Dy. CIT, Circle-9, Pune V. Jayashree Ajit Darekar, Pune

ITA 685/PUN/2013

• Counselvise Citation: 68524514 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B C MALAKAR
• Keywords: Cost of acquisition; Fair market value; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.685/PN/2013 ASSESSMENT YEAR: 2006-07 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE . APPELLANT VS. JAYASHREE AJIT DAREKAR JAYAJIT, SECTOR NO.27, PLOT NO.438, PCNTDA, NIGDI, PUNE 411044 PAN: AGHPD1686J . RESPONDENT APPELLANT BY : MR. B.C. MALAKAR DEPARTMENT BY : MR. JAYANT PENDSE DATE OF HEARING : 15-01-2015 DATE OF PRONOUNCEMENT : 28-01-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL IS DIRECTED AGAINST AN ORDER O F THE COMMISSIONER OF INCOME TAX(APPEALS)-V, PUNE DATED 26.12.2012 WHI CH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S 1 43(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 23.12.2010 PE RTAINING TO THE ASSESSMENT YEAR 2006-07. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE A.O. TO ADOPT THE VALUE OF LAND AS ON 1.4.1981 IN RESPECT OF LANDS AT S.NO.118 A AT RS.200 PER SQ. MTR. AND AT S.NO.129 AT RS.150 PER SQ. MTR ON PRESUMPTIVE / ESTIMATE BASIS, WITHOUT BRINGING ON R ECORD ANY COMPARABLE INSTANCE OR ANY OTHER PROOF. ITA NO.685/PN/2013 3. THE ONLY DISPUTE IN THE PRESENT APPEAL RELATES T O THE CAPITAL GAIN EARNED BY THE ASSESSEE ON SALE OF LAND AT SURVEY NOS.118A AND 129, PARVATI. THE DIFFERENCE BETWEEN ASSESSEE AND THE REVENUE WITH RE GARD TO THE COMPUTATION OF CAPITAL GAINS WAS THE ADOPTION OF THE FAIR MARKE T VALUE OF THE PROPERTY AS ON 01.04.1981 IN ORDER TO DETERMINE ITS COST OF ACQ UISITION. THE ASSESSEE HAD DECLARED THE FAIR MARKET VALUE OF THE PROPERTY AS O N 01.04.1981 ON THE BASIS OF THE REPORT OF REGISTERED VALUER FOR RS.27,93,212 /- AND RS.6,00,000/- WITH RESPECT TO SURVEY NOS.118A AND 129, RESPECTIVELY. THE ASSESSING OFFICER ADOPTED THE TOTAL FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 AT RS.1,54,000/-. AS A CONSEQUENCE, THE ASSESSING OFF ICER DETERMINED LONG TERM CAPITAL GAIN AT RS.71,53,300/- AS AGAINST A CAPITAL LOSS OF RS.66,72,403/- COMPUTED BY THE ASSESSEE. 4. IN APPEAL, THE CIT(A) ALLOWED PARTIAL RELIEF TO THE ASSESSEE BY DIRECTING THE ASSESSING OFFICER TO ADOPT THE FAIR MARKET VALU E OF LAND AT SURVEY NOS.118A AND 129 AT RS.200/- PER SQ. MTR. AND RS.15 0/- PER SQ. MTR., RESPECTIVELY AS ON 01.04.1981. AS A CONSEQUENCE, T HE LONG TERM CAPITAL GAIN HAS BEEN COMPUTED AT RS.18,66,931/- INSTEAD OF RS.7 1,53,300/- DETERMINED BY THE ASSESSING OFFICER. AGAINST THE DIRECTION OF CI T(A) IN ADOPTING THE FAIR MARKET VALUE OF LAND AS ON 01.04.1981 AT RS.200/- P ER SQ. MTR. AND RS.150/- PER SQ. MTR. FOR LAND AT SURVEY NOS.118A AND 129, R ESPECTIVELY, THE REVENUE IS IN APPEAL BEFORE US. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELI ED UPON THE ORDER OF ASSESSING OFFICER IN ORDER TO JUSTIFY THE ESTIMATIO N OF THE FAIR MARKET VALUE OF LAND AS ON 01.04.1981, WHEREAS THE LEARNED REPRESEN TATIVE APPEARING FOR THE RESPONDENT ASSESSEE POINTED OUT THAT THE CIT(A) WAS QUITE JUSTIFIED IN DIS- REGARDING THE ESTIMATION MADE BY THE ASSESSING OFFI CER FOR THE REASONS CONTAINED IN THE IMPUGNED ORDER. ITA NO.685/PN/2013 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CRUX OF THE CONTROVERSY RELATES TO THE FAIR MARKET VALUE OF THE LAND SOLD AS ON 01.04.1981 FOR THE PURPOSES OF COMPUTING CAPITAL GAINS. THE C IT(A) HAS OBSERVED THAT THE VALUE AS ON 01.04.1981 ADOPTED BY THE ASSESSING OFF ICER AT 1/50 TH OF THE SALE CONSIDERATION HAS NO BASIS. AT THE SAME TIME, THE CIT(A) HAS ALSO COME TO A FINDING THAT THE VALUATION REPORT FURNISHED BY THE ASSESSEE FROM A REGISTERED VALUER ALSO DID NOT CONTAIN ANY RELIABLE BASIS. CO NSIDERING THE AFORESAID, THE CIT(A) HAS ESTIMATED THE FAIR MARKET VALUE OF THE L AND AS ON 01.04.1981 BY MAKING FOLLOWING DISCUSSION:- 14. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AS WELL AS REPLY OF THE APPELLANT. IN THIS CASE, THE ASSESSING OFFIC ER, AFTER CONSIDERING THE APPRECIATION IN PROPERTIES IN AREAS WHICH ARE F AR OFF FROM THE PROPERTY SITUATED AT PARVATI HAS ADOPTED THE VALUE AS ON 01.04.1981 AT 1/50 TH OF THE SALE CONSIDERATION WHICH HAS NO BASIS. THE APPELLANT TOO HAS INFLATED THE COST ON THE BASIS OF VALUER'S REPO RT AS ON 01.04.1981 IN ORDER TO REDUCE THE CAPITAL GAINS. THEREFORE, THE A SSESSING OFFICER IS RIGHT IN HOLDING THAT PROBLEMS ASSOCIATED WITH LAND DUE TO WHICH SALE CONSIDERATION WAS LOW, WAS ALSO APPLICABLE FOR VALU ATION OF COST OF PROPERTIES AS ON 01.04.1981. THE APPELLANT IN HIS S UBMISSION HAS STATED THAT CONSIDERING 50% PRICE OF PRIME AREAS, T HE VALUE OF LAND WILL BE 20-25 PER SQ.FT. THEREFORE, IN MY VIEW ENDS OF JUS TICE WILL MEET IF VALUE OF LAND AT SURVEY NO.118A IS ADOPTED AT 200 S Q.MTRS AND VALUE OF LAND AT SURVEY NO.129 IS TAKEN AT 150/- PER SQ.MTR. ACCORDINGLY, COST OF LAND IS CALCULATED AS UNDER: I. SURVEY NO.118A AMOUNT ( ) AREA 6207.13 SQMTRS. X 200 = 12,41,426/- II. SURVEY NO.129 AREA 1744.61 SQMTR. X 150 = 2,61,692/- III. S.NO.722(CTS 212) = 1,40,000/- TOTAL 16,43,118/- ACCORDINGLY, L.T.C.G IS COMPUTED AS UNDER: SALE CONSIDERATION = 77,00,000/- INDEX COST OF ACQUISITION 16,43,118 X 497/140 = 58,33,069/- LONG TERM CAPITAL GAINS = 18,66,931/- ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO A DOPT THE VALUE OF LONG TERM CAPITAL GAINS AT 18,66,931/- INSTEAD OF 71,53,300/-. THUS, THE GROUND IS PARTLY ALLOWED. ITA NO.685/PN/2013 7. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE HAS NOT DEMONSTRATED ANY COGENT REASONS TO DIS-REGARD THE E STIMATION OF FAIR MARKET VALUE MADE BY THE CIT(A) ESPECIALLY, IN THE BACKGRO UND OF THE FACT THAT THE ESTIMATION MADE BY THE ASSESSING OFFICER LACKED ANY BASIS. THEREFORE, WE HEREBY AFFIRM THE ORDER OF THE CIT(A) ON THIS ASPEC T AND ACCORDINGLY, REVENUE FAILS. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 28 TH JANUARY, 2015. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 28 TH JANUARY, 2015. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-V, PUNE; 4) THE CIT-V, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE