ITO, Rewari V. Sh Moti Ram alias Moti Lal, Rewari

ITA 4805/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91015 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 31-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 10-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P DAM KANUNJNA
• Keywords: Capital asset; Cost of acquisition; Fair market value
• Section: 54B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, A.M. AND SHRI CM GARG, J.M. ITA NO. 4483 / DEL/20 1 2 ASSESSMENT YEAR : 20 06 - 07 SHRI MOTI RAM VS. ITO, WARD 2, REWARI 4025, DELHI GATE, REWARI PAN: ABGPR 2899 A ITA NO. 4805/ DEL/20 12 ASSESSMENT YEAR : 20 06 - 07 ITO, WARD 2, REWARI VS. SH. MOTI RAM ALIAS MOTI LAL, REWARI (APPELLANT) (RESPONDENT ) APPELLANT BY : - SH. GAUTAM JAIN, ADV. RESPONDENT BY : - SHRI P.DAMKANUNJNA, SR. D.R. O R D E R PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF THE LD.CIT(APPEALS), ROHTAK DT. 9.7.2012 PERTAINING TO THE ASSESSMENT YEAR 2006 - 07. 2. THE FACTS ARE BROUGHT OUT AT PARA 2 TO 2.4 OF THE LD.CIT(A) S ORDER WHICH IS EXTRACTED FOR READY REFERENCE. 2.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF SH. RAM KISHAN, BROTHER OF THE APPELLANT, THE AO NTOED THAT HE SOLD AGRICULTURE L AND MEASURING 42 KANALS 12 MARLAS AT REWARI ON 14.11.2005 FOR A CONSIDERATION OF RS 1,32,97,000/ - IN WHICH THE ASSEESEE HAD HALF SHARE. THE SHARE OF THE SALE PROCEEDS - TO THE ASSESSEE COMES TO RS 66,48,500/ - , WHICH IS LIABLE FOR CAPITAL GAINS TAX AND SINCE THE ASSESSEE HAS NOT FILED RETURN OF INCOME, THE AO ISSUED NOTICE U] S 148 AFTER RECORDING THE REASONS. IN RESPONSE 2 TO THE NOTICE, THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS 1,17,792/ - FROM BUSINESS AND OTHER SOURCES. THE COPY OF REASONS RECORDED WERE SUPPLIED TO THE ASSESSEE. 2.2 ON ENQUIRIES FROM TEHSILDAR, REWARI U/S 133 (6), THE AO NOTED THAT THE LAND IN QUESTION IS SITUATED ON THE HUDA BYEPASS ROAD WHICH IS WITHIN 5 KMS FROM MUNICIPAL LIMITS. SINCE THE LAND IN QUESTION LIES WITHIN THE LIMITS NOTIFIED BY CBDT, THE SAME IS COVERED UNDER THE DEFINITION OF CAPITAL ASSET AND HENCE THE SALE PROCEEDS ARE LIABLE FOR CAPITAL GAINS TAX U / S 45 OF THE ACT. THE ASSESSEE SUBMITTED THAT THE LAND UNDER CONSIDERATION IS NOT SITUATED WITHIN THE MU NICIPAL LIMITS AND ACCORDINGLY NOT LIABLE FOR CAPITAL GAINS TAX AND FURNISHED A CERTIFICATE FROM MUNICIPAL COUNCIL THAT THE LAND IS OUT OF MUNICIPAL LIMITS. SINCE THE LAND IS SITUATED WITHIN 5 KMS OF MUNICIPAL LIMITS, THE A O REJECTED THE CONTENTION OF TH E ASSESSEE. 2.3 THE AO ASKED THE ASSESSEE TO FILE DOCUMENTARY EVIDENCE REGARDING THE VALUE OF LAND AS ON 1.4. 1981 AS THE LAND WAS CLAIMED TO BE INHERITED. SINCE THE ASSESSEE HAS NOT PROVIDED ANY INFORMATION, THE AO OBTAINED THE DETAILS FROM THE OFFICE O F D T. REWARI BY ISSUING SUMMONS WHEREIN A PHOTO COPY OF SALE DEED OF AGRICULTURE LAND REGISTERED ON 2.7.1980 WAS PRODUCED AS PER WHICH AGRICULTURE LAND MEASURING 15 KANALS 12 MARLAS WAS SOLD ON 2.7.1980 FOR A TOTAL CONSIDERATION OF RS 23,500/ - @ RS 75.30 PER MARLA. APPLYING THIS RATE OF RS 75.30 PER MARLA, THE AO COMPUTED THE COST OF LAND SOLD BY THE ASSESSEE (HALF SHARE OF THE TOTAL ALONG WITH HIS BROTHER) AS ON 1.4.1981 AS RS . 32,040/ - AND ARRIVED AT LONG TERM CAPITAL GAIN (LTCG) OF RS.64,89,261/ - AS PER THE COMPUTATION GIVEN IN PARA 3 OF THE ASSESSMENT ORDER. 2.4. THE ASSESSEE CLAIMED DEDUCTION U/S 54B OF RS.22,08,725/ - . THE AO REJECTED THE CLAIM ON THE GROUND THAT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE WHICH MAY PROVE THAT THE LANDS IN QUESTION WERE USED FOR AGRICULTURAL PURPOSES. 3. THE ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE FIRST APPELLATE AUTHORITY WAS RIGHT IN ADOPTING THE COST OF ACQUISITION AS ON 3 1.4.1981 AT RS.1488.60 PER MARLA, WHICH WAS THE COST OF ACQUISITION TAKEN BY SHRI S.H.RAM KISHAN. THE ASSESSEE CLAIMED AN AVERAGE RATE OF RS.2100/ - PER MARLA ON THE BASIS OF TWO REGISTERED SALE DEEDS. THE FIRST WAS SALE OF LAND MEASURING 20 MARLAS ON 22.11.1981 AT RS.2271.75 PER MARLA AND THE SECOND SALE WAS OF LAND ME ASURING 6 MARLAS ON 28.12.1981 AT RS.1747.50 PER MARLA. THE AO REJECTED THIS CLAIM OF THE ASSESSEE ON THE GROUND THAT THE VALUE OF THE LAND AS ON 1.4.1981 CANNOT BE FIXED , BASED ON SALE PRICE OF SMALL PLOTS OF LAND MEASURING 150 SQ.YARDS, 600 SQ.YARDS AN D 160 SQ.YARDS, WHEN THE FACT IS THAT THE ASSESSEE HAS SOLD AGRICULTURAL LAND MEASURING 5.25 ACRES. 4. BEFORE US THE ASSESSEE ARGUED THAT THE FAIR MARKET VALUE DOES NOT DEPEND ON THE SIZE OF THE LAND SOLD AND THAT THE ACTUAL SALE INSTANCES HAVE TO BE TAKEN INTO CONSIDERATION. THE LD.D.R. SUBMITS THAT THE ORDER OF THE AO HAS TO BE UPHELD AS HE HAD RELIED ON SALE DEED OF 279 SQ.YARDS AT RS.75.30 PER MARLA. 5. AFTER HEARING RIVAL CONTENTIONS WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE FIRST APPELLA TE AUTHORITY HAS TO BE UPHELD. THE ARGUMENT OF THE ASSESSEE THAT THE VALUE OF WHICH PART OF LAND 5.25 ACRES IN THE PRESENT CASE, CAN BE FOUND OUT THROUGH THE SALE DEED OF SMALL HOUSE SITES MEASURING TO 150 SQ.YARDS TO 600 SQ.YARDS. SMALL PLOTS OF LAND HA VE HIGHER VALUES AND MANY AT TIME THE VALUE DEPEND UPON THE STRATEGIC LOCATION. THUS WE ARE UNABLE TO ACCEPT THE CONTENTIONS OF THE ASSESSEE. 6. COMING TO THE CONTENTION OF THE REVENUE , WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(A) FOR THE REASON THAT THE VALUE ADOPTED BY THE CO - OWNER 4 AND BROTHER OF THE ASSESSEE TOWARDS COST OF ACQUISITION ON 12.3.1981 WAS DIRECTED TO BE ADOPTED IN THE CASE OF THE ASSESSEE ALSO. 7. IN THE RESULT THE APPEALS OF BOTH THE ASSESSEE AND THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 8 T H M A Y , 2015 . S D / - S D / - ( C.M. GARG ) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 0 8 T H MAY, 2015 *MANGA COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR