Jupiter Manufacturing Pvt.Ltd., Rajasthan V. The Jt.CIT.,Spl.Range-2, Baroda

ITA 71/AHD/2012

• Counselvise Citation: 7120514 RSA 2012
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-08-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 10-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: S N DIVATIA
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Cost of acquisition; Fair market value

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER ./ ITA NO.71 /AHD/2012 / ASSESSMENT YEAR: 1997-98 JUPITER MANUFACTURING PRIVATE LTD., 6 PARSI SOCIETY, MAKARPURA ROAD, BARODA. PAN :AAACJ 4978 K VS JOINT COMMISSIONER OF INCOME TAX, SPL. RANGE-2, BARODA. / (APPELLANT) / (RESPONDENT) BY APPELLANT : SHRI S.N. DIVATIA, A.R. BY RESPONDENT : SHRI NARENDRA SINGH, SR. D.R. / DATE OF HEARING : 19/08/2015 / DATE OF PRONOUNCEMENT: 26/08/2015 / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, BAR ODA DATED 28.11.2011 FOR ASSESSMENT YEAR 1997-98. 2. IN THIS APPEAL BY THE ASSESSEE VARIOUS GROUNDS A RE RAISED. HOWEVER, THEY ARE ALL AGAINST THE DETERMINATION OF CAPITAL GAIN IN RESPECT OF SALE OF FACTORY PREMISES INCLUDING LAND. THE FACTS OF THE CASE ARE THAT FOR THE YEAR UNDER CONSIDERATION THE ASSES SEE DISCLOSED THE CAPITAL GAIN OF RS.12,63,766/- FOR THE SALE OF ITS FACTORY BUILDING ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 2 INCLUDING LAND AT BARODA. THE TOTAL CONSIDERATION W AS RS.68,83,000/-. THE ASSESSEE ALLOCATED THE SAME BETWEEN THE LAND AN D BUILDING AS UNDER:- CAPITAL GAIN RELATED TO LAND. RS.32,75, 000/- CAPITAL GAIN RELATED TO BUILDING. RS.36,08,000/- RS.68,83,000/- 3. THE SALE CONSIDERATION RELATING TO BUILDING WAS REDUCED FROM THE BLOCK OF BUILDING AVAILABLE WITH THE ASSESSEE. HOWE VER, THE CAPITAL GAIN OF RS.12,63,766/- WAS WORKED OUT IN RESPECT OF SALE CONSIDERATION RELATING TO LAND AS UNDER:- LONG TERM CAPITAL GAIN ON LAND SALE CONSIDERATION RELATABLE 32,75,000 LESS: INDEXED COST OF LAND LAND AREA 5241 MB MV [APP.] ON 81-82 AT THE RATE OF RS.125/- PER SQ.MT. M.V. 5241 X 125 6,55,125 INDEXED COST 655125 X 307 20,11,234 100 LONG TERM CAPITAL GAIN TAXABLE. 12,63,766 4. THE ASSESSING OFFICER DID NOT ACCEPT THE ALLOCAT ION OF SALE CONSIDERATION BETWEEN THE LAND AND BUILDING BY THE ASSESSEE. HE ALLOCATED ONLY RS.1,24,001/- TOWARDS FACTORY BUILDI NG AND REMAINING TOWARDS THE LAND AND ACCORDINGLY WORKED OUT THE LON G TERM CAPITAL GAIN OF RS.47,47,765/- AS UNDER:- ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 3 TOTAL SALE CONSIDERATION AS SHOWN BY THE ASSESSEE. RS. 68,83,000/- LESS: COST OF FACTORY BUILDING AS DISCUSSED ABOVE. RS. 1,24,001/- --------------------- SALE CONSIDERATION PERTAINING TO LAND. RS.67,58,9 99/- =========== THEREFORE, IN VIEW OF THE ABOVE, THE LONG TERM CA PITAL GAIN ON LAND IS WORKED OUT AS UNDER:- SALE CONSIDERATION RELATABLE TO LAND AS DISCUSSED ABOVE. RS. 67,58,999/- LESS: INDEXED COST OF THE LAND AS PER ASSESSEE. RS.20,11,234/- -------------------- LONG TERM CAPITAL GAIN. RS.47,47,765/- =========== 5. ON APPEAL, THE LD. CIT (A) VIDE HIS ORDER DATED 27-3-2002 ACCEPTED THE ASSESSEES CONTENTION AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF LONG TERM CAPI TAL GAIN. BEFORE THE LD. CIT (A), ASSESSEE HAS PRODUCED THE CERTIFICATE FROM GUJARAT INDUSTRIAL DEV ELOPEMENT CORPORATION (FOR SHORT GID C) AS PER WHICH FOR THE PERIOD1-4-1995 TO 31-3-1996 THE RATE OF PLO T WAS RS.550/- PER SQ.MT. + FRONTAGE CHARGES IF APPLICABLE. IT WAS CLA IMED BY THE ASSESSEE THAT ITS PLOT WAS IN THE FRONT ROW IN RESPECT OF W HICH FRONTAGE CHARGES @ RS.75/- PER SQ. MT WAS APPLICABLE AND ACCORDINGLY THE ASSESSEE HAS WORKED OUT THE FAIR MARKET VALUE OF THE LAND AT RS .625/- PER SQ.MT. THE LD. CIT (A) ACCEPTED THE ASSESSEES CONTENTION RELYING UPON THE CERTIFICATE OF GIDC. ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 4 6. THE REVENUE HAD FILED APPEAL BEFORE THE ITAT. TH E ITAT VIDE ORDER DATED 8-12-2006 IN ITA NO.1972/AHD/2002 SET A SIDE THE MATTER BACK TO THE FILE OF THE LD. CIT (A) WITH THE FOLLOW ING DIRECTION:- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSION. RECORD PERUSED. IT HAS BEEN NOTICED THAT A CONSOLIDATED SALE CONSIDERATIO N OF LAND AND BUILDING RECEIVED TO THE ASSESSEE. THE ASSESSEE WAS NOT PRES ENT BEFORE THE ASSESSING OFFICER AND HAS NOT FILED NECESSARY EXPLA NATION AND DETAILS BEFORE THE ASSESSING OFFICER, HOWEVER, THE ASSESSEE FILED LETTER DT. 23- 02-2002 OF GIDC BEFORE CIT (A) WHEREIN THE SALE OF LAND PER SQ. MTR. IS MENTIONED. THE CIT (A) HAS CONSIDERED THIS LETTER WH ICH AMOUNTS TO IMPORTANT EVIDENCE WITHOUT PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE ( THE LETTER OF GIDC IS DTD. 23-2-2002 AS STATED BY THE CIT (A) IN HIS ORDER WHEREAS AT PAGE-11 OF THE ASSESSEES P APER BOOK, A PHOTO COPY OF THE LETTER OF GIDC IS DTD. 23-02-2000, IT A PPEARS THAT THERE IS A TYPING MISTAKE IN MENTIONING THE DATE.). THE LETTERS OF ASSESSEE DATED 09-03-2000 AND 28-01-2000 FILED BY THE ASSESSING OF FICER HAVE NOT BEEN CONSIDERED BY THE ASSESSING OFFICER AS CONTEND ED BY THE LD. A.R. FROM THE FACTS OF THE CASE, IT IS CLEAR THAT THE AS SESSING OFFICER DID NOT CONSIDER CERTAIN MATERIALS/LETTERS WHICH ARE STATED TO BE FILED BEFORE THE ASSESSING OFFICER. HOWEVER, THE CIT (A) CONSIDERED T HOSE MATERIAL/LETTERS AND DECIDED THE ISSUE ON THOSE MAT ERIALS AND EVIDENCE WITHOUT PROVIDING OPPORTUNITY OF HEARING TO THE ASS ESSING OFFICER. THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S. V ALIMOHMED AHMEDBHAI 134 ITR 214 (GUJ.) WHEREIN IT HAS BEEN HE LD THAT IF THE ASSESSEE PRODUCES EVIDENCE IT IS NECESSARY TO PROVI DE OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER TO OPPOSE IT AND T O TEST THE ADDITIONAL EVIDENCE OR COUNTER THE EFFECT THEREOF OR TO PRODUC E EVIDENCE IN REBUTTAL. IN THE LIGHT OF ABOVE DISCUSSION AND KEEPING IN VI EW THE PRINCIPLE OF NATURAL JUSTICE, WE THINK IT PROPER TO SEND BACK THIS MATTER TO THE FILE OF THE CIT (A) WITH THE DIRECTION TO DECIDE THE ISS UE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING OPPORTUNITY OF HEARING TO BOTH SIDES. ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 5 7. CIT (A) PASSED THE ORDER DATED 28-11-2011 IN PUR SUANCE TO THE ORDER OF THE ITAT. IN THIS ORDER HE SLIGHTLY MODIFI ED THE ALLOCATION OF SALE CONSIDERATION BETWEEN THE LAND AND BUILDING AS UNDER:- SALE CONSIDERATION RELATING TO GROSS BLOCK OF BUILDING. RS. 4,17,847/- SALE CONSIDERATION RELATING TO LAND. RS.64,65,153/- --------------------- RS.68,83,000/- =========== 8. FURTHER THE CIT (A) ENHANCED THE CAPITAL GAIN DE TERMINED BY THE ASSESSING OFFICER BY THE SUM OF RS.17,39,189/- BY D ENYING OPTION OF ADOPTING FAIR MARKET VALUE OF THE LAND AS ON 1-4-19 81. HE WAS OF THE OPINION THAT THE RIGHT OF THE ASSESSEE TO THE LAND WAS ONLY THE TENANCY RIGHT AND THEREFORE, AS PER SECTION 55 (2)(A). THE ACTUAL COST OF ACQUISITION ONLY HAS TO BE CONSIDERED AND NOT THE F AIR MARKET VALUE AS ON 1-4-1981, ACCORDINGLY INSTEAD OF INDEXED COST OF LAND AT RS.20,11,234/- TAKEN BY THE ASSESSING OFFICER HE TO OK THE INDEXED COST OF ACQUISITION OF LAND AT RS. 2,72,045/- WHICH RESU LTED INTO ENHANCEMENT OF RS.17,39,189/-. THE ASSESSEE AGGRIE VED WITH THE ORDER OF THE CIT (A) IS IN APPEAL BEFORE US. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. BASICALLY THERE ARE TWO ISSUES IN THIS APPEAL (1) ALLOCATION OF THE SALE CONSIDERATION OF RS.68,83,000/- BETWEEN TH E LAND AND BUILDING, (2) WHETHER THE CIT (A) WAS JUSTIFIED IN MAKING EN HANCEMENT BY ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 6 DENYING THE OPTION OF FAIR MARKET VALUE AS ON 1-4-1 981 WHICH WAS ACCEPTED BY THE ASSESSING OFFICER. 10. WE SHALL FIRST TAKE UP THE QUESTION OF ALLOCATI ON OF SALE CONSIDERATION BETWEEN THE LAND AND BUILDING. THERE IS NO DISPUTE ABOUT THE TOTAL SALE CONSIDERATION OF RS.68,83,000/ -. THE ASSESSEE ALLOCATED THE SALE CONSIDERATION BETWEEN THE LAND A ND BUILDING BY DETERMINING THE VALUE OF THE LAND AS PER THE MARKET VALUE OF THE LAND ON THE DATE OF SALE. IN SUPPORT OF HIS CONTENTION W ITH REGARD TO MARKET VALUE OF THE LAND HE PRODUCED CERTIFICATE FROM GIDC , BARODA. THERE IS NO DISPUTE THAT THE PLOT UNDER CONSIDERATION IS WIT HIN THE INDUSTRIAL AREA, WITHIN THE JURISDICTION OF GIDC. THE VALUE O F THE BUILDING WAS TAKEN BY THE ASSESSEE AT RESIDUE FIGURE I.E. TOTAL SALE CONSIDERATION OF THE FACTORY REDUCED BY THE VALUE OF THE PLOT. THE A SSESSING OFFICER WAS OF THE OPINION THAT THE BUILDING IS VERY OLD AND IT S VALUE CANNOT BE RS.36,08,000/-. HE THEREFORE ADOPTED THE WDV OF FAC TORY BUILDING AT RS.1,24,001/- AS VALUE OF THE BUILDING ON THE DATE OF SALE. THE BALANCE SALE CONSIDERATION I.E. RS.67,58,999/- WAS ALLOCAT ED TOWARDS THE LAND. THE ASSESSING OFFICER HAS NOT GIVEN ANY REASON OR J USTIFICATION HOW THE VALUE OF THE LAND ON THE DATE OF SALE WAS RS.67,58, 999/-. THE CIT (A) HAD ACCEPTED THE ASSESSEES ALLOCATION OF THE SALE CONSIDERATION BETWEEN THE LAND AND BUILDING ON THE BASIS OF GIDC CERTIFICATE. ADMITTEDLY, GIDC CERTIFICATE WAS PRODUCED FOR THE F IRST TIME BEFORE THE CIT (A) AND HE HAS NOT CALLED FOR THE REMAND RE PORT FROM THE ASSESSING OFFICER. THEREFORE, THE ITAT SET ASIDE TH E MATTER BACK TO THE FILE OF CIT (A) WITH A DIRECTION TO HIM TO PROVIDE OPPORTUNITY TO THE ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 7 ASSESSING OFFICER IN THIS REGARD. AFTER THE ORDER O F THE ITAT, THE CIT (A) CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER AND IN THE REMAND REPORT THE ASSESSING OFFICER REITERATED THE STAND TAKEN IN THE ASSESSMENT ORDER. THE RELEVANT PORTION OF THE REMAN D REPORT READS AS UNDER:- 3.1. IN RESPECT OF PRICE OF LAND AND FACTORY BUILD ING, THE ASSESSEE RELIED UPON THE LETTER ISSUED BY GUJARAT INDUSTRIAL DEVELO PMENT CORPORATION DATED 27/2/2000. THE LD. CIT (A) HAS ALSO DELETED TH E ADDITION RELYING UPON THE ABOVE LETTER. 3.2. IT MAY BE MENTIONED HERE THAT, THE PURCHASER O F THE SAID LAND AND FACTORY BUILDING M/S. BEARING MFG. CO. PURCHASED TH E FACTORY BUILDING MAINLY WITH THE INTENTION OF SETTING UP OF THEIR OW N MANUFACTURING UNIT. IT IS EVIDENT THAT THE FACTORY BUILDING IS AN OLD SHED WHICH WAS COMPLETELY DISMANTLED BY THE NEW OWNER AS THE SAME WAS OF NO USE OR HAVING NIL MARKET VALUE EXCEPT THE SCRAP VALUE. THE REFORE THE MARKET VALUE IS BASICALLY RELATABLE TO THE LAND ONLY. 4. IN VIEW OF THE ABOVE FOR THE REASONS DISCUSSED I N THE ASSESSMENT ORDER THE L.T.C.G. OF RS.47,47,765/-MAY BE UPHELD. 11 . THUS, IN THE REMAND REPORT THE ASSESSING OFFICER R EITERATED THAT THE FACTORY BUILDING IS AN OLD SHED WHICH IS DISMAN TLED BY THE BUYER OF THE FACTORY AND THEREFORE FOR THE REASONS GIVEN IN THE ASSESSMENT ORDER HE REQUESTED FOR UPHOLDING THE CAPITAL GAIN DETERMI NED BY THE ASSESSING OFFICER. THE CIT (A) SLIGHTLY MODIFIED T HE WORKING OF THE ASSESSING OFFICER AND INSTEAD OF THE VALUE OF BUILD ING AT RS.1,24,001/- HE DIRECTED TO TAKE IT AT RS.4,17,847/- WITH THE FO LLOWING OBSERVATION:- ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 8 THUS, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, CONSIDERATION RECEIVED BY THE APPELLANT HAS TO BE TAKEN AS TOWARD S LAND ONLY AND AT BEST, THE ORIGINAL COST OF SHED AND BOUNDARY WALL C AN ONLY BE ALLOCATED TOWARDS CONSIDERATION FOR THE SAME. A.O. TOOK THE M ARKET VALUE OF THE FACTORY BUILDING/BOUNDARY WELL AT WDV AS ON 1-4-199 6 I.E. RS.1,24,000. THE SAME IS DIRECTED TO BE TAKEN AT TH E VALUE OF THE GROSS BLOCK OF BUILDING ETC. I.E. RS.4,17,847/- AND THE BALANCE AMOUNT OF SALE CONSIDERATION RS.64,65,153/- (68,83,000 4,17,847) IS DIRECTED TO BE TAKEN AS SALE CONSIDERATION TOWARDS LAND. 12. AFTER CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES WE ARE UNABLE TO AGREE WITH THE VIEWS OF THE LD. CIT (A). WE FIND THAT IN THE CASE CONSIDERATION BEFORE US NEITH ER THE ASSESSEE NOR THE ASSESSING OFFICER OR THE CIT (A) HAS TRIED TO D ETERMINE THE MARKET VALUE OF THE LAND AS WELL AS BUILDING ON THE DATE O F SALE SO AS TO ALLOCATE THE SALE CONSIDERATION BETWEEN THE LAND AND BUILDIN G. THE ASSESSEE CONSIDERED THE MARKET VALUE OF LAND ON THE BASIS OF GIDC CERTIFICATE WHILE THE ASSESSING OFFICER AS WELL AS THE CIT (A) WERE OF THE VIEW THAT SINCE THE BUILDING WAS OLD ONE AND THE BUYER H AS DISMANTLED THE BUILDING AND THEREFORE SO FAR AS BUYER IS CONCERNED THE FACTORY BUILDING WAS OF NO USE. THEREFORE, THE ASSESSING OF FICER CONSIDERED ONLY THE WDV AS THE FAIR SALE CONSIDERATION OF BUIL DING WHILE THE CIT (A) DIRECTED TO CONSIDER THE VALUE OF THE GROSS BLO CK OF THE BUILDING. HOWEVER, NEITHER THE ASSESSING OFFICER NOR THE CIT (A) HAS HELD THAT HOW THE SALE CONSIDERATION ALLOCATED BY THEM TOWARD S LAND IS A PROPER SALE CONSIDERATION ALLOCABLE TO LAND WHEN THE GIDC WAS SELLING THE PLOT IN THE INDUSTRIAL ESTATE @ RS.,550/- PER SQ. M T. + FRONTAGE CHARGES, THEN THE VALUE DETERMINED BY THE ASSESSING OFFICER AND THE CIT (A) AT ALMOST DOUBLE THE RATE AS PER GIDC CAN BE JUSTIFIED . IN OUR OPINION, ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 9 THE WDV OF THE BUILDING OR CONSTRUCTION COST CANNOT BE PROPER BASE FOR DETERMINING THE FAIR MARKET VALUE OF THE FACTORY BU ILDING. IF THE HISTORICAL COST IS TO BE CONSIDERED THEN THE COST O F THE PLOT OF THE LAND OF THE ASSESSEE WAS ONLY RS.75,589/-. THEREFORE, HISTO RICAL COST WHETHER OF THE LAND OR OF THE BUILDING IS NOT RELEVANT FOR ALLOCATING THE SALE CONSIDERATION OF THE FACTORY PREMISES WHICH INCLUDE D LAND AND BUILDING BOTH. WE FIND THAT CIT (A) IN HIS FIRST O RDER ACCEPTED THE ASSESSEES CONTENTION WITH THE FOLLOWING FINDING:- IT IS FURTHER MENTIONED THAT THE ASSESSING OFFICE R HAS NO CONTRARY MATERIAL AVAILABLE TO SHOW THAT THE RATE I N THE GIDC WAS HIGHER THAN THAT SPECIFIED BY THE GIDC ABOVE EVEN T HOUGH THESE FIGURES WERE NOT AVAILABLE TO THE ASSESSING OFFICER AS THEY WERE SUBMITTED LATE. IT IS HOWEVER STATED THAT THIS BEING THE SPECIFIED RATE OF GIDC THE QUESTION OF VALUING THE LAND AT A HIGHER FIGURE DOE S NOT ARISE. AS REGARDS THE BUILDING ALSO IT IS STATED THAT THE ASS ESSING OFFICER HAS ERRONEOUSLY MENTIONED IN THE ORDER THAT THE FACTORY BUILDING IS ONLY AN OLD SHED WHICH WAS COMPLETELY DISMANTLED BY THE NEW OWNERS AND WAS THEREFORE HAVING NIL MARKET VALUE AND ONLY A LITTLE SCRAP VALUE. THE APPELLANT CLARIFIES THAT FAR FROM BEING A SHED IT W AS FULLY BUILT UP AND INCLUDED REST ROOM FOR CHOWKIDAR AND BOUNDARY WALL, 16 FT. HIGH ON ALL FOUR SIDES. THEY HAVE SUBMITTED THAT THE VALUE OF T HE BUILDING WAS TAKEN AS FOLLOWS: COVERED AREA 1229.89 SQ. MTR. BUILT UP AREA 9500.00 SQ.FT. RATE OF CONSTRUCTION 350/- PER SQ. FT. LESS: REBATE FOR OLD COST 35/- ----------- 315/- THUS 315 X 9500 = 29,92,500.00 ADD:-VALUE OF BOUNDARY WALL 6,15,500.00 PLATFORM, CHOWKIDAR, LAND ---- --------------- LEVELING, TANK ETC. (L.S.) 36,08,000.00 ========== ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 10 IT IS SUBMITTED THAT THERE IS NO EVIDENCE FOR TAKIN G THE VALUE AT RS.1,24,001/- AS PER WDV. IN FACT UNABSORBED DEPREC IATION RELATING TO BUILDING WAS RS.1,45,220/- AS PER RECORD AND THIS S HOULD HAVE BEEN ADDED ALSO LEADING TO A VALUE OF RS.2,69,220/-. THI S DETAIL WAS GIVEN IN THE RETURN BUT IN FACT THE VALUE OF THE BUILDING WA S FAR IN EXCESS OF THE SAME. 2.4. AFTER GOING THROUGH THE DETAILS SUBMITTED BY T HE APPELLANT, I FIND THAT THE LETTER OF THE GIDC IS VERY CLEAR AS REGARD S THE LAND PRICE PREVAILING IN 1982 AND 1996. AS THE CONCERNED LAND IS IN GIDC IT IS A GOOD GUIDELINE TO THE VALUE OF THE LAND. IN ANY CAS E IT IS CLEAR FROM THE RECORD THAT THE ASSESSING OFFICER HAD NO REASON OR ANY EVIDENCE TO ENHANCE THE VALUE OF THE LAND AND INCREASING THE LO NG TERM CAPITAL GAIN BY MERELY REJECTING THE VALUATION OF THE BUILDING A ND WDV OF BUILDING AS BEING THE VALUE OF LAND ONLY. THIS IS MERELY A J UGGLERY OF FIGURES ON THE PART OF THE ASSESSING OFFICER BUT IS NOT BASED ON ANY EVIDENCE REGARDING THE VALUE OF EITHER LAND OR BUILDING. IN MY VIEW AS FAR AS THE VALUATION OF THE LAND IS CONCERNED, I HOLD THAT IT HAS BEEN CORRECTLY WORKED OUT AS PER GIDC VALUATION AND HAS TO BE ACCE PTED ON THE SAME LINES DUE TO LACK OF ANY EVIDENCE TO THE CONTRARY. SECONDLY, IT HAS TO BE ACCEPTED THAT THE WDV IS NO GUIDELINE TO THE MARKET VALUE OF THE FACTORY BUILDING ON THE DATE OF SALE. IT WOULD SUFF ICE TO MENTION THAT EVEN THE BOUNDARY WALL 16 FT. HIGH TOTALLY ENCIRCLI NG THE PROPERTY WOULD HAVE MORE MARKET VALUE THAN THE WDV SHOWN IN THE RECORD. THE APPELLANT HAS GIVEN AT HIS END A VERY FAIR AND REAS ONABLE BASIS FOR VALUATION OF THE BUILDING. EVEN OTHERWISE, THE LUMP SUM CONSIDERATION MINUS THE VALUE OF LAND WOULD CERTAINLY HAVE TO BE TAKEN AS THE VALUE OF THE BUILDING. 13. THE ABOVE FINDING OF THE CIT (A) WAS SET ASIDE BY THE ITAT ON THE LIMITED GROUND THAT THE CERTIFICATE OF GIDC WAS NOT AVAILABLE WITH THE A.O. AND THE CIT (A) HAS NOT ALLOWED ANY OPPORT UNITY TO THE A.O. TO REBUT THE ABOVE ADDITIONAL EVIDENCE FURNISHED BE FORE HIM. NOW AFTER THE SET ASIDE CIT (A) HAS CONFRONTED THE A.O. WITH THE CERTIFICATE OF GIDC. THE ASSESSING OFFICER IN HIS REMAND REPORT HAS NOT GIVEN ANY COGENT REASON WHY THE CERTIFICATE OF GIDC SHOULD NO T BE ACCEPTED FOR ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 11 DETERMINING THE VALUE OF THE LAND BUT REITERATED WH ATEVER WAS MENTIONED IN THE ASSESSMENT ORDER. HOWEVER, THE CIT (A) IN THE SUBSEQUENT ORDER I.E. THE ORDER IMPUGNED IN THIS AP PEAL BEFORE US HAS REJECTED THE GIDC CERTIFICATE AS UNDER:- AS FAR AS VALUE OF LAND IS CONCERNED, APPELLANT R ELIED UPON GIDC RATES AS PER GIDCS LETTER DT. 23-2-2000. ON GOING THROUGH THE SAID LETTER, I AM OF THE VIEW THAT MUCH WEIGHTAGE CANNOT BE ASSIGNED TO GIDCS LETTER, WHERE IT WAS SIMPLY MENTIONED THAT LAND PRICE OF MAKARPURA GIDC PREVAILING WAS RS.550 PER SQ. METER DURING1-4-95 TO 31-3-1996. THERE IS NO MENTION AS TO HOW AND ON WHA T BASIS SUCH RATES WERE INFORMED TO APPELLANT BY GIDC. NO INSTANCES OF SALE OF OPEN PLOTS OF LAND IN THE PERIOD IN QUESTION WERE REFERRED TO. THE LETTER BY GIDC ISSUED AT APPELLANTS BEHEST CANNOT BE RELIED UPON AS INDICATIVE OF MARKET VALUE OF LAND. 14. WE ARE UNABLE TO AGREE WITH THE ABOVE OBSERVATI ON OF THE LD. CIT (A), THAT THE RATE GIVEN IN THE CERTIFICATE OF THE GIDC IS NOT RELEVANT. THE RATE GIVEN IN THE GIDC CERTIFICATE IS THE RATE ON WHICH GIDC ALLOTTED PLOT TO THE INDUSTRIALIST AT THE RELEVANT TIME. THEREFORE, THE RATE MENTIONED IN THE CERTIFICATE OF THE GIDC IS THE PRE VALENT MARKET RATE OF THE PLOT OF LAND IN GIDC AREA AT THE RELEVANT TIME. THE LD. CIT (A) MERELY DOUBTED THE GIDC CERTIFICATE ON THE GROUND T HAT IT IS ISSUED AT THE APPELLANTS BEHEST. IN OUR OPINION IT IS IRRELE VANT AT WHOSE BEHEST CERTIFICATE WAS ISSUED. GIDC IS A GUJARAT GOVERNMEN T UNDERTAKING AND A CERTIFICATE ISSUED BY IT CANNOT BE REJECTED MEREL Y ON THE BASIS OF SUSPICION OR PRESUMPTION. THEREFORE, WE ARE OF THE OPINION THAT THE CERTIFICATE OF THE GIDC WITH REGARD TO THE RATE OF PLOT IN THE GIDC AREA AT THE RELEVANT TIME IS ONE OF THE PROPER BASIS FOR DETERMINATION OF THE MARKET VALUE OF THE PLOT IN THAT AREA. THE ASSESSIN G OFFICER AS WELL AS ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 12 THE CIT (A) HAS NOT GIVEN ANY BASIS FOR ALLOCATION OF THE SALE CONSIDERATION BETWEEN THE LAND AND BUILDING. THE WD V OF THE BUILDING CANNOT BE DETERMINATIVE OF MARKET VALUE OF THE BUILDING AFTER 20 YEARS. IN THE ALLOCATION OF SALE CONSIDERATION B ETWEEN THE LAND AND BUILDING BY THE ASSESSEE AT LEAST THE VALUE OF THE LAND IS DETERMINED ON THE BASIS OF GIDC CERTIFICATE AND RESIDUAL VALUE IS ALLOCATED TO THE BUILDING. BUT THE ALLOCATION OF SALE CONSIDERATION BY ASSESSING OFFICER AND CIT (A), BETWEEN THE LAND AND BUILDING IS ABSOL UTELY WITHOUT ANY BASIS. THE HISTORICAL COST OF BUILDING OR WDV OF BU ILDING CANNOT BE DETERMINATIVE OF MARKET VALUE OF BUILDING ON THE DA TE OF SALE. SIMILARLY END USE OF BUILDING BY THE BUYER IS ALSO NOT RELEVA NT FOR DETERMINING MARKET VALUE OF BUILDING ON THE DATE OF SALE. CONSI DERING THE FACTS OF THE CASE IN OUR OPINION THE ALLOCATION OF SALE CONS IDERATION BETWEEN THE LAND AND BUILDING BY THE ASSESSEE DESERVES TO BE AC CEPTED AND WE ORDER ACCORDINGLY. 15. NOW WE COME TO THE SECOND QUESTION IN THIS APPE AL I.E. ENHANCEMENT BY THE CIT (A). WE HAVE ALREADY MENTION ED THAT THE ITAT HAS SET ASIDE THE MATTER BACK TO THE FILE OF C IT (A) FOR THE PURPOSE OF ALLOWING OPPORTUNITY OF BEING HEARD TO T HE REVENUE WITH REFERENCE TO ADDITIONAL EVIDENCE PRODUCED BEFORE TH E CIT (A) IN THE FIRST ROUND. IN THE REMAND REPORT THE A.O. HAS NO WHERE REQUESTED FOR ENHANCEMENT. FROM THE READING OF THE ORDER OF THE I TAT WHICH IS REPRODUCED ABOVE IN PARA-6, IT IS EVIDENT THAT IT W AS A LIMITED SET ASIDE FOR THE PURPOSE OF GIVING OPPORTUNITY TO THE ASSESS ING OFFICER WITH REFERENCE TO THE ADDITIONAL EVIDENCE I.E. LETTER OF GIDC. IN THE ABOVE CIRCUMSTANCES, IN OUR OPINION, ENHANCEMENT WAS MADE BY THE CIT(A), ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 13 IN RESPECT OF ALTOGETHER NEW POINT WHICH WAS NOT TA KEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, WAS NOT AN ISSUE BEFORE THE CIT (A) OR ITAT IN FIRST ROUND. THE MATTER WAS SET ASIDE BY THE ITAT TO THE CIT (A) FOR THE LIMITED PURPOSE OF ALLOWING OPP ORTUNITY TO THE A.O. WITH REFERENCE TO THE ADDITIONAL EVIDENCE. THE REFORE, THE CIT (A) WAS NOT JUSTIFIED IN TAKING UP ALTOGETHER A NEW ISS UE WHILE RE- ADJUDICATING THE ISSUE AS PER DIRECTION OF ITAT. W E ARE THEREFORE OF THE OPINION THAT THE CIT (A) WAS NOT JUSTIFIED IN DENYI NG THE BENEFIT OF OPTION OF FAIR MARKET VALUE OF LAND AS ON 1-4-1981 TO THE ASSESSEE WHICH WAS ALLOWED BY THE ASSESSING OFFICER. BEFORE WE PART WITH THE MATTER WE MAY MENTION HERE THAT THE ASSESSEE HAS AL SO ARGUED THAT THE ALLOTMENT OF THE LAND BY GIDC TO THE ASSESSEE WAS O N THE PAYMENT OF LUMP SUM CONSIDERATION. IT WAS NOT A TENANCY RIGHT ON THE BASIS OF MONTHLY PAYMENT OF RENT. THEREFORE PROVISION OF SEC TION 55(2)(A) IS NOT APPLICABLE. HOWEVER, AS WE HAVE SET ASIDE THE ENHAN CEMENT MADE BY THE CIT (A) ON THE LIMITED GROUND THAT IT WAS BEYON D THE SCOPE OF ORDER OF SET-ASIDE BY THE ITAT, WE DO NOT EXPRESS A NY OPINION WHETHER THE ALLOTMENT OF LAND BY GIDC TO THE ASSESSEE WOULD FALL WITHIN THE AMBIT OF TENANCY RIGHT OR NOT. IN VIEW OF ABOVE, WE DIRECT THE ASSESSING OFFICER TO ACCEPT THE WORKINGS OF THE CAP ITAL GAIN OF THE ASSESSEE AND THE ADDITION MADE BY HIM AS WELL AS EN HANCEMENT MADE BY THE CIT (A) ARE DELETED. 16. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 26TH AUGUST, 2015 AT AHMEDABAD. S SD/- (S. S. GODARA) JUDICIAL MEMBER SD/- (G.D. AGRAWAL) VICE-PRESIDENT ITA NO.71/AHD/2012 JUPITER MANUFACTURING PVT. LTD. FOR AY 1997-98 14 PATKKI !'!# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. !' # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. &'( ' , ' , ! / D R, ITAT, AHMEDABAD 6. (-. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD