Rati Puzsurti, Secunderabad V. ITO, Hyderabad

ITA 786/HYD/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5910 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-02-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 12-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: AJAI GANDHI
• Keywords: Fair market value
• Section: 6; 2

Judgement Text

` IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMEBR ITA NO.786/HYD/09 : ASSTT . YEAR 2002-03 MRS. RATI PUZ SURTI, SECUNDERABAD. ( PAN AJUPS 4280 R ) V/S. INCOME-TAX OFFICER, WARD- 10(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAI GANDHI RESPONDENT BY : SHRI K.V.N.CHARYA O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2002- 03 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME- TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER- 1. THE ORDER OF THE CIT(APPEALS) IS IN GROSS VIOLATION OF THE PROVISIONS OF LAW AND HENCE IS BAD IN LAW. 2. THE CIT(APPEALS) HAS ERRED IN NOT CONSIDERING THE S UBMISSIONS MADE BEFORE HIM. 3. THE CIT(APPEALS) HAS ERRED IN UPHOLDING THE ASSESSI NG OFFICER'S REJECTION OF RS.500 PER SQ. YARD AS MARKET VALUE OF PROPERTY AS ON 01-04-1981, ADOPTED BY THE ASSESSEE AS PER MARKET V ALUE CERTIFICATE ISSUED BY SUB-REGISTRAR. 4. THE CIT(APPEALS) HAS ERRED IN UPHOLDING THE ASSESSI NG OFFICER'S ADOPTION OF RS.200 PER SQ. YARD AS THE MARKET VALUE OF THE PROPERTY AS ON 01-04-1981. ITA NO.786/HYD/09 MRS. RATI PUZ SURTI, SECUNDERABAD. 2 5. THE CIT(APPEALS) HAS ERRED IN UPHOLDING THE ASSESSI NG OFFICER'S ADOPTION OF MARKET VALUE APPLICABLE FOR RESIDENTIAL PROPERTIES FOR VALUATION OF PROPERTY SITUATED IN COMMERCIAL AREA 6. THE CIT(APPEALS) HAS ERRED IN UPHOLDING THE ASSESSI NG OFFICER'S CONCLUSION THAT THE STAMP DUTY WAS BORNE BY THE PUR CHASERS. 7. THE CIT(APPEALS) HAS ERRED IN UPHOLDING ADDITION MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF STAMP DUTY. 8. THE CIT(APPEALS) HAS ERRED IN UPHOLDING THE ASSESSM ENT OF LONG TERM CAPITAL GAINS AT RS.62,27,400. 9. THE CIT(APPEALS) HAS ERRED IN UPHOLDING THE ASSESSM ENT OF INCOME AT RS.63,28,620. 10. THE CIT(APPEALS) HAS ERRED IN UPHOLDING THE LEVY OF INTEREST U/S. 234B, 234C & 234D. 11. THE CIT(A) HAS ERRED IN UPHOLDING THE LEVY OF DEMAN D OF RS.3,86,164.' 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE ARE ONLY TWO ISSUES INVOLVED IN THE GROUNDS OF APPEAL OF T HE ASSESSEE. THE FIRST ISSUE IS REGARDING THE FAIR MARKET VALUE OF THE LAND IN QUESTION AS ON 1.4.1981. HE SUBMITTED THAT THE FAIR MARKET VALUE OF THE LAND AS ON 1.4.1981 IS ADOPTED BY THE ASSESSEE AT RS.500 PER SQ. Y ARD AS PER MARKET VALUE CERTIFICATE ISSUED BY THE SUB-REGISTRAR OR REGISTRATION AND STAMPS DEPARTMENT OF GOVERNMENT OF ANDHRA PRADESH , AND THE ASSESSING OFFICER HAS WRONGLY REDUCED IT TO RS. 200 PER SQ. YARD. HE SUBMITTED THAT THE PROPERTY IN QUESTION WAS IN THE COMM ERCIAL HUB OF SAROJINI DEVI ROAD WHICH EXTENDS FROM SANGEETH CINE MA THEATRE AND ENDS AT PARADISE RESTAURANT, JOINING THE MAIN COMMERCIA L HUB CALLED THE MAHATMA GANDHI ROAD. ON TO THE RIGHT OF THE ASSE SSEE'S PROPERTY LIES THE THEN FAMOUS AJANTHA THEATRE AND ON TO THE LE FT LIES THE OFFICE OF THE NOW FAMOUS DECCAN CHRONICLE DAILY. HE SUBMITTED THAT THE SUB-REGISTRAR OF THE REGISTRATION AND STAMPS DEPARTME NT OF GOVERNMENT OF ANDHRA PRADESH HAS ISSUED A CERTIFICATE DAT ED 14.9.2006, CERTIFYING THAT IN RESPECT OF THE HOUSE OF THE ASSESSEE ITA NO.786/HYD/09 MRS. RATI PUZ SURTI, SECUNDERABAD. 3 (HOUSE NO. IS MENTIONED) SITUATED AT SAROJINI DEVI RO AD, SECUNDERABAD, THE LAND RATE WAS RS.500 PER SQ. YARD AS P ER M.V. GUIDELINES OF 1982, SINCE IT WAS IN THE COMMERCIAL BLOCK. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER H AS WRONGLY RELIED ON THE LETTER OF HYDERABAD URBAN DEVE LOPMENT AUTHORITY ADDRESSED TO THE ADDITIONAL COMMISSIONER OF I NCOME-TAX, WHICH IS NOT RELEVANT TO THE ISSUE INVOLVED IN THIS CASE, AS THE ASSESSEE'S PROPERTY WAS ON THE MAIN ROAD AND NOT IN THE R ESIDENTIAL ZONE OF THE LOCALITY. HE SUBMITTED THAT THE ISSUE INVO LVED IN THIS CASE IS NOT HOW HUDA AUTHORITIES CLASSIFIED THE PROPERTY UND ER QUESTION, BUT THE REAL ISSUES IS THE STATE OF MIND OF THE PROSPECTI VE BUYER AS ON THE RELEVANT VALUATION DATE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE HUDA AUTHORITIES HAVE ISSU ED A LETTER ADDRESSED TO THE ADDITIONAL COMMISSIONER OF INCOME-TAX, CERTIFYING THAT THE PROPERTY IS COVERED IN THE AREA MARKED AS 'RESIDENTIAL USE ZONE (R2) RESIDENTIAL WITH SHOP LANE AT GROUND FLOO R' . HE RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE'S PROPERTY WAS IN THE COMMERCIAL HUB OF T HE CITY AND WAS UNDISPUTEDLY SITUATED ON THE MAIN COMMERCIAL STREET OF SAROJINI DEVI ROAD, SECUNDERABAD. THE SUB-REGISTRAR OF REGISTRA TION AND STAMPS DEPARTMENT OF THE GOVERNMENT OF ANDHRA PRADESH . HAS CERTIFIED THAT IN RESPECT OF THE HOUSE NO. OF THE ASSESSEE SITUATED AT SAROJINI DEVI ROAD, SECUNDERABAD, THE LAND RATE WAS R S.500 PER SQ. YARD AS PER M.V. GUIDELINES OF 1982, SINCE IT IS IN THE COMMERCIAL ITA NO.786/HYD/09 MRS. RATI PUZ SURTI, SECUNDERABAD. 4 BLOCK. THE CONTENTS OF THE CERTIFICATE ISSUED BY THE SUB -REGISTRAR COULD NOT BE CONTROVERTED ON BEHALF OF THE REVENUE. THE LETTER ISSUED BY THE HYDERABAD URBAN DEVELOPMENT AUTHORITY ADDRESSE D TO ADDITIONAL COMMISSIONER OF INCOME TAX IS NOT SPECIFIC WIT H REGARD TO THE LAND RATE OF THE PROPERTY OF THE ASSESSEE AND IT ME RELY MENTIONS THAT THE PROPERTY FALLS IN AREA EARMARKED 'RESIDENTIAL USE ZONE (R2) RESIDENTIAL WITH SHOP LANE AT GROUND FLOOR '. WE FIND THAT THERE IS FORCE IN THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IT IS THE STATE OF MIND OF THE PROSPECTIVE BUYER, WHICH IS RELEVANT. IN THIS CASE, THE PROPERTY, SINCE SITUATED ON THE MAIN ROAD IN THE COMMERCIAL HUB OF THE CITY AND SURROUNDED BY COMMERCIAL PROPERTIES ONLY, PROSPECTIVE BUYER OF THE PROPERTY IN QUESTION SHA LL VALUE THE PROPERTY OF THE ASSESSEE ACCORDINGLY, CONSIDERING THE FACT THAT IT CAN BE EXPLOITED FOR COMMERCIAL PURPOSES. IN THESE FACTS, WE HOLD THAT THE CLAIM OF THE ASSESSEE TO ADOPT THE VALUE OF THE LAND IN QUESTION AT RS.500 PER SQ. YARD AS ON 1.4.1981, AS PER THE CERTIFI CATE OF THE SUB- REGISTRAR OF REGISTRATION AND STAMPS DEPARTMENT OF THE GOVERNMENT OF ANDHRA PRADESH, IS WHOLLY JUSTIFIED. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE, AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE CAPITAL GAINS BY ADOPTING THE LAND VALUE AT RS.500 PER SQ. YARD AS ON 1.4.1981. CONSEQUENTLY, ASSESSE E'S GROUNDS ON THIS ISSUE ARE ALLOWED. 6. THE OTHER ISSUE INVOLVED IN THIS APPEAL OF THE ASSESSE E IS REGARDING THE DEDUCTION OF STAMP DUTY OF RS.1,94,000 CL AIMED TO HAVE BEEN PAID BY THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE STAMP DUTY WAS PAID INITIALLY BY T HE VENDEE BUT SUBSEQUENTLY THE SAME WAS REIMBURSED BY THE ASSESSEE (VENDO R) AND THEREFORE, THE ASSESSEE IS ENTITLED TO THE DEDUCTION OF T HE STAMP DUTY AMOUNT FROM THE GROSS CONSIDERATION RECEIVED FOR TRANSFER OF THE ITA NO.786/HYD/09 MRS. RATI PUZ SURTI, SECUNDERABAD. 5 PROPERTY. HE SUBMITTED THAT THE VENDEE HAS ISSUED A CERT IFICATE DATED 6.12.2004, CERTIFYING THAT THIS AMOUNT OF STAMP DUTY W AS REIMBURSED BY THE ASSESSEE TO HIM. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, OPPOSED THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE AND RELIED ON THE ORDERS OR THE ASSESSMENT ORDER AND TH E CIT(A). HE SUBMITTED THAT THE CERTIFICATE ISSUED BY THE VENDEE IS O NLY A SELF- SERVING DOCUMENT. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT THE CER TIFICATE ISSUED BY THE VENDEE REGARDING PAYMENT OF STAMP DUTY IS NOT SUPP ORTED BY ANY CORROBORATIVE EVIDENCE. IN REPLY TO A SPECIFIC QUERY FROM THE BENCH, BOTH THE PARTIES SHOWED THEIR INABILITY TO PRODUCE THE COPY OF SALE DEED TO VERIFY WHETHER THE STAMP DUTY AMOUNT CLAIMED TO HA VE BEEN PAID BY THE VENDOR, WAS IN FACT PAID BY THE ASSESSEE (VENDOR ) AND WHETHER IT CAN BE VERIFIED FROM THE CONTENTS OF SALE DEED IN THIS CASE. IN THESE FACTS, WE CONSIDER IT JUSTIFIED TO SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO REDECIDE THE SAME AFRESH, AFTER VERIFI CATION OF THE FACTS AND AFTER ALLOWING A REASONABLE OPPORTUNITY TO T HE ASSESSEE OF HEARING. WE DIRECT ACCORDINGLY. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5.3.2010 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 5TH MARCH, 2010 ITA NO.786/HYD/09 MRS. RATI PUZ SURTI, SECUNDERABAD. 6 COPY FORWARDED TO: 1. MRS. RATI PUZ SURTI(SECUNDERABAD) ,C/O. GANDHI & G ANDHI, CHARTERED ACCOUNTANTS, 1002, PAIGAH PLAZA, BASHEERBAGH, HYDERABAD. 2. INCOME-TAX OFFICER, WARD-10(2), HYDERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS) VI, HYDERABAD. 4. COMMISSIONER OF INCOME-TAX-V, HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.