The Assistant Commissioner of Income-tax 2(1), RAIPUR (CG) V. Keshavlal Tank, RAIPUR (CG)

ITA 59/BIL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2435 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 23-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUBHA TAH GOEL
• Assessee Lawyers: R B DOSHI
• Keywords: Capital asset; Cost of acquisition; Fair market value; Onus to prove
• Section: 54F

Judgement Text

, RA IPUR IN THE INCOME TA X A PPELLA TE TRIBUNA L, RA IPUR BEFORE S/SHRI MUKUL SHRAW AT (JM) SHAMIM YAHYA (AM) , , ./ I.T.A. NO.59/BLPR/2012 ( / ASSESSMENT YEAR :2009 - 2010 ) THE ASST. COMMISSIONER OF INCOME TAX - 2(1), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR / VS. KESHAVLAL TANK, C/O. M/S. GIPAL MEGHJI 13, STATION ROAD, RAIPUR ./ ./ PAN/GIR NO. :ABLPT 2918 E ( / AP PELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SMT. ANUBHA TAH GOEL / RESPONDENT BY : SHRI R.B.DOSHI / DATE OF HEARING : 10 - 02 - 2016 / DATE OF PRONOUNCEMENT : 12 - 02 - 2016 / O R D E R PER MUKUL SHRAWAT, JM THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM AN ORDER OF THE LD CIT(A), RAIPUR DATED.23.3.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. THE SOLITARY GROUND RAISED BY THE REVENUE READS AS UNDER: 2 I.T.A. NO.59/BLPR/2012 ASSESSMENT YEAR :2009 - 2010 ) W HETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.77,87,170/ - MADE BY THE A O ON A CCOUNT OF LONG TERM CAPITAL GAIN. 3. WH ILE PASSING THE ORDER U/S.143(3) OF THE I.T.ACT, 1961 DATED 27.12.2011, THE AO HAS NOTICED THAT THE ASSESSEE HAD SOLD LAND S ITUATED AT KACHANA FOR A SALE CONSIDERATION OF RS.1,81,90,000/ - ON 30.3.2009. THE ASSESSE E HAD CLAIMED INDEXED COST OF ACQUISITION. THE LONG TERM CAPITAL GAIN AFTER CLAIMING DEDUCTION U/ S . 54F WAS DISCLOSED AT R.16,12,676/ - . I N RESPECT OF SALE EXECUTED BY THE ASSESSEE, FOLLOWING DOCUMENTS WERE FURNISHED: I) COPY OF SALE DEED DATED 21.5.200 8 FOR SALE CONSIDERATION OF RS.1,81,90,000/ - II) COPY OF AGREEMENT DT.20.7.2009 IN RESPECT OF PURCHASE OF ONE UNIT HOUSE FOR RS.70,00,000/ - FOR CLAIM OF DEDUCTION U/S. 54F. III) COPY OF SALE DEED DTD.23.2.2009 IN RESPECT OF PURCHASE OF HOUSE PROPERTY FOR R S.70,000/ - (RELATED TO THE AGREEMENT REFERRED TO IN (II) ABOVE. IV) COPY OF SALE DEED DATED 21.3.1975 OF LAND AT KA C HANA PURCHASED BY THE ASSESSEE. V) COP OF SALE DEED DATED 30.12.1974 OF LAND AT KACHANA PURCHASED BY THE ASSESSEE. VI) COPY OF BHU - ADHIKAR & KRIN PUSTIKA. 4 THE OBJECTION OF THE A SSESSING OFFICER WAS ONLY IN RESPECT OF COST OF ACQUISITION CLAIMED BY THE ASSESSEE. T HE ASSESSEE HAD ADOPTED THE FAIR MARKET VALUE AS ON 1.4.1981 OF RS.26,75,000/ - IN THE COMPUTATION OF CAPITAL GAIN. T HE ASSESSEE WAS THEREFORE, ASKED TO SUBSTANTIATE THE CLAIM OF COST OF ACQUISITION. IN 3 I.T.A. NO.59/BLPR/2012 ASSESSMENT YEAR :2009 - 2010 ) SUPPORT, IT WAS INFORMED THAT THE LAND IS LOCATED AT THE OUTSKIRTS OF RAIPUR CITY. THE ASSESSEE HAD ADOPTED THE RATE OF L AND AS ON 1.4.1981 AT RS.5,00,000/ - PER ACRE. I N SUPPORT O F THE SAID CLAIM, THE ASSESSEE FURNISHED LETTERS ISSUED BY SARPANCH OF VILLAGE KACHANA. T HERE WERE TWO LETTERS BOTH DATED 12.10.2004 BUT IN ONE LETTER, THE RATE WAS MENTIONED AT RS.5,00,000/ - , HOWEVER, IN OTHER LETTER, THERE WAS A CORRECTION BY M ENTIONING THE RATE AS RS.5,00,000/ - PER ACRE. THE AO HAS DOUBTED THE CORRECTNESS OF THE MODIFIED LETTER. I N HIS OPINION, THE CORRECTION WAS DUBIOUS IN NATURE. T HE AO HAS ARRIVED AT THE CONCLUSION THAT RS.5,00,000/ - FOR .5.30 ACRE OF LAND WAS CORRECT WHICH COMES TO RS.94,340/ - PER ACRE . HE HAS , THEREFORE, HELD THAT THE ENTIRE LAND WAS HAVING COST OF ACQUISITION AS ON 1.4.1981OF RS.5 LAKHS ONLY. B Y APPLYING THE COST INFLATION INDEX, THE AO HAS COMPUTED THE LONG TERM CAPITAL GAIN AND TAXED IN THE HANDS OF THE AS SESSEE ACCORDINGLY. B EING AGGRIEVED, THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 5. THE LD CIT(A) HAS EXAMINED THE SUBMISSION OF THE ASSESSEE AND THE EVIDENCE PLACED AND THEREAFTER ARRIVED AT THE CONCLUSION AS UNDER: I HAVE CAREFULLY GON E THROUGH THE ASSESSMENT ORDER AND WRITTEN SUBMISSION OF THE APPELLANT. I F IND FORCE IN THE ARGUMENT OF THE APPELLANT THAT THE RECTIFIED CERTIFICATE ISSUED BY THE SARPANCH OF GRAMPANCHAYAT KACHANA IS GOVERNMENT AUTHORITY AND IS TO CLARIFY AND CORRECT THE TYPOGRAPHICAL ERROR IN THE INITIAL CERTIFICATE. T HE AO COULD HAVE EXAMINED THE SARPANCH IF HE HAD ANY DOUBTS WITH RESPECT TO RECTIFY CERTIFICATE. T HE AO HAS ACCEPTED THE FIRST CERTIFICATE OF THE AUTHORITY AND REJECTED THE SECOND RECTIFIED CERTIFICATE OF THE SAME AUTHORITY WITHOUT ANY COGENT REASON AND JUSTIFICATION. WH EREAS, RECTIFIED CERTIFICATE IS JUST A CLARIFICATION AND CORRECTION OF TYPOGRAPHICAL ERROR OF THE INITIAL CERTIFICATE. I A M OF THE CONSIDERED OPINION THAT BOTH THE CERTIFICATES ARE FROM TH E SAME AUTHORITY 4 I.T.A. NO.59/BLPR/2012 ASSESSMENT YEAR :2009 - 2010 ) AND RELIABLE. T HE AO COULD HAVE MADE FURTHER ENQUIRY FOR THE SANCTITY OF CERTIFICATES TO CLEAR ANY DOUBTS IF H E HAD, IN HIS MIND BY EXAMINING THE SARPANCH. T HE AO FAILED TO PROVE THAT RECTIFIED CERTIFICATE ISSUED BY THE AUTHORITY IS DUBI OUS IN N ATURE. H ENCE, THE IMPUGNED NET ADDITION/DISALLOWANCE OF RS.77,87,170/ - IN TOTAL INCOME DUE TO CHANGE IN LONG TERM CAPITAL GAIN CANNOT BE SUSTAINED AND HEREBY DELETED. 6. FR OM THE SIDE OF THE REVENUE, SMT. ANUBH A TAH GOEL, LD D.R. APPEARED AND VEHEMENTLY SUPPORTED THE ACTION OF THE AO. T HE MAIN OBJECTION WAS ABOUT THE MANNER IN WHICH THE EARLIER LETTER ISSUED BY THE SARPANCH WAS RECTIFIED. L D D.R. HAS INFORMED THAT THE WORD PER ACRE WAS WRITTEN IN INK BUT REST OF THE CERTIFICATE WAS DULY TYP ED, HENCE, IT WAS NOTHING BUT A MANIPULATION TO INCREASE THE VALUE OF THE LAND AS ON 1981. L D D.R. HAS ALSO PLEADED THAT THE SARPANCH HAD ISSUED A CERTIFICATE IN RESPECT OF CERTAIN KHATA NO. HENCE THE VALUE OF THE ENTI RE LAND WAS THEREFORE CERTIFIED AT R S.5,00,000/ - `. I T HAS THEREFORE BEEN PLEADED BEFORE US THAT THE AO WAS JUSTIFIED IN ACCEPTING THE CERTIFICATE OF SARPANCH AND ON THAT BASIS, CALCULATED THE VALUE OF LAND AT RS.94,340/ - PER ACRE. THE AO WAS VERY MUCH REASONABLE WHILE COMPUTING THE CAPITAL GAIN OF THE ASSESSEE, HENCE, THE SAME SHOULD BE APPROVED. 7. ON THE OTHER HAND, FROM THE SIDE OF THE ASSESSEE, SHRI R.B.DOSHI, LD A.R. APPEARED AND SUPPORTED THE VIEW EXPRESSED BY THE LD CIT(A). H E HAS PLEADED THAT BY MISTAKE THE CERTIFICATE WAS ISSUED B UT THAT WAS IMMEDIATELY RECTIFIED. H E HAS EXPLAINED THAT WHILE TYPING THE CERTIFICATE, THE WORD PER ACRE COULD NOT BE TYPED AND TO REMOVE THIS TYPOGRAPHICAL MISTAKE, THE SARPANCH HAS IMMEDIATELY RECTIFIED THAT CERTIFICATE. H E HAS ALSO MENTIONED THAT K ACHANA IS A LARGE 5 I.T.A. NO.59/BLPR/2012 ASSESSMENT YEAR :2009 - 2010 ) TOWNSHIP A ND IN THAT AREA, THERE WAS A PROJECT FOR DEVELOPMENT OF RESIDENCE S WAS COMING UP. T HE LAND IN QUESTION IS NOW VERY MUCH WITHIN THE MUNCIPAL CORPORATION. HE HAS ALSO PLEADED THAT THERE WAS NO ALLEGATION OF THE AO THAT THE SEC OND CERTIFICATE WAS FALSE OR FABRICATED, ELSE A.O. COULD HAVE REFERRED TO THE D.V.O. THEREFORE, THE VIEW TAKEN BY THE LD CIT(A) DESERVES TO BE AFFIRMED. 8. WE H AVE HEARD BOTH THE SIDES AT SOME LENGTH AND CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELO W AS WELL AS COMPILATION FILED. AS PER THE PROVISIONS OF SECTION 48 CONTAINING THE MODE OF COMPUTATION OF CAPITAL GAIN WHICH IS PRESCRIBED THAT THE CAPITAL GAIN S IS TO BE COMPUTED BY DEDUCTING FROM THE AMOUNT OF CONSIDERATION, THE COST OF ACQUISITION OF T HE ASSESSEE. T HERE IS A PROVISION OF THIS SECTION WHICH PROVIDED FURTHER THAT WHERE LONG TERM CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG TERM CAPITAL ASSET, THE TERM COST OF ACQUISITION SHALL HAVE EFFECT AS IF I N THE WORDS INDEXED COST OF ACQUISITION HAD BEEN SUBSTITUTED. I F T HE AO HAS ANY DOUBT ABOUT THE VALUE AS ON 1.4.1981, THEN WITH A VIEW TO ASCERTAIN THE FAIR MARKET VALUE OF CAPITAL ASSET FOR T HE PURPOSE OF THIS CHAPTER, I.E. CHAPTER - IV OF I.T.ACT MAY REFER THE VALUATION TO VALUATION OFFICER U/S.54F OF I.T.ACT. IN THIS CASE, THE AO HAD MADE NO EFFORT TO ASCERTAIN THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 WHEN HE WAS DOUBTING THE BASIS ON WHICH THE ASSESSEE HAD ADOPTED THE COST OF ACQUISITION. IN ALL FAIRNESS, IT WAS THE DUTY OF THE AO TO TAKE THE ADVICE OF A TECHNICAL PERSON WHO COULD HAVE EXAMINED THE COMPARABLE SALES INSTANCE OF THAT AREA FOR THE PERIOD 1981 TO ASCERTAIN THE PREVAILING MARKET RATE OF THE LAND IN QUESTION. T HIS EXERCISE HAS NOT BEEN DONE BY THE AO AND, THEREFORE, THE LD CIT(A) HAS HELD THAT IN THE ABSENCE OF ANY ENQUIRY FROM THE AO, IT WAS 6 I.T.A. NO.59/BLPR/2012 ASSESSMENT YEAR :2009 - 2010 ) JUSTIFIABLE TO PLACE RELIANCE ON THE CERTIFICATE ISSUED BY THE SARAPANCH, LD CIT(A) HAS ALSO HELD THAT IF T HE AO WAS DOU BTING THE RECTIFICATION OF THE MISTAKE THEN HE COULD HAVE EXAMINED THE SARPANCH TO VERIFY THE CORRECTNESS OF THE CERTIFICATE . A LEGAL MAXIM IS THAT THE NECESSITY OF PROOF ALWA YS LIES W ITH THE PERSON WHO LAYS CHARGE. I F THE PERSON WHO IS MAKING CHARGES D OES NOT DI SCHARGE THE ONUS OF PLACING THE EVIDENCE THEN THE CHARGES ARE IN GENERAL TO BE CONSIDERED AS BASED UPON ASSUMPTION. O THERWISE ALSO THE BURDEN OF PROOF RESTS ON WHO ASSERTS, NOT ON WHO DENIES. T HEREFORE, C ONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE MANNER IN WHICH THE AO HAS PROCEEDED, WE ARE OF THE VIEW THAT IN SUCH A SITUATION, WHEN THE PRIMARY ONUS OF THE SUBMISSION OF A CERTIFICATE IN SUPPORT OF THE FAIR MARKET VALUE AS ON 1981 STANDS DISCHARGED BY THE ASSESSEE AND IF THE AO HAD ANY DOUBT ABOUT THE CERTIFICATE THEN THE ONUS WAS SHIFTED UPON HIM TO VERIFY THE CORRECTNESS OF THE CERTIFICATE OR IN LIEU COULD HAVE PLACED ON RECORD AN AUTHENTICATE D EVIDENCE IN SUPPORT OF THE VALUATION HE HAS ADOPTED FOR THE PURPOSE O F COMPUTATION OF CAPITAL GAIN. WE , THEREFORE, HOLD THAT THERE WAS NO IRREGULARITY IN THE VIEW TAKEN BY THE LD CIT(A). THE SAME IS HEREBY CONFIRMED. . 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/2/2016 . SD/ - SD/ - ( , ) ( , ) SHAMIM Y AHY A , ACCOUNT ANT MEMBER MUKUL SHRA WA T , JUDICIAL M EM BER 7 I.T.A. NO.59/BLPR/2012 ASSESSMENT YEAR :2009 - 2010 ) RAIPUR , DATED 12 / 02/2016 . . ./ PARIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : THE ASST. COMMISSIONER OF INCOME TAX - 2(1), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR 2. / THE RESPONDENT: KESHAVLAL TANK, C/O. M/S. GIPAL MEGHJI 13, STATION ROAD, RAIPUR 3. ( ) / THE CIT(A) - RAIPUR 4. / CIT , RAIPUR 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SR. PS, ITAT, CAMP: RAIPUR