The ACIT, Circle-4, Ahmedabad V. Gujarat Agro Indus. Ltd., Ahmedabad

ITA 4484/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0368 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-08-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 20-12-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHUVNESH KUISHR ESTHA
• Assessee Lawyers: M G PATEL
• Keywords: Cost of acquisition; Fair market value; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABA D (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON'BLE S HRI A.N. PAHUJA , A.M.) I.T.A. NO. 4484/AHD./2007 ASSESSMENT YEAR : 2004-2005 ASSISTANT COMMISSIONER OF INCOME TAX, -VS.- GUJARAT AGRO INDUS. CORPORATION LTD., CIRCLE-4, AHMEDABAD AHMEDABAD (PAN : AAACG 5620 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BHUVNESH KUISHR ESTHA, D.R. RESPONDENT BY : SHRI M.G. PATEL AND SM T. ARTI N. SHAH O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 18.10.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-VIII, AHMEDABAD FOR THE ASSESSMENT YEAR 2004-05. 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APP EAL IS AS UNDER :- THE LD. CIT(A.) ERRED IN LAW AND ON THE FACTS OF T HE CASE IN DIRECTING TO ADOPT THE RATE AS ON 1.4.1981 @ 24/- PER SQ.MTR. FO R THE BAREJA LAND AND RS.54/- PER SQ. MTR. FOR THE MEHSANA LAND, FOR COMP UTATION OF COST OF ACQUISITION, THEREBY GIVING RELIEF OF RS.35,83,834/ - TO THE ASSESSEE:. 3. BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN THE AFORESAID GROUND OF APPEAL ARE THAT THE ASSESSEE IS A STATE GOVERNMENT CORPORATION, ENGAGED IN CARRYING OUT AGRO BASED ACTIVITIES. FOR THE ASSESSMENT YEAR UNDER APPEAL, IT FILED THE RETU RN OF INCOME ON 31.12.2004 SHOWING TOTAL INCOME AT RS.1,29,31,000/-, WHICH, INTER ALIA, INCL UDED LONG-TERM CAPITAL GAIN ON SALE OF LANDS SITUATED AT BAREJA AND MEHSANA. IN THE RETURN OF IN COME, THE ASSESSEE COMPUTED THE LONG-TERM CAPITAL GAIN IN RESPECT OF BOTH THE AFORESAID LANDS AFTER TAKING FAIR MARKET VALUE AS ON 01.04.1981; ON THE BASIS OF VALUATION REPORT OBTAINED FROM THE APPROVED VALUER, WHICH WAS DULY FILED ALONGWITH THE RETURN OF INCOME. THE ASSESSEE VALUED THE BAREJA LAND @ RS.30/- PER SQ.MTR. AND MEHSANA LAND @ RS.60/- PER SQ.MTR. THE ASSESSING OF FICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO SUBMIT THE BASIS OF FAIR MARKET VALUATION OF LANDS IN QUESTION. THE ASSESSING OFFICER ALSO CALLED THE APPROVED VALU ER SHRI PARAS RANGWALA, WHO ALSO SUBMITTED HIS DETAILED REPLY DATED 28.12.2006. AFTER DETAILED DISCUSSION AND REASONING GIVEN BY THE 2 ITA NO. 4484/AHD/2007 APPROVED VALUER, IN THE ASSESSMENT ORDER THE ASSESS ING OFFICER ADOPTED THE FAIR MARKET VALUE AS ON 1.4.1981 IN RESPECT OF BAREJA LAND AT RS.13.54 P ER SQ.MTR. AND IN RESPECT OF LAND AT MEHSANA AT RS.34.84 PER SQ.MTR. ON THIS BASIS, THE ASSESSING O FFICER COMPUTED THE CAPITAL GAIN IN RESPECT OF BOTH THE AFORESAID LANDS AND MADE THE ADDITION OF R S.70,37,501/- BEING THE DIFFERENCE BETWEEN THE CAPITAL GAIN SHOWN BY THE ASSESSEE AND AS COMPU TED BY HIM. ON APPEAL, BEFORE THE ASSESSING OFFICER, THE ASSESSEE CONTENDED THAT THE VALUE DECL ARED AS ON 1.4.1981 WAS BASED ON APPROVED VALUERS REPORT, WHICH WAS FILED ALONGWITH THE RETU RN OF INCOME. THE APPROVED VALUER, SHRI PARAS RANGWALA ALSO SUBMITTED SALES INSTANCES OF NEARBY L AND BEFORE THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE VALUE ADOPTED BY THE ASSESSING O FFICER BY TAKING THE AVERAGE SALES INSTANCES IS NOT CORRECT. 4. AFTER CONSIDERING THE DETAILED SUBMISSIONS OF TH E ASSESSEE, IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FOUND T HAT THE FAIR MARKET VALUE AS ON 1.4.1981 IN RESPECT OF BAREJA LAND AT RS.13.54 PER SQ.MTR. A ND IN RESPECT OF LAND AT MEHSANA AT RS.34.84 PER SQ.MTR. IS ON LOWER SIDE. THE LEARNED COMMISSIO NER OF INCOME TAX(APPEALS) ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO ADOPT THE GUIDELI NE VALUE FOR BAREJA LAND AS ON 1.4.1981 AT RS.24/- PER SQ.MTR. AND FOR MEHSANA LAND AT RS.54/- PER SQ.MTR. FOR DETERMINING FAIR MARKET VALUES OF THESE LANDS AND RE-COMPUTE THE CAPITAL GA INS. AGGRIEVED BY THIS DIRECTION OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, ON BEHALF OF REVENUE SHR I BHUVNESH KUISHRESTHA, LD. D.R. APPEARED AND CONTENDED THAT IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER AFTER CONSIDERING ALL THE OBJECTIONS OF ASSESSEES VALUER AND KEEPING IN VIEW THE RELEVANT DATA OBTAINED FROM THE REGISTER ADOPTED THE MARKET VALUE AS ON 1.4.1981 IN RESPECT OF BAREJA LAND AT RS.13.54 PER SQ.MTR. AND IN RESPECT OF LAND AT MEHSANA AT RS.34.84 PER S Q.MTR. THE LD. D.R. CONTENDED THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT JUSTIFIED IN ENHANCING THE SAME I.E. FOR BAREJA LAND AS ON 1.4.1981 AT RS.24/- PER SQ.MTR. A ND FOR MEHSANA LAND AT RS.54/- PER SQ.MTR. 6. ON THE OTHER HAND, SHRI M.G. PATEL, LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). HE POINTED OUT THAT THE ASSESSEE IS A STATE GOVERNMENT UNDERTA KING. IN ORDER TO COMPUTE THE CAPITAL GAIN, IT 3 ITA NO. 4484/AHD/2007 HAS OBTAINED THE VALUATION REPORT FROM THE GOVERNME NT APPROVED VALUER, WHO VALUED AS ON 1.4.1981 IN RESPECT OF BAREJA LAND @ RS.13.54 PER S Q.MTR. AND MEHSANA LAND @ RS.34.84 PER SQ.MTR. DESPITE ALL THESE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES DIRECTED THE ASSESS ING OFFICER TO ADOPT THE VALUE OF BAREJA LAND AS ON 1.4.1981 @ RS.24/- PER SQ.MTR. AND FOR MEHSAN A LAND @ RS.54/- PER SQ.MTR. IN ORDER TO AVOID FURTHER LITIGATION, THE ASSESSEE HAS ACCEPTED THE SAID DIRECTION OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THE LD. COUNSEL OF THE ASSESSE E SUBMITTED THAT THE DIRECTION GIVEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS FAIR AND REASONABLE, THEREFORE, THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 7. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT ALONGWITH THE R ETURN OF INCOME, THE ASSESSEE HAS SUBMITTED THE VALUATION REPORT FROM GOVERNMENT APPROVED VALUER. T HE GOVERNMENT APPROVED VALUER VALUED THE BAREJA LAND ON MATERIAL DATE I.E. 1.4.1981 @ RS .30/- PER SQ.MTR. AND MEHSANA LAND @ RS.60/- PER SQ.MTR. AS AGAINST THIS, IN THE ASSESSMENT ORDE R, AFTER COLLECTING VARIOUS DETAILS AND DATA, THE ASSESSING OFFICER ADOPTED THE AVERAGE VALUE, I.E. B AREJA LAND @ RS.13.54 PER SQ.MTR. AND MEHSANA LAND @ RS.34.84 PER SQ.MTR. IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FOUND THAT THE VALUATION ADOPTE D BY THE ASSESSING OFFICER IS ON THE LOWER SIDE. ACCORDINGLY, HE DIRECTED THE ASSESSING OFFICE R TO ADOPT THE VALUE AS ON 1.4.1981 IN RESPECT OF BAREJA LAND @ RS.24 PER SQ.MTR. AND MEHSANA LAND @ RS.54 PER SQ.MTR. AND RE-COMPUTE THE CAPITAL GAIN ACCORDINGLY. LOOKING TO THE TOTALITY O F THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LOCATION OF BOTH THE LANDS, REASONING GIVEN BY THE GOVERNMENT APPROVED VALUER, WE ARE OF THE VIEW THAT THE DIRECTION GIVEN BY THE LEARNED COMMIS SIONER OF INCOME TAX(APPEALS) IS FAIR AND REASONABLE. WE, THEREFORE, DECLINE TO INTERFERE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 09.08.20 10 SD/- SD/- (A.N. PAHUJA) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09 / 08 / 2010 4 ITA NO. 4484/AHD/2007 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.