Shri Shri Krishan Agarwal, Lucknow V. Income TAx Officer, Lucknow

ITA 494/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75168 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-01-2014
• Assessment Year: misc
• Appeal Filed On: 17-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Assessee Lawyers: ARVIND MOHAN JOHARI
• Keywords: Cost of acquisition; Fair market value; Valuation report

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.494/LKW/2011 A.Y.:2006 - 2007 MR. SHRI KRISHAN AGARWAL, PROP. M/S SHRI LUXMI STEELS, 12, G. B. MARG, LUCKNOW. PAN:ACOPA9475F VS. INCOME TAX OFFICER - IV(3), LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ARVIND MOHAN JOHARI, C.A. RESPONDENT BY SHRI R. K. RAM, D.R. DATE OF HEARING 08/01/2014 DATE OF PRONOUNCEMENT 3 0 /01/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - II, LUCKNOW DATED 27/05/2011 FOR THE ASSESSMENT YEAR 2006 - 07. 2. GROUND NO. 1 TO 6 ARE INTER - CONNECTED, WHICH ARE AS UNDER: 1. BECAUSE BOTH, THE LD. AO ERRED ON FACTS AND IN LAW IN COMPLETING THE ASSESSMENT AT AN INCOME OF RS.8,22,400/= AGAINST RETURNED INCOME OF RS.3,23,105/ - AND SUBSEQUENTLY THE LD. CIT(A) - LL ERRED IN CONFIRMING THE SAME. 2. BECAUSE THE LD. CIT(A) - LL ERRED ON F ACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS4,99,293/ - AS MADE BY THE LD AO ON ACCOUNT OF INCOME FROM LONG TERM CAPITAL GAINS. 3. BECAUSE THE LD. CIT(A) ERRED ON FACTS & IN LAW IN ADOPTING THE PREVAILING DM CIRCLE RATE INSTEAD OF CONSIDERING THE FAIR MARKET VALUE OF THE LAND AS WAS ARRIVED AT BY THE 2 GOVERNMENT APPROVED VALUER AS PER HIS VALUATION REPORT DT 15/8/2003. 4. BECAUSE THE LEARNED AO HAS CALCULATED THE COST OF A CQUISITION OF THE LAND BY TAKING THE DM CIRCLE RATE INSTEAD OF FAIR MARKET VALUE ON HIS OWN NOTION WITHOUT FORWARDING ANY PLAUSIBLE TECHNICAL REASON OR RELYING ON ANY TECHNICAL REPORT AND ALSO THAT THE LD CIT (A) - LL HAS CONFIRMED THE STAND OF THE LEARNED AO. 5. BECAUSE THE AUTHORITIES BELOW ERRED ON PRINCIPLES IN NOT TAKING THE OPINION OF THE DEPARTMENTAL VALUER OR SO IF THERE WAS ANY DOUBT, BEFORE COMPLETING THE ASSESSMENT AND REJECTING THE CLAIM OF THE ASSESSEE. 6. BECAUSE THE AUTHORITIES BELOW ERRED I N NOT PROVIDING REASONABLE & SUFFICIENT OPPORTUNITY TO THE APPELLANT TO SUBSTANTIATE ITS CLAIM BEFORE COMPLETING AND CONFIRMING THE SAID ADDITION. 3. BRIEF FACTS ARE THAT IT IS NOTED BY THE ASSESSING OFFICER ON PAGE NO. 2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN SALE OF PROPERTY ON 12/05/2005 FOR A SALE CONSIDERATION OF RS. 18 LAC. IT IS ALSO CLAIMED BY THE ASSESSEE THAT THE PROPERTY WAS ACQUIRED PRIOR TO 1981 AND THEREFORE, HE HAS EXERCISED HIS OP T ION TO CONSIDER THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01/04/81 AS AGAINST THE COST OF ACQUISITION OF THE PROPERTY AND FOR SUCH FAIR MARKET VALUE, THE ASSESSEE HAS FURNISHED VALUATION REPORT FROM THE REGISTERED VALUER SHRI AMRIT LAL KALRA IN WHICH THE REGISTERED VALUER HAS WORKED OUT THE MARKET VALUE AT RS. 100/ - PER SQ. FT AS AGAINST CIRCLE VALUE OF THE SAME AT RS25/ - PER SQ. FT. ON 01/04/1981. IN THIS MANNER, THE REGISTERED VALUER HAS MULTIPLIED THE CIRCLE VALUE OF RS.25/ - BY 4. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE DM CIRCLE RATE AS ON 01/04/81 @RS.25/ - SHOULD NOT BE APPLIED WHILE TAKING MARKET VALUE OF LAND AS ON 01/04/81. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FAILED TO COMPLY THESE QUERIES. IN THIS MANNER , HE WORKED OUT THE LONG TERM CAPITAL GAIN OF 3 THE ASSESSEE IN THIS RESPECT AT RS.4,99,293/ - AS AGAINST LOSS DECLARED BY THE ASSESSEE AT RS.6,94,940/ - . 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT SUCCESS AND NOW THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. IT IS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE BEFORE US THAT AT THE TIME OF SALE IN THE FINANCIAL YEAR 2005 - 06 ALSO , THE SALE PRICE WAS 4 TO 5 TIMES OF THE THEN CIRCLE RATE AS PER THE WRITTEN SUBMISSIONS IN PARA 9 ON PAGE 18 OF THE PAPER B OOK. AT THIS JUNCTURE, A QUERY WAS RAISED BY THE BENCH AS TO WHAT WAS THE CIRCLE RATE ON THE DATE OF SALE AND WHAT WAS THE SALE VALUE AS PER THE SALE DEED. IN REPLY, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT COPY OF SALE DEED OF THE PROPERTY IS AVAILABLE ON PAGES 22 TO 33 OF THE PAPER BOOK AND AS PER PAGE 22 OF THE PAPER BOOK, THE SALE CONSIDERATION IS RS.18 LAC S AND STAMP DUTY WAS PAID ON THE SALE CONSIDERATION OF RS.18 LAC S . THEREAFTER, A QUERY WAS RAISED BY THE BENCH AS TO WHEN THE SALE PR OCEEDS IN FINANCIAL YEAR 2005 - 06 WAS EQUAL TO CIRCLE RATE THEN IT CAN NOT BE ACCEPTED THAT THE MARKET RATE AS ON 01/04/81 WAS 4 TIMES OF THE CIRCLE RATE ON THAT DATE. IN REPLY, IT WAS SUBMITTED THAT CIRCLE RATE HAS BEEN INCREASED AFTER 01/04/81 BY MORE TIM ES THAN THE ACTUAL INCREASE IN THE MARKET RATE AND THEREFORE, THE ADJUSTMENT MADE BY THE REGISTERED VALUER AS ON 01/04/81 IS JUSTIFIED. LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN OUR CONSIDE RED OPINION, WHEN ON THE DATE OF SALE , THE ACTUAL SALE PRICE IS ALMOST EQUAL TO CIRCLE RATE THEN HOW IT CAN BE ACCEPTED THAT THE ACTUAL MARKET VALUE AS ON 01/04/81 WAS 4 TIMES OF THE CIRCLE RATE AS ON THAT DATE. RELIANCE HAS BEEN PLACED BY LEARNED A.R. OF THE ASSESSEE ON VARIOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF HIS CONTENTION THAT CIRCLE RATE CANNOT BE ADOPTED AS MARKET VALUE BUT IN THE 4 PRESENT CASE , WHEN ON THE DATE OF SALE, CIRCLE RATE IS EQUAL TO MARKET VALUE BEING SALE PROCEEDS, THEN THE ACTION OF THE ASSESSING OFFICER IN ADOPTING CIRCLE RATE AS MARKET VALUE AS ON 01/04/81 IS SUPPORTED BY THE FACTS ON THE DATE OF SALE AND, THEREFORE, THESE JUDGMENTS CITED BY LEARNED A.R. OF THE ASSESSEE AND SUBMITTED IN THE PAPER BOOK ARE OF NO HELP TO THE ASSESSEE IN THE FACTS OF THE PRESENT CASE. WE, THEREFORE, DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT(A). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 0 T H JANUARY, 2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR