Sri K Srinivasa Rao (HUF), Karimnagar V. ITO, Karimnagar

ITA 53/HYD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3199 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-05-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 12-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K V M CHARYA
• Assessee Lawyers: C P RAMASWAMY
• Keywords: Cost of acquisition; Fair market value; Difference of opinion; Change of opinion; Reassessment proceedings; Capital Gains
• Section: 143(3); 143(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMEBR S.NO ITA NO. P.A.N NO. APPELLANT RESPONDENT 1 53/H/09 AACHK 3307 C KAMARAPU SRINIVASA RAO (HUF), KARIMNAGAR ITO WARD-2 KARIMNAGAR 2 48/H/09 AABHK 3131 K SMT. KAMARAPU ARUNDHATHI, KARIMNAGAR ITO WARD-3, KARIMNAGAR 3 49/H/09 AAEHK 4183 N KAMARAPU SHASHI KUMAR (HUF) KARIMNAGAR ITO WARD-2 KARIMNAGAR 4 50/H/09 AAEHK 4154 P KAMARAPU RAVI KUMAR (HUF) KARIMNAGAR ITO WARD-2 KARIMNAGAR 5 51/H/09 AAEHK 5760 R KAMARAPU NAGENDER (HUF) KARIMNAGAR ITO WARD-2 KARIMNAGAR 6 52/H/09 AABHK 3704 J KAMARAPU RAMESHWAR (HUF) KARIMNAGAR ITO WARD-3 KARIMNAGAR 7 54/H/09 AAUPK 9354 P KAMARAPU SRINIVASA RAO, KARIMNAGAR ITO WARD-2 KARIMNAGAR 8 55/H/09 ABXPK 8585 G SMT. KAMARAPU LAXMI NARASAMMA, KARIMNAGAR ITO WARD-1 KARIMNAGAR 9 56/H/09 AABHK 0736 Q KAMARAPU HARI KRISHNA (HUF, KARIMNAGAR ITO WARD-2, KARIMNAGAR 10 57/H/09 AACHK 3306 D KAMARAPU SHYAM SUNDER (HUF) KARIMNAGAR ITO WARD-1 KARIMNAGAR 11 58/H/09 AABHK 0742 E KAMARAPU SHYAM SUNDER, KARIMNAGAR ITO WARD-1 KARIMNAGAR 12 205/H/09 AABHK 0797 B KAMARAPU RAJGOPAL (HUF) KARIMNAGAR ITO WARD-3 KARIMNAGAR APPELLANT BY : SHRI C.P. RAMASWAMY RESPONDENT BY : SHRI K.V.M. CHARYA, DR O R D E R PER SHRI G.C. GUPTA, VICE PRESIDENT: THIS GROUP OF 12 APPEALS BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-04 ARE DIRECTED AGAINST THE ORDER OF THE C IT (A). SINCE ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 2 IDENTICAL ISSUE IS INVOLVED IN THESE APPEALS PREFERRED B Y THE ASSESSEE, THESE ARE BEING DISPOSED OFF WITH THIS CONSOLIDATED ORDE R. 2. THE IDENTICAL GROUNDS OF APPEALS AT S.NOS.1,4 AND 5 OF THE ASSESSEES ARE AS UNDER: '1. THE ORDER OF THE LEARNED CIT(APPEALS) IS AGAIN ST LAW, WEIGHT OF EVIDENCE AND PROBABILITIES OF THE CASE. '4. IT IS PRAYED THAT THE LONG-TERM CAPITAL GAINS D ECLARED BY THE APPELLANT BE DIRECTED TO BE ASSESSED AS SUCH . 5. FOR THE ABOVE GROUNDS AND SUCH OTHER GROUNDS THA T MAY BE URGED AT THE TIME TO HEARING, THE APPELLANT PRAY S THAT THE APPEAL BE ALLOWED' THESE GROUNDS OF APPEALS ARE GENERAL IN NATURE, NEEDS N O ADJUDICATION. 3. IDENTICAL GROUNDS OF APPEAL AT S.NO.2 IN THESE APPE ALS ARE AS UNDER: ' 2) RE-OPENING IS BAD IN LAW: A) IT IS PRAYED THAT THE IMPUGNED REASSESSMENT HAS TO BE ANNULLED BECAUSE JURISDICTION UNDER SECTION 147 WA S WRONGLY ASSUMED WHEN A VALID RETURN WAS PENDING BEF ORE THE ASSESSING OFFICER AND THE TIME LIMIT FOR REGULA R ASSESSMENT UNDER SECTION 143(3) DID NOT LAPSE. B) THE LEARNED CIT (APPEALS) FAILED TO ANNUL THE IM PUGNED REASSESSMENT IN TOTAL DISREGARD OF THE DICTA OF THE APEX COURT REPORTED IN 36 ITR 569 (SC) AND 55 ITR 630 (S C). C) THE LEARNED CIT (APPEALS) ERRED IN RELYING ON TH E DECISION REPORTED IN 169 ITR 215 AP, WHICH IS TOTAL LY DIVORCED FROM THE FACTS OF THIS CASE. CONSEQUENTLY, HE ERRED IN HOLDING THAT THE REOPENING IS VALID. D) THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE IMPUGNED REASSESSMENT WAS VALID DESPITE THE FACT TH AT THERE WAS A VALID RETURN OF INCOME FILED AND PENDIN G FOR A REGULAR ASSESSMENT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT JURI SDICTION U/S 147 WAS WRONGLY ASSUMED BY THE ASSESSING OFFICER FOR THE REASON THAT ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 3 A VALID RETURN OF INCOME WAS PENDING BEFORE HIM AND THE TIME LIMIT FOR REGULAR ASSESSMENT U/S 143(3) HAD NOT LAPSED. HE SUBMITTED THAT THE ORIGINAL ASSESSMENT IN THIS CASE WERE FRAMED IN SUMMARY MAN NER U/S 143(1)(A) OF THE ACT AND THE REASSESSMENT PROCEEDINGS WE RE STARTED BY ISSUING A NOTICE U/S 147 WITHOUT ANY FURTHER FRESH M ATERIAL IN POSSESSION OF THE ASSESSING OFFICER, WITHIN A PERIOD OF 8 MO NTHS FROM THE ASSESSMENT U/S 143(1)(A) FRAMED BY THE ASSESSING OFFICER. HE SUBMITTED THAT THE IMPUGNED REASSESSMENTS HAVE TO BE ANNU LLED BECAUSE THE JURISDICTION U/S 147 WAS WRONGLY ASSUMED AND T HE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION IN 32 0 ITR 561 (SC), 256 ITR 1 (DEL), (F.B), 242 ITR, 381, 387 (S C), 323 ITR 346 (MAD.) AND OF MUMBAI TRIBUNAL IN 21 SOT 302. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBM ITTED THAT THE DECISION OF THE HON'BLE DELHI HIGH COURT IN 25 6 ITR 1 PERTAINS TO ASSESSMENT FRAMED U/S 143 (3) OF THE ACT IN SCRUTINY A SSESSMENT AND, THEREFORE, HAS NO RELEVANCE TO THE CASE OF THE ASSESSE E. HE SUBMITTED THAT THERE WAS APPLICATION OF MIND BY THE A SSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT IN THE OTHER DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE AND THEREFORE, ARE DISTINGUISHABLE. HE SUBMITTED THAT THE ISSUE IN THESE CASES IS COVERED IN FAVOUR OF THE REVENUE WITH THE DECISION OF HON'BLE APEX COURT IN RAJESH JHAVERI CASE 291 ITR 500 (SC). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. WE FIND THAT THE ORIGINAL ASSESSMENTS IN THESE CASES WERE FRAMED IN A SUM MARY MANNER U/S 143 (1)(A) OF THE ACT ON 27-07-2004 AND TH EREAFTER A NOTICE U/S 148 DATED 22-09-2004 WAS ISSUED TO THE ASSESSEES. WE HAVE PERUSED THE COPY OF THE REASONS RECORDED BY THE ASSESSI NG OFFICER WHILE ISSUING NOTICE U/S 148 OF THE ACT. THE ASSESSIN G OFFICER ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 4 RECORDED THE REASONS FOR REOPENING THE ASSESSMENT THAT LO CAL ENQUIRIES REVEALED THE VALUE IN THAT YEAR WOULD BE L ESS THAN RS.100/- PER SQ. YARD AND THE ASSESSEE HAS ADOPTED THE VALUE OF TH E LAND AT RS.1409/- PER SQ. YARD AS ON 01-04-1981 FOR THE PUR POSE OF ARRIVING AT THE LONG TERM CAPITAL GAINS/LOSS. WE FIND THAT IN VIEW OF THE REASON RECORDED BY THE ASSESSING OFFICER WHILE REOPENING THE ASSESSM ENT U/S 148 OF THE ACT THAT THE LOCAL ENQUIRIES REVEALED THE V ALUE OF THE LAND AT A VERY LESS FIGURE AS COMPARED TO THE VALUE OF THE L AND AS ON 01-04- 1981 ADOPTED BY THE ASSESSEE FOR THE PURPOSE OF ARRIVING THE LONG TERM CAPITAL GAIN/LOSS, IT COULD NOT BE SAID THAT THERE WAS NO FRESH MATERIAL WITH THE ASSESSING OFFICER TO JUSTIFY THE REOPEN ING OF THE ASSESSMENTS IN THESE CASES. 6. WE FIND THAT THE CIT (A) HAS DECIDED THE ISSUE IN FA VOUR OF THE REVENUE BY FOLLOWING THE RATIO OF THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN PUSA LAL VS. CIT 169 ITR 2 15, WHEREIN IT WAS HELD THAT THE POWER THAT CAN BE EXERCISED U/S 143 (2 ) TO CORRECT THE ASSESSMENT MADE U/S 143(1) DOES NOT EXCLUDE THE ITO'S P OWER TO REOPEN THE ASSESSMENT U/S 147. THE HON'BLE HIGH COURT FURT HER OBSERVED THAT IF THE INGREDIENTS TO SEC.147 ARE SATISFIE D, IT IS OPEN TO THE ITO TO EXERCISE THAT POWER NOTWITHSTANDING THE FA CT THAT THERE ARE OTHER REMEDIES OPEN TO HIM UNDER THE ACT. WE FIND TH AT THERE IS NO MISTAKE IN THE ORDER OF THE CIT (A) IN DECIDING THE I SSUE IN FAVOUR OF THE REVENUE. THE DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE FOR TH E REASON THAT IN THE CASE OF ASSESSEE'S BEFORE US THERE IS NO APPLICA TION OF MIND BY THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENTS FRAMED IN A SUMMARY MANNER U/S 143(1)(A) OF THE ACT. THE QUESTION OF CHANGE OF OPINION IN THE PRESENT CASE DOES NOT ARISE SINCE THERE WAS NO APPLICATION OF MIND OR FRAMING OF AN OPINION AT THE TIME OF ORIGINAL ASSESSMENT U/S 143(1)(A) OF THE ACT. THE NOTICE U/S 148 WAS ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 5 ADMITTEDLY ISSUED WITHIN 4 YEARS FROM THE END OF THE R ELEVANT ASSESSMENT YEAR. THE RATIO OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKE RS (P) LTD., 291 ITR 500 (SC) IS APPLICABLE TO THE CASE OF THE ASSESSEE AND ACCORDINGLY THE ISSUE IS DECIDED IN FAVOUR OF THE REVENU E AND THE GROUND OF APPEAL NO.2 OF THE ASSESSEE IN ALL THESE APPEA LS IS DISMISSED. 7. IDENTICAL GROUND OF APPEAL NO.3 IN THESE APPEALS A RE AS UNDER: '3. ON MERITS, WITHOUT PREJUDICE TO GROUND NO.2: A) THE LEARNED CIT (APPEALS) ERRED IN ADOPTING THE COST OF ACQUISITION AS ON 01-04-1981 @ RS.60/- PER SQ. Y ARD FOR COMPUTATION OF CAPITAL GAINS AS AGAINST RS.1409 /- PER SQ. YARD WORKED OUT BY THE APPELLANT ON THE BASIS O F UNIMPEACHABLE EVIDENCE. HE OUGHT TO HAVE ACCEPTED T HE COST OF ACQUISITION AS DECLARED BY THE APPELLANT. B) THE LEARNED CIT (APPEALS) ASSUMED CERTAIN IMAGI NARY PARTICULARS FOR REJECTING THE COMPARABLE CASES CITE D BY THE APPELLANT AND CONSEQUENTLY ERRED IN ADOPTING TH E COST OF ACQUISITION AS ON 01-04-1981 @ RS.60/- PER SQ. Y ARDS. C) THE LEARNED CIT (APPEALS) FAILED TO APPRECIATE THAT THE COMPARABLE CASES CITED BY THE APPELLANT WERE VERY C LOSE IN PROXIMITY TO THE PROPERTY SOLD AND ALSO COMPARAB LE IN THE MARKET VALUE AS AGAINST THE CASES CITED BY THE ASSESSING OFFICER, WHICH WERE LOCATED FARTHER FROM THE IMPUGNED PROPERTY AND DID NOT ENJOY APPRECIABLE MAR KET VALUE. D) CONSEQUENTLY, THE LEARNED CIT (APPEALS) ERRED I N ADOPTING AN ABYSMALLY LOW VALUE AS ON 01-04-1981 AN D ERRED IN SUBSTANTIALLY CONFIRMING THE LONG-TERM CAP ITAL GAINS ASSESSED BY THE ASSESSING OFFICER'. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ADOPTED THE FAIR MARKET VALUE OF THE LAND I N QUESTION AS ON 01-04-1981 AT RS.1409/- PER SQ. YARD WHICH WAS ARBIT RARILY REDUCED TO RS.30/- PER SQ. YARD BY THE ASSESSING OFFICER WHILE DET ERMINING THE LONG TERM CAPITAL GAINS/LOSS IN THE CASE OF THE ASSESSEE. HE SUBMITTED ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 6 THAT IN THE FIRST APPEAL, THE CIT (A) HAS DETERMINED THE FAIR MARKET VALUE OF THE LAND AS ON 01-04-1981 AT RS.60/- PER SQ. YARD WHICH IS VERY LOW. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LAND IN QUESTION WAS IN THE HEART OF THE CITY OF KARIM NAGAR AND WAS COMMERCIAL FROM THE LAST MANY DECADES AND THE ASSESSEE HAS FI LED A DETAILED LETTER ALONGWITH ITS RETURN OF INCOME EXPLAI NING THE BASIS FOR ADOPTING THE VALUE OF LAND AT RS.1409/- PER SQ. YARD AS ON 01-04- 1981. HE SUBMITTED THAT IN THE AUCTION CONDUCTED BY THE DISTRICT COLLECTOR, KARIMNAGAR OF THE LAND IN THE IMMEDIATE P ROXIMITY OF THE LAND OF THE ASSESSEE, THE RATE CAME TO RS.1594/- PER SQ. Y ARD IN THE YEAR1980. HE SUBMITTED THAT THE DISTANCE BETWEEN THE L AND AUCTIONED BY THE DISTRICT COLLECTOR, KARIMNAGAR AND THE LAND SOL D BY THE ASSESSEE IS NEARLY 300 METERS ONLY. HE REFERRED TO THE COPY OF T HE MASTER PLAN OF KARIMNAGAR FILED IN THE COMPILATION BEFORE THE TR IBUNAL IN SUPPORT OF HIS PLEA THAT THE ASSESSEE'S SALE INSTANCE IS COMPARABLE AND T HE SALE INSTANCES REFERRED TO BY THE ASSESSING OFFICER ARE NOT COMP ARABLE. HE SUBMITTED THAT THE SALE INSTANCES OF THE ASSESSING OFFICER RE LATES TO THE LAND WHICH WERE ON THE BACKWATER OF TANK BED WATE R AND THERE IS NO HABITATION THEREIN AND WERE UNDEVELOPED AND MORE THAN 1000 METERS INTERIOR FROM THE ASSESSEE'S LAND. 8.THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSED THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMI TTED THAT THE CIT (A) HAS GIVEN DIRECTIONS TO THE ASSESSING OFF ICER TO INQUIRE ABOUT THE COMPARABLE SALE INSTANCES IN THAT AREA IN THE YEAR 1981 AND THE ASSESSING OFFICER HAS SUBMITTED THE DETAILS OF 5 SALE I NSTANCES OF LAND ADJACENT TO THE ASSESSEE'S LAND WHICH GIVES THE RATE O F RS.20/- TO RS.30/- PER SQ. YARD. HE SUBMITTED THAT THE SALE INSTANCE S RELIED UPON BY THE ASSESSEE IS INCOMPARABLE SINCE THE LAND AUCTIONED B Y THE DISTRICT COLLECTOR, KARIMNAGAR WAS IN FRONT OF COLLECTO R'S OFFICE AND THE BEST COMMERCIAL PLOT IN KARIMNAGAR. MOREOVER THE VALUE OF LAND ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 7 FETCHED IN AN AUCTION SALE COULD NOT BE SAID TO BE THE CO RRECT FAIR MARKET VALUE AS IT REPRESENTS COMPETITIVE VALUE AND A PERSON IN DIRE NEED OF THE ADJACENT LAND MAY PAY EXORBITANT PRICE FO R THAT LAND SOLD IN AUCTION. HE SUBMITTED THAT THE LAND AUCTIONED BY T HE DISTRICT COLLECTOR, KARIMNAGAR WAS JUST IN FRONT OF THE COLLECTO R'S OFFICE AND A PRIME LAND AND IS NOT COMPARABLE WITH THE LAND IN QUE STION OF THE ASSESSEES. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. WE HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE CIT (A ) AND ALSO COPY OF VARIOUS DOCUMENTS FILED BY THE ASSESSEE IN THE COMPI LATION BEFORE US INCLUDING THE COPY OF MASTER PLAN OF THE ARE A WHERE THE LAND OF THE ASSESSEE AND THE SALE INSTANCES CITED BY THE PARTIES ARE SITUATED. WE FIND THAT THE 5 SALE INSTANCES CITED BY THE ASSESSING OFFICER IN HIS LETTER TO THE CIT (A) DATED 4-9-08 AR E NOT COMPARABLE TO THE LAND SOLD BY THE ASSESSEE. THE ASSESSEES LAND IS FACING 80 FEET ROAD ADJACENT TO THE OLD BUS DEPOT AND HAS ROAD OF 40 FEET TO ITS EAST AND 21 FEET ROAD TO ITS WEST. THE LAND OF THE ASSESSEE IS WITHIN 500 METERS OF THE AUCTIONED PLOT CITED BY THE ASSESSEE AND WAS A COMMERCIAL PROPERTY. WE FIND THAT THE SALE INSTANCES RELI ED UPON BY THE ASSESSING OFFICER ARE NOT IN THE FULLY DEVELOPED ARE A AND ARE ABOUT 1000 METERS INTERIOR FROM THE ASSESSEE'S LAND AND ALSO IN SOME SALE INSTANCES THE LANE IS 12 FEET WIDE ONLY AND IN ANOTHER SALE INSTANCES THE LANE IS 20 FEET WIDE ONLY. THE ASSESSEE HAS CLAIMED THAT ALL THE SALE INSTANCES RELIED UPON BY THE ASSESSING OFFICER WERE ON THE BACKWATER OF TANK BED WATER AND THIS CLAIM OF THE ASSESSE E COULD NOT BE CONTROVERTED BY THE REVENUE AUTHORITIES. IN THESE F ACTS WE HOLD THAT THE SALE INSTANCES RELIED UPON BY THE ASSESSING OFFICE R ARE INCOMPARABLE AND PROVIDE NO GUIDANCE TO THE FAIR MARK ET VALUE OF THE PLOT OF THE ASSESSEES AS ON 1-4-1981. ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 8 10. WITH REGARD TO THE SALE INSTANCE OF LAND AUCTIONED BY THE DISTRICT COLLECTOR, KARIMNAGAR OF A PLOT OF LAND IN FRONT OF THE COLLECTOR'S OFFICE RELIED UPON BY THE ASSESSEES, WE FIND THAT IT GIVES A RAT E OF RS.1594/- PER SQ. YARD AS ON 11-5-1980. WE FIND THAT THE SALE IN STANCES OF LAND AUCTIONED BY THE DISTRICT COLLECTOR KARIMNAGAR ARE ABOU T 300 SQ. YARDS FROM THE LAND OF THE ASSESSEE. ALTHOUGH THE LAND OF THE ASSESSEE FALLS IN A COMMERCIAL AREA BUT DUE TO THE LOCATION OF THE LA ND AUCTIONED BY THE DISTRICT COLLECTOR, KARIMNAGAR, WE FIND THAT THE LAND AUCTIONED BY THE DISTRICT COLLECTOR WAS AT A PRIME LOCATION IN FRONT OF THE DISTRICT COLLECTOR'S OFFICE AND SITUATED AT A BETTER LOCATION AS CO MPARED TO THE LAND OF THE ASSESSEE. MOREOVER THE AUCTIONED LAND BY TH E DISTRICT COLLECTOR, KARIMNAGAR WAS PURCHASED BY A GROUP OF 85 PE RSONS IN AN OPEN AUCTION WHICH REPRESENTS THE COMPETITIVE VALUE OF T HE LAND AND THE DISTRICT COLLECTOR, KARIMNAGAR ACTING ON BEHALF OF THE GOVT. OF ANDHRA PRADESH HAS EXECUTED SEPARATE SALE DEEDS IN FAVOUR OF THE VENDEES OF VERY SMALL PORTIONS OF LAND. WE FIND THAT THE METHOD ADOPTED BY THE ASSESSEE FOR ARRIVING THE COST AS ON 1/4 /1981 BY INDEXING BACKWARD IS NOT CORRECT. WE ALSO FIND THAT THE ASSESSEE HAS FILED A COPY OF THE AGREEMENT TO SALE BETWEEN DISTRICT COLLECTOR AND THE VENDEE WITH A PLAN SHOWING THE OPEN LAND NO.67 SO LD TO MR. M. PRABHAKAR RAO OF 32 SQ. YARDS ONLY OUT OF THE AUCTIONE D PLOT OF LAND, A COPY OF WHICH HAS BEEN FILED IN THE COMPILATION BEFORE US. IN VIEW OF THE LOCATION OF THE AUCTIONED PLOT AND THE SMALLNESS OF THE AREA FOR WHICH SEPARATE DEEDS WERE EXECUTED BY THE DISTRICT COLLE CTOR IN FAVOUR OF THE VENDEES, WE FIND THAT THE SALE INSTANCE OF AUCTIO NED PLOT DATED 11/5/1980 GIVING A RATE OF RS.1594/- COULD NOT BE ADO PTED IN TOTO WHILE DETERMINING THE FAIR MARKET VALUE OF THE ASSESSEE 'S LAND AS ON 1/4/1981 AND SUITABLE DEDUCTIONS HAVE TO BE MADE TO AR RIVE AT A FAIR MARKET VALUE OF THE LAND OF THE ASSESSEE. IT IS NOW WE LL SETTLED THAT THE COMPARABLE SALE INSTANCES ARE THE BEST EVIDENCE TO DET ERMINE THE FAIR MARKET VALUE OF THE LAND. HOWEVER, A CERTAIN ELE MENT OF GUESS ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 9 WORK, HAS TO BE THERE BASED ON VARIOUS VALID FACTORS AND HAVING NEXUS WITH THE EVIDENCE BROUGHT ON RECORD. CONSIDERING THE T OTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING LOCATION AND SI ZE OF THE LAND OF THE ASSESSEE, THE WIDTH OF THE ROAD CONNECTING TH E LAND AND AFTER MAKING SUITABLE DEDUCTIONS FROM THE SALE INSTAN CE OF THE AUCTIONED LAND BY THE DISTRICT COLLECTOR, ON ACCOUNT OF A UCTIONED LAND BEING IN A SUPERIOR AND PRIME LOCATION IN FRONT OF TH E COLLECTORS OFFICE AND THE SMALLNESS OF THE PLOT ACQUIRED BY A GROUP OF 8 5 PERSONS JOINED TOGETHER TO PURCHASE THE PROPERTY IN A GOVERNMENT AUCT ION, WE CONSIDER THAT THE ENDS OF JUSTICE SHALL BE MET IF THE FAI R MARKET VALUE OF THE PLOT OF THE ASSESSEE AS ON 1-4-1981 IS DETERMINED AT RS.900/- PER SQ. YARD AS AGAINST RS.60/- DETERMINED BY THE CIT (A) AND RS.1409/- CLAIMED BY THE ASSESSEE, THE ASSESSING OFFICER IS DIR ECTED TO DETERMINE THE FIGURE OF LONG TERM CAPITAL GAINS ACCORD INGLY AND THE GROUND OF APPEAL NO.3 IN ALL THESE APPEALS IS PARTLY ALLOWED . 11. IN THE RESULT ALL THE APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED . ORDER PRONOUNCED IN THE COURT ON 04-06-2010. SD/- SD/- (CHANDRA POOJARI) (G.C. GUPTA) ACCOUNTANT MEMBER VICE-PRESIDENT PVV/SPS DATE: 4TH JUNE, 2010. COPY FORWARDED TO: 1. SHRI KAMARAPU SRINIVASA RAO, C/O.SHRI C.P. RAMASWA MY, ADVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRIN AGAR COLONY, HYDERABAD 500 073 2. SMT. KAMARAPU ARUNDHATHI, C/O.SHRI C.P. RAMASWAMY , ADVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRIN AGAR COLONY, HYDERABAD 500 073 ITA NO.48 TO 58 & 205/HYD/09 SHRI KAMARAPU SRINIVASA RAO & OTHERS, KARIMNAGAR 10 3. SHRI KAMARAPU SHASHI KUMAR, C/O.SHRI C.P. RAMASWAM Y, ADVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRI NAGAR COLONY, HYDERABAD 500 073 4. SHRI KAMARAPU RAVI KUMAR, C/O.SHRI C.P. RAMASWAMY , ADVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRI NAGAR COLONY, HYDERABAD 500 073 5 SHRI KAMARAPU NAGENDER, C/O.SHRI C.P. RAMASWAMY, A DVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRINAGAR COLONY, HYDERABAD 500 073 6 SHRI KAMARAPU RAMESHWAR, C/O.SHRI C.P. RAMASWAMY, A DVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRI NAGAR COLONY, HYDERABAD 500 073 7 SMT. KAMARAPU LAXMI C/O.SHRI C.P. RAMASWAMY, ADVOCA TE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRINAGAR COLONY, HYDERABAD 500 073 8 SHRI KAMARAPU HARI KRISHNA C/O.SHRI C.P. RAMASWAMY, ADVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRI NAGAR COLONY, HYDERABAD 500 073 9 SHRI KAMARAPU SHYAM SUNDER, C/O.SHRI C.P. RAMASWAM Y, ADVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO. 108, SRINAGAR COLONY, HYDERABAD 500 073 10 SHRI KAMARAPU RAJGOPAL, C/O.SHRI C.P. RAMASWAMY, ADVOCATE, FLAT NO.303, GITANJALI APARTMENTS, PLOT NO.108, SRINAGAR COLONY, HYDERABAD 500 073 11 THE ITO, WARD-1, KARIMNAGAR 12 THE ITO, WARD-2, KARIMNAGAR 13 THE ITO, WARD-3, KARIMNAGAR 14 THE COMMISSIONER OF INCOME-TAX (APPEALS) III, HYDERAB AD. 15 COMMISSIONER OF INCOME-TAX-II, HYDERABAD 16 THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD.