORDING TO THE REVENUE, THE VALUE SHOULD BE TAKEN AT RS.1 LAKH PER ACRE AS ON 01-04-8 1 SINCE THE VALUATION DONE BY THE REGISTERED VALUER SUFFERS FROM CERTAIN INFIRMITIES AND IN THE CASE OF ANOTHER CO-OWNER NAMELY SHRI KANTILAL BALDOTA TH E CIT(A) HAS UPHELD THE VALUE OF RS. 1 LAKH PER ACRE AS ON 01-04-81 WHICH H AS ATTAINED FINALITY AND THE CO-OWNER HAS NOT CHALLENGED THE SAME BEFORE THE HIGHER FORUM. 9 8.1 IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSES SEE THAT SINCE THE ASSESSING OFFICER HAS NOT REFERRED THE MATTER TO TH E DVO AFTER REJECTING THE VALUATION REPORT SUBMITTED BY THE ASSESSEE ADOPTING THE VALUE AT RS.2 LAKHS PER ACRE AS ON 01-04-81, THE ASSESSING OFFICER IS B OUND TO ADOPT THE VALUE AT RS. 1 LAKH PER ACRE AS ON 01-04-81. IT IS THE ALTE RNATE CONTENTION OF THE ASSESSEE THAT SINCE THE ASSESSING OFFICER OF BANGAL ORE IN THE CASE OF ANOTHER CO-OWNER HAS ADOPTED THE VALUE AT RS. 1.5 LAKHS PER ACRE AS ON 01-04-81, THEREFORE, ATLEAST THE SAME SHOULD BE ADOPTED. 8.2 WE FIND MERIT IN THE ALTERNATE CONTENTION OF TH E ASSESSEE. WE FIND THE ASSESSING OFFICER IN THE CASE OF SMT. PUSHPA BALDOT A, ANOTHER CO-OWNER HAS ADOPTED THE VALUE OF RS.1.5 LAKHS AS ON 01-04-81. THE RELEVANT OBSERVATION OF THE ASSESSING OFFICER AT PARA 2 OF THE ORDER REA DS AS UNDER : DURING THE ACCOUNTING YEAR, THE ASSESSEE HAS TRANSFERRE D 4.09 ACRES OF CONVERTED LAND TO M/S. HAPPY VALLEY DEVELOPERS FOR A CONSIDERATION OF RS.1,11,18,500/- ON 01-04-2004. THE PROPERTY UNDER TRANSFER WAS RECEIVED BY THE ASSESSEE BY WAY OF PARTITION DATED 10-03-1978 AN D MUTATION HAS BEEN EFFECTED AS PER M.R.NO.2/8-83, DATED 08-09-92. THE MARKET VALUE OF THE PROPERTY AS ON 01-04-81 WAS AT RS.2 LAKHS PER ACRE. TH E MARKET VALUE VALUED BY THE ASSESSEE IS ON THE BASIS OF THE VALUATION REPORT O F THE GOVERNMENT REGISTERED VALUER WHO HAS SUBMITTED HIS VALUATION REPOR T DATED 15-05-05. WHILE VALUING THE ABOVE SAID LAND, THE REGISTERED VAL UER HAS RELIED ON ONE OF THE SALE INSTANCES, I.E. SALE OF AGRICULTURAL LAND IN S.Y. 9/2A, 9/2B AND 9/2C AT UTTARAHALLI, HOBLI, BANGALORE SOUTH TALUK. THE REGI STERED VALUE OF THE ABOVE SAID PROPERTY WAS RS.1 LAKHS PER ACRE WHICH WAS REGISTERE D BEFORE THE SUB- REGISTRAR, BANGALORE SOUTH TALUK, BANGALORE. HOWEVE R, THE VALUER HAS STATED THAT THE LAND UNDER CONSIDERATION OWNED BY THE ASSESSEE. SMT. PUSHPA BALDOTA WAS FERTILE AND IS A FRUIT GARDEN HAVING FRUI T BEARING TREES AND HAVING GOOD SOURCE OF WATER FACILITY AND IS AN IRRIGATED LA ND. THEREFORE, THE REGISTERED VALUER HAS VALUED THE LAND UNDER CONSIDERAT ION AT RS.2 LAKHS PER ACRE AS ON 01-04-1981. THE REGISTERED VALUERS REPORT CANNOT BE ACCEPTED. S INCE THE VALUER HAS VISITED THE ABOVE SAID LAND ONLY ON 15-05-2005 BY TH AT TIME THE ASSESSEE HAD ALREADY FORMED THE LAYOUT. IT IS ALSO NOTED THAT THE ASSESSEE WAS NOT DECLARING ANY AGRICULTURAL INCOME IN THE EARLIER YE ARS. IN THE ABOVE CIRCUMSTANCES, THE MARKET VALUE OF THE PROPERTY AS ON 01-04-81 HAS BEEN ADOPTED AT RS.1,50,000/- PER ACRE FOR THE PURPOSES OF ARRIVING AT CAPITAL GAINS. ACCORDINGLY, THE INDEXED COST OF THE PROPERTY HAS BEEN ARRIVED AT RS.30,41,064/- AS AGAINST THE ASSESSEES VALUATION ON INDEX ED COST OF RS.50,54,752/- AND THE TOTAL INDEXED COST OF ACQUISITI ON OF THE ABOVE SAID 10 PROPERTY HAS BEEN WORKED OUT AT RS.41,87,512/- AS AGAI NST THE ASSESSEES INDEXED COST OF ACQUISITION OF RS.52,01,200/-. 8.3 WE FIND IN THE INSTANT CASE FOR THE LAND SITUAT ED AT THE SAME PLACE ONE ASSESSING OFFICER HAS ADOPTED THE VALUE AS ON 01-04 -81 AT RS.1.50 LAKHS PER ACRE WHEREAS ANOTHER ASSESSING OFFICER HAS ADOPTED THE VALUE OF RS. 1 LAKH PER ACRE AS AGAINST THE CLAIM OF THE ASSESSEE AT RS .2 LAKH PER ACRE. IT IS THE SETTLED POSITION OF LAW THAT WHEN TWO VIEWS ARE POS SIBLE, THE VIEW WHICH IS FAVOURABLE TO THE ASSESSEE HAS TO BE ADOPTED. WE, T HEREFORE, DIRECT THE ASSESSING OFFICER TO ADOPT THE VALUE OF THE LAND AS ON 01-04-81 AT RS. 1.50 LAKHS PER ACRE AS AGAINST RS. 2 LAKHS PER ACRE TAKE N BY THE ASSESSEE AND RS. 1 LAKH PER ACRE TAKEN BY THE ASSESSING OFFICER AND UP HELD BY THE CIT(A). GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PART LY ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 27-03-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE, DATED 27 TH MARCH, 2014 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE