Sh. Ramesh Kumar Goyal, Ludhiana V. ITO, W-7(3), Ludhiana

ITA 516/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1581 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGRAWAL ASSISTANT VALU
• Assessee Lawyers: NIKHIL GOYAL CA SH ASHOK GOYAL
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR.B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 516/CHD/2018 ASSESSMENT YEAR : 2014-15 SH. RAMESH KUMAR GOYAL, VS. THE ITO, WARD 7(3), 49-B, GURU CHHAYA, LUDHIANA TAGORE NAGAR, LUDHIANA PAN NO. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. NIKHIL GOYAL, CA SH. ASHOK GOYAL, CA RESPONDENT BY : SMT.CHANDERKANTA, SR.DR & SH.VIVEK AGRAWAL (ASSISTANT VALUATION OFFICER, I,T.DEPT, MEERUT) DATE OF HEARING : 13.08.2018 DATE OF PRONOUNCEMENT : 04.09. 2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 5.3.2018 OF THE COMMISSIONER OF IN COME TAX(A)-3, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)] 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE LD. CIT(A)-3, LUDHIANA HAS ERRED IN DISMISSING THE APPEAL OF THE ASSESSEE, WHEREIN, T HE ADDITION OF RS. 7,64,000/- WAS MADE BY THE ASSESSI NG OFFICER ON THE BASIS OF VALUATION REPORT OF ASSTT. VALUATION OFFICER. ITA NO. 516/CHD/2018- SH. RAMESH KUMAR GOYAL,, LUDHIANA 2 2. THAT THE LD. CIT(A)-3, LUDHIANA HAS FAILED TO APPRECIATE THE FACT THAT THE VALUE OF PLOT COULD NO T BE MORE THAN THE REGISTERED VALUE SINCE NEITHER THE POSSESSION OF THE PLOT NOR ITS DEMARCATION WERE MAD E AVAILABLE TO THE ASSESSEE, SINCE ITS PURCHASE AND T O THE DATE OF SALE. 3. THAT THE LD. CIT(A)-3, LUDHIANA HAS ERRED IN RELYIN G ON THE CONTENTS WRITTEN IN THE NORMAL COURSE IN REGISTRATION DEED, THAN THE DOCUMENTARY EVIDENCES A S PLACED BEFORE THE ASSESSING OFFICER/CIT(A) ABOUT ADVERSE POSSESSION OF THE PLOTS. 4. THAT EVEN, THE VALUATION OFFICER HAS NOT DISPUTED T HAT THE PLOT WAS NOT IN THE POSSESSION OF THE ASSESSEE AND WHICH FACT HAS TOTALLY BEEN IGNORED BY THE WORTHY CIT(A)-3, LUDHIANA AND NOT EVEN CONSIDERED THE BINDING OBSERVATIONS OF THE VALUATION OFFICER OF TH E DEPARTMENT. 5. THAT THE ADDITION SUSTAINED BY THE CIT(A) IS AG AINST THE FACTS AND CIRCUMSTANCES OF THE CASE . 3. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS REGARD ING THE VALUE OF THE PROPERLY SOLD BY THE ASSESSEE FOR COMPUTATIO N OF CAPITAL GAINS TAX. 4. THE ASSESSING OFFICER NOTED THAT THE AS PER THE STAMP VALUATION AUTHORITY / SUB REGISTRAR, THE SALE VALUE OF THE LAND WAS AT RS. 58,80,000/-. HOWEVER, THE ASSESSEE IN TH E RETURN OF INCOME HAD COMPUTED THE CAPITAL GAINS TAKING THE SA LE CONSIDERATION AT RS. 10 LACS. ON BEING ASKED TO EXP LAIN IN THIS RESPECT, THE ASSESSEE EXPLAINED THAT THE ASSESSEE H AD PURCHASED THE PLOT / LAND IN QUESTION IN VILLAGE CHOTPUR, TEH SIL DADRI, DISTT. ITA NO. 516/CHD/2018- SH. RAMESH KUMAR GOYAL,, LUDHIANA 3 GHAZIABAD, U.P. FROM ONE SMT. NEELAM KHANNA ON 17.1 0.2011 FOR RS. 5 LACS. HOWEVER, LATER ON IT WAS GATHERED THAT THE SAID PLOT WAS UNDER THE ILLEGAL POSSESSION WITH SOME OTHER PE RSON AND MOREOVER THE PLOT UNDER CONSIDERATION WAS SITUATED IN CATCHMENT AREA OF HINDON RIVER WHERE NO CONSTRUCTION WAS PERM ISSIBLE. THE LAND WAS NOT FULFILLING THE BASIC REQUIREMENTS FOR URBANIZATION. THE ASSESSEE THEREFORE, WAS NOT IN A POSITION TO USE THE LAND. THE ASSESSEE, THEREFORE, COULD FETCH ONLY RS. 10 LACS AS SALE CONSIDERATION OF THE SAID PLOT AND HAS RIGHTLY RETU RNED THE CAPITAL GAINS. THE ASSESSING OFFICER CONSIDERING THE ABOVE SUBMISSIONS, APPOINTED THE VALUATION OFFICER TO ASSESS THE VALUE OF THE LAND. THE VALUATION OFFICER VISITED THE SITE AND AGREED T HAT THE LAND WAS UNDER ILLEGAL OCCUPATION AND FURTHER THAT THE SAME WAS SITUATED IN CATCHMENT AREA OF HINDON RIVER AND NO CONSTRUCTION WAS ALLOWED AT THIS PLOT. HE ALSO, CONSIDERING THE SIZE OF THE PLOT MADE CERTAIN ADJUSTMENTS AND THEREAFTER ASSESSED THE VALUE OF T HE LAND AT RS. 17 LACS. 5. THE ASSESSING OFFICER ACCORDINGLY TOOK THE VALUE OF LAND AT RS. 17 LACS AND COMPUTED THE CAPITAL GAINS TAX. THE ASSESSEE UNSUCCESSFULLY CONTESTED THE ABOVE ADDITION IN RESP ECT OF CAPITAL GAINS BEFORE THE CIT(A). 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS REIT ERATED HIS SUBMISSIONS AND HAS SUBMITTED THAT THE ASSESSEE HAS RIGHTLY RETURNED THE CAPITAL GAINS AS PER THE ACTUAL SALE VALUE RECEIVED BY THE ASSESSEE. ITA NO. 516/CHD/2018- SH. RAMESH KUMAR GOYAL,, LUDHIANA 4 7. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND THE VALUATION OFFICER ON THIS ISSUE. SHRI VIVEK AGRAWAL , THE VALUATION OFFICER, HAS SUBMITTED THAT HE HAD ESTIMA TED THE VALUE OF THE LAND AS PER THE SET GUIDELINES. THAT AS PER THOSE GUIDELINES, IN RESPECT OF THE PROPERTY NOT IN POSSESSION OF THE ASSESSEE I.E IF ILLEGALLY OCCUPIED BY OTHER PERSON, THE MAXIMUM ADJ USTMENT THAT CAN BE ALLOWED IS 30% AND CONSIDERING THE ABOVE GUI DELINES HE HAD GIVEN 25% ADJUSTMENT TOWARDS THE VALUE OF THE L AND. SIMILARLY, THE ADJUSTMENTS WERE MADE TAKING INTO CO NSIDERATION THAT THE CONSTRUCTION WAS NOT ALLOWED ON THE LAND A ND ALSO IN RESPECT OF THE BIG SIZE OF THE PLOT AND THEREAFTER VALUE OF THE LAND WAS CALCULATED AT RS. 17,64,000/-. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE AS SESSEE WITH POSITIVE EVIDENCE HAS PROVED THAT THE LAND WAS UNDER ILLEGAL OCCUPATION AND FURTHER CONSTRUCTION WAS NOT ALLOWE D ON THE SAID LAND AND FURTHER THAT THE LOCATION AND SIZE OF THE LAND WAS SUCH THAT IT COULD NOT FETCH THE APPROPRIATE SALE CONSID ERATION. PERHAPS THESE WERE FACTORS BECAUSE OF WHICH THE ASSESSEE CO ULD PURCHASE THE LAND AT A LOWER CONSIDERATION OF RS. 5 LACS ONL Y. IT IS A FACT ON THE FILE THAT THE ASSESSEE HAS SOLD THE LAND AT THE DOUBLE OF THE PRICE AT WHICH HE HAD PURCHASED. THE VALUE OF THE L AND ESTIMATED BY THE VALUATION OFFICER IN THIS CASE IS NOT BASED ON THE BASIS OF MARKET VALUE OF THE LAND, RATHER, HE HAD MADE THE A DJUSTMENT AS PER THE GUIDELINES. IN OUR VIEW, THESE GUIDELINES A RE JUST RECOMMENDATORY IN NATURE. HOWEVER, THE ACTUAL VALUE OF THE LAND CANNOT BE ASCERTAINED BY STRICTLY APPLYING THESE TY PE OF ITA NO. 516/CHD/2018- SH. RAMESH KUMAR GOYAL,, LUDHIANA 5 GUIDELINES. NONE OF THE AVERMENTS MADE BY THE ASSES SEE REGARDING THE FACTORS DIMINISHING THE VALUE / SALE CONSIDERAT ION OF THE LAND HAVE BEEN DENIED BY LOWER AUTHORITIES. UNDER THE CI RCUMSTANCES, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUTHORITIES FOR ESTIMATING THE VALUE OF THE LAND AT THE HIGHER RATE THAN THAT HAS BEEN DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME WHICH IS AS PER THE SALE CONSIDERATION MENTI ONED IN THE SALE DEED. IN VIEW OF THIS, THE ADDITION MADE BY TH E LOWER AUTHORITIES IN RESPECT OF THE CAPITAL GAINS / CAPIT AL GAINS TAX IS HEREBY SET ASIDE AND THE APPEAL OF THE ASSESSEE STA ND ALLOWED. IN THE RESULT, APPEAL OF THE ASSESSEE IS HEREBY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.09.2018. SD/- SD/- (B.R.R. KUMAR) (SANJAY GA RG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 04.09.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR