Arindam Mukherji, Kolkata V. ITO, WD-31(20, KOLKATA, Kolkata

ITA 507/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0863 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 29-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOUMYAJIT DASGUPTA
• Assessee Lawyers: I BAN ERJEE
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report
• Section: 143(3); 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & SHRI S.S. VISWANETHRA RAVI, JM] I.T.A NO. 507/KOL/201 5 ASSESSMENT YEAR : 2010-1 1 ARINDAM MUKHERJI -VS- ITO, WARD-31( 2), KOLKATA [PAN: AEVPM 3352 G] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : I. BANERJEE, FCA FOR THE RESPONDENT : SHRI SOUMYAJIT DASGUPTA, ADDL. CIT DATE OF HEARING : 13.11.2017 DATE OF PRONOUNCEMENT : 01.12.2017 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-9, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO.63/CIT(A)- 9/WD-31(2)/2014-15/KOL DATED 12.01.2015 AGAINST TH E ORDER PASSED BY THE ITO, WD- 31(2), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 25.03.2013 FOR THE ASSE SSMENT YEAR 2010-11. 2. DURING THE COURSE OF HEARING, THE LD. AR BEFORE US STATED THAT HE IS NOT PRESSING GROUND NOS. 3,6, AND 8 RAISED BY THE ASSESSEE AS T HE GRIEVANCE OF THE ASSESSEE IS ADDRESSED IN OTHER GROUNDS ITSELF. ACCORDINGLY, WE DO NOT DEEM IT NECESSARY TO ADJUDICATE THE GROUND NOS. 3,6 AND 8. 2 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 2 3. GROUND NO. 9 RAISED BY THE ASSESSEE IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 4. IN RESPECT OF THE REMAINING GROUNDS, THOUGH THE ASSESSEE HAD RAISED SEVERAL GROUNDS, WE FIND THAT ONLY EFFECTIVE ISSUE TO BE DECIDED IN THE INSTANT CASE IS WITH REGARD TO THE DETERMINATION OF FAIR MARKET VALUE OF THE PROPERTY THAT HAS BEEN SOLD DURING THE YEAR UNDER APPEAL. 5. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE SOLD TWO ROOMS IN A BUILDING SITUATED AT 124/1, B.B. GANGULY STREET, KOLKATA-700012. THE DETAILS OF THE SALE ARE AS UNDER: 717.80 SQ. FT. ROOM - SOLD FOR RS. 10 LACS. 2009 SQ. FT. ROOM - SOLD FOR RS. 20 LACS. THE ASSESSEE COMPUTED THE LONG TERM CAPITAL GAINS A FTER INDEXATION AT RS. 28,23,980/-. SINCE, THE ASSESSEE HAD INVESTED RS. 30 LACS. IN CA PITAL GAINS ACCOUNT SCHEME ON 22.10.2009 WHICH IS WELL WITHIN THE DUE DATE PRESCR IBED FOR THE SAME, THE ASSESSEE CLAIMED DEDUCTION U/S 54F FOR THE SAME RESTRICTED T O THE VALUE OF GAINS AT RS. 28,23,980/- AS STATED HEREIN ABOVE. IN EFFECT THE A SSESSEE DECLARED NIL CAPITAL GAINS ON ACCOUNT OF SALE OF THESE TWO ROOMS IN A BUILDING. T HE LD. AO ADOPTED THAT THE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF LEVY OF STAMP DUTY IN TERMS OF SECTION 50C(1) OF THE ACT. THE VALUE DETER MINED AS PER 50C(1) OF THE ACT IS AS BELOW: 717.80 SQ. FT. ROOM - RS. 52,95,928/- 2009 SQ. FT. ROOM - RS. 1,48,22,402/- THERE IS NO DISPUTE WITH REGARD TO COST OF ACQUISIT ION AND THE INDEXATION BENEFIT CLAIMED BY THE ASSESSEE THEREON. THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDINGS DID NOT AGREE WITH THE VALUE PROPOSED TO BE DETERMINED IN ACCORDANCE WITH SECTION 50C(1) OF THE ACT AND ACCORDINGLY, REQUESTED THE LD. AO TO REFER THE CASE FOR VALUATION TO 3 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 3 VALUATION OFFICER OF THE INCOME TAX DEPARTMENT IN A CCORDANCE WITH SECTION 50C(2) OF THE ACT. THE VALUATION OFFICER DETERMINED THE VALUE THEREON AS UNDER: 717.80 SQ. FT. ROOM - RS. 25,85,516/- 2009 SQ. FT. ROOM - RS. 72,36,418/- THE ASSESSEE OBJECTED TO THE VALUE DETERMINED BY TH E VALUATION OFFICER BY POINTING OUT VARIOUS FALLACIES THEREON. THESE FALLACIES WERE EVE N POINTED OUT BEFORE THE VALUATION OFFICER BEFORE FINALIZATION OF THE VALUATION REPORT . THE ASSESSEE ALSO FURNISHED A REGISTERED VALUERS REPORT DATED 10.12.2012 BEFORE THE LD. AO IN RESPECT OF TWO ROOMS THAT WERE SOLD TO THE EXTENT OF 2726.80 SQ. FT (717 .80 +2009), WHEREIN THE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF SALE WAS WORKE D OUT AT RS. 890 PER SQ. FT AND ACCORDINGLY THE MARKET VALUE WAS ARRIVED AT RS. 24, 26,852/-. THE ASSESSEE JUSTIFIED ITS SALE CONSIDERATION REFLECTED IN THE SALE DEED AT RS . 30 LACS. AND STATED THAT THE SALE CONSIDERATION ACTUALLY RECEIVED IS MORE THAN THE FA IR MARKET VALUE DETERMINED BY THE REGISTERED VALUER VIDE REGISTERED VALUERS REPORT D ATED 10.12.2012. IN FACT THIS REGISTERED VALUERS REPORT WAS ALSO SUBMITTED BY THE ASSESSEE BEFORE THE ASSISTANT VALUATION OFFICER (IN SHORT AVO) OF THE INCOME TAX DEPARTME NT. THE ASSESSEE ALSO BROUGHT ON RECORD BOTH BEFORE THE AVO AND THE LD. AO WITH REGA RD TO EXISTENCE OF VARIOUS TENANCY DISPUTES IN THE PROPERTY THAT HAS BEEN SOLD . IN FACT THE FOLLOWING TENANTS ARE STAYING IN THE PROPERTY THAT HAS BEEN SOLD BY THE ASSESSEE :- SL.NO. NAME OF TENANT RENT PER MONTH FLOOR 1. SIDDHARTHA & NANDADULAL SAHA 900/-(CHARLI GARMEN TS) GROUND 2. SHEW KUMAR & MONORAMA CHOWRASIA 200/- (FRUIT JUI CE/TEA) GROUND 3. JAGABANDHU MONDAL 735/-(KAMALA SHOE) GROUND 4. MANDIRA MIRA 100/- (TEA SHOP) GROUND 5. UPEN PANIGRAHI 90/- (PAN SHOP) GROUND 6. SUKDEV & BROTHERS 75/- (LOTO) GROUND 7. SHEW CHARAN PRASAD 75/-(LOTO) GROUND 8. S.M. ENTERPRISE 640/- (WINE) GROUND 9. TAPAN GHOSH 700/-(RAJ LAXMI JEWELERS) GROUND 10. GOUTAM GHOSH 100/- GROUND 5.1. THE ASSESSEE ALSO SUBMITTED THE LIST OF LITIGA TED TENANTS THAT ARE PENDING BEFORE VARIOUS CITY CIVIL COURTS WITH REGARD TO FIXATION O F RENTS AND OTHER DISPUTES AS UNDER: 4 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 4 SL. NO. NAME OF THE TENANTS RENT PER MONTH FLOOR DISPUTES WHERE PENDING 1. SRINIWAS GUPTA SUB LESSEE STATE BANK OF INDIA 5000/- 1 ST TS NO. 520/03 WITH THE CITY CIVIL COURT, BENCH-13. 2. SURYA KANTI JAISWAL 5000/- 3 RD TS NO. 747/03 & BT CASE NO. 4/04, CITY CIVIL COURT, BENCH-13. 3. SHANTI DEVI GUPTA 5000/- 2 ND TS 748/03 & B T CASE NO. 04/04 TRIBUNAL 4. SRINIWAS GUPTA 800/- GROUND TS 1391/02 & MISC. C ASE NO. 24/04 5. PROBODH & PRAKASH MAITY 250/- GROUND TS 1392/02 CITY CIVIL COURT, BENCH-13 6. BISHU DAS 100/- GROUND EI 224/03 SECOND COURT, 3 RD BENCH. 7. SRINIWAS GUPTA 100/- GROUND EI 225/03 SECOND COU RT, 3 RD BENCH. 8. SRINIWAS GUPTA 1200/- GROUND EI 226/03 SECOND CO URT, 3 RD BENCH. 9. SRINIWAS GUPTA & PROBHAT MAITY 100/- GROUND TS 1 609/99 CITY CIVIL BENCH-13. 5.2. THE ASSESSEE SOLD M/S KAMAL SHOE STORES & PUNJ ABI HINDU HOTEL TO SENCO GOLD FOR RS. 20 LACS. THE ASSESSEE SOLD CHARLY SHOP TO SENCO GOLD WITH TENANT FOR RS. 10 LACS. BOTH THESE PROPERTIES ARE SITUATED IN GROUND FLOOR. THE ASSESSEE SOLD THE PROPERTY IN SEPTEMBER, 2009. THE PROPERTY WAS PURCHASED BY THE ASSESSEE IN 1995 AND SINCE THERE WAS SOME DISPUTE WITH REGARD TO LEVY OF STAMP DUTY THEREON, THERE WAS A PENDING LITIGATION AND ULTIMATELY THE STAMP DUTY TO BE PAID BY THE ASSESSEE WAS FINALLY DETERMINED ONLY ON 13.07.2007 IN RESPONSE TO THE PR OPERTY PURCHASED BY THE ASSESSEE, WHICH IS THE SUBJECT MATTER OF PART OF THE SALE IN THIS YEAR UNDER APPEAL. THE STAMP DUTY VALUE ON THE DATE OF PURCHASE WAS DETERMINED BY THE STAMP VALUATION AUTHORITIES AT RS. 86,88,200/- FOR THE WHOLE PROPERTY. THIS WAS DETERM INED ONLY ON 13.07.2007. THE ASSESSEE OBJECTED TO THE VALUATION DONE BY THE AVO THAT, IN RESPECT OF 717.80 SQ. FT. SOLD BY THE ASSESSEE FOR RS. 10 LACS WHICH WORKS O UT TO RS. 1393.14 PER SQ. FT, THE AVO VALUE U/S 50C(2) OF THE ACT WAS RS. 25,85,516/- WHI CH WORKED OUT TO 3602 PER SQ. FT. SIMILARLY IN RESPECT OF 2009 SQ. FT ROOM SOLD BY T HE ASSESSEE FOR RS. 20 LACS WHICH WORKS OUT TO 995.52 PER SQ. FT AS AGAINST WHICH, AV O VALUE U/S 50C(2) OF THE ACT WAS RS. 72,36,418/- WHICH WORKED OUT TO 3602 PER SQ. FT . THE ASSESSEE FILED OBJECTIONS BEFORE AVO MENTIONING VARIOUS FALLACIES WHICH ARE E NCLOSED PAGES IN 95 TO 97 OF THE PAPER BOOK. THE AVO WITHOUT RESORTING TO THESE OBJE CTIONS PROCEEDED TO DETERMINE THE VALUE AT RS. 3602 PER SQ. FT. THE ASSESSEE ALSO PLE ADED BEFORE THE LD. AO THAT THE REGISTERED VALUERS REPORT REFLECTS ONLY RS. 890 PE R SQ. FT. WHICH IS DETERMINED BASED ON 5 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 5 THE VALUE AS PREVALENT IN THE YEAR 2007 AND THEREAF TER THE REGISTERED VALUER HAD ADDED 50% GROWTH TO THE SAID VALUE AND FINALLY ARRIVED AT THE VALUE OF RS. 890/- PER SQ. FT. THIS IN THE OPINION OF THE ASSESSEE WAS TO BE ACCEPTED A S THE FAIR MARKET VALUE. THE ASSESSEE FURTHER PLEADED THAT HE HAD SOLD ON 18.12.2011 RELE VANT TO ASSESSMENT YEAR 2012-13, THE REMAINING PART OF THE SUBJECT MENTIONED PROPERTY, W HEREIN, THE VALUE AS PER SECTION 50C WAS WORKED OUT AT RS. 15,86,58,001/-. THE ASSESSEE MADE THE SIMILAR OBJECTIONS FOR THE SAME BEFORE THE LD AO AND THE LD AO REFERRED THE CA SE TO THE AVO IN TERMS OF SECTION 50C(2) OF THE ACT. THE AVO DETERMINED THE FAIR MARK ET VALUE OF THE PROPERTY AT RS. 3,47,83,000/- VIDE HIS REPORT DATED 16.03.2015. HEN CE, IT WAS ARGUED EVEN AS PER AVO, THE VALUE OF THE PROPERTY AS ON 08.12.2011 OF THE V ERY SAME PROPERTY WAS ONLY RS. 1832 PER SQ. FT., WHICH HAVING BEEN ADJUSTED WITH INDEX FACTORS, WORKS OUT TO RS 1474 PER SQ. FT ON REVERSE WORKING BASIS. THE ASSESSEES ACTUAL RATE ON AN AVERAGE WAS RS. 1104 SQ. FT. IN THE YEAR 2009. HENCE, THE VALUE SHOWN BY TH E ASSESSEE WAS PRAYED TO BE ADOPTED AS THE FAIR MARKET VALUE EVEN AS PER THE SUBSEQUENT VALUATION OF THE AVO FOR THE VERY SAME PROPERTY MADE FOR THE ASSESSMENT YEAR 2012-13. THE ASSESSEE ALSO FILED PROPERTY PRICE INDEX GIVEN BY NATIONAL HOUSING BANK TO UNDER STAND THE GROWTH IN REAL ESTATE MARKET FROM THE YEARS 2007 TO 2011. BASED ON THAT, THE ASSESSEE PLEADED THAT THE REAL ESTATE MARKET DID NOT REGISTER A GROWTH OF 9.15 TIM ES AS DETERMINED BY THE AVO IN HIS VALUATION REPORT. ALTERNATIVELY, THE ASSESSEE PLEAD ED THAT WHEN THE VALUE SHOWN IN THE SALE DEED IS SOUGHT TO BE SUBSTITUTED BY THE FAIR M ARKET VALUE DETERMINED BY THE AVO WHICH SHOWS A HIGHER VALUE THAN THE REGISTERED VALU ERS REPORT SUBMITTED BY THE ASSESSEE AND THE ACTUAL SALE CONSIDERATION REPORTED BY THE ASSESSEE, THEN THE ALTERNATIVE MECHANISM TO BE ADOPTED FOR DETERMINING THE FAIR MA RKET VALUE WOULD BE BASED ON RENTAL METHOD AS ADMITTEDLY THE SUBJECT MENTIONED P ROPERTY WAS DULY GIVEN ON RENT TO VARIOUS TENANTS. IN THIS REGARD, HE STATED THAT THE VARIOUS TENANCY DISPUTES PENDING WITH VARIOUS CITY CIVIL COURT ALSO ARE TO BE TAKEN INTO ACCOUNT WHILE DETERMINING THE FAIR MARKET VALUE. 6 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 6 6. THE LD. AO IGNORED ALL THE SUBMISSIONS AND FALLA CIES POINTED OUT BY THE ASSESSEE AND REWORKED THE LONG TERM CAPITAL GAINS AND SALE OF 27 26.80 SQ. FT. (717.80 + 2009) BY ADOPTING THE VALUE DETERMINED BY THE AVO AS FULL VA LUE OF CONSIDERATION IN ACCORDANCE WITH SECTION 50C(2) OF THE ACT AND DETERMINED THE L ONG TERM CAPITAL GAIN AT RS. 66,45,914/- AFTER GIVING THE DEDUCTION U/S 54F OF T HE ACT TO THE TUNE OF RS. 30 LACS. THIS ACTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE LD. CIT(A), IS BAD IN LAW AND THEREFORE LIAB LE TO BE REVERSED AND CANCELLED IN FULL, IN VIEW OF ITS TOTAL OMISSION TO TAKE LAWF UL AND APPROPRIATE COGNIZANCE OF THE FACTS AND EVIDENCE ON RECORD, EXPLANATIONS FURN ISHED IN THIS BEHALF AND THEREAFTER, ADJUDICATE THE APPEAL IN THIS LIGHT OF PERTINENT PROVISIONS OF LAW AND AFTER JUDICIOUS APPLICATION OF MIND, THERETO. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS IN GROSS ERROR IN UPHOLDING, FOR THE PURPOSE OF COM PUTATION OF CAPITAL GAIN, THE DEEMED FULL VALUATION OF CONSIDERATION OF THE PROPE RTY AT RS. 9821084/-, DETERMINED BY THE LD. ASSISTANT VALUATION OFFICER ( AVO) U/S 50C(2), AS AGAINST THE ACTUAL CONSIDERATION OF RS. 30 LACS RECEIVED BY THE APPELLANT, AFTER FOUNDING HIS DECISION ON SUPERFICIAL AND ARBITRARY FINDINGS. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), HAS GROSSLY ERRED IN ENDORSING THE DEEMED SALE PRICE, A RRIVED AT BY THE LD. AVO U/S 50C(2), AT RS. 9821084/-, AS THE DEEMED FULL VALUAT ION OF CONSIDERATION, IN THE PLACE OF ACTUAL CONSIDERATION AFTER TOTALLY IGNORI NG THE VALUATION REPORT, FURNISHED BY THE APPELLANT. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), HAS GROSSLY ERRED IN ENDORSING THE DEEMED SALE VALUE, A RRIVED AT BY THE LD. AVO U/S 50C(2), AT RS. 9821084/- AS THE DEEMED FULL VALUATI ON OF CONSIDERATION, AFTER NOT APPRECIATING THE MERIT AND NEED OF A MUCH LOWER DETERMINATION, BASED ON RENT MULTIPLIER METHOD, IN THE LIGHT OF THE DIMIN ISHING AND ADVERSE FACTORS LIKE ACTUAL RENT REALIZED, RENT IN ARREARS, EXISTEN CE OF A NUMBER OF SUITS, LONG TERM LEASES, ETC. 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), WHILE DISMISSING THE APPEAL, OUGHT TO HAVE CONSIDER ED THE LD. AVOS VALUATION 7 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 7 OF THE MARKET VALUE AT RS. 9821084/- AFTER OMITTING TO APPRECIATE THE FLAWED, GROSS ANOMALOUS AND IRRATIONAL ADOPTION OF PER SQ. FT. RATE OF RS. 3602/-, DETERMINED ON THE BASIS OF REGRESSION OF SOME FUTUR E SALE AND SOME FICTIONAL UPWARD ADJUSTMENTS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. AR REITERATED THE SUBMISSION MADE HEREIN ABOVE BEFORE THE LOWER AUTHORITIES. IN RESPO NSE, THE LD. DR ARGUED THAT AVO HAS DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY BA SED ON COMMERCIAL POTENTIALITY OF THE SUBJECT MENTIONED PROPERTY AND ACCORDINGLY IS JUSTI FIED IN DETERMINING THE VALUE FIXED THEREON. THE LD. AR ALSO PLACED RELIANCE ON THE DEC ISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF PRAFULLA KR. BHOSE VS. ITO IN I.T.A. NO. 316/KOL/2015 FOR ASSESSMENT YEAR 2007-08 DATED 18.11.2015 WHEREIN IT WAS HELD THAT FAIR MARKET VALUE OF THE LET OUT PORTION OF THE PROPERTY IS TO BE DETERM INED BY TAKING INTO ACCOUNT RENT ACTUALLY RECEIVED/RECEIVABLE BY THE ASSESSEE. THE LD. DR DEFENDED THIS TRIBUNALS DECISION BY ARGUING THAT IN THAT CASE, THE SUBJECT MENTIONED PROPERTY WAS A RESIDENTIAL PROPERTY AND NOT A COMMERCIAL PROPERTY. HENCE, THE SAME RATIO CANNOT BE MADE APPLICABLE TO THE FACTS OF THE INSTANT CASE. 7.1. WE FIND THAT THE LD. AVO HAD ARRIVED AT THE VA LUE OF RS. 3602 PER SQ. FT WHICH IS WORKED OUT AS UNDER: RATE AS ON 08.12.2011 RS. 3091.00/SQ. FT LESS @ 8% PER YEAR (-) RS. 247.00/S Q. FT RATE AS ON 07.12.2010 RS.2844.00/SQ. FT. LESS @ 8% PER YEAR (-) RS. 228.00/ SQ. FT RATE AS ON 06.12.2009 RS. 2616.00/SQ. FT LESS @ 1.65% (FROM 06.12.09 TO 23.09.09=2.47MONTHS@.67% PER MONTH) RS. 43.00/SQ. FT RATE AS ON 23.09.2009 RS. 2573.00/S Q. FT 8 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 8 IN FACT, THE LD. AVO HAD BACK WORKED THE VALUE AS O N THE DATE OF SALE ON 23.09.2009 BY TAKING INTO ACCOUNT THE 50C VALUE ON 08.12.2011. WE FIND THAT THE LD. AVO TO THIS VALUE OF RS. 2573 PER SQ. FT. HAD ADDED 40% FOR COM MERCIAL POTENTIALITY AND ACCORDINGLY ADDED RS. 1029 PER SQ. FT. ACCORDINGLY, HE ARRIVED WITH THE FAIR MARKET VALUE OF THE PROPERTY AS ON 23.09.2009 AT RS. 3602 PER SQ. FT. B UT WE FIND THAT THE SAID 50C VALUE HAD BEEN OBJECTED BY THE ASSESSEE IN ASSESSMENT YEAR 2 012-13 PROCEEDINGS AND REFERENCE TO THE LD. AVO WAS REQUESTED TO THE LD. AO IN ASSESSME NT YEAR 2012-13. THE LD. AVO HAD VALUED THE SUBJECT MENTIONED PROPERTY AT RS. 3, 47,83,000/- WHICH WORKS OUT TO RS 1832 PER SQ. FT. IN THIS SCENARIO, IT IS PERTINEN T TO NOTE THAT THE VALUE OF THIS PROPERTY ON 08.12.2011 AS PER AVOS REPORT WAS ONLY RS. 1832 PE R SQ. FT. WHEREAS THE AVO HAD DETERMINED THE VALUE AS ON 23.09.2009 OF THE VERY S AME PROPERTY AT RS. 3602 PER SQ. FT. THIS PROVES THE FALLACY AND MISTAKE COMMITTED BY TH E LD. AVO BEYOND DOUBT. HENCE, WE HOLD THAT THE LD. AO OUGHT NOT TO HAVE RESORTED TO ADOPTION OF THE SAID AVOS VALUE IGNORING THE PRACTICAL CONSIDERATIONS CONNECTED WIT H THE SUBJECT MENTIONED PROPERTY. HAVING SAID SO, WE ARE NOW LEFT WITH FAIR MARKET VA LUE BASED ON REGISTERED VALUERS REPORT. AT THE SAME TIME, IT CANNOT BE IGNORED THAT REFERENCE TO AVO WAS DONE AT THE INSTANCE OF THE ASSESSEE IN TERMS OF SECTION 50C(2) OF THE ACT. BUT WE FIND THAT THE FAIR MARKET VALUE COULD ALSO BE DETERMINED BY AN ALTERNA TIVE METHOD I.E. BASED ON RENTAL METHODS. IN THIS REGARD, WE FIND THAT THE RELIANCE HAS BEEN RIGHTLY PLACED BY THIS TRIBUNAL WHEREIN THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ASHA DEVI AGARWAL WAS RELIED UPON. WE FIND THAT THIS TRIBUNAL IN THE CASE OF PRAFULLA KR. BHOSE VS. ITO IN I.T.A. NO. 31 6/KOL/2015 FOR ASSESSMENT YEAR 2007-08 DATED 18.11.2015 HAD HELD AS UNDER: 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE TIME OF HE ARING BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS RAISED A LIMITED ISSUE THAT WHILE DETERMINING THE FAIR MARKET VALUE OF THE ASSESSEES PROPERTY, THE VALUATION OF THE PORTION OCCUPIED BY TENANT SHOULD BE DETERMINED BY 9 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 9 APPLYING THE RENT CAPITALIZATION METHOD TAKING THE RENT ACTUALLY RECEIVED BY THE ASSESSEE AND NOT THE FAIR MARKET RENT AS DON E BY THE DVO. IT IS OBSERVED THAT THIS CLAIM OF THE ASSESSEE IS DULY SU PPORTED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF ASHA DEVI AGARWAL (SUPRA), WHEREIN IT WAS HELD BY THEIR LORDS HIPS THAT WHILE ESTIMATING THE VALUE OF A PROPERTY ON RENTAL BASIS, ONLY THE RENT, WHICH IS ACTUALLY PAYABLE BY THE TENANTS TO THE OWNERS OF TH E PROPERTY, AS THE LANDLORDS SHOULD BE TAKEN INTO ACCOUNT. IT WAS HELD THAT WHEN THE PROPERTY IS A TENANTED PROPERTY, THE OWNER IS ENTIT LED TO COLLECT ONLY THE RENT PAYABLE BY THE TENANTS AND A PURCHASER OF SUCH TENANTED PROPERTY WOULD BE IN THE SAME POSITION AS THE VENDOR, I.E. O RIGINAL OWNER. IT WAS HELD THAT A PURCHASER, THEREFORE, WOULD BE RESTRICT ED TO COLLECTION OF RENT ONLY FROM THE TENANTS AND THE VALUE OF SUCH PROPERT Y IN THE HANDS OF THE OWNER OR TRANSFEREE, IF CALCULATED ON THE RENTAL BA SIS, WOULD HAVE TO BE DETERMINED BY THE RENT, WHICH IS AVAILABLE TO THEM FOR COLLECTION. AT THE TIME OF HEARING BEFORE US, NO AUTHORITY HAS CITED O N BEHALF OF THE DEPARTMENT TAKING A CONTRARY VIEW ON THIS ISSUE. WE , THEREFORE, RESPECTFULLY FOLLOW THE RATIO OF THE DECISION OF TH E HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ASHA DEVI AGARWAL AND DIR ECT THE ASSESSING OFFICER/DEPARTMENTAL VALUATION OFFICER TO COMPUTE T HE FAIR MARKET VALUE OF THE LET OUT PORTION OF THE ASSESSEES PROPERTY B Y TAKING INTO CONSIDERATION THE RENT ACTUALLY RECEIVABLE BY THE A SSESSEE FROM THE TENANTS. LD. COUNSEL FOR THE ASSESSEE HAS ALSO CONT ENDED THAT IF THE VALUATION OF THE LET OUT PORTION OF THE ASSESSEES PROPERTY IS DONE BY TAKING INTO CONSIDERATION, THE ACTUAL RENT RECEIVAB LE BY THE ASSESSEE FROM THE TENANTS, THE TOTAL FAIR MARKET VALUE OF TH E PROPERTY OF THE ASSESSEE AS PER SUCH REVISED ESTIMATION WOULD BE LE SS THAN THE SALE CONSIDERATION OF RS.1,30,00,000/- SHOWN BY THE ASSE SSEE AND THERE WOULD BE NO CASE OF MAKING ADDITION ON ACCOUNT OF CAPITAL GAIN. WE DIRECT THE ASSESSING OFFICER TO VERIFY THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE AND IF IT IS FOUND AFTER RECOMPUTATION OF THE VALUATION OF THE ASSESSEES PROPERTY THAT THE FAIR MARKET VALUE IS L ESS THAN THE SALE CONSIDERATION SHOWN BY THE ASSESSEE, NO ADDITION SH ALL BE REQUIRED TO BE MADE ON THIS ISSUE. RESPECTFULLY FOLLOWING THE DECISION OF THIS TRIBUNA L, WE HOLD THAT THE FAIR MARKET VALUE OF THE PROPERTY SHOULD BE DETERMINED BASED ON RENTA L VALUE ONLY. IF THE VALUE DETERMINED THEREON IS HIGHER THAN THE ACTUAL SALE CONSIDERATIO N REPORTED BY THE ASSESSEE, THEN THE VALUE THAT WAS DETERMINED BASED ON RENTAL METHOD SH OULD BE CONSIDERED AS FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTING CAPITAL GAINS. IF THE VALUE BASED ON RENTAL METHOD IS FOUND TO BE LESS THAN THE ACTUAL CONSIDER ATION REPORTED BY THE ASSESSEE, THEN THE ACTUAL CONSIDERATION REPORTED BY THE ASSESSEE SHOULD BE CONSIDERED AS FULL VALUE OF 10 ITA NO.507/KOL/2015 ARINDAM MUKHERJI A.YR. 2010-11 10 CONSIDERATION FOR THE PURPOSE OF COMPUTING CAPITAL GAINS. WITH THESE DIRECTIONS WE DIRECT THE LD. AO TO RE-COMPUTE THE CAPITAL GAINS A ND DECIDE ACCORDINGLY. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STA TISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 01.12.2017 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BALAGA NESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 01.12.2017 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ARINDAM MUKHERJI, 79/1, SERPENTINE LANE, KOLKATA -700014 2. ITO, WARD-31(2), KOLKATA, 10, MIDDLETON ROW, KOL KATA-700071. 3..C.I.T.- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S