Sri. H.D. Shiva Kumar, Bangalore V. ITO, Bangalore

ITA 548/BANG/2011

• Counselvise Citation: 54821114 RSA 2011
• Duration Of Justice: 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 11-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAVANAN B JT
• Assessee Lawyers: SIDDAREDDY K G
• Keywords: Gift; Opportunity of being heard; Principle of natural justice; Additional evidence; Cost of acquisition; Fair market value; Valuation report
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.548/BANG/2011 ASSESSMENT YEAR : 2005-06 SHRI H.D. SHIVAKUMAR, NO.88, 6 TH CROSS, SOMESHWARAPURA, CAMBRIDGE LAYOUT, ULSOOR, BANGALORE 560 008. PAN :ASOPS 8777N VS. THE INCOME TAX OFFICER, WARD 1(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI SIDDAREDDY K.G., ADVOCATE RESPONDENT BY : SHRI SARAVANAN B., JT.CIT(DR) DATE OF HEARING : 27.03.2012 DATE OF PRONOUNCEMENT : 27.03.2012 O R D E R PER N.K. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 28.02.2011 OF THE CIT(APPEALS)-I, BANGALORE. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: ITA NO.548/BANG/11 PAGE 2 OF 11 1. THE IMPUGNED ORDER IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT GRANTING THE RELIEFS SOUGHT BY THE APPELLANT. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE ANNULLED THE ASSESSMENT ORDER AS IT WAS PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE COMPUTATION OF CAPITAL GAIN AS COMPUTED BY THE A.O WAS INCORRECT AND NOT IN ACCORDANCE WITH LA W. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE A.O WAS WRONG IN NOT TAKING INTO CONSIDERATION THE COST OF ACQUISITION AS RETURNED BY THE APPELLAN T FOR COMPUTATION OF CAPITAL GAINS. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE AO HAS COMPLETELY OVERLOOKED AN D DID NOT TAKE INTO CONSIDERATION THE COST OF ACQUISITION OF THE SUPER STRUCTURE FOR COMPUTATION OF CAPITAL GAINS. 7. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS) ERRED IN NOT ADMITTING THE EVIDENCE PRODUCED BY THE ASSESSEE DURING THE CASE OF HEARING OF THE APPEAL. 8. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE EXERCISED THE POWERS VESTED IN HIM FOR ADMITTI NG THE EVIDENCE PRODUCED BY THE ASSESSEE FOR THE PROPER DI SPOSAL OF THE APPEAL. 9. ALTERNATIVELY AND WITHOUT PREJUDICE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE DECIDED THE A PPEAL ON MERITS ON THE BASIS OF AVAILABLE MATERIAL / INFORMA TION. 10. THE APPELLANT CRAVES FOR LEAVE TO ADD TO, DELET E FROM, OR AMEND THE GROUNDS OF APPEAL. 3. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO COMPUTATION OF THE CAPITAL GAIN. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31.3.2006 DE CLARING AN INCOME OF Q 95,500 WHICH WAS PROCESSED U/S. 143(1) OF THE ACT. THE AO ISSUED NOTICE ITA NO.548/BANG/11 PAGE 3 OF 11 U/S. 148 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER R EFERRED TO AS THE ACT IN SHORT] AND ASKED THE ASSESSEE TO FILE A RETURN OF INCOME WITHIN 30 DAYS. ACCORDING TO THE AO, VALUE OF THE LAND WHILE WORKIN G OUT THE SHORT TERM CAPITAL LOSS HAS BEEN TAKEN BY THE ASSESSEE AT Q 250 PER SQ.FT. AS ON 1.4.1981, BUT AS PER THE GOVERNMENT GUIDELINES VALU E OF THE LAND IN THAT AREA WAS Q 22 PER SQ.FT. SINCE THERE WAS NO RESPONSE FROM T HE ASSESSEE, THE AO ISSUED A LETTER DATED 18.12.2007 ASKING THE ASSESSEE THE BASIS FOR VALUATION OF LAND AT Q 250 PER SQ.FT., THE SAID LETTER WAS SERVED TO THE ASSESSEE ON 26.12.07. IN RESPONSE TO THAT, THE ASS ESSEE VIDE LETTER DATED 4.1.08 REQUESTED FROM TIME TILL APRIL, 2008 TO FURN ISH THE REQUIRED DETAILS. THE AO DID NOT ACCEPT THAT REQUEST OF THE ASSESSEE AND ISSUED ANOTHER LETTER ON 17.1.08. THE ASSESSEE AGAIN REQUESTED FOR TIME TILL FEBRUARY, 2008, THE AO HOWEVER FRAMED THE ASSESSMENT EX PARTE U/S. 144 OF THE ACT AND WORKED OUT THE LONG TERM CAPITAL GAINS AT Q 36,04,749 INSTEAD OF SHORT TERM CAPITAL LOSS OF Q 7,15,527 DECLARED BY THE ASSESSEE. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(APPEALS) AND THE SUBMISSIONS MADE BY THE ASSESS EE AS MENTIONED IN PARA 5 OF THE IMPUGNED ORDER WERE AS UNDER: THE APPELLANT AN INDIVIDUAL FILED HIS RETURN OF I NCOME WHICH CAME TO BE PROCEEDED U/S. 143(1). NOTICE U/S . 148 WAS ISSUED AND A BEST JUDGEMENT ASSESSMENT WAS PASSED B Y THE A.O. WHEREIN THE LONG TERM CAPITAL GAIN, ON SALE OF ONE FLAT BY THE ASSESSEE, WAS COMPUTED AT RS.36,04,749/- . 2. THE BRIEF FACT OF THE CASE IS AS UNDER: A) THE FATHER OF THE APPELLANT OWNED LAND TO THE EX TENT 20 GUNTAS IN VARTHUR HOBLI, BANGALORE. THE LAND WAS PURCHASED VIDE SALE DEED DATED 07.09.65 . HE DIED INTESTATE LEAVING BEHIND HIS WIFE AND CHILDREN (INCLUDING 5 SONS, ASSESSEE BEING ONE OF THEM). AFTER ITA NO.548/BANG/11 PAGE 4 OF 11 THE DEATH OF THE FATHER, THE PROPERTY DOCUMENTS SHO WS THE NAME OF SMT.HANUMAKKA, THE MOTHER OF APPELLANT, AS THE K AHTHADHAR. SINCE THEN THE MOTHER HAS BEEN LAWFUL AND ABSOLUTE OWNER OF THE SAID LAND. B) ON 21.11.94 THE MOTHER ALONG WITH FIVE SONS (APP ELLANT BEING ONE AMONG THEM) WHO WERE THE CONFIRMING PARTIES ENT ERED INTO A COLLABORATION AGREEMENT WITH M/S. HUKU CONSTRUCTION S LIMITED., (DEVELOPERS), TO DEVELOP THE SAID EXTENT OF LAND. V IDE THIS DEVELOPMENT AGREEMENT ON SURRENDER OF 60% OF UNDIVI DED INTEREST IN THE LAND TO THE DEVELOPER THE LAND OWNE R RECEIVED 40% OF THE SUPER BUILT AREA WHICH IS 13 FLATS IN TOTAL. IT MAY BE PERTINENT TO NOTE HERE THAT ALL THE 13 FLATS FELL T O THE SHARE OF THE MOTHER AS SHE WAS THE ABSOLUTE OWNER OF THE SAID PI ECE OF LAND. THE SONS WERE ONLY CONFIRMING PARTIES OF THE SAID A GREEMENT, WHICH OBVIOUSLY WAS A MEASURE OF CAUTION BY THE BUI LDER. C) ON 1.12.04 A GIFT DEED WAS EXECUTED BY THE MOTHE R GIFTING 5 FLATS OUT OF THE TOTAL 13 FLATS THAT SHE RECEIVED ON THE BASIS OF THE DEVELOPMENT AGREEMENT TO THE APPELLANT. THIS IS DUL Y REGISTERED. D) THE APPELLANT OUT OF THE 5 FIATS THAT HE RECEIVE D BY THE VIRTUE OF THE GIFT MADE BY HIS MOTHER SOLD 1 FLAT ON 10.3.05 (SALE DEED ENCLOSED) FOR A TOTAL CONSIDERATION OF RS.37 LAKHS. 3. SUBMISSIONS A) THE DISPUTE HERE IS ONLY WITH RESPECT TO THE COM PUTATION OF CAPITAL GAINS ARISING OUT OF THE ABOVE TRANSACTION. ASSET UNDER CONSIDERATION WHICH IS A FLAT MEASURING 2180 SQ.FT ALONG WITH UNDIVIDED INTEREST IN LAND MEASURING 902 SQ.FT. THE SUBJECT FLAT WAS ACQUIRED BY THE ASSESSEES MOTHER WAY BACK IN 1 995 . AS STATED ABOVE THE ASSESSEE GOT THE SAID PROPERTY BY WAY OF GIFT FROM HIS MOTHER. THE ASSESSING OFFICER IS CORRECT I N SO FAR AS HE HAS STATED THAT THE TRANSACTION IS LONG TERM CAPITA L GAINS WHICH, IS NOT DISPUTED . THE ONLY DISPUTE HERE IS THE METHOD OF COMPUTATIO N ARRIVED AT FOR BRINGING TO TAX THE CAPITAL GAINS. T HE ASSESSING OFFICER HAS ADOPTED A SUM OF RS.22 PER SQ.FT AS THE FAIR MARKET VALUE AS ON 1.4.81 FOR INDEXED COST OF ACQUISITION AND BASED HIS WORKING AND BROUGHT TO TAX A SUM OF RS.36,04, 749/- AS LONG TERM CAPITAL GAIN . THIS VALUATION IS STATED TO BE BASED UPON THE CIR CULAR ISSUED BY THE GOVERNMENT. THE VALUE ADOPTED BY THE APPELLANT IS RS.250 PER SQ.FT. THIS IS SUPPORTED BY THE VALUATIO N REPORT OBTAINED FROM AN APPROVED VALUER (COPY ENCLOSED). H ERE IT MAY BE NECESSARY TO NOTE THAT THE ASSESSING OFFICER HAS ADOPTED THE FAIR MARKET VALUE OF RS.22 IN RESPECT OF LAND ALONE . IT IS IMPORTANT TO NOTE THAT THE ASSESSING OFFICER HAS TOTALLY IGNO RED THE COST OF ITA NO.548/BANG/11 PAGE 5 OF 11 CONSTRUCTION OF THE SUPERSTRUCTURE I.E. FLAT FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAINS. THE APPELLANT IS AGGRIEVED AND SUBMITS THAT THE TRANSACTION INCLUDES BOTH SUPE RSTRUCTURE AND THE LANDS. THEREFORE FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN, THE VALUE TO BE ADOPTED FOR ARRIVING AT INDEX ED COST OF ACQUISITION SHOULD BE BOTH THE COST OF SUPERSTRUCTU RE AND THE COST OF UNDIVIDED INTEREST IN LAND. THE APPELLANT HAS AD OPTED VALUE FOR INDEXATION OF THE SUPER STRUCTURE AT RS. 825 PER SQ .FT. THIS WAS THE PREVAILING RATE AT THE MATERIAL TIME . WE ARE ENCLOSING HEREWITH A COPY OF THE VALUATION REPORT TO SUBSTANTIATE OUR CL AIM. THE FAIR MARKET VALUE AS RETURNED OUGHT TO BE ADOPTED FOR AR RIVING AT THE INDEXED COST OF ACQUISITION OF THE SUPERSTRUCTURE B EING 2180 SQ.FT. AND ALSO CALCULATE THE CAPITAL GAIN OF BOTH THE FLA TS AND THE UNDIVIDED LAND ACCORDINGLY. 4. HENCE IT IS RESPECTFULLY SUBMITTED THAT THE HON BLE COMMISSIONER MAY BE PLEASED TO ALLOW THE APPEAL AND DIRECT THE ASSESSING OFFICER TO ADOPT THE COMPUTATION OF CAPIT AL GAINS AS RETURNED BY THE ASSESSEE. 5. THE LD. CIT(A) ASKED THE REMAND REPORT OF THE AO , IN RESPONSE THE AO STATED AS UNDER: THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS FORWA RDED THE WRITTEN SUBMISSIONS, COPIES OF SALE DEED AND THE VA LUATION REPORT FILED BY THE ABOVE MENTIONED ASSESSEE AND DIRECTED TO FURNISH COMMENTS ON THE SAME. IN THIS CONNECTION, I AM SUBMITTING HEREWITH THE GI ST OF THE FACTS AND CIRCUMSTANCES OF THE CASE UNDER WHICH THE ASSES SING OFFICER COMPLETED THE ASSESSMENT IN THE ABOVE MENTIONED CAS E FOR THE ASSESSMENT YEAR 2005-06 AS UNDER: THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2005-06 ON 31.3.2006 DECLARING AN INCOME OF RS.95,5 00/-. THE ASSESSEE HAD DECLARED INCOME FROM HOUSE PROPERTY OF RS.63,000/- SHORT TERM CAPITAL LOSS OF RS.7,15,527/- AND INCOME FROM OTHER SOURCES OF RS.32,500/-. IN RESPECT OF THE SHORT TERM CAPITAL LOSS, THE ASSE SSEE HAD ADOPTED (I) THE VALUE OF THE LAND AT RS.250/- PER SQFT AS O N 1.4.1981 AND (II) THE VALUE OF CONSTRUCTION AT RS.2180/- (SIC RS .825/-). THE ASSESSING OFFICER FOUND THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE ITA NO.548/BANG/11 PAGE 6 OF 11 I.T.ACT, 1961, AS HE WORKED OUT THE VALUE OF LAND A T RS.95,251/- BY ADOPTING THE VALUE OF THE LAND IN THE AREA AT RS .22/- PER SQFT AS PER THE GOVERNMENT GUIDELINES AS AGAINST CLAIM OF T HE ASSESSEE AT RS. 10,82,400/-. THE ASSESSING OFFICER ISSUED NOTIC E U/S.148 ON 11.5.2007 WHICH WAS SERVED ON THE ASSESSEE ON 12.5.2007 . THERE WAS NO RESPONSE. SUBSEQUENTLY, HE ISSUED NOTICES U/ S.142(1) ON 28.6.2007 AND 17.8.2007. EVEN TO THESE NOTICES, THE ASSESSEE HAS NOT RESPONDED ON 18.12.2007 , THE ASSESSING OFFICER ISSUED A LETTER ASKING HIM TO SUBMIT (I) THE BASIS FOR VALUA TION OF LAND AT RS.250/- AND (II) A COPY OF THE JOINT DEVELOPMENT A GREEMENT. THE ASSESSEE HAD SOUGHT TIME TO FURNISH THE ABOVE DETAI LS. ONCE AGAIN, THE ASSESSING OFFICER ISSUED A LETTER ON 17.1.2008 POSTING THE CASE FOR HEARING ON 28.1.2008. IN RESPONSE TO THE L ETTER, THE ASSESSEE FILED A LETTER DATED 25.1.2008 REQUESTING TIME TILL FEBRUARY, 2008 TO FURNISH THE REQUIRED INFORMATION. HOWEVER TILL THE DATE OF COMPLETION OF THE ASSESSMENT I.E., 31.3 .2008, THE ASSESSEE DID NOT RESPOND TO THE NOTICE. HENCE THE A SSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 144 OF THE I. T.ACT, 1961. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFI CER BROUGHT THE LONG TERM CAPITAL GAINS OF RS.36,04,749/- TO TA X AND ARRIVED AT THE TAXABLE INCOME AT RS.37,00,249/- AS AGAINST THE RETURNED INCOME OF RS.95,500/-. A DEMAND OF RS.11,12,470/- W AS RAISED. AGGRIEVED WITH THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE HAS NOW FILED APPEAL BEFORE THE COMMISSIONER OF INC OME-TAX (APPEALS) AND HAS PRODUCED HIS WRITTEN SUBMISSIONS, COPY OF SALE DEED AND THE VALUATION REPORT. FROM THE ABOVE PARAGRAPHS, IT IS VERY CLEAR THAT TH E ASSESSEE HAS NOT FURNISHED THE DETAILS CALLED FOR BY THE ASSESSI NG OFFICER IN SPITE OF GIVING SEVERAL OPPORTUNITIES TO HIM THOUGH THE DETAILS FURNISHED BY HIM BEFORE THE COMMISSIONER OF INCOME- TAX (APPEALS) WERE ALREADY IN HIS POSSESSION . I, THEREFORE, REQUEST THE COMMISSIONER OF INCOME-TAX (APPEALS) NOT TO ADMIT T HE EVIDENCES PRODUCED BY THE ASSESSEE IN ACCORDANCE WI TH RULE 46A OF THE INCOME-TAX RULES, 1962 . HOWEVER, IN CASE THE COMMISSIONER OF INCOME-TAX (AP PEALS) WISH TO ADMIT THE EVIDENCES PRODUCED BY THE ASSESSE E, THEN, I REQUEST THE COMMISSIONER OF INCOME-TAX (APPEAL)S P ERMISSION TO EXAMINE THE ASSESSEE WITH REFERENCE TO THE DOCUM ENTS PRODUCED BY HIM SO THAT A DETAILED REPORT / COMMENT S ON SUCH EVIDENCES COULD BE SUBMITTED BY THIS OFFICE TO THE COMMISSIONER OF INCOME- TAX (APPEALS). ITA NO.548/BANG/11 PAGE 7 OF 11 6. THE LD. CIT(A) AFTER CONSIDERING THE CONTENTS OF THE ABOVE REMAND REPORT OBSERVED THAT THE AO HAD OBJECTED TO THE FIL ING OF ADDITIONAL EVIDENCE UNDER RULE 46A OF THE ACT SINCE SEVERAL OPPORTUNITI ES WERE GIVEN TO THE ASSESSEE BEFORE COMPLETION OF THE ASSESSMENT. THE LD. CIT(A) ASKED THE REJOINDER FROM THE ASSESSEE. THE SUBMISSIONS OF TH E ASSESSEE AS MENTIONED IN PARA 9 OF THE IMPUGNED ORDER BEFORE TH E LD. CIT(A) READS AS UNDER:- 1. AS CAN BE SEEN FROM THE ASSESSMENT ORDER FROM THE TOTAL CONSIDERATION OF RS.37 LAKHS ON THE SALE OF THE FLA T IN QUESTION A SUM OF RS.95,251/- ALONE HAS BEEN DEDUCTED BEING TH E PROPORTIONATE LAND COST AS ESTIMATED BY THE AO. 2. THE SUBJECT MATTER OF SALE WAS FLAT, WHICH MEAN S THE SUPER STRUCTURE TOGETHER WITH THE PROPORTIONATE LAND UNDE RNEATH, THE FLAT WAS OBTAINED BY THE ASSESSEE ON GIFT BY HIS MOTHER. THE MOTHER HERSELF ACQUIRED THE FLAT UNDER A DEVELOPMENT AGREE MENT AND THEREFORE CAPITAL GAINS ON THE TRANSFER OF THE 60% TOTAL LAND TO THE DEVELOPER BY HER WAS LIABLE IN HER HANDS. SHE HAD R ECEIVED THE FLATS IN CONSIDERATION FOR THE SURRENDER OF HER LAN D DEVELOPER. HENCE THE COST OF ACQUISITION OF THE FLAT TO THE MO THER WILL BE THE MARKET VALUE OF THE PROPORTIONATE LAND SURRENDERED BY HER. IT IS HER OWN PROPORTIONATE SHARE OF THE LAND RETAINED BY HER TOGETHER WITH THE SUPER STRUCTURE SO OBTAINED THAT IS THE SU BJECT MATTER OF GIFT. U/S.49 THE COST TO THE PREVIOUS OWNER IS THE COST TO AN ASSESSEE WHO HAS SOLD THE GIFTED ASSET AND EARNED C APITAL GAINS. HENCE IT IS OBLIGATORY U/S.48 FOR THE ASSESSING OFF ICER TO DEDUCT FROM THE TOTAL CONSIDERATION, THE INDEX COST OF ACQ UISITION OF THE LAND PROPORTIONATE TO THE FLAT AS WELL AS THAT OF T HE SUPER STRUCTURE. HE HAS TAKEN INTO ACCOUNT ONLY LAND OBTAINED. THERE IS NO DISPUTE THAT THE CAPITAL GAINS ARE LONG TERM IN NATURE. 3. THE COST OF ACQUISITION OF THE SUPER STRUCTURE HAVING REGARD TO THE MANNER OF OBTAINING IT BY THE PREVIOUS OWNER NA MELY THE MOTHER HAS BEEN ARRIVED AT RS.825/SQ.FT. AND SUPPOR TED BY A VALUATION REPORT. THUS THE TOTAL COST OF ACQUISITIO N WILL BE THE COST OF THE PROPORTIONATE LAND AND THE COST OF THE SUPER STRUCTURE. THE COST OF THE SUPER STRUCTURE WAS COMPLETELY OVERLOOK ED BY THE ASSESSING OFFICER. ITA NO.548/BANG/11 PAGE 8 OF 11 4. THERE IS A DISPUTE ABOUT THE COST OF ACQUISITIO N OF THE LAND ON 1/4/81 WHEN IT WAS A PROPERTY OF THE FATHER (A PREV IOUS OWNER FROM WHOM THE MOTHER I.E. THE DONOR INHERITED THE L AND). THE MARKET VALUE OF 1/4/81 IS ADOPTED BY THE ASSESSEE A S PER THE VALUATION REPORT AT RS.250/SQ.FT. PREFERENCE MAY BE INVITED TO PART A RELATING TO LAND VALUATION WHERE IT IS MENTIONED THAT THERE ARE NO GUIDE LINE VALUE NOTIFIED BY THE GOVERNMENT FOR THE AREA WHERE THE LAND IS LOCATED. THEREFORE HE HAS GONE BY THE SALES INSTANCES DURING THE PERIOD THAT IS IN 1981 AND AS PER THE ENQUIRIES WITH REAL ESTATE AGENTS. THE STATEMENT OF THE ASSESSING OFFICER THAT HE HAS ADOPTED THE GUIDE LINE VALUE IS WITHOUT ANY BASIS. 5. THE GUIDE LINE VALUE, ON ENQUIRY IT IS FOUND WER E NOT IN VOGUE IN 1981. ANYWAY THEY HAVE TO GIVE WAY TO ACTUAL SAL E INSTANCES IN. THE AREA. THERE IS NOTHING TO DOUBT THE CORRECT NESS OF THE STATEMENT OF THE APPROVED VALUER THAT HE HAS VERIFI ED THE SALE INSTANCES AT THAT TIME. HENCE THE ADOPTION OF THE MARKET VALUE OF THE LAND AT RS.250/- ON 1-4-1981 IS EMINENTLY JUSTI FIED. THIS HAS TO BE INDEXED AND ADOPTED FOR THE PURPOSE OF CAPITA L GAINS. A.O. HAS NOT PRODUCED THE GUIDELINES AS IN 1981. 6. EVEN IN AN EXPARTE ASSESSMENT AN ARBITRARY METH OD CANNOT BE ADOPTED. THE ASSESSING OFFICER IS EXPECTED TO MAKE A REASONABLE COMPUTATION OF THE INCOME UNDER ANY HEAD. HE CANNOT STATE THAT HE IS ADOPTING THE GUIDE LINE VALUE, WHEN NO SUCH G UIDE LINE FOR THE AREA IS THERE. HE CANNOT DEDUCT AS COST OF ACQ UISITION ONLY THE COST OF THE LAND WHEN WHAT IS SOLD IS A FLAT. HENC E ASSESSING OFFICERS APPROACH IS TOTALLY OPPOSED TO LAW. THER EFORE THERE IS NOTHING WRONG IN THE CIT(A) AS A SUPERIOR QUASI JUD ICIAL AUTHORITY TO TAKE INTO ACQUISITION RELEVANT MATERIALS TO MAKE REASONABLE ESTIMATE OF CAPITAL GAINS. THIS IS PRECISELY WHAT THE ASSESSEE IS PRAYING FOR. WE RELY UPON THE JUDGMENTS OF THE SUP REME COURT IN 60 ITR 239. 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT IN THE REJOINDER THE ASSESSEE HAD NOT MENTIONED REASONS AS TO WHY HE FAILED TO FILE THOSE EVIDENCES DURING THE ASSESSMENT PROCEEDINGS FOR THE CONSIDERATION OF THE AO. ACCORDING TO THE LD. CIT(A), THE ASSESSEE WAS NOT AT ALL SERIOUS IN HIS PURSUANCE OF THE APPE AL PROCEEDINGS. THE LD. ITA NO.548/BANG/11 PAGE 9 OF 11 CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE BY OBSE RVING IN PARA 11 OF THE IMPUGNED ORDER AS UNDER:- 11. RECORD SHOWS THE DATE OF FIXATION FOR HEARING AS 08-12- 2008, 16-07-2009, 19-08-2009, 16-09-2009, 12-11-200 9, 25-11- 2009, 12-02-2010, 02-11-2010, 28-01-2011 & 10-02-20 11 ON WHICH DATES THE APPELLANT HAS SOUGHT THE ADJOURNMEN T. ONLY ON 08-01-2010 THE A.R. APPEARED AND FOR THE FIRST TIME AND SOUGHT TIME TO FILE THE COPY OF SALE DEED AND THE VALUATIO N REPORT WHICH WAS FILED AFTER TWO MONTHS IN 01-03-2010. THUS THE FACTUAL HISTORY SHOWS A VERY ERRATIC BEHAVIOUR OF THE APPEL LANT AND SHOWS HIS CALLOUSNESS TO RESPOND TO THE NOTICES PROPERLY. IN VIEW OF THIS I UPHOLD THE REQUEST OF THE A.O. NOT TO ADMIT THE A DDITIONAL EVIDENCES PRODUCED DURING THE APPELLATE STAGE AND A CCORDINGLY DISMISS THE APPEAL. 8. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE LD. CIT(A) WITHOUT CONSIDERING THE ADDITIONAL EVIDENCES DISMIS SED THE APPEAL OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE LD. CI T(A) DID NOT CONSIDER THE SUBMISSIONS MADE BY THE ASSESSEE AND DISMISSED THE APPEAL, BUT NO DISCUSSION HAS BEEN MADE ON THE MERITS OF THE CASE. IT WAS FURTHER SUBMITTED THAT THE AO HAD NOT GIVEN PROPER AND REAS ONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, EVEN THE TIME SOUGHT F OR FURNISHING DETAILS UPTO FEBRUARY, 2008 WAS NOT ALLOWED AND ASSESSMENT WAS COMPLETED U/S. 144 OF THE ACT ON 31.03.2008. 9. IN HIS RIVAL SUBMISSIONS, THE LD. DR STRONGLY SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT TH E AO AS WELL AS THE LD. CIT(A) HAD GIVEN AMPLE OPPORTUNITIES TO THE ASSESSE E, BUT NO EVIDENCE OR SUPPORTING MATERIAL WAS PRODUCED BY THE ASSESSEE, T HEREFORE THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ACTION OF THE AO. ITA NO.548/BANG/11 PAGE 10 OF 11 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND MATERIAL ON RECORD. IN THE PRESENT CASE, IT IS NOT ICED THAT THE AO FRAMED THE ASSESSMENT U/S. 144 OF THE ACT ON 31.03.2008. IT I S MENTIONED AT PAGE 2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAD REQUESTE D FOR TIME TILL FEBRUARY, 2008. THE AO NEITHER REJECTED NOR ACCEPT ED THAT REQUEST OF THE ASSESSEE. IN THE PRESENT CASE, IT IS ALSO NOT CLEA R AS TO WHETHER ANY OTHER OPPORTUNITY WAS GIVEN BY THE AO AFTER FEBRUARY, 200 8 AND BEFORE COMPLETION OF THE ASSESSMENT ON 31.3.2008 TO THE AS SESSEE. SIMILARLY, THE LD. CIT(A) ALTHOUGH ASKED THE REMAND REPORT FROM TH E AO AND REJOINDER FROM THE ASSESSEE, BUT WHILE PASSING THE IMPUGNED O RDER NO DISCUSSION HAS BEEN MADE ON THE MERITS OF THE CASE EVEN AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES. THE LD. CIT(A) SI MPLY UPHELD THE REQUEST OF THE AO NOT TO ADMIT ADDITIONAL EVIDENCE PRODUCED DURING THE APPELLATE STAGE AND DISMISSED THE APPEAL OF THE ASSESSEE. HO WEVER, HE HAD NOT APPRECIATED THIS VITAL FACT THAT THE POWERS OF THE LD. CIT(A) AND THE ASSESSING OFFICER ARE CO-TERMINUS AND THAT THE LD. CIT(A) HAS THE POWERS TO DO ALL THOSE THINGS WHICH THE AO OUGHT TO HAVE DONE . IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS PER THE MAXIM AUDI ALTERAM PARTEM, HOWEVER, IN THE PRESENT CASE, IT APPEARS THAT THE A O HAD NOT GIVEN DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE AND FRAMED THE EX PARTE ASSESSMENT U/S. 144 OF THE ACT AND WHEN THE ASSESSE E FURNISHED THE EVIDENCES BEFORE THE LD. CIT(A), HE H AD NOT CONSIDERED THE SAME WHILE PASSING THE IMPUGNED ORDER AND CONFIRMED THE ACTION OF THE AO IN A SLIPSHOD MANNER. WE THEREFORE, CONSIDERING TH E TOTALITY OF THE FACTS OF THE PRESENT CASE, DEEM IT APPROPRIATE TO REMIT THIS CASE BACK TO THE FILE OF ITA NO.548/BANG/11 PAGE 11 OF 11 THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACC ORDANCE WITH THE LAW, AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO COOPER ATE AND NOT SEEK UNDUE AND UNREASONABLE ADJOURNMENTS. 11. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF MARCH, 2012. SD/- SD/- ( SMT. P. MADHAVI DEVI ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 27 TH MARCH , 2012. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.