Gujarat Agro Industries Corpn.Ltd., Ahmedabad V. The ACIT., Circle-4, Ahmedabad

ITA 612/AHD/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1674 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 24-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDAN SRDR
• Assessee Lawyers: M G PATEL
• Keywords: Fair market value; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI G.D. AGARWAL, HONBLE VICE-PRESIDENT (AZ) AND SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER ITA NO.612/AHD/2009 [ASSTT.YEAR 2005-06] GUJARAT AGRO INDUSTRIES CORPN. LTD. VS- ASSTT. CO MMISSIONER OF KET UDYOG BHAVAN, OPP. HIGH COURT INCOME-TAX , CIRCLE-4 NAVRANGPURA, AHMEDABAD AHMEDABAD PAN NO.AAACGS5620R (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K MADHUSUDAN, SR-DR ASSESSEE BY: SHRI M.G. PATEL, AR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME-TAX(APPEALS)-III, AHMEDABAD IN APPEAL NO. CI T(A)-VIII/AC-4/202/07- 08 DATED 24-12-2008 FOR ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUND:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-VIII, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE BY ADDITION OF RS.1,23,65,986/- OF THE ASSETS AS ON 1-4-1981 AS VA LUED BY GOVT. APPROVED VALUER AND ADOPTING THE SAME AT RS.2,69,75 3/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A GOVERNMENT CORPORATION ENGAGED IN CARRYING AGRO BASED ACTIVITI ES. THE ASSESSEE HAS FIELD ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4 2,39,200/- INCLUDING LONG TERM CAPITAL GAINS (LTCG FOR SHORT) OF RS.27,89,200 /-. THE ASSESSMENT IN ITA NO.612/AHD/2009 A.Y. 2005-06 GAIC LTD. V. ACIT, CIR-4, ABD PAGE 2 THIS CASE WAS COMPLETED U/S.143(3) OF THE I.T. ACT. DURING THE ASSESSMENT PROCEEDINGS ASSESSING OFFICER FOUND THAT ASSESSEE H AS SOLD ITS AGRO SERVICE COMPLEX AT SURAT CONSISTING OF LAND AND VARIOUS STR UCTURES THEREON FOR A TOTAL CONSIDERATION OF RS.1.79 CRORES. HE FURTHER NOTED T HAT ON SALE OF SUCH COMPLEX, THE ASSESSEE DISCLOSED LTCG AT RS.27,89,20 0/- AND TOTAL AREA OF LAND WAS 22,764 SQ. MT. AND WHICH WAS LOCATED ON AH MEDABAD-MUMBAI NH- 8,NARODA GAM, TAL. KAMRAJA, DIST. SURAT. IT WAS FUR THER NOTED THAT ASSESSEE FOR WORKING OUT THE CAPITAL GAIN ON SALE OF SUCH LA ND TOOK THE VALUE AT RS.125/- PER SQ.MT. AS ON 01-04-1981 ON THE BASIS OF VALUATI ON REPORT PREPARED BY SHRI PARESH RANGWALA. THE AO OBTAINED THE DETAILS OF VAR IOUS PROPERTIES SOLD BETWEEN 21-02-1981 AND 27-07-1981 FROM THE SUB-REGI STRAR, KAMRAJ. ON THE BASIS OF INFORMATION RECEIVED FROM THE SUB-REGISTRA R, AO CAME TO THE CONCLUSION THAT AVERAGE PRICE OF THE LAND IN THE SU RROUNDING AREAS AS ON 01- 04-1981 WAS AT RS.11.85 PER SQ.MT. HE ACCORDINGLY W ORKED OUT THE VALUE OF PROPERTY ON 01-04-1981 BY APPLYING THE RATE AT RS.1 1.85 PER SQ.MT. AND LTCG AT RS.1,51,55,186/-. HE ACCORDINGLY ADDED THE DIFFE RENCE TO THE INCOME OF THE ASSESSEE. AGGRIEVED BY THIS ORDER, ASSESSEE WENT IN APPEAL BEFORE FIRST APPELLATE AUTHORITY. 4. DURING THE APPELLATE PROCEEDINGS, ASSESSEE OBJEC TED TO THE ASSESSING OFFICERS ACTION AND CONTENDED THAT VALUE ADOPTED B Y ASSESSEE WAS BASED ON THE VALUATION REPORT FROM THE GOVT. SUB-REGISTRY AP PROVED VALUER. IT WAS ARGUED THAT THE VALUER HAS ALSO SUPPLIED THE SALE I NSTANCES OF NEARBY PROPERTIES WHICH WERE AUTHENTIC SALE INSTANCES TAKE N FROM SUB-REGISTRARS OFFICE AT NAVAGAM. IT WAS FURTHER ARGUED THAT FAIR MARKET VALUE OF PARTICULAR LAND DEVELOPMENT OF SURROUNDING AREA, LOCALITY AND AFTER CONSIDERING ALL SUCH ASPECTS THE VALUER HAS VALUED LAND IN QUESTION AT R S.125/- PER SQ. MT. IT WAS CONTENDED THAT AO WITHOUT APPRECIATING THE SALE INS TANCES SUPPLIED BY APPROVED VALUER IN SUPPORT VALUATION AS ON 01-04-19 81, WITHOUT BRINGING ANY CONTRARY EVIDENCE EXCEPT THE SAID INSTANCES SUPPLIE D BY SUB-REGISTRAR, KAMRAJ, SURAT HAS ADOPTED THE SALE INSTANCES FOR TH E PURPOSE OF COMPUTING ITA NO.612/AHD/2009 A.Y. 2005-06 GAIC LTD. V. ACIT, CIR-4, ABD PAGE 3 CAPITAL GAIN. IT WAS ALSO ARGUED THAT AO BEFORE ARR IVING AT THE CONCLUSION DID NOT SUPPLY THE DETAILS OF PROPERTIES ON THE BASIS O F WHICH VALUATION WAS DONE BY HIM. THEREFORE, IT WAS PLEADED THAT THE VALUE TA KEN BY THE AO IS REQUIRED TO BE REJECTED. IN THIS REGARD, RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS:- I) NARAYAN CHANDRA BAIDYA V. CIT 201 ITR 287 (CAL) II) CIT V. EASTERN COMMERCIAL ENTERPRISE 210 ITR 1 03 (CAL) III) CIT V. SMT. VIMLABEN BHAGWANDAS PATEL 118 ITR 134 (GUJ) IV) SHAH SOHONI & CO. V. STATE OF RAJASTHAN 208 IT R 321 (RAJ) AFTER TAKING INTO CONSIDERATION THE SUBMISSION OF A SSESSEE, LD. CIT(A) DISMISSED THE APPEAL FILED BY ASSESSEE CONFIRMING T HE ORDER PASSED BY ASSESSING OFFICER. 5. FURTHER, AGGRIEVED THE ASSESSEE IS NOW IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE REITERATED THE SAME SUBMISSION AS MADE BEFORE THE LD. CIT(A). LD. DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 7. HEARD BOTH THE PARTIES AND PERUSED THE RECORDS A ND WE FIND THAT ONLY ISSUE IN THIS APPEAL IS IN RESPECT OF VALUATION OF THE PROPERTY AS ON 01-04-1981. THE ASSESSEE HAS TAKEN THE VALUE ON THE BASIS OF GO VERNMENT APPROVED VALUERS REPORT WHO HAS VALUED THE PROPERTY AS ON 0 1-04-1981 ON THE BASIS OF SALE INSTANCES OCCURRED BETWEEN THE PERIOD 08-03-19 79 AND 20-04-1981. THUS, THE PERIOD IN WHICH SALE INSTANCES HAVE BEEN CONSIDERED BY THE VALUER STRETCHES MORE THAN TWO YEARS. THIS LONG TIME PERIO D MADE THE VALUATION OF THE VALUER LESS RELIABLE. WE FURTHER FIND THAT THE SURVEY NUMBER OF SALE INSTANCES QUOTED BY THE VALUER ARE FROM 19 TO 23 WH ICH ARE FAR FROM THE LOCATION OF THE PROPERTY UNDER CONSIDERATION. THERE FORE THE RELEVANT DATES AND MATERIAL USED BY THE VALAUER CANNOT BE SAID TO BE R ELIABLE FOR VALUING THE PROPERTY. THE ASSESSING OFFICER ON THE OTHER HAND, WHILE MAKING THE VALUE OF ITA NO.612/AHD/2009 A.Y. 2005-06 GAIC LTD. V. ACIT, CIR-4, ABD PAGE 4 THE PROPERTY HAS TAKEN INTO CONSIDERATION THE SALE INSTANCES WHICH OCCURRED BETWEEN 21-02-1981 AND 27-07-1981. HE HAS ALSO TAKE N INTO CONSIDERATION, THE SALES INSTANCES OF THE BLOCKS WHICH ARE CLOSER TO THE BLOCK NUMBER OF THE PROPERTY UNDER CONSIDERATION. FROM THIS IT APPEARS THAT AO HAS TAKEN THE SALE INSTANCES FOR THE PERIOD, WHICH WERE CLOSE TO THE C RITICAL DATE I.S. 01-04-1981 AND ALSO THE LOCATIONS OF THE VARIOUS PROPERTIES WH ICH WERE CLOSE TO THE PROPERTY UNDER CONSIDERATION. IN VIEW OF THIS, WE A RE OF THE CONSIDERED OPINION THAT THE AVERAGE VALUE TAKEN BY AO AT 11.85 PER SQ. MT. IS QUIRE REASONABLE AND LD. CIT(A) HAS RIGHTLY CONFIRMED THIS ACTION OF AO AND THEREFORE ORDER PASSED BY HIM IS HEREBY UPHELD. THE APPEAL FILED BY ASSESSEE IS HEREBY DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS DAY OF 31 ST MARCH, 2011 SD/- SD/- ( G.D.AGARWAL ) ( D.K. TYAGI ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD, DATED : 31/03/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-VIII, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD