T.V.Muthukrishnan, Palakkad V. DCIT, Palakkad

ITA 592/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65062 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 28-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: B MOHAN
• Keywords: Fair market value

Judgement Text

1 ITA NO.592/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 592/COCH/2011 (ASSESSMENT YEAR 2007-08) SHRI T.V. MUTHUKRISHNAN VS THE DY.C.I.T., CIR.1 DOOR NO.6/355(1), PALAKKAD SREERANGAM, (THANKAM NIWAS) R.K. NAGAR, PUTHUR SEKHARIPURAM P.O. PALAKKAD 678 010 PAN : ANOPM9185F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B MOHAN RESPONDENT BY : SMT. S VIJAYAPRABHA DATE OF HEARING : 17-12-2012 DATE OF PRONOUNCEMENT : 21-12-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(A)-V, KOCHI DATED 22-08- 2011 PERTAINING TO ASSESSMENT YEAR 2007-08. 2 ITA NO.592/COCH/2011 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS FAIR MARKET VALUE AS ON 01- 04-1981 FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. 3. SHRI V MOHAN, THE LD.REPRESENTATIVE FOR THE TAXP AYER SUBMITTED THAT THE TAXPAYER ADOPTED RS. 2,92,480 AS ON 01-04-1981. HOWEVER, THE ASSESSING OFFICER ADOPTED RS.18,338 WHICH WAS MODIF IED BY THE FIRST APPELLATE AUTHORITY BY DETERMINING THE SAME AT RS. 43,872. ACCORDING TO THE LD.REPRESENTATIVE, THE TAXPAYER HAS FILED VARIO US COPIES OF THE DOCUMENT WHICH WAS EXECUTED IN THE YEAR 1996, 2001, 2002 & 2 004. THE ORDER OF SPECIAL COURT, ERNAKULAM IN LAND ACQUISITION CLAIM PROCEEDINGS WAS ALSO FILED. ACCORDING TO THE LD.REPRESENTATIVE, THE MAR KET VALUE AS ON 01-04- 1981 IS RS.2,92,480 PER CENT. THEREFORE, THE ORDER OF THE LOWER AUTHORITY IS NOT JUSTIFIED. 4. ON THE CONTRARY, SMT. S. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE LAND ACQUISITION PROCEEDINGS WERE INITIATED IN THE YEAR 2008. THEREFORE, IT CANNOT BE TAKEN AS VALUE FOR THE YEAR 1981. THE SA LE DEED FILED BY THE TAXPAYER IS ALSO NOT OF 1981. THEREFORE, ACCORDING TO THE LD.DR, THE 3 ITA NO.592/COCH/2011 COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY WORKED OU T THE FAIR MARKET VALUE AT RS.43,872. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FAIR MARKET VALUE IS NOTHING BUT A PRICE AGREED BETWEEN A WILLING PURCHASER AND A WILLING SELLER. FOR THE PURPOSE OF COMPUTING CAPITAL GAIN, THE TAXPAYER IS GIVEN AN OPTION TO ADOPT THE FAIR MARKET VALUE AS ON 01-04-1981. THEREFORE, WE HAVE TO ESTIMATE THE FAIR MARKET VALUE IN A NOTIONAL WAY AS ON 01-04-198 1. ON A QUERY FROM THE BENCH, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBM ITTED THAT THERE WAS PROHIBITION FROM SALE OF PROPERTY FROM THE YEAR 198 1 TO 1996. BUT NO MATERIAL IS AVAILABLE ON RECORD TO SHOW WHETHER THE ACQUISITION PROCEEDINGS WERE INITIATED IN THE YEAR 1981 OR NOT. FOR INITIA TING ACQUISITION PROCEEDINGS, THE COLLECTOR UNDER THE LAND ACQUISITI ON ACT HAS TO ISSUE NOTICE TO THE RESPECTIVE LAND OWNERS AND THEY SHALL CONDUCT AN ENQUIRY. NO MATERIAL IS AVAILABLE ON RECORD TO SHOW THAT THE PR OCEEDINGS WERE INITIATED IN THE YEAR 1981. IT IS ALSO NOT KNOWN AS TO WHEN THE PROCEEDINGS WERE NOT INITIATED IN THE YEAR 1981 HOW WILL THERE BE PROHIB ITION FOR SALE OF LAND. THEREFORE, IT IS REQUIRED TO BE EXAMINED AS TO WHEN THE ACQUISITION 4 ITA NO.592/COCH/2011 PROCEEDINGS WERE ACTUALLY INITIATED AND WHETHER THE RE WAS ANY PROHIBITION FOR SALE OF THE LAND FROM THE YEAR 1981 TO 1996. F OR THE PURPOSE OF FAIR MARKET VALUE WE HAVE TO EXAMINE VARIOUS FACTORS SUC H AS AREA OF THE LAND, LOCALITY OF LAND, PROXIMITY TO THE INFRASTRUCTURE F ACILITIES, AVAILABILITY OF INFRASTRUCTURE FACILITY, IN THE VICINITY, POTENTIAL FOR FUTURE DEVELOPMENT, COMPARATIVE SALE INSTANCES IN THE LOCALITY, ETC. I F THE LAND WAS ACQUIRED FOR PUBLIC PURPOSE BY GOVERNMENT, THEN, THE MARKET RATE FIXED FOR AWARDING COMPENSATION MAY ALSO BE ONE OF THE RELEVANT FACTOR TO BE CONSIDERED. IN THIS CASE, THE LOWER AUTHORITIES HAVE NOT CONSIDERE D ALL THESE FACTORS. THOUGH THE TAXPAYER CLAIMED BEFORE THE ASSESSING OF FICER THAT THERE WAS NO SALE FROM 1977 TO 1997, THE ASSESSING OFFICER HAS N OT MADE ANY ATTEMPT TO VERIFY FROM THE SUB REGISTRAR WHETHER THERE WAS ANY SALE DURING THOSE PERIOD OR NOT. APART FROM THIS, THE FACTORS WHICH WE HAVE REFERRED ABOVE NEED TO BE CONSIDERED FOR THE PURPOSE OF DETERMININ G THE FAIR MARKET VALUE OF THE LAND. SINCE THESE FACTORS WERE NOT CONSIDER ED, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECO NSIDERED. ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES ARE SET ASIDE AND T HE ISSUE IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER IS DIRECTED TO RECONSIDER THE ISSUE IN THE LIGHT OF THE OBSERVATIO NS MADE ABOVE AND 5 ITA NO.592/COCH/2011 THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING OPPORTUNITY OF HEARING TO THE TAXPAYER. 6. THE TAXPAYER HAS RAISED ONE MORE GROUND WITH REG ARD TO VALUATION OF THE BUILDING. HOWEVER, THE LD.REPRESENTATIVE FOR T HE TAXPAYER HAS SUBMITTED THAT HE DID NOT WANT TO PRESS THIS GROUND . THE LD.REPRESENTATIVE FOR THE TAXPAYER HAS ALSO MADE AN ENDORSEMENT IN TH IS REGARD. THEREFORE, THE GROUND RELATING TO VALUATION OF BUILDING IS DIS MISSED AS NOT PRESSED. 7. IN THE RESULT, THE APPEAL OF THE TAXPAYER IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DECEMBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 21 ST DECEMBER, 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH