Malathi Ramarathinam, Power Agent of Mrs. Kamakshi Raman, CHENNAI V. ITO, CHENNAI

ITA 705/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8130 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-12-2015
• Assessment Year: 1994-1995
• Appeal Filed On: 07-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: S SRIDHAR SHRI L MOHUN
• Keywords: Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.705/MDS/2015 ' (' / ASSESSMENT YEAR : 1994-95 MRS. MALATHI RAMARATNAM, POWER AGENT TO MRS.KAMAKSHI RAMAN, C/O SHRI L. MOHUN, ADVOCATE, 1/8, RESIDENCY APARTMENTS, 1, TRUSTPAKKAM SOUTH STREET, MANDAVELI, CHENNAI 600 028. PAN : AHCPR 8920 P V. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION 2(1), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE FOR SHRI L. MOHUN, ADVOCATE ,-*+ . / / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT 0 . 1$ / DATE OF HEARING : 11.12.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 05.02.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 16, CHEN NAI, DATED 20.01.2015 AND PERTAINS TO ASSESSMENT YEAR 1994-95. THE ONLY 2 I.T.A. NO.705/MDS/15 ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DE TERMINATION OF FAIR MARKET VALUE AS ON 01.04.1981 FOR COMPUTATION OF CA PITAL GAIN. 2. SHRI S. SRIDHAR, THE LD. COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSING OFFICER COMPUTED THE FAIR MARKET VALUE AS ON 01.04.1981 ON THE BASIS OF THE GUIDELINE VALUE OF T HE REGISTRATION DEPARTMENT. ACCORDING TO THE LD. COUNSEL, THE GUID ELINE VALUE OF THE REGISTRATION DEPARTMENT IS ONLY TO ASSIST THE S UB-REGISTRAR TO DETERMINE THE FAIR MARKET VALUE. THEREFORE, THE GU IDELINE VALUE WOULD NOT REFLECT THE MARKET VALUE OF THE PROPERTY AS ON 01.04.1981. 3. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THIS IS SECOND ROUND OF LITIGATION BEFORE THIS TRIBUNAL. IN THE FIRST ROUND, THIS TRI BUNAL DIRECTED THE ASSESSING OFFICER TO ADOPT THE GUIDELINE VALUE AS O N 01.04.1981 AFTER OBTAINING THE SAME FROM SUB-REGISTRAR. ACCORD INGLY THE GUIDELINES VALUE FROM THE OFFICE OF SUB-REGISTRAR W AS OBTAINED AND THE ASSESSING OFFICER COMPUTED THE CAPITAL GAIN ACC ORDINGLY. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE APPEARS TO HAVE CLAIMED THE MARKET VALUE OF THE PRO PERTY AS ON 3 I.T.A. NO.705/MDS/15 01.04.1981 AT ` 2,50,000/- PER GROUND. HOWEVER, THE ASSESSING OFFICER ADOPTED THE GUIDELINE VALUE AT ` 40,000/- PER GROUND AS AGAINST THE GUIDELINE VALUE OF THE PROPERTY AS ON 0 1.04.1981 AT ` 22,000/- PER GROUND. WHEN THE MATTER CAME BEFORE T HIS TRIBUNAL, THIS TRIBUNAL DIRECTED THE ASSESSING OFFICER TO OBT AIN THE FAIR MARKET VALUE AS ON 01.04.1981 FROM SUB-REGISTRAR CONCERNED AND DETERMINE THE SAME ACCORDINGLY. THEREFORE, THIS DI RECTION OF THE TRIBUNAL IS TO OBTAIN FAIR MARKET VALUE OF THE PROP ERTY AND NOT THE GUIDELINE VALUE. INSPITE OF THIS DIRECTION, THE AS SESSING OFFICER HAS TAKEN THE GUIDELINE VALUE OF THE PROPERTY AT ` 22,000/- PER GROUND. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MAR KET VALUE OF THE PROPERTY IS NOT A CONSTANT FIGURE. IN OTHER WORDS, THE MARKET VALUE OF THE PROPERTY WOULD DEPEND UPON VARIOUS FACTORS, NAMELY, THE AREA OF THE LAND, THE LOCATION OF THE PROPERTY, INF RASTRUCTURE FACILITIES AVAILABLE AROUND THE LAND, POTENTIAL FUTURE DEVELOP MENT AROUND THE LOCATION, ETC. THE GUIDELINE VALUE OF THE PROPERTY DETERMINED BY THE STATE GOVERNMENT IS ONLY TO GUIDE THE SUB-REGISTRAR TO ASCERTAIN THE RIGHT MARKET VALUE. THEREFORE, THE GUIDELINE V ALUE IS ALSO ONE OF THE FACTORS TO BE TAKEN INTO CONSIDERATION WHILE DE TERMINING THE FAIR MARKET VALUE. IT IS A WELL SETTLED PRINCIPLE OF LA W THAT THE MARKET VALUE OF THE PROPERTY IS NOTHING BUT A PRICE THAT W OULD BE AGREED 4 I.T.A. NO.705/MDS/15 BETWEEN THE WILLING PURCHASER AND WILLING SELLER. THEREFORE, THE ASSESSING OFFICER HAS TO ASSUME A NOTIONAL MARKET T O ASCERTAIN THE FAIR MARKET VALUE AFTER CONSIDERING ALL THOSE FACTO RS MENTIONED ABOVE. UNFORTUNATELY, THE ASSESSING OFFICER HAS TA KEN THE GUIDELINE VALUE OF THE PROPERTY ALONE. THEREFORE, THIS TRIBUN AL IS UNABLE TO ACCEPT THE ORDERS OF THE LOWER AUTHORITIES. ACCORD INGLY THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSUE OF COMPUTATION OF CAPITAL GAIN IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL REC ONSIDER THE CLAIM OF THE ASSESSEE AND FIND OUT THE FAIR MARKET VALUE BY CONSIDERING ALL THE FACTORS MENTIONED ABOVE AND THEREAFTER DETERMIN E THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981. THE ASSESSING OFFICER SHALL THEREAFTER COMPUTE THE ASSESSABLE CAP ITAL GAIN AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 5 TH FEBRUARY, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER 5 I.T.A. NO.705/MDS/15 /CHENNAI, 4 /DATED, THE 5 TH FEBRUARY, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-16, CHENNAI 4. 0 81 /CIT (INTERNATIONAL TAXATION), CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.