ACIT, CIR-32, KOLKATA, Kolkata V. M/s Bajaj Chemicals, Kolkata

ITA 640/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1632 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHOWNGTHU ADD L
• Assessee Lawyers: S K TULSIYAN
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Fair market value; Valuation report; Assessment record
• Section: 50C

Judgement Text

ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C KOL KATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & SHRI S.S.VISWANETHRA RAVI, JM ] ITA NO.640/KOL/2015 ASSESSMENT YEAR : 2005-06 D.C.I.T., CIRCLE-32, -VERSUS- M/S. BAJAJ CH EMICALS KOLKATA KOLKATA (PAN: AADFB 7734 M) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI DAVID Z. CHOWNGTHU, ADD L. CIT(DR) FOR THE RESPONDENT: SHRI S.K.TULSIYAN, ADVOCATE DATE OF HEARING : 10.08.2017. DATE OF PRONOUNCEMENT : 23.08.2017. ORDER PER J.SUDHAKAR REDDY, AM: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-9, KOLKATA FOR A.Y. 2005-06. 2. THERE IS ONLY ONE ISSUE INVOLVED IN ALL THE GR OUNDS OF APPEAL AND THIS RELATES TO COMPUTATION OF THE LONG TERM CAPITAL GAIN AT RS.83, 38,733/- BY THE AO AS AGAINST RS.17,70,015/- DECLARED BY THE APPELLANT. 3. THE FACT OF THE CASE IS THAT THE RETURN OF I NCOME WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME AT RS.66,83,684/- WHICH WAS ASSESSED AT RS.L,31,53,007/-. THE DIFFERENCE BETWEEN THE RETURNED INCOME AND THE ASSE SSED INCOME RESULTED FROM DETERMINATION OF LONG-TERM CAPITAL GAIN AT RS.82,38 ,733/- BY THE AO BY INVOKING AND APPLYING THE PROVISIONS OF SEC. 50C OF THE ACT. THE ASSESSEE-FIRM HAD JOINTLY HELD WITH OTHER TWO CO-OWNERS, A PLOT OF LAND SITUATED AT, 16 /LF, EAST TOPSIA ROAD, TILJALA, 24- PARGANAS (5) AND THE COST ATTRIBUTABLE TO THE ASSES SEES L/3RD SHARE WAS OF RS.L,65,000/- . DURING THE YEAR UNDER CONSIDERATION, THE SAID LAN D WAS SOLD FOR RS.19,35,015/-. THE A.O. NOTICED THAT THE SALE VALUE ADOPTED BY THE STA MP VALUATION AUTHORITY FOR THE ENTIRE PLOT OF LAND WAS OF RS.2,56,33,822/-, WHEREA S DEED OF CONVEYANCE REFLECTED THE ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 2 SALE CONSIDERATION TO THE TUNE OF RS.58,05,000/- ON LY. IN TERMS OF THE DEED OF CONVEYANCE THE ASSESSEE WAS TO HAVE RECEIVED RS.19, 35,000/- AS ITS L/3RD SHARE OF THE SALE PROCEEDS, THE AMOUNT RECEIVABLE IN TERMS OF TH E STAMP DUTY VALUATION WAS OF RS. 85,44,607/-. DURING ORIGINAL ASSESSMENT PROCEEDINGS , THE A.O. ASKED THE ASSESSEE TO EXPLAIN AS TO WHY STAMP DUTY VALUATION SHOULD NOT B E DEEMED TO BE THE FULL VALUE OF CONSIDERATION OF TRANSFER FOR THE PURPOSE OF CAPITA L GAIN U/S. 50C OF THE ACT. THEREAFTER, THE A.O. REFERRED THE MATTER TO THE D.V .O., WHO AFTER ALLOWING TIME TO THE ASSESSEE AND OBTAINING FURTHER INFORMATION/DETAILS /DATAS FROM ALIPORE SUB-REGISTRY OFFICE, ESTIMATED THE TOTAL VALUE OF THE IMPUGNED L AND AT RS.2,52,13,000/-. THE ASSESSEE OBJECTED TO SUCH ADOPTION OF VALUE OF THE LAND ON THE GROUND THAT, HE OMITTED TO CONSIDER SEVERAL FACTORS AND RELATED DOCUMENTS F URNISHED TO HIM INCLUDING, THE VALUATION REPORT OF THE IMPUGNED LAND MADE BY A REG ISTERED VALUER MR. A.K. DEY WHO VALUED THE LAND AT RS.58,05,000/-. THE A.O. ASSUMED THE VALUE ADOPTED BY THE DVO AND COMPLETED THE ASSESSMENT BY TAKING VALUE OF L/3 RD SHARE OF THE ASSESSEE IN THE SAID LAND AT RS.85,44,607/- FOR THE PURPOSE OF CALCULATI ON OF LTCG. THE ASSESSEE WAS UNSUCCESSFUL IN THE FIRST ROUND OF APPEAL BEFORE TH E C.I.T.(A) AND THUS PREFERRED SECOND APPEAL BEFORE THE HON'BLE I.T.A.T., KOLKATA. BEFORE THE TRIBUNAL, THE ASSESSEE FILED SEVERAL DOCUMENTS/EVIDENCES IN THE FORM OF PA PER BOOK. AFTER PERUSAL OF THE SAME AND HEARING THE REPRESENTATIVES OF BOTH THE SI DES, THE HON'BLE TRIBUNAL WAS OF THE CONSIDERED OPINION THAT THE A.O. IN THE PRESENT CASE HAD PASSED THE ASSESSMENT ORDER JUST TO COMPLY THE STATUTORY REQUIREMENTS FOR COMPLETING THE ASSESSMENT BEFORE 31/12/2007 AND IT WAS FURTHER HELD THAT THE MATERIA LS BROUGHT ON RECORD BY THE ASSESSEE BEFORE THE A.O. HAS NEITHER BEEN CONSIDERED BY HIM NOR BY THE C.I.T.(A). THEREFORE, IN THE INTEREST OF NATURAL JUSTICE, THE MATTER WAS SET ASIDE TO THE FILE OF THE A.O. TO RE- DECIDE THE ISSUE AS PER LAW, AFTER TAKING INTO CON SIDERATION OF THE VARIOUS MATERIALS FILED BY THE ASSESSEE AND AFFORDING REASONABLE OPPO RTUNITY OF BEING HEARD. THE PRESENT ORDER GIVING EFFECT TO THE SAID ORDER OF HON'BLE TRIBUNAL PASSED BY THE A.O. U/S. 254 OF THE ACT WAS THE SUBJECT MATTER OF APPEAL BEFORE THE LD. CIT(A). IN THE SAID APPEAL EFFECT ORDER, THE A.O. FOLLOWED THE SAME BASIS OF VALUATION AS ADOPTED ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 3 IN THE ORIGINAL ASSESSMENT PROCEEDING AND THE VALUE OF THE SALE CONSIDERATION WAS DEEMED TO HAVE BEEN FIXED AT RS.2,52,13,000/- AND T HE L/3RD SHARE OF THE APPELLANT AT RS.84,04,333/-, MEANING THEREBY THE LTCG WAS COMPUT ED AT RS.82,38,733/- AND THE TOTAL INCOME AT RS.1,31,53,007/-. 4. THE ASSESSEE CARRIED THE MATTER ON APPEAL T O THE LD. FIRST APPELLATE AUTHORITY, WHO CONSIDERED VARIOUS FACTORS AND OTHER EVIDENCES FURNISHED BY THE ASSESSEE, IN SUPPORT OF HIS CONTENTION THAT THE MARKET VALUE OF THE PROPERTY IN QUESTION WAS MUCH LESSER THAN THE GUIDELINES VALUE FIXED BY SUB-REGIS TRAR OFFICE AND GRANTED RELIEF. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS :- GROUND NO.L : 'THAT, ON THE FACTS AND IN CIRCUMSTA NCES OF THE CASE AND IN LAW, THE CIT(APPEALS) ERRED IN ALLOWING RELIEF TO THE AS SESSEE BY ACCEPTING THE VALUATION MADE BY THE APPELLANT AND NOT CONSIDERING THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER, THEREBY REDUCING TH E AMOUNT OF LONG TERM CAPITAL GAIN ON SALE OF PROPERTY. ' GROUND NO.2 : 'THAT, ON THE FACTS AND IN CIRCUMSTAN CES OF THE CASE AND IN LAW, THE CIT(APPEALS) ERRED IN ALLOWING RELIEF TO THE AS SESSEE BY HOLDING THAT THE A 0 HAS NOT COME UP WITH ANY RELIABLE MATERIAL AND FIND INGS WHILE MAKING THE ADDITION WHILE ON THE CONTRARY AO HAD PASSED THE OR DER AFTER GATHERING SUFFICIENT MATERIAL ON RECORD AND CONSIDERING THE APPELLANT'S SUBMISSIONS.' GROUND NO.3 : 'THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSES SEE FIRM BY RELYING ON JUDGMENTS IN CASES WHEREIN THE FACTUAL MATRIX ARE D IFFERENT FROM THAT OF THE PRESENT CASE OF THE APPELLANT FIRM. GROUND NO.4 : 'THAT THE APPELLANT CRAVES LEAVE TO S UBMIT ADDITIONAL GROUNDS OF APPEAL, IF ANY, AT OR BEFORE THE TIME OF HEARING AN D/OR ALTER, MODIFY, REFRAME ANY GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. ' 5. THE LD. SENIOR DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT THE LD. CIT(A) DID NOT HAVE THE POWER NOR THE EXPERTISE TO DETERMINE THE M ARKET VALUE OF THE PROPERTY ON TRANSFER. HE SUBMITTED THAT THE AO REFERRED THE MAT TER TO THE DEPARTMENT VALUATION OFFICER AND THE LD. DVO HAD AFTER TAKING INTO CONSI DERATION THE DETAILS FURNISHED BY THE ASSESSEE ARRIVED AT THE TOTAL VALUE OF THE IMPU GNED LAND AT RS.2,52,13,000/- IN PLACE OF THE VALUE ARRIVED AT BY THE REGISTERED VAL UER SHRI A.K.DEY AT RS.58,05,000/-. ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 4 HE SUBMITTED THAT AT BEST THE LD. CIT(A) SHOULD HAV E REFERRED THE ISSUE BACK TO THE DVO AND HE SHOULD NOT HAVE HIMSELF ARRIVED AT THE P RESENT VALUE. HE REFERRED TO THE VARIOUS FACTORS CONSIDERED BY LD. CIT(A) WHILE COMI NG TO A CONCLUSION THAT THE VALUE OF THE SAID LAND IS DEPRESSED AND SUBMITTED THAT T HESE FACTORS CANNOT LEAD TO THE QUANTUM OF REDUCTION IN VALUE AS REDUCED BY THE LD . CIT(A). HE PRAYED THAT THE ISSUE SHOULD BE RESTORED TO THE FILE OF THE AO , WHO SHAL L REFER ONCE AGAIN TO THE DVO FOR FRESH ADJUDICATION. 6. THE LD.COUNSEL FOR THE ASSESSEE, ON THE OTHE R HAND, VEHEMENTLY OPPOSED THE CONTENTIONS AND SUBMITTED THAT THE ASSESSEE WAS THE OWNER OF 1/3 RD OF THE LAND AND THE OTHER TWO OWNERS SOLD THE LAND AT THE VERY SAME RAT E AND THE REVENUE HAD ACCEPTED THE SALE RATES IN THOSE CASE. HE FURTHER SUBMITTED THAT IN THE FIRST ROUND OF THE APPELLATE PROCEEDINGS THE TRIBUNAL HAD GIVEN CERTAIN DIRECTIO NS AND THE LD. AO FAILED TO CONSIDER THE DIRECTIONS AND REPEATED THE ASSESSMENT. HE SUBM ITTED THAT THE LAND WAS LOCATED IN A SLUM AREA WITH FAMILIES ALL ALONG AND PRIMARILY INH ABITED BY WORKING CLASS PEOPLE OF THE MINORITY COMMUNITY KNOWN AS ANJUMAN-E-BURHANI H E ENUMERATED EACH ONE OF THE FACTORS WHICH DEPRESSED THE VALUE OF THE LAND A ND THE OFFER OF PURCHASE FOR BUILDING OF A MOSQUE ON THE SAID LAND AND SUBMITTED THAT THE ASSESSEE HAD NO CHOICE BUT TO SELL THE LAND AT THE RATE OFFERED. HE RELIED ON VARIOUS SUBMISSIONS MADE BEFORE LD. CIT(A) AS WELL AS THE FINDINGS OF THE LD. CIT(A ) AND SUBMITTED THAT THE SAME BE UPHELD. 7. HEARD THE RIVAL SUBMISSIONS. ON A CAREFUL CO NSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS CITED WE HOLD AS FOLLOWS : THE TRIBUNAL IN THE FIRST ROUND OF THE APPELLATE PR OCEEDINGS IN ITA NO.373/KOL/2009 FOR A.Y.2005-06 ORDER DATED 11.09.2009 AT PARA 4 HE LD AS FOLLOWS :- 4. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CA REFUL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD AND TAKING INTO CONSIDERATION T HE VARIOUS SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR AND FURTHER ON CAREFUL PERUSAL OF THE PROVISIONS OF SECTION 50C, WE ARE OF THE CON SIDERED OPINION THAT THE AO HAS PASSED THE ASSESSMENT ORDER IN ORDER TO COMPLY THE STATUTORY REQUIREMENTS BY ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 5 COMPLETING THE ASSESSMENT BEFORE 31.12.07 AND WE FU RTHER OBSERVE THAT THE MATERIALS BROUGHT ON RECORD BY THE ASSESSEE BEFORE THE AO HAS NEITHER BEEN CONSIDERED BY THE AO NOR BY THE LD. CIT(A). THEREFO RE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE MATTER TO THE FILE OF THE AO TO RE -DECIDE THE ISSUE, AS PER LAW, AFTER TAKING INTO CONSIDERATION OF THE VARIOUS MATE RIALS FILED BY THE ASSESSEE AND AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. 8. THE TRIBUNAL WHILE DOING SO CONSIDERED THE OB JECTIONS OF THE ASSESSEE ON THE DVOS VALUATION. THE REGISTERED VALUER OF THE INCOM E TAX DEPARTMENT, IN HIS VALUATION REPORT, HAD VALUED THE VERY SAME LAND AT RS.58,05,000/-. ON THESE FACTS THE FIRST APPELLATE AUTHORITY IN HIS IMPUGNED ORDER HEL D AS FOLLOWS :- 7. I HAVE CONSIDERED THE SUBMISSION OF THE APPE LLANT AND CAREFULLY PERUSED THE MATERIAL PLACED DURING THE APPELLATE PROCEEDINGS AS WELL AS THE ASSESSMENT RECORDS, IN THE INSTANT CASE, THE ISSUE INVOLVED IS WHETHER THE SALE CONSIDERATION RECEIVED BY THE APPELLANT ON SALE OF PLOTS OF LAND SITUATED 16/1F, EAST TOPSIA ROAD, KOLKATA DURING OCTOBER & NOVEMBER, 2004 SHOUL D BE TAKEN BY APPLYING THE PROVISIONS OF SEC. 50C OF THE ACT ADMITTING THE VALUATION REPORT OF THE DVO DEPICTING FAIR MARKET VALUE OF THE PROPERTY OR THE SAME SHOULD BE TAKEN ON THE SALE PRICE CLAIMED TO HAVE BEEN ACTUALLY RECEIVED B Y THE APPELLANT AND WHICH WAS DULY SUPPORTED BY REGISTERED VALUER'S REPORT. 7.2. BEFORE COMING TO THE ISSUE WHETHER THE SALE PR ICE RECEIVED AND/OR SHOWN AS PER DEED OF CONVEYANCE IS THE ACTUAL VALUE REALIZED BY THE APPELLANT OR THE APPELLANT HAS SUPPRESSED THE SAME IN VIEW OF DVO'S REPORT BACKED BY VALUE ESTIMATED BY THE STAMP DUTY AUTHORITY WHILE REGISTE RING THE CONVEYANCE DEEDS OF THE IMPUGNED LAND, THE GEOGRAPHICAL SITUATION OF TH E LAND, SURROUNDED ATTENDING SITUATION AND FACTORS HAVING ANY DEPRESSING OR APPR ECIATIVE EFFECT ON THE VALUE OF THE PROPERTY ARE TO BE LOOKED INTO. THE APPELLANT S UBMITTED AND NARRATED SUCH SITUATION IN DETAIL AND ARGUED THAT THE SAME CANNOT BE SAID TO BE UNTRUE IN ABSENCE OF DENIAL OF SUCH FACTS BY THE A.O. THE APP ELLANT FURTHER SUBMITTED THAT THE IMPUGNED LAND AT THE RELEVANT TIME CONSISTED OF VERY LOW LAND, PARTLY AGRICULTURAL AND PARTLY DOBA (SMALL WATERBODY). THE DOBAS AND OTHER LOW AREAS GRADUALLY GOT FILLED UP DUE TO GARBAGE DUMPING BY T HE KMC. THE LAND IS BOUNDED ON THE NORTH BY EAST TOPSIA ROAD, A DECREPIT ROAD O F 12 TO 15 FEET AVERAGE WIDTH, WHICH IS THE ONLY INGRESS AND EGRESS TO THE LAND. T HE LAND COULD NOT BE APPROACHED THROUGH ANY OTHER SIDE WITHOUT TRESPASSI NG INTO PROPERTIES OF OTHER PEOPLE, WHICH WERE ALSO OF SIMILAR TYPE DURING THE RELEVANT TIME. SUCH SURROUNDINGS AND ACCESS TO ANY LAND IS BOUND TO SU BSTANTIALLY DIMINISH ITS MARKET VALUE. THE LOCALITY AND NEIGHBOURHOOD, IN WH ICH THE LAND IS SITUATED, IS MOSTLY SLUM AREA WITH TANNERIES ALL AROUND AND PRIM ARILY INHABITED . BY WORKING CLASS PEOPLE, MAINLY OF THE MINORITY COMMUNITY. THE PLOTS ADJACENT TO THE APPELLANT'S PLOT WERE UNDER POSSESSION OF TANNERY A ND THESE PLOTS ULTIMATELY CAME UNDER THE POSSESSION OF A SOCIETY RUN BY THE MINORI TY COMMUNITY KNOWN AS ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 6 ANJUMAN-E-BURHANI, WHO ACQUIRED THE SAME BETWEEN 22 /01/2004 AND 07/04/2004 FOR THE PURPOSE OF CONSTRUCTING OF A MOSQUE. FURTHE R, FROM THE LETTER DATED 16/1/2004 RECEIVED BY THE APPELLANT FROM ANJUMAN-E- BURHANI, QUOTED ABOVE, IT IS EVIDENT THAT THE APPELLANT HAD NO REAL OPTION BUT T O SELL THE LAND TO THIS SOCIETY AT A PRICE OFFERED BY THEM. IN SUCH SITUATION, THERE W AS HARDLY ANY OPTION TO BARGAIN FOR BETTER PRICE. PRICE OF A LAND DEPENDS ON ITS GE OGRAPHICAL POSITION AND AVAILABILITIES OF CIVIC AMENITIES. THE STAMP DUTY A UTHORITY GENERALLY ESTIMATES THE VALUE WARD-WISE. THE STAMP DUTY AUTHORITIES VALUE A PROPERTY FOR STAMP DUTY PURPOSES SIMPLY ON THE BASIS OF PRE-DECLARED RATE A ND NOT ON THE BASIS OF THE FACTORS GOVERNING EACH INDIVIDUAL PREMISE AS HAD BE EN WRONGLY PRESUMED BY THE A.O. IT IS ALSO FACT THAT EACH PART OF THE WARD MAY NOT FETCH THE SAME GEOGRAPHICAL SITUATION, CIVIC FACILITIES AND OTHER FACTORS, THEREFORE, THE IMPUGNED LAND CANNOT FETCH SUCH VALUE AS ESTIMATED BY THE A. O. AND DVO DEPENDING UPON THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY. 7.3. THE A.R TO JUSTIFY THE SALE PRICE OF THE IMPUG NED LAND HAS REFERRED TO THE GOVT. NOTIFICATION NO.72-LA(CAL)1-2/2000/M.A. DATED 16/11/2000, PUBLISHED IN THE CALCUTTA GAZETTE ON 21/11/2000, A COPY OF WHICH IS PLACED ON RECORD. IT IS EVIDENT THERE FROM THAT CERTAIN HOLDING' ADJACENTS TO THE IMPUGNED LAND OF THE APPELLANT WERE ACQUIRED AT A PRICE OF R .48,082/- P ER KOTTAH. IT IS FURTHER OBSERVED THAT AS ON 14/01/2004, FOUR OWNERS OF PREM ISES NO.16F, EAST TOPSIA ROAD (APPELLANT'S IMPUGNED PLOT IS JUST ADJACENT, I .E. 16/1F, EAST TOPSIA ROAD) HAD SOLD THEIR LAND TO ANJUMAN-E-BURTHANI ON 14/01/ 2004 AT A VALUE BETWEEN RS.49,905/- AND RS.51,285/- PER KOTTAH. THE COPIES OF CONVEYANCE DEEDS OF PLOT NO.16/F, EAST TOPSIA ROAD ARE ON RECORD. THEREFORE, ON THE BASIS OF THE AFORESAID INSTANCES, IT CANNOT BE SAID THAT THE MAR KET VALUE OF THE APPELLANT'S LAND AT THE RELEVANT TIME WAS HIGHER THAN MENTIONED IN THE CONVEYANCE DEED. ON TH OTHER HAND, IT IS EVIDENT THAT THE DVO IN HIS RE PORT HAS NOT DISCUSSED OR TAKEN INTO CONSIDERATION THE ABOVE POSITION IN AND AROUND THE LAND AND CIRCUMSTANCE UNDER WHICH THE APPELLANT HAD TO SELL THE PROPERTY AT THE PRICE FIXED BY THE PURCHASER WHILE DETERMINING FAIR MARKET VALUE RATHE R HE HAS BASED HIS OPINION ON THE BASIS OF VALUE ASSESSED BY THE ADDL, DISTRIC T SUB-REGISTRAR OFFICE, ALIPORE FOR ASCERTAINING VALUE FOR STAMP VALUATION PURPOSES . IN FACT, RELYING ON THE STAMP VALUATION FOR VALUING A PROPERTY DEFEATS THE VERY P URPOSE OF REFERRING THE MATTER FOR VALUATION TO THE DVO SINCE THE DISPUTE IS IN RE SPECT OF THE STAMP DUTY VALUATION ITSELF. THE DVO SHOULD HAVE BASED HIS VAL UATION ON ACTUAL VERIFICATION OF THE LAND AND THE VARIOUS METHODS OF VALUATION, I .E. PRIMARILY LAND & BUILDING METHOD, CONTRACTOR'S METHOD OF VALUATION, RENTAL BA SIS OR YIELD BASIS METHOD, MUNICIPAL VALUATION METHOD ETC. IN THIS CASE, THE D VO HAS NOT ASCERTAINED ANY MARKET VALUE TO WHICH A WILLING, REASONABLE AND PRU DENT PURCHASER WOULD PAY FOR THIS PROPERTY. EVEN THE DVO HAS NOT CONSIDERED THE FACTORS HAVING ANY DEPRESSING OR APPRECIATIVE EFFECT ON THE VALUE OF T HE PROPERTY. IT IS THE FACT THAT VALUATION OF AN IMMOVABLE PROPERTY DEPENDS ON VARIO US PLUS AND MINUS FACTORS AND EVALUATION OF THESE FACTORS, OF COURSE, DEPENDS ON THE FACTS OF EACH CASE. IN GENERAL, PLUS AND MINUS FACTORS ARE AS UNDER AS SUB MITTED BY THE APPELLANT. ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 7 PLUS FACTORS MINUS FACTORS 1. SMALLNESS OF SIZE 1. LARGENESS OF AREA 2. PROXIMITY TO A ROAD. 2. PROXIMITY TO A ROAD 2.SITUATION IN THE INTER IOR AT A DISTANCE FROM THE ROAD. 3. FRONTAGE ON A ROAD. 3. NARROW STRIP OF LAND WIT H SMALL FRONTAGE COMPARED TO DEPTH 4. NEARNESS TO DEVELOPED AREA. 4. LOWER LEVEL RE QUIRING FILLING UP 5. REGULAR SHAPE 5.SOME SPECIAL DISADVANTAGEOUS FACTOR WHICH WOULD DETER A PURCHASER. IF THE ABOVE FACTORS ARE APPLIED TO THE APPELLANT' S PROPERTY, IT WOULD BE SEEN THAT IN COMPARISON TO PLUS FACTORS, MINUS FACTORS EXISTE D MUCH AT THE RELEVANT TIME. THE AREA OF PLOT WAS LARGE, WHICH WAS ABOUT 114.95 COTTAHS. THE PLOT WAS NOT ON THE MAIN ROAD, RATHER THE FRONT APPROACH ROAD WAS N ARROW, KUTCHA AND WITHOUT DRAINAGE FACILITY. THE APPROACH ROAD WAS ENDING AT THE MOSQUE WHICH WAS SURROUNDED BY KUTCHA HUTMENTS OF SLUM DWELLERS. THE LAND AT THE RELEVANT TIME WAS A DUMPING GROUND OF KMC GARBAGE AND THUS SOFT A ND UNDERDEVELOPED WITHOUT PROPER FILLING. FURTHER, RIGHT TO PEACEFUL ENJOYMENT OF THE PROPERTY WAS DISTURBED AND FREE CHOICE OF SALE WAS NOT POSSIBLE DUE TO INSISTENCE BY ANJUMAN- E-BURHANI FOR TRANSFER OF THE LAND AT THE PRICE SET TLED BY THEM. IT APPEARS, NEITHER THE DVO NOR THE AO HAS CONSIDERED THE ABOVE THINGS WHILE DETERMINING THE FAIR MARKET PRICE OF THE LAND AND INSTEAD THEY WERE SIMP LY GUIDED BY THE VALUATION MADE FOR STAMP DUTY PURPOSES BY THE REGISTERING AU THORITY, WHICH IS A VALUATION MADE AT PREDETERMINED RATE AND NOT ON THE BASIS OF THE ACTUAL FACTS OF EACH PROPERTY. 9. THE LD. DR HAS NOT CONTROVERTED THESE FACTU AL FINDING OF THE LD. CIT(A). FURTHER THE LD. CIT(A) HELD AS FOLLOWS :- 7.6. THE APPELLANT ALSO FILED A VALUATION REPORT FROM A REGISTERED VALUER, SRI A.K. DEY, DURING ASSESSMENT PROCEEDING. ACCORDING T O THE APPELLANT, THE SAID VALUER VISITED/INSPECTED THE IMPUGNED LAND/AREA IN ORDER TO DETERMINE AND ASSESS VALUATION OF THE SAME AS ON NOVEMBER, 2004. ON PERU SAL OF THE SAID REPORT IT IS FOUND THAT THE REGISTERED VALUER HAS, IN FACT, INCO RPORATED THE DETAILED BASIS OF VALUATION INCLUDING THE COMPARABLE SALE TRANSACTION ADJACENT TO THE APPELLANT'S IMPUGNED LAND AND THUS ADOPTED THE FAIR MARKET VALU E AS ON NOVEMBER, 2004 OF THE APPELLANT'S IMPUGNED LAND AT RS.50,509/- PER CO TTAH AND FOR ENTIRE 114.93 COTTAH AT RS.58,05,000/-. ACCORDINGLY, THE VALUATIO N AS PER STAMP DUTY AUTHORITY OF RS.2,56,33,822/-, BEING MORE THAN 4 TIMES HIGHER , APPEARED NOT REASONABLE .. IT IS FOUND THAT THE A.O. HAS NOT DISCUSSED ABOUT T HE MERITS OR DEMERITS OF THE SAID VALUATION REPORT. THE A.O. COULD HAVE DISCARDED THE REPORT BY ADDUCING REASON ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 8 WHATSOEVER AND THAT NOT BEING DONE, IT IS TO BE PRE SUMED THAT HE HAS NOTHING TO COMMENT ON THE SAME. 7.7. BEFORE PARTING, IT MAY BE MENTIONED HERE THAT DURING FIRST ROUND OF APPELLATE PROCEEDING, THE THEN C.I.T.(A) SOUGHT FOR A REMAND REPORT FROM THE A.O. TO KNOW THE STATUS OF ASSESSMENT IN THE CASE OF OTHER TWO J OINT-OWNERS FOR A.Y. 2005-06. IN REPLY, THE A.O. VIDE COMMUNICATION DATED 18/08/2014 TO THE C.I.T.{A) HAS INTIMATED THAT IN BOTH THE CASES NO SCRUTINY ASSESS MENT WAS DONE BY THE CONCERNED A.O. FOR BETTER APPRECIATION, THE RELEVAN T PORTION OF THE REMAND REPORT IS REPRODUCED HEREUNDER : 'THE JURISDICTION OF BAJAJ BROTHERS LIES WITH THE C HARGE ITSELF. IT IS FOUND FROM THE RECORDS OF THE SAID BAJAJ BROTHERS THAT IT HAD FILE D RETURN OF INCOME FOR THE A.Y. 2005-06 ON 31/10/2005 AND COMPUTED CAPITAL GAINS BY TAKING SALE CONSIDERATION AT RS.19,34,992/-. NO SCRUTINY ASSESSMENT WAS MADE IN THIS CASE. FROM THE RETURN OF INCOME FILED BY M/S. MILAP LEATHER CO. FOR THE A .Y. 2005-06, IT WAS OBSERVED THAT IT HAD ALSO COMPUTED THE CAPITAL GAINS BY TAKI NG SALE CONSIDERATION AT RS.19,34,993/-. IT IS ALSO TO BE STATED THAT THE JU RISDICTION OF M/S. MILAP LEATHER DURING THE FINANCIAL YEAR 2007-08 (DURING WHICH THE ASSESSMENT FOR A.Y. 2005-06 WAS TO GET BARRED) WAS FOUND TO BE WITH A.CLT., CIR CLE-31, KOLKATA. ACCORDINGLY, A.CL.I.T., CIRCLE-31, KOLKATA WAS REQUESTED TO INFO RM WHETHER ANY SCRUTINY ASSESSMENT WAS MADE IN THIS CASE. HE INFORMED THAT NO SCRUTINY ASSESSMENT WAS MADE IN THAT CASE ALSO.' 8. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN TOTALITY AND JUDICIAL PRECEDENCE REFERRED TO ABOVE, I FIND MERIT IN THE SUBMISSION OF THE APPELLANT AND FIND NO JUSTIFIABLE REASON TO ADOPT T HE DEEMED VALUE OF SALE CONSIDERATION OF THE APPELLANT'S 1/3RD PORTION IN T HE PROPERTY AT RS.84,04,333/- AND CONSEQUENTIAL ASSESSMENT OF RS.82,38,733/- UNDE R THE HEAD LTCG. THEREFORE, APPEAL ON THIS GROUND IS ALLOWED. 10. WE FIND NO INFIRMITY IN THE ORDER OF THE FIR ST APPELLATE AUTHORITY. THIS IS A CASE WHERE THERE ARE TWO VALUATION REPORTS, ONE BY THE D EPARTMENTAL VALUATION OFFICER AND THE OTHER BY THE REGISTERED VALUER OF THE INCOME TA X DEPARTMENT. IN SUCH A SITUATION, WE ARE OF THE OPINION THAT THE ADJUDICATING AUTHORI TY HAS TO EXAMINE BOTH THE REPORTS ON FACTS AND COME TO A CONCLUSION AS TO WHICH REPOR T IS MORE REALISTIC ON THE FACTS OF THE CASE AND THEN CHOOSE TO ADOPT THE SAME. WHEN TH E DVOS REPORT HAS NOT TAKEN INTO ACCOUNT VITAL FACTS, IT CANNOT BE A BASIS FOR SUBST ITUTING THE STAMP DUTY VALUATION FIXED BY THE REGISTRATION AUTHORITY OF THE STATE GOVT. IT IS OPEN TO THE APPELLATE AUTHORITIES TO EXAMINE BOTH THE VALUATION REPORTS AND COME TO A CO NCLUSION AS TO WHICH REPORT GIVES THE FAIR MARKET VALUE OF THE PROPERTY. THE CONTENTI ON OF THE LD. DR THAT THE VALUATION ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 9 MADE BY THE DVO CANNOT BE LOOKED INTO OR INTERFERED WITH BY THE APPELLATE AUTHORITIES IS NOT CORRECT. THE ISSUE OF DETERMINATION OF FAI R MARKET VALUE IS A FINDING OF A FACT AND THE REPORT OF THE DVO IS AN OPINION IN ARR IVING AT THIS FACT. THE REPORT OF THE DVO OR THE REGISTERED VALUER IS AN EXPERT OPINION A ND IT CAN BE CHALLENGED AND QUESTIONED BY THE PARTIES BEFORE THE AUTHORITIES. W HEN THIS DVOS REPORT IS PROVED AS WRONG, THEN IT IS OPEN TO THE AUTHORITIES TO REJECT IT AND ADOPT OTHER METHODS FOR ARRIVING AT THE FAIR MARKET VALUE . SUB-SEC.(3) OF SEC.50C PROVIDES FOR ADOPTION OF THE VALUE ASCERTAINED UNDER SUB-SEC. (2) AS THE FUL L VALUE OF CONSIDERATION. IN THE CASE ON HAND, ON FACTS, THE FAIR MARKET VALUE ARRIVED A T BY THE REGISTERED VALUER AND ACCEPTED BY THE LD. CIT(A) HAS NOT BEEN CONTROVERTE D BY THE LD. DR. THE ORDER OF THE LD. CIT(A) IS A REASONED ORDER. HENCE WE UPHOLD THE SAME. 11. IN THE RESULT THE APPEAL BY THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE COURT ON 23.08.2017. SD/- SD/- [S.S.VISWANETHRA RAVI] [ J.SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23.08.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. BAJAJ CHEMICALS, 83, SHAKESPEARE SARANI, KOL KATA-700017. 2. DY/A.C.I.T., CIRCLE-32, KOLKATA. 3. C.I.T.(A)- 9, KOLKATA 4. C.I.T-11, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES ITA NO.640/KO0L/2015- M/S. BAJAJ CHEMICALS A.Y.2005 -06 10