Sh. Balraj Singh Grewal, Ludhiana V. ACIT, Ludhiana

ITA 786/CHANDI/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5367 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 31-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Fair market value; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 786/CHD/2012 ASSESSMENT YEAR : 2005-06 BALRAJ SINGH GREWAL VS. A.C.I.T. C-VI 243-A, SARABHA NAGAR LUDHIANA LUDHIANA AHKPG 4828 M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ASHWANI KUMAR RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING 6.1.2014 DATE OF PRONOUNCEMENT 8. 1.2014 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 23. 5.2012 OF THE LD. CIT(A)-II, LUDHIANA. 2 IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 1 THAT ORDER PASSED U/S 250(6) OF THE ACT BY THE L D. CIT(A)-II, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH HE WAS NOT JUSTIFIED TO ARBITRARY UPHOLD THE ACTION OF TH E ASSESSING OFFICER IN UPHOLDING THE ADDITION OF RS. 41,59,600/- MADE O N ACCOUNT OF ALLEGED CAPITAL GAIN. 2 THAT HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE ASSESSING OFFICER IN ADOPTING THE VALUE OF LAND AT RS. 10 PER SQYD AS AGAINST RS. 225/- AND RS. 50 PER SQYD ADOPTED BY THE APPELLANT FOR WORKING OUT THE CAPITAL GAIN. 3 THAT HE GRAVELY ERRED IN UPHOLDING THE ADDITION D ESPITE THE FACT THAT THE ASSESSING OFFICER HAD SIMPLY IGNORED THE MATERIAL EVIDENCE BROUGHT ON RECORD AND ALSO THE DIRECTIONS OF THE CHANDIGARH BENCH OF INCOME TAX APPELLATE TRIBUNAL IN APPELLANTS OWN CASE FOR FRAMING OF ASSESSMENT. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G THE YEAR THE ASSESSEE HAS SOLD THREE PLOTS IN GURU AMAR DASS COLONY, VILLALGE DAAD NEAR LUDHIANA. LONG TERM CAPITAL GAI N WAS COMPUTED BY THE ASSESSEE AFTER SUBSTITUTING FAIR MA RKET VALUE OF THE PROPERTY AS ON 1.4.1981 @ RS. 50 PER SQYD. THIS 2 ESTIMATE WAS ON THE BASIS OF VALUATION REPORT BY RE GD VALUER. IT WAS NOTICED THAT VALUE HAD BEEN WORKED OUT BACKW ARDS FROM THE PRESENT MARKET RATE. IN THE EARLIER ROUND THE ASSESSING OFFICER HAD ESTIMATED THE COST OF ACQUISITION @ RS. 10 PER SQYD AS THE FAIR MARKET VALUE AS ON 1.4.1981. WHEN THE MATTER TRAVELLELD TO THE TRIBUNAL THE TRIBUNAL SET ASIDE T HE APPEAL TO THE FILE OF ASSESSING OFFICER TO RE-DETERMINE THE F AIR MARKET VALUE AFTER CONSIDERING ALL THE EVIDENCES. IN THIS SET ASIDE PROCEEDINGS REFERENCE WAS MADE TO THE DECISION OF H ON'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF RAJ PAUL O SWAL VS. CWT, 171 ITR 489 (PH) IN WHICH IT WAS HELD THAT VAL UE OF REGD VALUATION SHOULD NOT BE DISTURBED WITHOUT OBTAINING VALUATION FROM DEPARTMENTAL VALUER. COPY OF SOME SALE INSTAN CES WERE FILED TO SHOW THAT DURING RELEVANT PERIOD SOME SALE DEEDS WERE EXECUTED WHEREIN VALUE OF RS. 17 PER SQYD WERE SHOW N. THE ASSESSING OFFICER AFTER EXAMINING THE SUBMISSIO NS WAS OF THE OPINION THAT NO CONCRETE EVIDENCE HAS BEEN FILE D BY THE ASSESSEE TO SUPPORT HIS VALUATION AND ULTIMATELY VA LUE OF RS. 10 PER SQYD WAS AGAIN ADOPTED AS PER ORIGINAL ASSES SMENT. 4 ON APPEAL BEFORE THE LD. CIT(A) REFERENCE TO COMM ENTS OF THE REGD VALUER WAS MADE. IT WAS FURTHER POINTED O UT THAT REGD VALUER HAD CLEARLY POINTED OUT THAT LOCATION O F THE PLOTS SOLD BY THE ASSESSEE WAS ADVANTAGEOUS AS THE ENTIRE STRETCH OF LAND WAS LOCATED ON THE MAIN ROAD. 5 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS DID NOT FIND FORCE IN THE SAME. HE ALSO OBSERVED THAT THE ASSESSING OFFICER HAS RIGHTLY ESTIMATED THE VALUE ON THE BASI S OF INSTANCES GATHERED DURING THE ENQUIRY WHEREIN AVERAGE RATE OF LAND WAS RS. 7.71 PER SQYD. 3 6 BEFORE US. THE LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT LAND OF THE ASSESSEE WAS LOCATED AT A VERY ADVANTAG EOUS LOCATION ON THE MAN ROAD, THEREFORE HIGHER FAIR MAR KET VALUE WAS JUSTIFIED. HE FURTHER SUBMITTED THAT THIS BECO MES FURTHER CLEAR FROM THE FACT THAT WHEN THE LAND WAS SOLD BY THE ASSESSEE, RATE SHOWN WAS ALMOST DOUBLE THE CIRCLE R ATE. THEREFORE VALUE SHOWN BY THE ASSESSEE WAS JUSTIFIED . 7 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SU PPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT AVER AGE VALUE IN THE INSTANCES COLLECTED BY THE ASSESSING OFFICER CA ME ONLY TO RS. 7.71 PER SQYD AND THEREFORE VALUE OF RS. 10 PER SQYD WAS JUSTIFIED. 8 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREFU LLY. AS A MATTER OF FACT IT CAN BE SAID THAT IN SUCH A SITU ATION NO CONCRETE EVIDENCE IS POSSIBLE AND VALUE HAS TO BE E STIMATED ON THE BASIS OF SURROUNDING CIRCUMSTANCES. IT HAS NOT BEEN DENIED BEFORE US THAT LAND WAS LOCATED ON THE MAIN ROAD. FURTHER BECAUSE OF THIS FACT THE ASSESSEE GOT BETTER CONSID ERATION THAN THE PREVAILING CIRCLE RATES WHICH ALSO PROVE T HAT THE LAND IS HAVING HIGHER VALUE. THEREFORE CONSIDERING OVERA LL CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT IF THE VALUE IS ESTIMATED AT RS. 20 PER SQYD THE SAME WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO ADOPT FAIR MARKET VALU E OF RS. 20 PER SQYD FOR THE PURPOSE OF CAPITAL GAINS. 9 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8.1.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 8.1.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4