Ankitham Jagga Row Indrani, Visakhapatnam V. THE ITO, Ward - 1(1), Visakhapatnam

ITA 684/VIZ/2013

• Counselvise Citation: 68425314 RSA 2013
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 22-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOMALI KRISHNAN
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report; Competent authority; Bonafide mistake
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI SAKTIJIT DEY, JM ITA NO.684/VIZAG/2013 : ASST.YEAR 2010-2011 SRI ANKITHAM JAGGA ROW INDRANI C/O.M/S.A.V.BHANOJI ROW G.P.RAMAYYA & CO., PORT AREA VISAKHAPATNAM. PAN : AFPVA3791G. VS. THE INCOME TAX OFFICER WARD 1(1) VISAKHAPATNAM. (APPELLANT) (RESPONDENT) ITA NO.685/VIZAG/2013 : ASST.YEAR 2010-2011 SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW D/NO.10-28-4/31, P-2 `DEEPANJALI WALTAIR UPLANDS, SIRIPURAM VISAKHAPATNAM 530 003. PAN : ACVPA4899A. VS. THE INCOME TAX OFFICER WARD 1(1) VISAKHAPATNAM. (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI G.V.N.HARI RESPONDENT BY : SMT.KOMALI KRISHNAN, ADDL.CIT DATE OF HEARING : 0 5 .03 .2014 DATE OF PRONOUNCEMENT : 07 .0 3 .2014 O R D E R PER J.SUDHAKAR REDDY (AM) : BOTH THESE APPEALS ARE FILED BY DIFFERENT ASSESSEES AND DIRECTED AGAINST THE IDENTICAL ORDER OF THE COMMISSIONER OF INCOME-TAX ( APPEALS), VISAKHAPATNAM, DATED 20.09.2013, FOR ASSESSMENT YEAR 2010-2011. 2. BOTH THE ASSESSEES ARE CO-OWNERS OF A PROPERTY H AVING 1/3 RD SHARE EACH AND THE ISSUE IN THIS APPEAL IS COMPUTATION OF CAPI TAL GAINS ON SALE OF THIS PROPERTY. AS THE ISSUES ARE COMMON, FOR THE SAKE OF CONVENIEN CE, THEY ARE HEARD TOGETHER AND DISPOSED OFF BY WAY OF THIS COMMON ORDER. 3. FACTS IN BRIEF ARE THAT THE ASSESSEES ARE INDIVI DUALS. THEY FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-2011 ON 16.02.2 012 DECLARING TOTAL INCOME ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 2 OF RS.64,55,376 IN THE CASE OF SRI ANKITHAM JAGGA R OW INDRANI AND AN AMOUNT OF RS.56,50,510 IN THE HANDS OF SRI ANKITHAM VENKATA M ONISH SAMERANDRA RAO. THEY DECLARED INCOME ON LONG TERM CAPITAL GAINS AND SHAR E IN PARTNERSHIP FIRM. THE RETURNS WERE PROCESSED U/S 143(1) ON 07.05.2012. TH E CASES WERE SELECTED FOR SCRUTINY UNDER CASS AND NOTICES U/S 143(2) WERE ISS UED. ON A SCRUTINY OF THE RETURNS, THE ASSESSING OFFICER FOUND THAT THE ASSES SEES HAD OFFERED LONG TERM CAPITAL GAINS, ON THEIR SHARE OF THE SALE PROCEEDS OF IMMOVABLE PROPERTY. THE TOTAL CONSIDERATION DECLARED FROM THE SALE WAS RS.4,79,00 ,000. 1/3 RD OF THE SAME I.E. RS.1,59,66,667 WAS TAKEN AS CONSIDERATION OF EACH O F THE ASSESSEE AND AFTER REDUCING THE COST OF ACQUISITION I.E. MARKET VALUE AS ON 01.04.1981 AND INDEXATION THEREON, THEY DECLARED LONG TERM CAPITAL GAINS AT R S.55,89,227 EACH. THE ASSESSING OFFICER VERIFIED THE SALE CONSIDERATION W ITH REGISTERED SALE DEED AND NOTED THAT THE TOTAL SALE CONSIDERATION RECORDED IN THE DOCUMENTS WAS RS.4,79,00,000 AND WHEREAS THE STAMP VALUATION AUTH ORITY DETERMINED THE VALUE AT RS.20,93,50,000. THE ASSESSEE WAS ASKED AS TO WHY T HE FAIR MARKET VALUE OF THE PROPERTY AS DETERMINED BY THE STAMP DUTY AUTHORITY AT RS.20,93,50,000 SHOULD NOT BE ADOPTED AS FULL VALUE OF CONSIDERATION BY INVOKI NG THE PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT, 1961. THE ASSESSEE SUBMITTE D THAT THE FAIR MARKET VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY WAS NOT AC CEPTABLE DUE TO VARIOUS FACTORS, WHICH HE EXPLAINED BY WAY OF A LETTER DATED 30.03.2 013. THE ASSESSING OFFICER REFERRED THE MATTER TO THE DEPARTMENTAL VALUATION O FFICER (HEREINAFTER REFERRED TO AS THE `DVO) TO ASCERTAIN THE FAIR MARKET VALUE OF TH E PROPERTY IN TERMS OF SECTION 50C(2). THE DVO VIDE HIS REPORT DATED 27.03.2013, E STIMATED THE FAIR MARKET VALUE OF THE PROPERTY AS ON 30.07.2009 AT RS.6,28,06,500. THE ASSESSING OFFICER, ON RECEIPT OF THE VALUATION REPORT FROM THE DVO, ISSUE D A SHOW CAUSE NOTICE TO THE ASSESSEE PROPOSING TO COMPLETE THE ASSESSMENT BY CO MPUTING INCOME UNDER THE HEAD `LONG TERM CAPITAL GAINS BY CONSIDERING THE F AIR MARKET VALUE AT RS.20,93,55,000 AS ADOPTED BY THE STAMP VALUATION A UTHORITY ON THE GROUND THAT THE VALUE WAS NOT CONTESTED BY THE ASSESSEE BEFORE ANY COURT. HE ALSO PROPOSED ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 3 TO DISALLOW THE EXTRA DEDUCTION CLAIMED BY THE ASSE SSEE ON ACCOUNT OF INDEXED COST OF ACQUISITION. IN RESPONSE, THE ASSESSEE SUBMITTED AS FOLLOWS:- 4.6. IN REPLY TO THE ABOVE FINAL SHOW-CAUSE, THE A SSESSEE FURNISHED HIS CONTENTION VIDE HIS WRITTEN SUBMISSIO N DATED 30-03- 2013, WHICH IS REPRODUCED AS UNDER:- 'IN RESPONSE TO THE ABOVE SHOW-CAUSE NOTICE, IN MY C ASE, I RESPECTFULLY SUBMIT THE FOLLOWING FOR YOUR FAVOURAB LE CONSIDERATION: 1. DURING THE FINANCIAL YEAR 2009-10 RELEVANT TO THE ASSL YEAR 2010-11, I SOLD MY 1/3RD SHARE IN THE PROPERTY SIT UATED AT H NO.31-33/A3,TS NO. 1176 (PART), BLOCK 36, ALLIPURAM WARD, VISAKHAPATNAM JOINTLY WITH MY MOTHER AND BROTHER 2. AS YOU ARE KINDLY AWARE, THE SAID PROPERTY WAS R EFERRED TO THE DISTRICT VALUATION OFFICER (DVO) FOR THE PURPOSES O F VALUATION. THE DVO DETERMINED THE FAIR MARKET VALUE OF THE PROPERT Y UNDER REFERENCE, AT RS.62806500 AS PER THEIR LETTER NO.SE (V)/HYD/2499/CG/1683 DATED 27.3.2013. FACTUALLY, THE CONSIDERATION RECEIVED FROM THE VEND EE COMPANY WAS RS.4,79,00,000 ONLY OF WHICH I AM ENTITLED TO 1/3 SHARE) AGAINST WHICH THE LEARNED DVO HAD ESTIMATED THE VAL UE OF RS. 6,28,06,500 WHICH IS HIGHER BY RS. 1,49,06,500 WHIC H IS NOTHING BUT A NOTIONAL INCOME ON WHICH I AM SUBJECTED TO TA X. AS YOU ARE KINDLY AWARE, THE PROPERTY UNDER REFERENCE IS CLEAR LY AN ENCUMBERED PROPERTY WITH REGISTERED LEASE FOR A PER IOD OF FIFTY YEARS UP TO JULY.2021 AND THE FAIR MARKET VALUE OF SUCH ENCUMBERED PROPERTY CAN BE ASCERTAINED ONLY AFTER T AKING ALL ISSUES ASSOCIATED WITH SUCH PROPERTY INCLUDING THE FOLLOWING INTO CONSIDERATION; A) REGISTERED LEASE DEED IN JULY, 1971 FOR A PERI OD OF FIFTY YEARS EXPIRING IN JULY, 2021 WHICH MEANS 17 YEARS STILL T O BE COMPLETED AS ON THE DATE OF NEGOTIATION WITH THE VENDEE COMPA NY FOR SALE OF OUR PROPERTY DESPITE LEASEHOLD. B) LEGAL DISPUTES WITH THE LESSEE AND PETITION FI LED IN CIVIL COURT. C) OUR NEGOTIATION WITH THE VENDEE COMPANY IN OCTO BER, 2004 FOLLOWED BY LOK ADALAT AWARD ON 25'' MARCH, 2005, BA SED ON A COMPROMISE PETITION BETWEEN THE PARTIES. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 4 D) OUR COMMUNICATION IN SEPT.2005 TO THE URBAN LAND CEILING (ULC) AUTHORITIES SEEKING PERMISSION FOR SALE OF PR OPERTY. E) HOTEL STRUCTURE IN THE PREMISES HAVING COMMENCE D IN THE YEAR 1980 WITH PLINTH AREA OF AROUND 130000SFT INCLUDING ALL UTILITIES. F) PAYMENTS RECEIVED IN THE YEAR 2007 IN TOKEN O F ADVANCE BY WAY OF CHEQUES DRAWN IN OUR NAMES BY THE VENDEE COM PANY, WHICH HAVE BEEN ENCASHED. IN FACT, WE HAVE-FURNISHED OUR OBJECTIONS BEFORE DV O ON 28TH MARCH 2013 FOR CONSIDERING THE ACTUAL VALUE OF SALE CONSIDERATION RECEIVED IN RESPECT OF A PROPERTY EXPLAINING THE CI RCUMSTANCES UNDER WHICH THE TRANSACTION OF SALE HAS BEEN COMPLE TED. THE TRANSACTION OF SALE IN THIS CASE IS COMPLETELY UNIQ UE BY ITSELF WITH ALL THE ISSUES SUCH AS UNEXPIRED LEASE, AWARD ISSUE D BY ANOTHER STATUTORY BODY I.E. LOK ADALAT, POSSESSION AND ENJO YMENT WITH THE LESSEE AND OUR COMMITMENT INJURE YEAR 2005 ITSELF W HICH CANNOT BE COMPARED WITH ANY OTHER FREEHOLD PROPERTY OR VAC ANT LAND BY ANY INTERPRETATION. A COPY OF OUR OBJECTIONS SUBMIT TED TO LEARNED DVO IS ENCLOSED FOR YOUR KIND PERUSAL. I FURTHER SUBMIT THAT MY ONE-THIRD SHARE IN THE ACT UAL SALE CONSIDERATION OF RS. 4,79,00,000 RECEIVED FROM THE VENDEE COMPANY WAS RIGHTLY OFFERED TO TAX WHILE IT WAS VAL UED AT RS.20,93,55,000 FOR STAMP VALUE PURPOSES FIXED BY G OVT OF AP. HOWEVER, THE FAIR MARKET VALUE ESTIMATED BY LEARNED DVO ON THE REFERENCE MADE BY YOUR GOOD SELVES, WAS RS. 6,28,06 ,500 AS AGAINST ACTUAL CONSIDERATION OF RS. 4,79,00,000 AS PER THE LETTER ISSUED BY THE OFFICE OF DVO ON 27TH MARCH, 2013 IT IS ALSO RELEVANT TO SUBMIT THAT THE TRANSACTION OF SALE HAS BEEN AGREED AND CONCLUDED BEFORE LOK ADALAT THROUGH A COMPROMISE PETITION, WHICH IS LEGALLY ENFORCEABLE A ND BINDING ON BOTH THE VENDOR AND VENDEE. HOWEVER, DUE TO INORDIN ATE DELAY IN OBTAINING ULC PERMISSIONS FOR REGISTRATION, WHEREIN OUR FIRST REPRESENTATION WAS SUBMITTED IN SEPT.2005, THE TRAN SACTION COULD NOT BE EXECUTED IN THE YEAR 2005. FURTHER, IN CONTI NUATION THERETO, WHILE ULC WAS PENDING, WE HAVE ALSO RECEIVED AN ADV ANCE OF RS.20 LAKHS IN AUGUST 2007. IT IS ALSO SUBMITTED THAT YOUR PROPOSAL TO ADOPT RS .20, 93,55,000 AS VALUE OF THE PROPERTY WHEN THE REFERENCE WAS MAD E TO DVO, IS TOTALLY UNCALLED FOR AND IS AGAINST NATURAL PRINCIP LES OF JUSTICE ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 5 CONSIDERING THE FACTS OF THE CASE AND THE NATURE OF ENCUMBRANCE WITH WHICH THE PROPERTY SEIZED WAS OFFERED FOR SALE . ALSO SUBMITTED YOUR PROPOSED ACTION ADOPTING HIGHER VALUE WOULD RESULT HUGE TAX LIABILITY CAUSING LOT OF PAIN AND A GONY, ON AN IMAGINARY VALUE, WHICH WAS NEVER RECEIVED NOR ACCRU ED TO US FROM THE TRANSACTION ABSOLUTELY. I ALSO REQUEST YOU TO K INDLY APPRECIATE AND INQUIRE INTO THE REAL CIRCUMSTANCES UNDER WHICH IT WAS SOLD. I ALSO INVITE YOUR KIND ATTENTION TO THE CLARIFICAT ION ISSUED BY CBDT VIDE CIRCULAR NO.8 OF 2002 DATED AUGUST,27,2002 (EF FECTIVE FROM THE ASST YEAR 2003-04) WHICH CLEARLY SUPPORTS OUR S UBMISSIONS AND CONTENTION THAT WHEN THE PROPERTY IS REFERRED T O VALUATION, WHEN THE VALUE FIXED BY DVO IS LESS THAN THE VALUE ADOPTED FOR STAMP DUTY PURPOSES, THE VALUE DETERMINED IS TO BE CONSIDERED AS FAIR MARKET VALUE FOR THE ASCERTAINING THE CAPITAL GAINS IN RESPECT OF THE PROPERTY SOLD. A COPY OF THE CIRCULAR IS ENC LOSED FOR YOUR KIND PERUSAL. I ALSO RELY UPON A JUDGMENT RENDERED IN THE CASE OF CIT VRS DR INDRA SWAROOP BHANAGAR (HON'BLE ALLAHABAD HIGH COUR T) 349 ITR 210 (2012) WHEREIN IT WAS CLEARLY HELD THAT WHEN ON CE THE MATTER IS REFERRED TO DEPARTMENTAL VALUATION, THE ASSESSIN G AUTHORITY SHALL ADOPT THE VALUE DETERMINED BY DVO BEING THE AUTHORI TY ON VALUATION. WHILE MENTIONING LAW UPHELD IN THE CASE OF DR H RAHMAN AS TO INTERPRETATION OF SECTION 50C, THE HON 'BLE COURT OBSERVED THAT 'A READING OF THE SUB-SECTION SHOWS T HAT WEALTH TAX OFFICER HAS NO OPTION BUT TO PROCEED TO COMPLETE TH E ASSESSMENT IN CONFORMITY WITH THE ASSESSMENT OF THE VALUATION OFFICER IN SO FAR AS THE VALUATION OF THE ASSET IN QUESTION IS CONCER NED.' THIS IS ALSO A VIEW TAKEN BY A DIVISION BENCH OF TH E COURT IN THE CASE OF MC KAUNNAH VRS UNION OF INDIA (118 ITR414(A II). THE FACTS OF THE CASE ARE SQUARELY APPLICABLE TO OUR TR ANSACTION, WHICH MAY KINDLY BE CONSIDERED. SIMILAR VIEW WAS CONSIDER ED IN THE CASE OF N MEENAKSHI VRS ACIT 326 ITR 229 (MADRAS). THE VALUE DETERMINED BY DVO AT RS.6,28,06,500 IS HI GHER BY RS. 1,49,06,500 WHEN COMPARED TO ACTUAL RECEIPT OF SALE CONSIDERATION OF RS.4,79,00,000 FOR THE ENTIRE PROP ERTY, WHICH IS NOTHING BUT A NOTIONAL AND IMAGINARY VALUE RESULTIN G INTO AN ADDITIONAL INCOME BY WAY OF CAPITAL GAIN, WHICH HAD NEITHER ACCRUED NOR RECEIVED BY ME. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 6 WITH REGARD TO MISTAKE CREPT IN CONSIDERING THE IN DEXED COST OF ACQUISITION, WHEREIN I HAVE BY MISTAKE CONSIDERED T HE FULL VALUE INSTEAD OF 1/3RD SHARE BELONGING TO ME, I HAVE ACCE PTED THE SAME AND SUBMITTED A REVISED COMPUTATION OF INCOME IN MY PREVIOUS SUBMISSIONS, HERE, I ONCE AGAIN SUBMIT THAT THE SAI D MISTAKE WAS AN UNINTENTIONAL MISTAKE IN RECORD AND IT WAS NEITH ER INTERNATIONAL NOR DELIBERATE. HENCE THE SAME MAY KINDLY BE CONSID ERED. HOWEVER, EVEN THOUGH IT IS PAINFUL, IN ORDER TO BU Y PEACE AND TO AVOID PENAL CONSEQUENCES, I HEREBY AGREE TO THE VAL UE OF RS.6,28,06,500 DETERMINED BY DVO WHEREIN MY SHARE O F CAPITAL GAIN WILL BE HIGHER TO THE SAME EXTENT. I ALSO ASSU RE YOU SIR, TO PAY THE TAXES WHATEVER DUE THEREON IMMEDIATELY WITH A R EQUEST TO DROP ALL PENAL PROCEEDINGS IN RELATION THERETO. SUBMITTED FOR FAVOURABLE CONSIDERATION. 3.1 THE ASSESSING OFFICER REJECTED THE ABOVE CONTEN TIONS OF THE ASSESSEE BY HOLDING THAT (A) NEITHER THE ASSESSEE NOR THE PUR CHASER HAS OBJECTED TO THE ASSESSED MARKET VALUE OF THE SRO FOR THE PURPOSE OF STAMPS AND REGISTRATION, (B) ON THE ARGUMENT THAT THERE WAS A COMPROMISE PETITIO N IN THE LOK ADALAT, WHICH IS LEGALLY ENFORCEABLE AND BINDING ON BOTH THE VENDOR AND VENDEE, HE HELD THAT THE LOK ADALAT HAS DIRECTED THAT THE SALE DEED REGISTRA TION SHALL BE COMPLETED ON OR BEFORE 31 ST MAY, 2005 AND THE TOTAL SALE CONSIDERATION WOULD B E RS.2,62,35,000 WHEREAS THE SALE DEED WAS EXECUTED ON 27.07.2009 AF TER FOUR YEAR FOR THE TOTAL CONSIDERATION OF RS.4,79,00,000, AS IS EVIDENT FROM THE VENDOR AND VENDEE AND THAT BOTH VENDOR AND VENDEE HAVE VIOLATED THE DIRECTIONS OF THE LOK ADALAT. HE DISMISSED THE PLEADING OF THE ASSESSEE THAT THE DEL AY IN REGISTRATION WAS DUE TO INORDINATE DELAY IN OBTAINING URBAN LAND CEILING PE RMISSION. ON THE ARGUMENT THAT THE PROPERTY IS TENANTED PROPERTY, THE AO RECORDED THAT THE PERSON WHO HAS BROUGHT THE PROPERTY IS THE SAME PERSON WHO HAS TAKEN THE P ROPERTY ON LEASE AND HENCE REJECTED THIS ARGUMENT. HE COMPUTED CAPITAL GAINS B Y ADOPTING RS.20,93,55,000 AS THE FULL VALUE OF CONSIDERATION. AGGRIEVED, THE ASS ESSEE CARRIED THE MATTER IN APPEAL. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 7 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE FIRST APPELLATE AUTHORITY IN THE ONE HAND, HELD AS FOLLOWS:- (A) THE ESTIMATE BY THE DVO IS BINDING ON THE ASSE SSING AUTHORITY BUT NOT ON THE APPELLATE AUTHORITY. (B) ON A PERUSAL OF THE VALUATION REPORT AND ANALY ZING THE SAME HE HELD THAT ITEMS 2, 3 AND 4 OF THE TABLE IN THE VALUATION REPORT GIVEN IN THE LD.CIT(A)S ORDER ON ACCOUNT OF ENCUMBRANCE CREATED ON THE PROPERTY BY WAY OF LEASE DECREASE IN THE FAIR VALUE OF THE PROP ERTY IS JUSTIFIED, IN THE FACTS OF THE CASE AND WHEREAS ON THE OTHER FACTORS REFERR ED IN ITEM NOS. 1, 5, 6, 7, 8 AND 9 ON THE TABLE DO NOT RELATE TO ENCUMBRANCE O N ACCOUNT OF LEASEHOLD RIGHTS AND ARE APPLICABLE TO THE PROPERTY SITUATED IN THE LOCATION OR SURVEY NUMBER AND ARE NOT IN ANY WAY UNIQUE OR SPECIFIC TO THE SUBJECTED LAND. HE HELD THAT THE DVO IS INCORRECT AND IN GIVING DISCOU NT ON THESE FACTORS. HE GAVE DIRECTIONS TO THE AO TO GIVE ALLOWANCE TO THE EXTENT OF 65% FROM THE BASE RATE AND THEN TO ARRIVE AT THE FULL VALUE OF C ONSIDERATION AND ON THAT BASIS TO COMPUTE THE CAPITAL GAINS. THEREAFTER THE CIT(A) VISAKHAPATNAM PASSED A CORRIGENDUM TO HIS ORDER DATED 29.02.2013, ON 31 ST OCTOBER, 2013, WHEREIN HE MODIFIED PARA 5.4. HE DIRECTED THE AO TO EXCLUDE THE ALLOWANCE IN RESPECT OF THE FACTORS MENTIONED IN 5, 6, 7, 8 A ND 9 OF THE TABLE AND RE- COMPUTE THE CAPITAL GAINS. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5.1 THE LEARNED COUNSEL FOR THE ASSESSEE, SRI G.V.N .HARI, REITERATED ALL THE FACTS NARRATED BEFORE THE AO AND CIT(A) AND SUBMITT ED THAT THE ACTUAL SALE CONSIDERATION OF RS.4,79,00,000 HAS TO BE ADOPTED A T FULL VALUE OF CONSIDERATION FOR THE FOLLOWING REASONS:- ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 8 (A) SECTION 50C CANNOT BE APPLIED TO A SALE AGREEM ENT ENTERED INTO AT AN MUCH EARLIER DATE, SPECIALLY WHEN DELAY IN REGIS TRATION OF SALE DEED IS SUFFICIENTLY EXPLAINED AND THERE IS NO SUPPRESSION OF ACTUAL CONSIDERATION AND THAT IN THIS CASE, LOK ADALAT HAD PASSED AN AWA RD ON 25.03.2005. (B) WHEN CONSIDERATION IS RECEIVED BY THE ASSESSEE IN PURSUANCE TO THE ORDER GIVEN BY JUDICIAL BODY I.E. THE LOK ADALAT IN THIS CASE, THERE IS NO SUPPRESSION OF ACTUAL CONSIDERATION AND HENCE SECTI ON 50C CANNOT BE APPLIED. (C) WHEN THERE IS A CHANGE OF LAW BETWEEN THE DATE S WHEN THE TRANSACTION WAS ENTERED INTO AND THE TRANSACTION WA S ACTUALLY COMPLETED, THEN THE SUBSEQUENT AMENDMENT WILL NOT CHANGE THE C HARACTER OF THE TRANSACTION AND CONSEQUENTLY THE LAW THAT EXISTED A T THE TIME OF ENTERING INTO THE TRANSACTION WILL PREVAIL OVER THE AMENDMENTS SU BSEQUENTLY MADE. (D) THE OBJECT OF INTRODUCTION OF SECTION 50C IS T O PREVENT UNDER- VALUATION OF REAL VALUE OF THE PROPERTY IN THE SALE DEED TO AVOID PAYMENT OF TAX OR DUTY, WHICH THE GOVERNMENT IS ENTITLED TO WH ICH IS AKIN TO THE OBJECTIVES OF INTRODUCTION OF SECTION 52 WHICH WAS EXISTING EARLIER AND HENCE THE OBSERVATIONS OF THE HONBLE SUPREME COURT IN TH E CASE OF K.P.VARGHESE V. ITO [131 ITR 597] APPLIES ON ALL FOURS IN THIS CASE. (E) THAT KEEPING THE DEPRESSING FACTORS AND THE SU RROUNDING CIRCUMSTANCES OF THE CASE, ON FACTS THE SALE CONSID ERATION RECEIVED BY THE ASSESSEE IS TO BE TAKEN AS FULL SALE CONSIDERATION AND NO ADDITION IS CALLED FOR. THAT WHEN A SALE DEED IS REGISTERED IN ACCORDA NCE WITH AN AGREEMENT, WHICH WAS ENTERED EARLIER, THE PROVISIONS OF SECTIO N 50C SHOULD BE APPLIED ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 9 AS ON THE DATE OF SALE AGREEMENT AND NOT ON THE DAT E OF SALE REGISTRATION OR CONVEYANCE. THE TRANSACTION DATES BACK TO THE AGREE MENT. (F) THAT THE CONSIDERATION IN QUESTION WAS ORIGINA LLY DETERMINED BY A LEGAL FORUM BY WAY OF AN AWARD AND THAT THE CONSIDE RATION RECEIVED WAS HIGHER THAN THIS LEGAL FORUM AND UNDER THE CIRCUMST ANCES, THERE IS NO UNDER- STATEMENT OF CONSIDERATION, CALLING FOR APPLICATION OF SECTION 50C. THE LEARNED CIT(A) WAS ERRED THAT, WHERE ON THE ONE HAN D HE HELD THAT THE REPORT OF THE DVO IS BINDING ON THE ASSESSING OFFIC ER AND WHEREAS ON THE OTHER HAND, WENT INTO THE DETAILS OF THE VALUATION REPORT AND EXPRESSED CERTAIN OPINION ON THE SAME, WHICH IS BAD IN LAW. H E SUBMITTED THAT THE REPORT OF THE DVO IS BINDING ON THE ASSESSING OFFIC ER AND THE CIT(A) IS NOT AN EXPERT TO TINKER WITH THE REPORT OF THE DVO, AND IF AT ALL, HE COULD REFER BACK TO THE DVO, IF HE HAS CERTAIN RESERVATIONS ON THE SAME. HE ARGUED THAT THE CIT(A) CANNOT SUBSTITUTE HIS OPINION AS TO THE FAIR MARKET VALUE, FOR THE OPINION OF THE DVO. (G) THAT THE OFFER OF THE ASSESSEE BEFORE THE A.O. THAT HE WOULD BE WILLING TO ACCEPT DVOS VALUE, HAS NOT BEEN ACCEPTE D BY THE A.O. AND HENCE THE ASSESSEE IS NO MORE BOUND BY IT AND THAT NOTION AL INCOME CANNOT BE TAXED EVEN ON A SURRENDER. 5.2 HE RELIED ON THE FOLLOWING CASE LAWS. (I) SIVA PARVATHI & ORS. V. ITO (2013) 81 DTR (HYD ) (TRIB) 173 (II) K.SATYA SRINIVAS & K.ANUPAM ITA NOS.556 & 5 57/V/2008 ORDER DATED 27.06.2013 (III) SRI PATTABHIRAM COMMERCIAL SYNDICATE ITA N O.243/V/2011 ORDER DATED 13.12.2013. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 10 (IV) S.VENKAT REDDY ITA NO.501/V/2013 ORDER DATE D 24.10.2013. 5.3 THE LEARNED DEPARTMENTAL REPRESENTATIVE, SMT.KO MALI KRISHNAN, ADDL.CIT, ON THE OTHER HAND, VEHEMENTLY SUPPORTED THE ORDER O F THE CIT(A) AND SUBMITTED THAT THE REPORT OF DVO IS AN OPINION AND THE APPELL ATE AUTHORITIES HAVE THE RIGHT TO EXAMINE THE VALUATION REPORT AND EXPRESS THEIR OPIN ION. SHE SUBMITTED THAT THE AWARD OF THE LOK ADALAT TO BE TAKEN AS A FAIR MARKE T VALUE, FOR THE REASON THAT IN THE LOK ADALAT, ONLY COMPRISE DECREE IS PASSED AND RULE ADJUDICATING IS DONE ON THE ISSUE OF FAIR MARKET VALUE. SHE ARGUED THAT IF IT I S LAID DOWN THAT THE AWARD OF THE LOK ADALAT IS TO BE TAKEN AS THE FAIR MARKET VALUE, IT WOULD SET A WRONG PRECEDENT AND WHICH WILL ULTIMATELY DEFEAT THE PURPOSES FOR W HICH SECTION 50C OF THE ACT HAS BEEN INTRODUCED. SHE SUBMITTED THAT THERE IS A LONG TIME GAP BETWEEN THE AWARD GIVEN BY THE LOK ADALAT AND THE SALE DEED AND UNDER SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT THE VALUE ADOPTED IN THE SALE DEED HAS TO BE ACCEPTED AS A CORRECT MARKET VALUE. HE POINTED OUT THAT THE LEARNED CIT(A ) HAS BEEN VERY CONSIDERATE AND HAS GIVEN REBATE FOR ITEMS MENTIONED IN 2, 3 AN D 4 IN TABLE OF THE VALUATION REPORT, WHICH WOULD GIVE A GREAT RELIEF TO THE ASSE SSEE. SHE PRAYED THAT NO FURTHER RELIEF SHOULD BE GIVEN. 6. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERAT ION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAP ERS ON RECORD AND ORDERS OF THE AUTHORITIES BELOW, CASE LAWS CITED, WE HOLD AS FOLL OWS. 6.1 THE OBJECTION OF THE ASSESSEE BEFORE THE DISTRI CT VALUATION OFFICER VIDE LETTER DATED 28.03.2013 ARE AS FOLLOWS:- AT THE OUTSET, I STRONGLY OBJECT TO YOUR PROPOSED ESTIMATION OF VALUE OF THE PROPERTY SOLD IN THE YEAR 2005 VIRTUAL LY IGNORING THE ACTUAL CONSIDERATION RECEIVED FROM THE VENDEE COMPA NY, FACTS OF THE CASE AND THE MANDATORY CIRCUMSTANCES UNDER INFL UENCE OF WHICH THE SALE OF PROPERTY HAD TAKEN PLACE. YOUR BA SIC APPROACH ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 11 TO ESTIMATE THE VALUE OF PROPERTY SOLD IS NOT BASED ON PRUDENT BASIS AND VALUATION PRINCIPLES. I THEREFORE SUBMIT HEREUNDER MY OBJECTIONS TO THE PROPOSED ESTIMATION VIDE YOUR LET TER REFERRED TO ABOVE WHICH IS BASELESS AND CAUSING US HUGE TAX LIA BILITY INCLUDING INTEREST ON A NOTIONAL INCOME WHICH HAD N EVER ACCRUED NOR RECEIVED BY US FROM THE SAID SALE TRANSACTION; * YOUR ESTIMATION OF VALUE OF PROPERTY IGNORING T HE FAIR MARKET VALUE APPROACH IN THE CASE OF THE PROPERTY VIRTUALL Y ENCUMBERED FOR EVER WITHOUT ANY FREEDOM FOR THE MARKETABILITY IS INCORRECT. YOU SHOULD HAVE ACCEPTED THE VALUE RECEIVED BY THE VEND ORS AS THE FAIR MARKET VALUE IN THE GIVEN CIRCUMSTANCES INSTEA D OF DRAWING YOUR OWN CONCLUSION WITHOUT ANY PRUDENT BASIS OR ME THOD AND IN COMPARISON WITH OTHER FREE HOLD PROPERTIES. * YOU SHOULD ALSO HAVE PROPERLY AND FAIRLY EXAMIN ED THE DOCUMENTS PRODUCED BEFORE YOUR GOODSELVES EXPLAININ G THE COMPLETE CIRCUMSTANCES UNDER THE INFLUENCE OF WHICH THE SALE OF PROPERTY HAD TAKEN PLACE IN THE YEAR 2004-05 ITSELF . * YOU SHOULD HAVE COMPARED THE TRANSACTION OF SAL E WITH ANY OTHER ENCUMBERED PROPERTY WITH ALL THE RESTRICTIONS AND STIPULATIONS OUR PROPERTY POSSESS AT THE TIME OF SA LE OFFER GIVEN TO THE VENDEE IN THE YEAR 2004-05. * YOUR APPROACH TO COMPARE WITH FREEHOLD PROPERTI ES AND THEN DISCOUNTING THE VALUE ALSO IMPACTS THE VALUE OF THE ENCUMBERED PROPERTY WITH SPECIAL STIPULATIONS ALL AROUND VIRTU ALLY NOT LEAVING ANY SCOPE FOR THE VENDORS EVEN TO SEEK REFERENCE FR OM ANY OTHER INTENDING BUYER. * YOU SHOULD HAVE FAIRLY EXAMINED THE FOLLOWING LEGAL DOCUMENTS WHICH HAVE SEVERELY TAKEN AWAY OUR RIGHTS TO EXPLOR E FREE MARKET VALUE AS IN THE CASE OF ANY OTHER PROPERTY; A. REGISTERED LEASE DEED IN JULY,1971 FOR A PERIOD OF FIFTY YEARS EXPIRING IN JULY,2021 WHICH MEANS 17 YE ARS STILL TO BE COMPLETED AS ON THE DATE OF NEGOTIATION WITH THE VENDEE COMPANY FOR SALE OF OUR PROPERTY DESPITE LEASEHOLD. B. LEGAL DISPUTES AND PETITION FILED IN CIVIL CO URT, ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 12 C. OUR NEGOTIATION WITH THE VENDEE COMPANY IN OCTOBER,2004 FOLLOWED BY LOK ADALAT AWARD ON 25LH MARCH,2005 BASED ON A COMPROMISE PETITION BETWEEN T HE PARTIES, D. OUR COMMUNICATION IN SEPT.2005 TO THE URBAN LA ND CEILING (ULC) AUTHORITIES SEEKING PERMISSION FOR SA LE OF PROPERTY, E. HOTEL STRUCTURE IN THE PREMISES HAVING COMME NCED IN THE YEAR 1980 WITH PLINTH AREA OF AROUND 130000SFT INCLUDING ALL UTILITIES, F. PAYMENTS RECEIVED IN THE YEAR 2004, 2007 IN TOKEN OF ADVANCE BY WAY OF CHEQUES DR AWN IN OUR NAMES BY THE VENDEE COMPANY WHICH HAVE BEEN ENCASHED. FROM THE ABOVE, IT IS OBVIOUS AND CLEAR THAT THE VA LUATION ESTIMATED IN YOUR LETTER CITED ABOVE IS TOTALLY INC ORRECT AND BASELESS WITHOUT FOLLOWING ANY PRUDENT PROCEDURES A ND IGNORING THE FACTS OF THE CASE COMPLETELY. THE LEARNED DISTR ICT VALUATION OFFICER SHOULD HAVE CONSIDERED ALL THE LEGAL IMPEDI MENTS AND MANDATORY RESTRICTIONS WITH WHICH THE PROPERTY IS S EIZED, BEFORE ESTIMATING THE VALUE OF ENCUMBERED PROPERTY ON SURM ISES. * THE VALUE OF RS.6,28,06,500 IS TOTALLY BASELES S WHICH IS AGAINST NATURALLY PRINCIPLES AND LAW. THE LEARNED D ISTRICT VALUATION OFFICER SHOULD HAVE ACCEPTED THE ACTUAL CONSIDERATION RECEIVED BY THE VENDORS IN THE GIVEN CIRCUMSTANCES WHEN WE DO NOT HAVE ANY RIGHT TO SELL THE PROPERTY TO ANY OTHER THIRD PARTY UNLESS IT IS AGRE ED BY THE VENDEE COMPANY. * THE LEARNED DISTRICT VALUATION OFFICER SHOULD HAVE APPRECIATED THAT THE PROPERTY CAN NOT BE SOLD TO AN Y OTHER PRIVATE BUYER IN VIEW OF THE UNEXPIRED REGISTERED L EASE UPTO THE YEAR 2021 WITH HUGE STRUCTURE IN THE PREMISES. EVEN ON THE DATE OF EXECUTION OF SALE DEED IN JULY,2009, TH E UNEXPIRED PERIOD WAS 12 YEARS. * THE LEARNED DISTRICT VALUATION OFFICER SHOULD HAVE GIVEN DUE WEIGHTAGE OF 100% FOR THE REGISTERED LEASE ALON E IN THE GIVEN CIRCUMSTANCES APART FROM MAY OTHER FACTOR S THAT HAVE DIRECTLY IMPACTED THE TRANSACTION OF SALE. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 13 * THE LEARNED DISTRICT VALUATION OFFICER SHOULD HAVE APPRECIATED THAT, WHEN THE VENDORS HAVING RECEIVED ADVANCE AND ALSO AGREED BEFORE ANOTHER STATUTORY BO DY I.E. LOK ADALAT AS AWARDED ON 25TH MARCH,2005 FOR A CONSIDERATION OF RS.26235000, HAVE NO OTHER OPTION EXCEPT TO EXECUTE THE SALE DEED ONCE THE ULC PERMISSION IS OBTAINED. * THE LEARNED DISTRICT VALUATION OFFICER SHOULD ALSO HAVE APPRECIATED THAT THE AWARD ISSUED BY LOK ADALAT IS A DIRECTION WHICH IS MANDATORILY BINDING ON BOTH THE PARTIES IN TERMS OF VALUE AND SALE TRANSACTION WITHOUT ANY DEV IATION AND CAN NOT BE DISPENSED WITH IN ANY MANNER. THE AW ARD IS LEGALLY ENFORCEABLE AGAINST EACH OTHER IN THE EV ENT OF FAILURE BY ANY ONE OF THE PARTIES TO COMPROMISE. * THE LEARNED DISTRICT VALUATION OFFICER ALSO SHOUL D HAVE APPRECIATED THAT THE PROPERTY UNDER SALE IS SURROUN DED BY COAL YARD WITH LOT OF COAL DUST AROUND 365 DAYS CAU SING LOT OF INCONVENIENCE AND POLLUTION TO THE ESTEEMED CUSTOMERS WHICH IS A SIGNIFICANT FACTOR AFFECTING T HE VALUE OF THE PROPERTY DIRECTLY. * THE TEAMED DISTRICT VALUATION OFFICER ALSO SH OULD HAVE NOTICED THAT THE LOCATION OF THE PROPERTY IS IN OLD TOWN AND THE ENTRANCE OF THE PREMISES ON SOUTH SIDE IS SURRO UNDED BY LOW INCOME GROUP HOUSING WHICH ALSO IMPACTS THE VALUE OF THE PROPERTY BY HIGHER PERCENTAGE THAN WHAT IS ENVISAGED IN THE ESTIMATIONS MADE. * THE LEARNED DISTRICT VALUATION OFFICER SHOULD HAVE APPRECIATED THAT THE POWERS VESTED UNDER SECTION 55 A OF THE INCOME-TAX ACT ARE ONLY CONFINED TO ASCERTAIN T HE FAIR MARKET VALUE OF PROPERTY WHICH HAS BEEN SUBJECT MAT TER OF TRANSFER. HENCE, THE LEARNED DISTRICT VALUATION OFF ICER SHOULD HAVE GIVEN ADEQUATE WEIGHTAGE AND CONSIDERAT ION FOR ALL THE ISSUES IN ASCERTAINING THE FAIR VALUE O F A PROPERTY WHICH IS ENCUMBERED AND LEGALLY ENTANGLED WITH VARI OUS STIPULATIONS FOR MANDATORY SALE TO THE VENDEE COMPA NY. * THE LEARNED DISTRICT VALUATION OFFICER SHOULD ALSO HAVE APPRECIATED THAT BUT FOR THE EXECUTION OF DOCUMENT IN ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 14 JULY,2009, THE SALE HAD BEEN CONFIRMED AND CONCLUDE D IN ALL RESPECTS IN THE YEAR 2004-05 ITSELF LEAVING NO SCOPE AND OPPORTUNITY FOR THE VENDORS TO DEVIATE FROM THE TRA NSACTION. * AFTER WEIGHING THE MANDATORY CIRCUMSTANCES UN DER WHICH THE SALE HAD TAKEN PLACE, THE LEARNED DISTRICT VALU ATION OFFICER SHOULD HAVE ACCEPTED THE ACTUAL VALUE OF RS.479,00,000 IN JULY,2009 RECEIVED BY THE VENDORS FROM THE VENDEE COMPANY INSTEAD OF COMPARING IT TO ANY O THER PROPERTY WHICH IS FREEHOLD AND FREELY MARKETABLE. * THE LEARNED DISTRICT VALUATION OFFICER SHOULD ALSO HAVE APPRECIATED YOUR HASTY ACTION WOULD LEAVE US WITH H UGE ADDITIONAL TAX LIABILITY ON AN AMOUNT WHICH WAS NEV ER RECEIVED AND MAKING US LIABLE TO TAX ON VIRTUALLY N OTIONAL INCOME. IN VIEW OF THE ABOVE AND ALSO THE MANDATORY CIRCUMS TANCES IN THE YEAR 2004-05 UNDER THE INFLUENCE OF WHICH THE SALE HAD TAKEN PLACE, I REQUEST YOU TO PLEASE CONSIDER THE ACTUAL VALUE OF CONSIDERATION OF RS.479,00,000 RECEIVED FROM THE VE NDEE COMPANY IN JULY,2009 INSTEAD OF ESTIMATING THE VALU E WITHOUT ANY PRUDENT APPROACH AND BASIS. KINDLY RECONSIDER AND S UBSTITUTE THE ACTUAL VALUE AND OBLIGE. 6.2 A PERUSAL OF THE ABOVE OBJECTIONS, WHICH ARE NO T DISPUTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, DEMONSTRATE THAT THERE ARE NUMBER OF DEPRESSING FACTORS AND THE FAIR MARKET VALUE CANNOT BY WAY OF ANY STRETCH OF IMAGINATION BE TAKEN AT RS.20,93,50,000. 6.3 THE SECOND IMPORTANT DOCUMENT WHICH WE EXTRACT IS THE COMPRISE PETITION FILED BY BOTH VENDOR AND VENDEE BEFORE THE LOK ADAL AT, VISAKHAPATNAM IN O.S.1279/2004:- COMPROMISE PETITIONFILED UNDER ORDER-23 R-3 OF C.P.C. THE PLAINTIFFS HEREIN ARE THE ABSOLUTE OWNERS AND LESSORS OF THE PROPERTY COVERED BY AND LOCATED (HEREINAFTER REFERR ED TO AS ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 15 `PROPERTY), AT SURVEY NO.T.S.NO.1176(PART), BLOCK NO.36 (PART), ALLIPURAM WARD, DABA GARDENS, VISAKHAPATNAM. THE PROPERTY IS UNDER A LONG TERM LEASE OF 50 YEAR S WITH THE DEFENDANT, OF WHICH 16 YEARS STILL TO BE COMPLETED AS ON DATE. THE DEFENDANTS, CONSIDERING THE LONG UNEXPIRED PER IOD OF LEASE FOR ABOUT 16 YEARS, INSTEAD OF PROTRACTING THE LITI GATION OVER THE MATTER, APPROACHED THE PLAINTIFF AND STRAIGHTAWAY O FFERED TO ACQUIRE THE PROPERTY. AFTER DETAILED NEGOTIATIONS AND DISCUSSIONS AND IN VIEW OF THE FAMILY ARRANGEMENT AND FINANCIAL COMMITMENTS OF THE PLAINTIFFS AND ON THE ADVISE OF THEIR RELATIVES AND EXPERTS, B OTH THE PARTIES HAVE MUTUALLY SETTLED THEIR DISPUTE AND ENTERED INT O THIS COMPROMISE ON THE TERMS AND CONDITIONS APPEARING HE REIN BELOW: 01. THE PLAINTIFFS AGREED TO SELL THE PROPERTY DES CRIBED IN THE SCHEDULE HEREUNDER TO THE DEFENDANT FOR A TOTAL CON SIDERATION OF RS.2,62,35,000/- (RUPEES TWO CRORES SIXTY TWO LAKHS THIRTY FIVE THOUSANDS ONLY) AND THE DEFENDANT HAS AGREED A ND ACCEPTED FOR THE SAME. 02. THAT IN PURSUANCE OF THE ABOVE OFFER AND ACCEP TANCE, IT IS FURTHER AGREED THAT THE CONSIDERATION SHALL BE PAID AS PER THE SCHEDULE GIVEN HEREUNDER: (A) RS.82,35,000/- ON THE DATE OF REGISTRATION OF SALE DEED, WHICH SHALL BE COMPLETED ON OR BEFORE 31 ST DAY OF MAY, 2005 FROM THE DATE OF THIS COMPROMISE. (B) THE BALANCE OF RS.1,80,00,000/- DIVIDED INTO T HREE HALF YEARLY INSTALLMENTS OF RS.60,00,000/- AT THE END OF SIX MONTHS FROM THE DATE OF REGISTRATION. (I) THE FIRST INSTALLMENT OF RS.60,00,000/- AT TH E END OF SIX MONTHS FROM THE DATE OF REGISTRATION. (II) SECOND INSTALLMENT OF RS.60,00,000/- AT THE E ND OF SIX MONTHS FROM THE PAYMENT OF THE FIRST INSTALLMENT, (III) THE THIRD INSTALLMENT OF RS.60,00,000/- AT T HE END OF SIX MONTHS FROM THE PAYMENT OF THE SECOND INSTALLMENT. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 16 03. THE PLAINTIFFS HAVE HEREBY ASSURED AND CONFIRM ED THE DEFENDANT THAT THEY ARE FULLY COMPETENT TO SELL THE SCHEDULE PROPERTY AND NO ONE ELSE HAS ANY CLAIM, INTEREST OR RIGHT, WHATSOEVER ON THE SCHEDULE PROPERTY. IT IS ALSO CON FIRMED THAT THERE ARE NO ENCUMBRANCES OR ANY PRIOR AGREEMENTS O F SALE, EASEMENTS, ATTACHMENTS, PLEDGES, MORTGAGES, LIENS O R LITIGATIONS ETC., PENDING WITH REGARD TO THE SCHEDULE PROPERTY. 04. THE PLAINTIFFS HEREBY AGREE TO EXECUTE AND REG ISTER A SALE DEED / DEEDS IN FAVOUR OF THE DEFENDANT OR ITS NOMI NEE OR NOMINEES. 05. THE DEFENDANT OR ITS NOMINEE / NOMINEES SHALL PAY ALL EXPENSES TOWARDS STAMP DUTY AND REGISTRATION FEE FO R REGISTRATION OF SALE DEED / DEEDS. 06. THE PLAINTIFF SHALL DO ALL SUCH ACTS OR THINGS INCLUDING SALE DEEDS, APPLICATIONS AFFIDAVITS OR JOINING OF ANY OF THE MEMBER OF THEIR FAMILY AS PARTIES TO THE SALE DEED / DEEDS, P ERMISSIONS IF ANY, AS MAY BE REQUIRED FOR BETTER AND EFFECTUAL CO NVEYANCE OF LEGAL AND MARKETABLE TITLE TO THE SCHEDULE PROPERTY AND SHALL FURTHER DO SUCH OTHER THINGS FOR MUTATION OF SCHEDU LE PROPERTY IN FAVOUR OF THE PURCHASER / PURCHASERS. 07. THE PLAINTIFF HEREBY DECLARE AND ASSURE THE DE FENDANT THAT THE SCHEDULE PROPERTY IS NOT AFFECTED BY THE U RBAN LAND CEILING ACT AND THIS IS NOT AN ASSIGNED LAND UNDER THE A.P.ASSIGNED LANDS (PROHIBITION OF TRANSFER) ACT, 1 977 NOR THAT IT BELONGS TO GOVERNMENT OR INSTITUTIONS LIKE HINDU CH ARITABLE AND RELIGIOUS ENDOWMENTS OR WAKF BOARD. 08. BOTH THE PARTIES HEREIN AGREE THAT IN CASE THE PLAINTIFFS FAIL TO EXECUTE THE SALE DEED AS MENTIONED ABOVE, THE DE FENDANT WILL BE ENTITLED TO GET THE SALE DEED EXECUTED THROUGH C OURT BY EXECUTING THIS AWARD. IN CASE THE DEFENDANT COMMITS A BREACH OF ANY OF THE TERMS OF THIS COMPROMISE, THE PLAINTIFFS ARE AT LIBERTY TO TAKE SUCH STEPS AS ARE OPEN TO THEM UNDER LAW. 6.4 WE ALSO EXTRACT THE AWARD BY THE LOK ADALAT, VI SAKHAPATNAM, DATED 25 TH MARCH, 2005, AS FOLLOWS:- ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 17 AWARD 1. THAT THE PLAINTIFFS BE AND HEREBY AGREED TO SEL L THE PROPERTY DESCRIBED IN THE SCHEDULE ATTACHED HEREWIT H TO THE DEFENDANT FOR A TOTAL CONSIDERATION OF RS.2,62,35,0 00/- (RUPEES TWO CRORE SIXTY TWO LAKH THIRTY FIVE THOUSAND ONLY) AND THE DEFENDANT HAS AGREED AND ACCEPTED FOR THE SAME. 2. THAT IS HEREBY FURTHER AGREED THAT THE ABOVE CO NSIDERATION SHALL BE PAID AS PER THE SCHEDULE GIVEN HEREUNDER:- (A) RS.82,35,000/- (RUPEES EIGHTY TWO LAKH THIRTY FIVE THOUSAND ONLY) SHALL BE PAID ON THE DATE OF REGISTR ATION OF SALE DEED, WHICH SHALL BE COMPLETED ON OR BEFORE 31 ST DAY OF MAY 2005 FROM THE DATE OF THIS COMPROMISE; (B) THE BALANCE OF RS.1,80,00,000/- DIVIDED INTO T HREE HALF YEARLY INSTALLMENTS OF RS.60,00,000/- (RUPEES SIXTY LAKHS ONLY) EACH, AND IT SHALL BE PAID AS FOLLOWS:- (I) THAT THE FIRST INSTALLMENT OF RS.60,00,000/- (RUPEES SIXTY LAKHS ONLY) AT THE END OF SIX MONTHS FROM THE DATE OF REGISTRATION. (II) SECOND INSTALLMENT OF RS.60,00,000/- (RUPEES SIXTY LAKHS ONLY) AT THE END OF SIX MONTHS FROM THE PAYMENT OF THE FIRST INSTALLMENT, (III) THE THIRD INSTALLMENT OF RS.60,00,000/- (RUP EES SIXTY LAKHS ONLY) AT THE END OF SIX MONTHS FROM THE PAYME NT OF THE SECOND INSTALLMENT. 03. THAT THE PLAINTIFFS HEREBY ASSURE AND CONFIRM THE DEFENDANTS THAT THEY ARE FULLY COMPETENT TO SELL TH E SCHEDULE PROPERTY AND NO ONE ELSE HAS ANY CLAIM, INTEREST OR RIGHT, WHATSOEVER ON THE SCHEDULE PROPERTY. IT IS ALSO CON FIRM THAT THERE ARE NO ENCUMBRANCES OR ANY PRIOR AGREEMENTS OF SALE , EASEMENTS, ATTACHMENTS, PLEDGES, MORTGAGES, LIENS O R LITIGATIONS ETC., PENDING WITH REGARD TO THE SCHEDULE PROPERTY. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 18 04. THAT THE PLAINTIFFS HEREBY AGREED TO EXECUTE A ND REGISTER A SALE DEED / DEEDS IN FAVOUR OF THE DEFENDANT OR ITS NOMINEE OR NOMINEES. 05. THAT THE DEFENDANT OR THE NOMINEE / NOMINEES S HALL PAY ALL EXPENSES TOWARDS STAMP DUTY AND REGISTRATION FE E FOR REGISTRATION OF SALE DEED / DEEDS. 06. THAT THE PLAINTIFF HEREBY AGREED TO DO ALL SUC H ACTS OR THINGS INCLUDING SALE DEEDS, APPLICATIONS AFFIDAVIT S OR JOINING OF ANY OF THE MEMBER OF THEIR FAMILY AS PARTIES TO THE SALE DEED / DEEDS, PERMISSIONS IF ANY, AS MAY BE REQUIRED FOR B ETTER AND EFFECTUAL CONVEYANCE OF LEGAL AND MARKETABLE TITLE TO THE SCHEDULE PROPERTY AND SHALL FURTHER DO SUCH OTHER THINGS FOR MUTATION OF SCHEDULE PROPERTY IN FAVOUR OF THE PURCHASER / PURC HASERS. 07. THAT THE PLAINTIFF HEREBY DECLARE AND ASSURE T HE DEFENDANT THAT THE SCHEDULE PROPERTY IS NOT AFFECTED BY THE U RBAN LAND CEILING ACT AND THIS IS NOT AN ASSIGNED LAND UNDER THE A.P.ASSIGNED LANDS (PROHIBITION OF TRANSFER) ACT, 1 977 NOR THAT IT BELONGS TO GOVERNMENT OR INSTITUTIONS LIKE HINDU CH ARITABLE AND RELIGIOUS ENDOWMENTS OR WAKF BOARD. 08. THAT BOTH THE PARTIES HEREBY AGREE THAT IN CAS E THE PLAINTIFFS FAILED TO EXECUTE THE SALE DEED AS MENTI ONED ABOVE, THE DEFENDANT WILL BE ENTITLED TO GET THE SALE DEED EXE CUTED THROUGH COURT BY EXECUTING THIS AWARD. 09. THAT IN CASE THE DEFENDANT COMMITS A BREACH OF ANY OF THE TERMS OF THIS COMPROMISE, THE PLAINTIFFS ARE AT LIB ERTY TO TAKE SUCH STEPS AS ARE OPEN TO THEM UNDER LAW. 6.5 THE REGISTRATION OF THE PROPERTY COULD NOT TAKE PLACE DUE TO LONG DELAY IN OBTAINING PERMISSION FROM THE URBAN LAND CEILING AU THORITY. FINALLY THE SALE DEED WAS REGISTERED ON A CONSIDERATION OF RS.4,79,00,000 . 6.6 ON A CAREFUL EXAMINATION OF THE ABOVE FACTS DEM ONSTRATE THAT THERE WERE A NUMBER OF IMPEDIMENTS AND DEPRESSING FACTORS, WHICH RESULTED IN THE DEPRESSING THE FAIR MARKET VALUE OF THE PROPERTY. THE LEARNED CIT(A) HAS RECOGNIZED THAT THE ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 19 LEASE HOLD RIGHTS IS A DEPRESSING FACTOR AND DIRECT ED THAT 25% BE REDUCED FROM THE FAIR MARKET VALUE DETERMINED BY THE SRO ON THIS COU NT. SIMILARLY, HE HELD THAT FURTHER 20% HAS TO BE DEDUCTED TOWARDS IMPACT ON LE GAL OBSTRUCTIONS. HE DIRECTED DEDUCTION OF 20% ON ACCOUNT OF ENCUMBRANCES. THESE FINDINGS OF THE LEARNED CIT(A) ARE NOT DISPUTED BY THE ASSESSING OFFICER BE FORE US. THUS, THE ISSUE BOILS DOWN AS TO WHETHER (A) THE ACTUAL SALE CONSIDERAT ION AS RECORDED IN THE SALE DEED IS TO BE TAKEN OR, (B) THE VALUATION GIVEN BY THE D VO IS TO BE TAKEN OR, (C) THE FAIR MARKET VALUE AS DETERMINED BY THE CIT(A) HAS TO BE TAKEN, AS FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAP ITAL GAIN TAX. THE REVENUE ACCEPTS THAT THE VALUATION OF THE S.R.O. IS NOT THE FAIR MARKET VALUE OF THIS PROPERTY. 6.7 IN OUR VIEW, THE ACTUAL VALUE FOR WHICH THE PRO PERTY HAS BEEN SOLD, AS EVIDENCED BY THE REGISTERED SALE DEED, HAS TO BE TA KEN AS FULL VALUE OF CONSIDERATION FOR THE FOLLOWING REASONS. (A) THE LEARNED CIT(A) CANNOT SUBSTITUTE HIS OPINI ON FOR THE OPINION OF THE DVO AS ADMITTEDLY HE IS NOT A TECHNICAL EXPERT. THE ANALYSIS GIVEN BY THE LEARNED CIT(A) IS ARBITRARY AND HIS ACCEPTANCE OF CERTAIN FACTORS AND VALUES DETERMINED BY THE VALUATION OFFICER AND REJE CTION OF THE SAME IS WITHOUT SOUND REASONING. ONE OPINION CANNOT BE SUBS TITUTED BY ANOTHER OPINION. THUS, THE VALUE AS DETERMINED BY THE LEARN ED CIT(A) HAS TO BE NECESSARILY BE VACATED. AN OPINION CANNOT TAKE THE PLACE OF A FACT, WHICH IS THE SALE CONSIDERATION IN THE SALE DEED. (B) THIS LEAVES US WITH THE VALUE AS DETERMINED BY THE DVO, WHICH IS ALSO AN OPINION AND WHEREAS THE ACTUAL SALE CONSIDE RATION, AS EVIDENCED BY THE REGISTERED DOCUMENT, IS A FACT. (C) THERE IS NO DISPUTE ON THE FACT THAT THE DVOS REPORT IS BINDING ON THE ASSESSING OFFICER AND HE COULD NOT HAVE REJECTED TH E SAME WHILE COMPUTING THE CAPITAL GAIN. BE THAT AS IT MAY, THE ASSESSEE H AS BEEN DISPUTING THE ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 20 DVOS REPORT AND SUBMITTING THAT THE ACTUAL SALE CO NSIDERATION SHOULD BE CONSIDERED AS THE FULL VALUE OF CONSIDERATION FOR T HE PURPOSE OF COMPUTATION OF CAPITAL GAINS. NO DOUBT, THE ASSESSEE IN A LETTE R, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAD OFFERED TO ACCEPT THE D VOS REPORT. BUT THE ASSESSING OFFICER HAD NOT ACCEPTED THIS OFFER, NOR THE FIRST APPELLATE AUTHORITY CONSIDERED THIS OFFER. UNDER THE CIRCUMST ANCES, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THIS CONCESSI ON IS NO MORE BINDING ON THE ASSESSEE. WE UPHOLD THIS CONTENTION. IN OUR VIEW, THE LIABILITY TO TAX HAS TO BE DETERMINED BASED ON THE FACTS AND LAW AND NOT BASED ON CONCESSION OF PARTIES. THERE IS NO ESTOPPELS AGAINS T LAW. AS THE FACT THAT PRICE IS FIXED AFTER PROTRACTED LITIGATION BETWEEN UNRELATED PARTIES, THIS IS TO BE CONSIDERED AS A FAIR MARKET VALUE. AN OPINION OF A VALUER CANNOT TAKE THE PLACE OF THIS FACT, WHEN THERE IS NO OTHER EVIDENCE WITH THE REVENUE AND WHEN IT ACCEPTS THAT THE VALUE FIXED BY S.R.O. IS N OT THE FAIR MARKET VALUE. 6.8 FROM THE PERUSAL OF THE COMPROMISE DECREE BEFOR E THE LOK ADALAT, IT IS EVIDENT THAT THERE ARE LEGAL DISPUTES BETWEEN THE P ARTIES CONSEQUENT TO A REGISTERED 50 YEAR LEASE DEED EXECUTED BETWEEN THE PARTIES IN JULY, 1971. ON A CONSIDERATION OF ALL THE FACTORS, THE LOK ADALAT HAS ISSUED AWARD DETERMINING THE TOTAL CONSIDERATION OF SALE AT RS.2,62,35,000 ON 20 TH MARCH, 2005. ON THE FACTS AND CIRCUMSTANCES OF THIS CASE, IN OUR VIEW, WEIGHT HAS TO BE GIVEN TO THIS FACTOR IN DETERMINING THE FAIR MARKET VALUE AS ON THE DATE OF SALE. ADMITTEDLY, THE COMPROMISE DECREE COULD NOT BE EXECUTED BECAUSE OF THE DELAY IN OBTAINING ULC PERMISSION. THE ASSESSEE HAD NO OTHER ALTERNATE BUT TO EXECUTE THE SALE DEED IN VIEW OF THE AWARD GIVEN BY THE LOK ADALAT. THE SALE DEED EXECUTED REFERS TO THE CIVIL LITIGATION FILED BEFORE THE PRINCIPAL SENIOR CIVIL JUDGE OF VISAKHAPATNAM VIDE O.S.NO.1279/2004 AND THE AWARD OF THE LOK ADALAT P ASSED ON 25 TH DAY OF MARCH, 2005 AS A REASON FOR EXECUTING THE SALE DEED. THE P URCHASE CONSIDERATION WAS FIXED AT RS.4,79,00,000 IN PLACE OF RS.2,62,35,000 AS AWARDED BY THE LOK ADALAT. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 21 THIS FIGURE OF CONSIDERATION AS ARRIVED AT BETWEEN THE PARTIES AFTER LONG LEGAL BATTLES AND NEGOTIATIONS. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE FIGURE MENTIONED IN THE SALE DEED IS THE FAIR M ARKET VALUE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THE REPORT GIVEN BY THE DVO IS NOTHING BUT AN OPINION, WHICH WHEN WEIGHED AGAINST THE ACTUAL FACT OF CONSI DERATION PAID FOR THE PURCHASE OF THE PROPERTY, CANNOT BE ACCEPTED ON THE FAIR MAR KET VALUE OF THE PROPERTY. IT IS A CASE WHERE THE FACTS HAVE TO BE WEIGHED AGAINST THE OPINIONS. NEITHER THE ASSESSING OFFICER NOR THE LEARNED CIT(A) HAVE BASED ON THEMSELVES ON ANY EVIDENCES OR COMPARABLE DOCUMENTS OR LOGICAL REASON ING TO COME TO A CONCLUSION THAT THE NEGOTIATED VALUE OF THE PROPERTY IN QUESTI ON BETWEEN THE PARTIES IS NOT THE FAIR MARKET VALUE OF THE PROPERTY. 6.9 COMING THE BASE RATE ANALYSIS GIVEN BY THE DVO IN HIS REPORT, WE ARE UNABLE TO FIND LOGIC IN SUCH ANALYSIS. WE EXTRACT T HE SAME FOR THE READY REFERENCE. S.NO. DATE OF EXECUTION REGD. DOCUMENT NO. EXTENT OF LAND (S.YD) TOTAL CONSI- DERATION VALUE. RS. BUILT UP AREA (S.YD) BLDG. COST RS. LAND COST RS. LAND RATE PER S.YD. RS. 1. 27.01.2007 324/2007 255.00 760500 880 352000 408500 1602 2. 06.03.2007 1000/2007 388.00 6518400 350 140000 6378400 16439 3. 02.05.2007 1989/2007 90.25 814000 745 298000 516000 5717 4. 31.05.2007 2421/2007 498.00 8400000 6400 2560000 5840000 11727 5. 26.11.2007 4903/2007 58.81 1100000 1000 400000 700000 11943 6. 18.04.2008 1493/2008 1000.00 2400000 2408 1083600 1316400 1316 6A. INTERPOLATION AS ON 30.07.2009 (36291 - 1316/25*15) 22301 7 28.04.2010 2524/2010 19.33 951500 500 250000 701500 36291 AVERAGE RATE OF SALE INSTANCES (1 TO 6A) PER SQ. YD . = 10149 GOVERNMENT STAMP DUTY RATE PER SQ.YD. = 25500 ADOPTABLE BASE RATE PER SQ.YD. = 25500 6.10 THE LAND RATES BY SQ.YARDS VARIOUS BETWEEN RS. 1602 AND RS.36,291. SUCH A VARIATION DEMONSTRATES THAT THE VALUATION REPORT BY THE DVO IS NOT CORRECT AND HAS TO BE SEEN AS NOT GIVEN THE APPROPRIATE FAIR MARKET VALUE. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 22 6.11 COMING TO THE DECISIONS CITED, WE FIND THAT TH E VISAKHAPATNAM BENCH OF THE TRIBUNAL IN THE CASE OF SIVA PARVATHI & ORS. V. ITO (SUPRA), HELD AS FOLLOWS:- BOTH THE PARTIES TO THE SALE DEED HAVE CONFIRMED T HAT THEY HAVE ENTERED INTO A SALE AGREEMENT IN AUGUST, 2001, I.E. , THE SUBMISSION OF THE VENDORS THAT THE SALE AGREEMENT W AS MISPLACED WAS ALSO CONFIRMED BY THE BUYER OF THE PROPERTY BY WAY OF AN AFFIDAVIT EXECUTED BY ITS MANAGING DIRECTOR. THE PA RTIES COULD HAVE ENTERED INTO A SALE AGREEMENT IS SUPPORTED BY THE F ACT THAT THE VENDORS HAVE RECEIVED PART-PAYMENT OF THE TOTAL CON SIDERATION WAY BACK IN AUGUST, 2001 ITSELF. THE DETAILS OF SAI D RECEIPTS ARE ALSO MENTIONED IN THE SALE DEED. UNDER THE CONTRACT ACT, BY VIRTUE OF SALE AGREEMENT, THE BUYER OF THE PROPERTY GETS A PRE-EMPTIVE RIGHT OVER THE PROPERTY. IN VIEW OF SUCH PRE-EMPTIV E RIGHT ONLY, THE ADVOCATES FOR THE BUYER HAVE ISSUED A PUBLIC CAUTIO N NOTICE CAUTIONING THE PUBLIC ABOUT THE EXISTENCE OF AGREEM ENT OF SALE. THIS FACT ALSO SUPPORTS THE EXISTENCE OF A SALE AGR EEMENT. IN VIEW OF THE FOREGOING, THERE IS NO REASON TO SUSPECT ABO UT THE EXISTENCE OF SALE AGREEMENT. THE PARTIES HAVE SUFFICIENTLY EX PLAINED THE CAUSES FOR THE DELAY IN REGISTERING THE SALE DEED. FROM THE SUBMISSIONS OF THE ASSESSEES, WHICH ARE ALSO SUPPOR TED BY THE CAUTION NOTICE ISSUED BY THE BUYERS, THE VENDORS WE RE UNDER AN OBLIGATION TO OBTAIN URBAN LAND CLEARANCE PERMISSIO N AND WERE ALSO UNDER AN OBLIGATION TO SETTLE CERTAIN DISPUTES . THE ASSESSEES HAVE FILED A COPY OF THE PROCEEDIN GS OF THE SPECIAL OFFICER AND COMPETENT AUTHORITY OF URBAN LAND CEILING ACT IN SUPPORT OF THEIR CONTENTIONS IN THIS REGARD. THE ASSESSEES HAVE SUBMITTED THAT CERTAIN PERSONS CLAIMED THEMSEL VES TO BE THE LEGAL HEIRS OF PVR (FROM WHOM THE ASSESSEES HAVE IN HERITED THE PROPERTY) AND THOSE PERSONS ALSO CLAIMED RIGHT OVER THE PROPERTY AND THE SETTLING OF THEIR CLAIMS HAS ALSO CAUSED DE LAY. THE SAID EXPLANATION IS SUPPORTED BY THE FACT THAT THE PERSO NS BELONGING TO MASETTY FAMILY WERE ALSO INCLUDED AS VENDORS AND FU RTHER ANOTHER LADY NAMED SMT. AC HAS GIVEN A DEED OF CONFIRMATION ABOUT THE RECEIPT OF MONEY WAY BACK IN AUGUST, 2001 ITSELF TO RELINQUISH HER INTEREST IN THE PROPERTY. FROM THE FOREGOING IT IS AMPLY CLEAR THAT THE DELAY IN REGISTERING THE SALE DEED HAS OCCURRED FOR GENUINE CAUSES AND FOR THE REASONS BEYOND THE CONTROL OF TH E ASSESSEE. (PARAS 8.4 &8.5) THE AVERAGE COST AS PER THE SALE AGREEMENT WAS MORE THAN THE MARKET VALUE FIXED BY THE JT. SUB-REGISTRAR AT THE TIME THE SALE AGREEMENT WAS ENTERED INTO. FROM THESE DETAILS, IT IS NOTICED THAT THERE IS NO UNDERSTATEMENT OR SUPPRESSION OF ACTUAL CONSIDERATION. IT MAY BE NOTED THAT THE REVENUE HAS ALSO NOT BROUG HT ANY OTHER MATERIAL TO SHOW THAT THERE WAS SUPPRESSION OF ACTU AL CONSIDERATION. THE PERIODS OF THE IMPUGNED TRANSACT IONS HAVE FALLEN IN THE TRANSITION PHASE OF LAW, I.E., THE SA LE AGREEMENT WAS ENTERED BEFORE THE INTRODUCTION OF S. 50C AND THE R EGISTRATION WAS COMPLETED AFTER THE INTRODUCTION OF SAID SECTION. T HE PROVISIONS OF S. 50C CANNOT BE APPLIED TO THE SALE AGREEMENT AS T HE SAID SECTION WAS NOT AVAILABLE IN THE STATUTE BOOK AT TH E TIME THE TRANSACTION WAS INITIALLY ENTERED INTO. EVEN OTHERW ISE, THERE IS NO SUPPRESSION OF ACTUAL CONSIDERATION. CONSEQUENTLY, SINCE THE FINAL ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 23 REGISTRATION OF THE SALE IS ONLY IN FULFILMENT OF T HE CONTRACTUAL OBLIGATION, THE LOGICAL CONCLUSION IS THAT THE PROV ISIONS WHICH DO NOT APPLY AT THE TIME OF ENTERING INTO THE TRANSACT ION INITIALLY WOULD NOT ALSO APPLY AT THE TIME THE TRANSACTION IS COMPL ETED.K.P. VARGHESE VS. ITO (1981) 24 CTR (SC) 358 : (1981) 13 1 ITR 597 (SC), CIT VS. NIRMAL TEXTILES (1996) 136 CTR (GUJ) 148 : (1997) 224 ITR 378 (GUJ), NEVILLE DE NORANHA VS. ASST.CIT (2008) 1-15 TTJ (KOL) 390 : (2008) 5 DTR (KOL)(TRIB) 389 AND CI T.VS. LAXMAN.SINGH (1985) 49 CTR (RAJ) 50 : (1986) 159 IT R 983 (RAJ) RELIED ON. (PARAS 8.8 & 8.10 ) CONCLUSION : SEC. 50C CANNOT BE APPLIED TO THE SALE AGREEMENT EN TERED INTO BEFORE INTRODUCTION OF SAID SECTION I.E., BEFORE 1S T APRIL, 2003 ESPECIALLY WHEN DELAY IN REGISTRATION OF SALE DEED IS SUFFICIENTLY EXPLAINED AND THERE IS NO SUPPRESSION OF ACTUAL CON SIDERATION. 6.12 IN THE CASE OF K.SATYA SRINIVAS & K.ANUPAMA (S UPRA), THE TRIBUNAL REFERRED TO THE DECISION OF M/S.LAHIRI PROMOTORS IN ITA NO.1 2/VIZAG/2009, ORDER DATED 22.06.2010, AND AT PARA 6 HELD AS FOLLOWS:- IN THE CASES BEFORE US ALSO, THERE IS NO DISPUTE T HAT THE ASSESSEES HEREIN ENTERED INTO SALE AGREEMENTS ON 04.6.2005 AN D THE SALE VALUE FIXED ON THAT DATE WAS EQUIVALENT TO THE SRO RATES FIXED FOR STAMP DUTY PURPOSES. THE CONVEYANCE DEED WAS REGISTERED O N 25.8.2005, I.E. WITHIN A PERIOD OF THREE MONTHS. THOUGH THE SR O RATES HAD BEEN RAISED UPWARD ON THAT DATE, YET, AS OBSERVED IN THE ABOVE CITED CASE, THE ASSESSEES HEREIN HAVE FULFILLED A CONTRACTUAL O BLIGATION, WHICH THEY ARE BOUND BY LAW TO CARRY OUT. SINCE THE PROCESS OF SALE HAS BEEN INITIATED FROM THE DATE OF SALE AGREEMENT, WE HAVE HELD IN THE ABOVE CITED CASE THAT THE APPLICABILITY OF PROVISIONS OF SECTION 50C SHOULD BE LOOKED AT ONLY ON THE DATE OF SALE AGREEMENT. IN TH E INSTANT CASES, THE QUESTION OF ADOPTION OF A HIGHER VALUE BY INVOKING THE PROVISIONS OF SECTION 50C ON THE DATE OF SALE AGREEMENT DOES NOT ARISE AS THE SALE VALUE FIXED BY THE ASSESSEES WAS EQUIVALENT TO THE SRO VALUE FOR STAMP DUTY PURPOSES. 6.13 THE DECISION IN THE CASE OF SRI PATTABHIRAM CO MMERCIAL SYNDICATE, ITA NO.243/VIZAG/2011, ORDER DATED 13.12.2013, THE TRIB UNAL HAS HELD THAT THE VALUATION REPORT SUBMITTED BY THE DVO IS BINDING ON THE ASSESSING OFFICER. ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 24 6.14 THE HONBLE ANDHRA PRADESH HIGH COURT IN IT AP PEAL NO.501 OF 2013 DATED 24.10.2013 IN THE CASE OF CIT-V, HYDERABAD V. SRI S .VENKAT REDDY, ANSWERED THE FOLLOWING QUESTIONS IN FAVOUR OF THE ASSESSEE, BY D ISMISSING THE REVENUES APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHE THER THE HONBLE TRIBUNAL (ITAT) IS JUSTIFIED IN REMITTING T HE MATTER TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE ISSUE THAT THE TRANSFER OF PROPERTY SITUATED AT SANATHNAGAR IS COMPLETED IN TERMS OF UN REGISTERED SALE AGREEMENT DATED 13.06.2005, WHEREAS THE POSSESSION OF PROPERTY WAS HANDED OVER AT THE TIME OF EXECUTION OF SALE DE ED ON 25.11.2005? 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHE THER THE HONBLE TRIBUNAL (ITAT) IS CORRECT IN LAW IN ADOPTI NG THE MARKET VALUE ON THE DATE OF AGREEMENT OF SALE RATHER THAN THE DA TE OF REGISTRATION AS STIPULATED IN SECTION 50C OF THE ACT? 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHE THER THE HONBLE TRIBUNAL (ITAT) IS CORRECT IN LAW IN HOLDIN G THAT THE ASSESSING OFFICER IS REQUIRED TO ADOPT THE SRO RATE AS ON THE DATE OF TRANSFER VIDE SALE AGREEMENT FOR THE PURPOSE OF DETERMINING THE C APITAL GAIN THOUGH IT WAS NOT REGISTERED? 6.15 IN VIEW OF THE ABOVE DISCUSSION, AS THE FACTUA L FINDING IS THAT THE FAIR MARKET VALUE IN THIS CASE IS THAT THE NEGOTIATED VALUE BET WEEN THE PARTIES, WHICH WAS A RESULT OF PROLONGED LITIGATION, SUPPORTED AWARD BY A LEGAL AUTHORITY, WHICH ULTIMATELY CULMINATED INTO A SALE DEED, AND AS WE HAVE FOUND T HAT THE VALUE BY THE DVO AND THE VALUE ARRIVED AT BY THE LEARNED CIT(A) ARE BOTH OPINIONS, WE ARE OF THE CONSIDERED OPINION THAT THE FAIR MARKET VALUE OF TH E PROPERTY HAS TO BE TAKEN AT RS.4,79,00,000. IN VIEW OF THE ABOVE DISCUSSION, WE UPHOLD THE CONTENTION OF THE ASSESSEE AND ALLOW THE APPEALS. 7. IN THE RESULT, THE ASSESSEES APPEALS ARE ALLOWE D. ORDER PRONOUNCED ON THIS 7 TH DAY OF MARCH, 2014. SD/- SD/- ( SAKTIJIT DEY ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM; DATED : 7 TH MARCH, 2014. DEVDAS* ITA NO.684/V/2013 & 685/V/2013 SRI ANKITHAM JAGGA ROW INDRANI & SRI ANKITHAM VENKATA MONISH SAMARENDRA ROW. 25 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT, VISAKHAPATNAM. 4. CIT(A) VISAKHAPATNAM. 5. DR, ITAT, VISAKHAPATNAM. 6. GUARD FILE. BY ORDER, //TRUE COPY// (SENIOR PRIVATE SECRETARY) ITAT, VISAKHAPATNAM