Shri Maganlal Limbabhai Parsana, RAJKOT-GUJARAT V. The Deputy Commissioner of Income Tax, Central Circle-1, RAJKOT-GUJARAT

ITA 476/RJT/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72563 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 17-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Assessee Lawyers: DM RINDANI
• Keywords: Capital asset; Search and seizure; Cost of acquisition; Fair market value; Valuation report
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA, JM AND SHRI D K SRIVASTAVA, AM ITA NO. 445 /RJ T/201 2 ASSESSMENT YEAR : 200 7 - 0 8 ACIT, CIRCLE - 1 , RAJKOT V. SMT. HANSABEN MADHUKANT PARSANA 2 - NARSINH PARK, NR. SHREE COLONY, OPP. SNOWHILL APPT, RAJKOT PAN : AGCPP 4915 F ITA NO. 478 /RJT/201 2 ASSESSMENT YEAR : 2007 - 08 SMT. HANSABEN MADHUKANT PARSANA V. D CIT, CENTRAL CIRCLE - 1 , RAJKOT ITA NO. 446 /RJT/201 2 ASSESSMENT YEAR : 2007 - 08 ACIT, CIRCLE - 1 , RAJKOT V. SHRI MAGANBHAI LIMBABHAI PARSANA PAN : ADDPP 8193 P ITA NO. 476 /RJT/201 2 ASSESSMENT YEAR : 2007 - 08 SHRI MAGANBHAI LIMBABHAI PARSANA V. D CIT, CENTRAL CIRCLE - 1 , RAJKOT ITA NO. 447 /RJT/201 2 ASSESSMENT YEAR : 2007 - 08 ITO, WARD 1(4), RAJKO T V. SHRI LAKHABHAI LIMBABHAI PARSANA PAN : AGCPP 4932 F ITA NO. 47 7 /RJT/201 2 ASSESSMENT YEAR : 2007 - 08 SHRI LAKHABHAI LIMBABHAI PARSANA V. D CIT, CENTRAL CIRCLE - 1 , RAJKOT ITA NO. 448 /RJT/201 2 ASSESSMENT YEAR : 2007 - 08 ITO, WARD 1(4), RA JKOT V. LATE SHRI TULSIBHAI LIMBABHAI PARSANA PAN : AGCPP 49 21 H ITA NO. 47 5 /RJT/201 2 ASSESSMENT YEAR : 2007 - 08 LATE SHRI TULSIBHAI LIMBABHAI PARSANA V. D CIT, CENTRAL CIRCLE - 1 , RAJKOT DATE OF HEARING : 23 .0 8 .2013 DATE OF PRONOUNCEMENT : 30 .0 8 .2013 ASSESSEE BY : SHRI D M RINDANI, CA REVENUE BY : SHRI VILAS V. SHINDE, DR ORDER D K SRIVASTAVA : THE PRESENT BUNCH OF APPEALS FILED BY THE REVENUE AND FOUR ASSESSEES ARE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE CI T(A) - IV, 2 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA AHMEDABAD ON 18.05.2012. FACTS, ISSUES AND GROUNDS OF APPEAL TAKEN BY THE REVENUE AS WELL AS BY ALL THE FOUR ASSESSEES ARE COMMON . THEY ARE THEREFORE BEING DISPOSE D OF BY A CONSOLIDATED ORDER. AS SUGGESTED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE S AT THE TIME OF HEARING , THE APPEAL FILED BY SHRI MAGANBHAI LIMBABHAI PARSANA , ITA NO.4 76 /RJT/2012 IS TAKEN AS A LEAD CASE AND THEREFORE ALL THE RELEVANT DETAILS ARE BEING CULLED OUT FROM THE CASE RECORDS OF SHRI MAGANBHAI LIMBABHAI PARSANA . 2. IN APPEAL BEARING ITA NO.476/RJT/2012 FILED BY THE ASSESSEE, NAMELY , SHRI MAGANBHAI LIMBABHAI PARSANA , THE FOLLOWING GROUNDS OF APPEAL HAVE BEEN TAKEN: - THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, AHMEDABAD HAS ERRED IN THE UPHOLDING COST OF ACQUISITION OF LAND (ADMEASURING 6760.78 SQ. MTR.) TAKEN BY THE ASSESSING OFFICER AT RS.550/ PER SQ. METER BEING THE FAIR MARKET VALUE AS ON 01.04.1981 AS AGAINST ADOPTED BY THE APPELLANT AT RS.750/ - FOR THE PURPOSE OF LONG TERM CAPITAL GAIN IS UNWARRANTED , UNJUSTIFIED AND BAD IN LAW. 3. IN APPEAL BEARING ITA NO.446 /RJT/2012 FILED BY THE REVENUE, THE FOLLOWING GROUNDS OF APPEAL HAVE BEEN TAKEN: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT IN ALLOWING THE RELIEF OF RS.8,25,000/ - CLAIMED TO HAVE BEEN I NCURRED IN 1984 FOR EVACUATION OF ILLEGAL OCCUPANT AND THEREBY ALLOWING THE BENEFIT OF INDEXATION OF THIS COST FOR THE PURPOSE OF CAPITAL GAIN. 2. THE LD . CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE EXPENDITURE TO HAVE BEEN CLAIMED BY THE ASSESSE E AS MADE TO SHRI SANDEEP TOPIA IN CONNECTION WITH TRANSFER OF LAND. 3. ON LEGAL AND FACTUAL STATUS OF THE CASE, THE LD. CIT(A), OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS, THEREFORE, PRAYED THAT THE FINDING GIVEN IN THE ORDER OF THE LD . CIT(A) MAY BE DISMISSED/DELETED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA 4. IT IS ONLY AFTER TEN ADJOURNMENTS THAT THE HEARING TOOK PLACE ON THE ELEVENTH DATE OF HEARING. THE APPEAL WAS LISTED FOR HEARING ON 08.01.2013, 17.01.2013, 26.02.20 13, 20.03.2013 , 28.05.2013, 29.05.2013, 05.06.2013, 23.07.2013, 24.07.2013 AND 31.07.2013 . THE HEARING ULTIMATELY TOOK PLACE ON 23.08.2013. IT ALSO DESERVES TO BE MENTIONED THAT THIS IS THE SECOND ROUND OF LITIGATION BEFORE THIS TRIBUNAL IN WHICH SUBSTANTI AL REVENUE IS INVOLVED. 5. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT BY THE INCOME - TAX AUTHORITIES AT THE PREMISES OF THE ASSESSEE ON 22.12.2006 DURING WHICH STATEMENT OF SHRI TULSIBHAI LIMBABHAI PARSAN A WAS RECORDED. ENGLISH TRANSLATION OF THE STATEMENT GIVEN BY SHRI TULSIBHAI LIMBABHAI PARSANA HAS BEEN PLACED AT PP. 9 - 10 OF THE PAPER BOOK FILED BY THE ASSESSEE. IN THE SAID STATEMENT RECORDED U/S 132( 4 ), SHRI TULSIBHAI LIMBABHAI PARSANA STATED THAT LAND , BEARING SURVEY NO.435 ADMEASURING 6760 SQ. MTRS. , WAS SOLD BY FOUR BROTHERS NAMELY, SHRI TULSIBHAI LIMBABHAI PARSANA HIMSELF, MAGANBHAI LIMBABHAI PARSANA , SHRI LAKHABHAI LIMBABHAI PARSANA AND SHRI MADHUBHAI LIMBABHAI PARSANA . SALE DEED CONVEY ING THE AFOR ESAID PROPERTY IN FAVOUR OF THE SELLER , NAMELY , M/S. K AND K PROPERTIES (GUJARAT) PVT. LTD. WAS, AS PER HIS STATEMENT, EXECUTED ON 1 9.10.2006. IN RESPONSE TO QUESTION NO.3, IT WAS ADMITTED BY SHRI TULSIBHAI LIMBABHAI PARSANA THAT THE SAID PROPERTY WAS SOLD FOR A SUM OF RS.9,99,00,000/ - OUT OF WHICH A SUM OF RS.2,07,00,00 0/ - WAS RECEIVED THROUGH CHEQUE AND THE BALANCE AMOUNT WAS RECEIVED IN CASH. T HE APPARENT CONSIDERATION SHOWN IN THE SALE DEED , HOWEVER, WAS RS.2,07,00,000/ - , I.E., THE AMOUNT RECEIVED THRO UGH CHEQUES, AS AGAINST RS.9,99,00,000/ - ADMITTED BY SHRI TULSIBHAI LIMBABHAI PARSANA TO HAVE ACTUALLY BEEN RECEIVED . BASED ON THE AFORESAID STATEMENT AND THE MATERIALS COLLECTED BY THE ASSESSING OFFICER, NOTICE U/S 153A WAS SERVED UPON ALL THE FOUR ASSESS EES REQUIRING THEM TO FILE THEIR RETURN OF INCOME. PURSUANT TO THE AFORESAID NOTICE ISSUED BY THE ASSESSING OFFICER U/S 153A, SHRI MAGANBHAI LIMBABHAI PARSANA FILED HIS RETURN OF INCOME ON 16.08.2007 IN THE OFFICE OF THE DEPUTY COMM ISSIONER OF INCOME - TAX, CIRCLE - 1 , RAJKOT IN WHICH TOTAL INCOME OF RS.52,74,230/ - WAS DECLARED. ALL THE ASSESSEES IN THEIR RESPECTIVE RETURNS HAVE DECLARED THE SAME AMOUNT OF SALE 4 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA CONSIDERATION AS WAS ADMITTED BY SHRI TULSIBHAI LIMBABHAI PARSANA IN HIS STATEMENT U/S 132(4) OF THE INCOME - TAX ACT. 6. IN THE DOCUMENTS ACCOMPANYING THE RETURN OF INCOME FILED BY SHRI MAGANBHAI LIMBABHAI PARSANA , THE COMPUTATION OF L ONG T ERM C APITAL G AIN HAS BEEN GIVEN, WHICH H AS BEEN REPRODUCED BY THE AO IN PARAGRAPHS 4.1 & 4.2 OF THE ASSESSMENT ORDER AS UNDER: - 4.1 IN THE RETURNS OF INCOME FILED U/S 139(1) FOR AY 07 - 08, THE ASSESSEE HAS TAKEN THE SALE CONSIDERATION AT RS.2,49,75,000/ - (9,99,00,000/ - DIVIDED BY 4) IN HIS OWN CASE. THE ASSESSEE HAS WORKED OUT LONG TERM CAPITAL GAIN AS UNDER. SALE OF LAND AS PER XEROX COPY OF DEED 2,49,75,000/ - LESS : (COST OF ACQUISITION ETC.) INDEXED COST OF ACQUISITION ACQN . YEAR ACQN. COST INDEXED COST 80 - 81 28,30,100 1,46,88,219 ( - ) 1,46,88,219/ - LESS : (EXEMPTIONS U/S 54B/54D/54G ETC.) EXPENSES 79,776 TEC BOND U/S 54EC AS PER CERTIFICATE 59,00,000 ( - )____ 50,79,776/ - __ CAPITAL GAIN 52,07,005/ - 4.2 IT IS SEEN FROM THE ASSESSEES WORKING AS ABOVE THAT THE COST OF LAND HAS BEEN ADOPTED AT RS.1, 13,20,400 (28,30,100 X 4). THE COST OF LAND ADMEASURING 6760.78 SQ. FOR THE PURPOSE OF LONG TERM CAPITAL HAS BEEN TAKEN AT RS.1,13,20,400/ - WHICH WORKS OUT TO RS.1674/ - PER SQ METER AS ON 1 . 4 . 1981. THE ASSESSEE WAS REQUESTED TO PRODUCE THE BASIS OF VALUATI ON ARRIVED AT RS.1674/ - SQ METER AS ON 1.4.1981. IT WAS STATED BY THE ASSESSEES A R THAT VALUATION REPORT HAS BEEN PREPARED FROM SOME APPROVED VALUER. DESPITE PERSONAL REMINDERS TO THE ASSESSEES A.R. FOR OVER A PERIOD OF SIX MONTHS SINCE TAKING UP OF THE ASSESSMENT PROCEEDINGS, NO VALUATION REPORT OR THE BASIS OF VALUATION ARRIVED AT RS.1674/ - PER SQ. METER HAS BEEN PUT FORTH TILL THIS DATE. THE ASSESSEES GESTURE OF NON - COMPLIANCE WAS AN INDICATIVE FACTOR OF THE CASE THAT THE ASSESSEE HAS ADOPTED HIGH PI TCHED VALUATION AS AT 01.04.1981 FOR THE PURPOSE OF LONG TERM CAPITAL GAIN AND THIS OFFICE WAS INCLINED TO PRESUME THAT THE ASSESSEE DOES NOT HAVE ANY BASIS OR COMPARABLE SALE INSTANCE OF THE RELEVANT PERID AND OF 5 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA SURROUNDING LOCATION OR VALUATION REPORT S O AS TO STRENGTHEN ITS STAND IN THE RETURNS OF INCOME AND THE SUBMISSIONS FILED. 7. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE PROPERTY WAS ACQUIRED BY INHERITANCE BY ALL THE FOUR ASSESSEES PRIOR TO 01.04.1981. THEREFORE THE COST OF ACQUISITION AS ON 01.04.1981 WAS REQUIRED TO BE TAKEN INTO ACCOUNT FOR COMPUTING THE CAPITAL GAIN. AS EVIDENT FROM THE ASSESSMENT ORDER, THE ASSESSEE HAD CLAIMED THE COST OF A CQUISITION AT RS.1,674 / - PER SQ. MTR . AS ON 01.04.1981. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE WAS REPEATEDLY ASKED TO FURNISH COPY OF VALUATION REPORT IN SUPPORT OF THE AFORESAID COST OF ACQUISITION BUT THE ASSESSEE NEVER FILED THE SAME BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER THERE AFTER MADE INQUIRIES FROM THE LOCAL SUB - RE GISTRARS OFFICE TO GATHER THE DETAILS OF COMPARABLE INSTANCES OF SALE SO AS TO ARRIVE AT THE COST OF ACQUISITION AS ON 1.4.1981 . IN THE MEANTIME, THE ASSESSEE HIMSELF FILED COMPARATIVE SALE INSTANCES WHICH WERE PERUSED BY THE ASSESSING OFFICER. AFTER GOIN G THROUGH THE DETAILS OF COMPARATIVE SALE INSTANCES FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER FIXED THE COST OF ACQUISITION AT RS.550/ - PER SQ . MTR . AS ON 01.04.1981 AS AGAINST RS.1674/ - PER SQ. METER CLAIMED BY THE ASSESSEE WITH THE FOLLOWING OBSER VATIONS: - 4.9 I HAVE DULY CONSIDERED THE ASSESSEES SUBMISSION. THE SUBMISSION MADE BY THE ASSESSEE APPEARS TO BE QUITE NEARER TO THE GROUND REALITY AND THIS BEING A MATTER OF ESTIMATION, THE MOST COGENT AND JUDICIOUS VIEW BE ADOPTED. ACCORDINGLY, THE AS SESSEES SUBMISSION IS BEING CONSIDERED AS UNDER, TO DETERMINE THE FAIR MARKET VALUE AS ON 1.4.1981. 4.10 THE MAXIMUM VALUE OF THE LAND NEARER TO THE LAND IN QUESTION IS RS.765/ - PER SQ. METER AS ON 29.3.1982, AS PER THE LIST SUBMITTED BY THE ASSESSEE HI MSELF. THUS THE FAIR VALUE OF THIS LAND AS ON 1.4.1981 WOULD BE AT LEAST 10% LOWER THAN THIS VALUE. THUS THE MAXIMUM FAIR VALUE AS ON 1.4.1981 FOR THIS LAND WOULD BE RS.690/ - PER SQ METER, ON THIS COUNT ALONE. HOWEVER, THE ASSESSEE HAS HIMSELF SUBMITTED TH AT IN 1993 THEY HAD TO INCUR HUGE EXPENDITURE O F 13.30 LACS FOR EVACUATION OF ILLEGAL OCCUPANTS AND ALSO FOR LEVELING OF THE LAND. THUS IT IS ADMITTED BY THE ASSESSEE HIMSELF THAT THIS LAND WAS ENCROACHED BY ILLEGAL OCCUPANTS AND WAS NOT LEVEL, BUT HAD 20 FEET DEEP 6 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA EXCAVATIONS AT VARIOUS PLACES AS ON 1.4.1981, AND THESE DEFECTS WERE REMOVED BY SPENDING HUGE AMOUNT OF RS.13.30 LACS IN 1993. THUS THE FAIR MARKET VALUE OF THIS LAND AS ON 1.4.1981 WOULD BE SUBSTANTIALLY LOWER, ON ACCOUNT OF THE AFORE - MENTIONED DEFECTS IN THE LAND IN QUESTION. CONSIDERING THE ENTIRE EVIDENCES AND SUBMISSION OF THE ASSESSEE, THE FAIR MARKET VALUE OF THE LAND AS ON 1.4.1981 IS DETERMINED AT RS.550/ - PER SQ. METER. 8. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT EXPENDITURE OF RS.13.30 LA KHS WAS INCURRED BY THE ASSESSEE IN THE YEAR 1993 FOR EVACUATION OF ILLEGAL OCCUPANTS ON THE LAND. THE OBSERVATIONS MADE BY THE ASSESSING OFFICER IN PARAGRAPH 4.7 OF THE ASSESSMENT ORDER IN THIS BEHALF ARE RELEVANT. THE AO HIMSELF HAS DULY TA KEN INTO ACCOUNT THE SAID SUM OF RS.13.30 LA KHS AS COST OF IMPROVEMENT AND HAS ACCORDINGLY WORKED OUT THE INDEXED COST OF IMPROVEMENT AT RS.28,29,000/ - WHILE COMPUTING THE CAPITAL GAIN . 9. THE ASSESSING OFFICER HAS WORKED OUT THE CAPITAL GAINS (EXCLUDING EXEMPTION U/S 54B/54D/54G ETC.) IN THE CASE OF SHRI MAGANBHAI LIMBABHAI PARSANA AS UNDER: - SALE CONSIDERATION OF LAND AS PER RETURN OF INCOME RS.9,99,00,000/ - LESS: INDEXED COST OF A C QUISIT I ON YEAR OF ACQUISITION YEAR PRIOR TO 1 - 4 - 1981 COST OF ACQUI SITION AS AT 1 - 4 - 1981 WORKS OUT TO (6760.78 X 550) 37,18,429 INDEXED COST OF ACQUISITION WORKS OUT (37,18,429 X 5.19) RS.1,92,98,650/ - LESS: INDEXED COST OF IMPROVEMENT MADE IN 1993 AS CLAIMED (13,30,000 X 519/244) RS. 28,29,000/ - RS.2,21,27 ,650/ - TOTAL CAPITAL GAIN RS.7,77,72,350/ - 10. IT IS QUITE EVIDENT ON BARE PERUSAL OF THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HA S TAKEN THE COST OF ACQUISITION AT RS.550/ - PER SQ. METER AS ON 01.04.1981 AS AGAINST RS.1,67 4 / - PER SQ. METER CLAIMED BY THE ASSESSEE. IT IS EQUALLY EVIDENT THAT THE ASSESSEE HAD CLAIMED A SUM OF RS.13.30 LA KHS BEING THE AMOUNT SPENT ON EVACUATION OF ILLEGAL OCCUPANTS IN 1993 AS TOWARDS COST OF IMPROVEMENT, WHICH WAS ALSO ACCEPTED BY THE ASSESSING OFFICER AND THE BENEFIT OF INDEXATION WAS ALLOWED NOT ONLY WITH REFERENCE TO COST OF ACQUISITION AS TAKEN ON 01.04.1981 BUT ALSO WITH REFERENCE TO COST OF IMPROVEMENT AMOUNTING TO RS.13.30 LA KHS . 7 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA 11. THE MATTER THEREAFTER TRAVELLED BEFORE THE LD . CIT(A) . IT WAS THE CASE OF THE ASSESSEE BEFORE THE LD . CIT(A) THAT THE ASSESSING OFFICER SHOULD HAVE ACCEPTED THE COST OF ACQUISITION AT RS. 1674/ - AS ON 01.04.1981 AS SHOWN BY THE ASSESSEE. THE AFORESAID CLAIM WAS ACCEPTED BY THE LD . CIT(A) VIDE PARAGRAPH 2.1 OF HIS APPELLATE OR DER DATED 07.05.2009 . IT WAS FURTHER SUBMITTED BY THE ASSESSEE BEFORE THE LD CIT(A) THAT A SUM OF RS.63,00,000/ - W AS PAID TO SHRI SANDEEP TOPIA TO GET HIS SIGNATURE ON THE SALE DEED AS HE WAS THE NAME - LENDER . THE LD . CIT(A) HOWEVER RESTRICTED THE SAID CLAI M TO RS.34,50,000/ - FOR REASONS GIVEN BY HIM IN PARAGRAPH 3.1 OF HIS APPELLATE ORDER DATED 07.05.2009. 12. AS EVIDENT FROM THE APPELLATE ORDER PASSED BY THE LD. CIT(A) IN FIRST ROUND OF LITIGATION, TWO ISSUES, NAMELY, THE ISSUE OF COST OF ACQUISITION AS ON 1.4.1981 AND THE ISSUE OF ELIGIBILITY OF RS.34.50 LAKHS ALLEGEDLY PAID TO SANDEEP TOPIYA FOR DEDUCTION FROM SALE CONSIDERATION, WERE DECIDED BY THE CIT(A) AGAINST THE REVENUE. BEING AGGRIEVED BY THE ORDER OF THE CIT(A) ON THE AFORESAID TWO ISSUES, THE R EVENUE APPROACHED THIS TRIBUNAL . T HE ORDER PASSED BY THE LD CIT(A) ON 07.05.2009 WAS SET ASIDE BY THIS TRIBUNAL VIDE ITS ORDER DATED 18.03.2011 IN DCIT V. SHRI MAGANBHAI LIMBABHAI PARSANA AND OTHERS, ITA NO S .996 - 999/RJT/2010 AND THE MATTER WAS RESTORED TO THE FILE OF THE LD CIT(A) FOR A FRESH DECISION, WITH THE FOLLOWING OBSERVATIONS: - 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES, RECORD PERUSED. WE FIND THAT THE RELEVANT COMPLETE FACTS OF THE CASE ARE NOT PUT ON RECORD BY THE REVENUE AUTHO RITIES AFTER EXAMINING THE RELEVANT MATERIALS. AS PER THE CERTIFICATE GIVEN IN THE PAPER BOOK A COPY OF SALE DEED DATED 19.10.2006 AND COPY OF CONFIRMATION FROM K AND K PROPERTIES (GUJ) PVT LTD DATED 13.04.2009 WERE FILED BEFORE THE CIT(A). THE CIT(A) WITH OUT EXAMINING THE RECORDING THE RELEVANT FACTS DECIDED THE ISSUES. IT IS NOT CLEAR FROM THE RECORD THE NATURE OF PAYMENT OF RS.63 LAKHS WAS PAID TO SHRI SANDIP TOPIA. IN THE ABSENCE OF COMPLETE FACTS, THE MATTER CANNOT BE DECIDED AT THIS STAGE. SINCE THE C OMPLETE FACTS ARE REQUIRED TO BE PUT ON RECORD AFTER EXAMINING THE RELEVANT MATERIAL WE FIND IT PROPER TO SEND BACK THIS MATTER TO THE FILE OF THE 8 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA CIT(A) WITH A DIRECTION TO DECIDE THE ISSUES AFRESH IN ACCORDANCE WITH LAW AFTER RECORDING THE COMPLETE FACTS BY SPEAKING ORDER AND AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO BOTH THE SIDES. 13. IN PURSUANCE OF THE AFORESAID DIRECTIONS, THE LD . CIT(A) HAS PASSED ANOTHER ORDER ON 18.05.2012, WHICH IS NOW THE SUBJECT MATTER OF APPEAL BY THE ASSESSEE S AS WELL AS BY THE REVENUE. 14. WE SHALL FIRST TAKE UP THE APPEALS FILED BY THE REVENUE , NAMELY , ITA NO S . 445 - 448 /RJT/2012 , IN WHICH FIRST GROUND OF APPEAL IS DIRECTED AGAINST THE ORDER OF THE LD . CIT(A) DIRECTING THE ASSESSING OFFICER TO WORK OUT INDEX ED CO ST OF IMPROVEMENT IN RESPECT OF EXPENDITURE OF RS.8,25,000/ - REPORTEDLY INCURRED BY THE ASSESSEE IN 1984 FOR GETTING THE ILLEGAL OCCUPANTS EVICTED . WE HAVE HEARD THE PARTIES AND ALSO PERUSED THE ENTIRE ASSESSMENT ORDER. IT IS STATED AT PAGE 4 OF THE APPELL ATE ORDER PASSED BY THE CIT(A) IN FIRST ROUND OF LITIGATION THAT THE ASSESSING OFFICER HAD NOT CONSIDERED THE DOCUMENT DATED 01.08.1984 BETWEEN THE APPELLANT AND M/S SOJITRA DEVELOPERS, RAJKOT, WHO WERE DOING THE BUSINESS OF LEVELING OF LAND AND EVACUA TION OF HUTMENTS/ILLEGAL OCCUPANTS. IT IS IN THIS BACKGROUND THAT THE CIT(A) HAS NOW, LIKE HIS PREDECESSOR IN THE FIRST ROUND OF LITIGATION, TREATED THE SAID EXPENDITURE AS COST OF IMPROVEMENT AND CONSEQUENTLY DIRECTED THE AO TO WORK OUT THE INDEXED COST OF THE SAID IMPROVEMENT WHILE COMPUTING CAPITAL GAIN. THE REVENUE COULD GIVE NO REASON AS TO HOW THE ORDER PASSED BY THE CIT(A) IN THIS BEHALF IS INCORRECT. IN THIS VIEW OF THE MATTER, HIS ORDER IN THIS BEHALF IS CONFIRMED. GROUND NO.1 TAKEN BY THE REVENUE IN ALL THE APPEALS IS RESULTANTLY DISMISSED. 1 5 . GROUND NO.2 TAKEN BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD . CIT(A) BY WHICH HE HAS DIRECTED THE ASSESSING OFFICER TO EXCLUDE A SUM OF RS.6 2 , 5 0,000/ - FROM THE SALE CONSIDERATION. IN TH E FIRST ROUND OF LITIGATION, THE LD. CIT(A) HAD RESTRICTED THE ALLOWABILITY OF SUCH EXPENDITURE TO RS.34.50 LAKHS AGAINST WHICH THE REVENUE HAD FILED APPEAL BEFORE THIS TRIBUNAL AND NOT THE ASSESSEES. THEREFORE, THE LIMITED ISSUE BEFORE THIS TRIBUNAL WAS R EGARDING THE CORRECTNESS OF DEDUCTION OF RS.34.50 LAKHS AND NOT RS.62.50 LAKHS AS NOW ALLOWED BY THE CIT(A) . THERE IS NO DISCUSSION ABOUT THIS ASPECT OF THE MATTER IN THE ASSESSMENT ORDER . THE 9 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA LD . CIT(A) HAS HOWEVER DIRECTED THE AO TO EXCLUDE A SUM OF RS.6 2.50 LAKHS FROM SALE CONSIDERAT ION FOR COMPUTING CAPITAL GAIN. IT IS THE CASE OF THE REVENUE THAT THE AFORESAID CLAIM FOR DEDUCTION IS N EITHER SUPPORTED BY ANY EVIDENCE NOR OTHERWISE ADMISSIBLE IN LAW. THE ASSESSEE, ON THE OTHER HAND, RELIES ON THE ORDER P ASSED BY THE CIT(A) . 16. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS CLAIMED BY THE ASSESSEE BEFORE US THAT SHRI SANDEEP TOPIA AND OTHER PERSONS W ERE NAME - LENDER S AND THEREFORE A SUM O F RS.6 2 , 5 0,000/ - WAS PAID TO THEM TO FACILITATE EXECUTION OF SALE DEED . THE LD. CIT(A) HAS ALLOWED THE IMPUGNED CLAIM WITH THE FOLLOWING OBSERVATIONS: - 8.9 IN VIEW OF THE ABOVE, IT IS A FACT THAT THE PAYMENTS TO SHRI SANDEEP TOPIA WERE MADE IN CONNECTION WITH THE TRANSFER OF LAN D. IT IS A FACT THAT EXECUTION OF SALE DEED WOULD NOT HAVE BEEN POSSIBLE UNLESS SHRI SANDEEP TOPIA BEING BENAMI NAME LENDER WOULD HAVE SIGNED ON SUCH SALE DEED. IF THE PAYMENTS MADE TO THE TENANTS WHO HAVE LIMITED RIGHTS ON THE USE OF PROPERTY FOR VACATING THE PREMISES ARE ALLOWED AS DEDUCTION IN COMPUTATION OF CAPITAL GAINS, THERE IS NO REASONS AS TO WHY PAYMENTS MADE TO BENAMI OWNERS/NAME LENDERS FOR ALLOWING THE SALE OF LAND CANNOT BE ALLOWED AS DEDUCTION BEING EXPENDITURE WHOLLY AND EXCLUSIVELY IN CONNE CTION WITH THE TRANSFER OF LAND. IT IS FURTHER NOTED THAT ONLY ONE OF THE MANY NAME LENDERS WAS PAID BY THE APPELLANT WHO HAD TRIED TO BLACKMAIL THE APPELLANTS. IN VIEW OF THE ABOVE, IT IS HELD THAT PAYMENT MADE TO SHRI SANDEEP TOPIA IS WHOLLY AND EXCLUSIV ELY IN CONNECTION WITH THE TRANSFER OF LAND AND THE SAME SHOULD BE ALLOWED AS DEDUCTION AS CLAIMED BY THE APPELLANTS. ALTERNATIVELY ALSO SUCH PAYMENT CAN BE REDUCED FROM THE FULL VALUE OF CONSIDERATION SINCE THE PAYMENTS HAVE BEEN MADE OUT OF THE FULL VALU E OF CONSIDERATION RECEIVED BY THE APPELLANTS SINCE IT SI COMMON MARKET PRACTICE THAT IN CASE OF SALE OF LAND WITH ANY ENCUMBRANCE, THE AMOUNT OF CONSIDERATION GETS REDUCED IF THE PURCHASER HAS TO GET RID OF THE ENCUMBRANCE OF HIS OWN. TAKING ANY VIEW OF T HE MATTER, THE PAYMENTS MADE TO SHRI SANDEEP TOPIA ARE ALLOWED AS AN EXPENDITURE WHICH HAS BEEN INCURRED IN CONNECTION WITH THE TRANSFER OF LAND. 10 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA 17. AT THE TIME OF HEARING, THE LD . DEPARTMENTAL REPRESENTATIVE COULD NOT REBUT THE AFORESAID FINDINGS RECOR DED BY THE CIT(A). THE VIEW TAKEN BY THE CIT(A) IS IN CONFORMITY WITH THE FACTS AVAILABLE ON RECORD INCLUDING COPY OF SALE DEED FILED BY THE ASSESSEE. IN THIS VIEW OF THE MATTER, THE ORDER PASSED BY THE CIT(A) IN THIS BEHALF IS CONFIRMED. GROUND NO.2 TAKEN BY THE REVENUE IN ALL THE APPEALS IS THEREFORE DISMISSED. 1 8 . APROPOS THE APPEAL FILED BY THE ASSESSEES, THE ONLY GROUND TAKEN BY THEM IS THAT THE LD . CIT(A) HAS ERRED IN CONFIRMING THE COST OF ACQUISITION TAKEN BY THE ASSESSEE AT RS.550/ - PER SQ. METER AS ON 01.04.1981 WHILE COMPUTING THE CAPITAL GAIN. THE ORDER PASSED BY THE ASSESSING OFFICER IN THIS BEHALF HAS BEEN CONFIRMED BY THE LD . CIT(A). THE CIT(A) HAS CONSIDERED COMPARABLE SALE INSTANCES GIVEN BY THE ASSESSEES THEMSELVES BEFORE THE AO AND ALSO T HE FACT THAT THE LAND WAS UNDER ILLEGAL OCCUPATION AND NOT EVEN LEVELLED AS ON 1.4.1981. THE LD . AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS NOT GIVEN ANY COGENT REASON TO SHOW AS TO HOW THE ORDER PASSED BY THE ASSESSING OFFICER AND THE CIT(A) IN THIS B EHALF IS INCORRECT OR AGAINST THE FACTS ON RECORD. IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER AND THE CIT(A) HA VE TAKEN RELEVANT MATERIALS INTO ACCOUNT AND GIVEN CONVINCING REASON S FOR FIXING THE C O ST OF ACQUISITION AT RS.550/ - PER SQ. METER AS ON 01.04 .1981 WHILE COMPUTING THE CAPITAL GAIN. IN THIS VIEW OF THE MATTER, THE ORDER PASSED BY THE CIT(A) IN THIS BEHALF IS CONFIRMED. APPEALS FILED BY ALL THE ASSESSEES IN THIS BEHALF ARE THEREFORE DISMISSED. 1 9 . IN VIEW OF THE FOREGOING, THE APPEALS FILED BY ALL THE FOUR ASSESSEES AND THE REVENUE STAND DISMISSED. ORDER PRONOUNCED ON 30 . 0 8 . 201 3 SD/ - SD/ - (T. K. SHARMA) ( D. K. SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: .0 8 .2013 B T 11 446,476,447,477,445,478,475 & 448 - RJT - 2012 - SHRI MAGANBHAI LIMBABHAI PARSANA COPY OF ORDER FORWARDED T O: - 1 . APPELLANT ACIT, CIRCLE - 1 , RAJKOT 2 . RESPONDENT - 1 ) SHRI MAGANBHAI LIMBABHAI PARSANA 2) SHRI LAKHABHAI LIMBABHAI PARSANA 3) SHRI LAKHABHAI LIMBABHAI PARSANA 4) SMT. HANSABEN MADHUKANT PARSANA 2 - NARSINH PARK, NR. SHREE COL ONY, OPP. SNOWHILL APPT, RAJKOT 3 . CONCERNED CIT , CENTRAL - II, AHMEDABAD 4 . CIT(A) - IV, AHMEDABAD 5 . DR, ITAT, RAJKOT 6 . GUARD FILE. BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT