S Rajamani L/R Late S SengodaGounder, Salem V. ACIT, Circle-1, Salem

ITA 817/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4259 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: T VASUDEVAN
• Keywords: Reopening of assessment; Fair market value; Valuation report; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.817/CHNY/2019 ' (' / ASSESSMENT YEAR : 2010-11 SHRI S. RAJAMANI, L/R OF LATE S. SENGODA GOUNDER, NO.1, YERCAUD ROAD, SALEM 636007. PAN : AAYHS 3071 F V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, SALEM. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 0 . 1$ / DATE OF HEARING : 08.05.2019 2!( . 1$ / DATE OF PRONOUNCEMENT : 10.05.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DA TED 31.01.2019 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. SHRI T. VASUDEVAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT APART FROM THE ISSUE OF REOPENING OF ASSESSMENT, THE 2 I.T.A. NO.817/CHNY/19 ASSESSEE HAS ALSO RAISED AN ISSUE WITH REGARD TO DE TERMINATION OF FAIR MARKET VALUE AS ON 01.04.1981 FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER REOPENED THE ASSESSMENT ON THE BASIS OF THE RETURN OF INCOME FILED BY ONE OF THE LEGAL REPRESENTATIVES OF THE ASSESSEE SHRI S. NATARAJAN. AFTER REOPENING, ACCORDING TO THE LD. C OUNSEL, THE ASSESSING OFFICER HAS TAKEN THE GUIDELINE VALUE OF THE PROPERTY FOR THE PURPOSE OF DETERMINATION OF FAIR MARKET VALUE A S ON 01.04.1981. REFERRING TO THE COMMUNICATION SAID TO BE RECEIVED BY THE ASSESSING OFFICER FROM SUB-REGISTRAR OFFICE, COPY OF WHICH IS AVAILABLE AT PAGE 10 OF THE PAPER-BOOK, THE LD.COUN SEL SUBMITTED THAT FROM 22.04.1968 TO 01.09.1981, THE GUIDELINE V ALUE REMAINED THE SAME, I.E. THE GUIDELINE VALUE FIXED AS ON 22.0 4.1968 WAS TAKEN AS GUIDELINE VALUE BY THE ASSESSING OFFICER FOR THE PURPOSE OF DETERMINING THE FAIR MARKET VALUE AS ON 01.04.1981. REFERRING TO THE COPY OF VALUATION REPORT, WHICH IS AVAILABLE AT PAGE 11 OF THE PAPER-BOOK, THE LD.COUNSEL SUBMITTED THAT THE REGIS TERED VALUER HAS TAKEN A COMPARATIVE SALE INSTANCE WHICH TOOK PL ACE IN THE YEAR 1985 AND DETERMINED THE FAIR MARKET VALUE OF THE PR OPERTY AT 6/- PER SQ.FT. THE LD.COUNSEL FURTHER SUBMITTED THAT T HE ASSESSEE WORKED OUT THE FAIR MARKET VALUE AS ON 01.04.1981 B Y TAKING THE FAIR 3 I.T.A. NO.817/CHNY/19 MARKET VALUE AT 6/- PER SQ.FT. IN THE YEAR 1985. AFTER GIVING 10% DISCOUNT EVERY YEAR, THE ASSESSEE HAS DETERMINED TH E FAIR MARKET VALUE AS 4.02 PER SQ.FT. ACCORDING TO THE LD. COUNSEL, THE COMPARATIVE SALE INSTANCE IS FOR RESIDENTIAL PROPER TY, WHEREAS THE ASSESSEES LAND IS AGRICULTURAL LAND, THEREFORE, TH E ASSESSEE HAS TAKEN FURTHER DISCOUNT OF 10%. ULTIMATELY, ACCORDI NG TO THE LD. COUNSEL, THE ASSESSEE AS PER THE COMPUTATION AVAILA BLE AT PAGE 1 OF THE PAPER-BOOK, HAS ARRIVED THE FAIR MARKET VALUE A S ON 01.04.1981 AT 1,57,968/- PER ACRE. ACCORDING TO THE LD. COUNSEL, THE REGISTERED VALUER, IN FACT, ESTIMATED THE FAIR MARK ET VALUE AS ON 01.04.1981 AT 2,40,000/- PER ACRE AS AGAINST 2,15,100/- PER ACRE IN THE RETURN OF INCOME. HOWEVER, THE ASSESSING OF FICER ESTIMATED THE FAIR MARKET VALUE AT 57,500/- PER ACRE WITHOUT CONSIDERING THE LOCATION OF THE PROPERTY. ON A QUERY FROM THE BENC H WHETHER THE FAIR MARKET VALUE COULD BE FIXED AT 1,50,000/- PER ACRE? THE LD.COUNSEL VERY FAIRLY SUBMITTED THAT HE IS LEAVING THE MATTER TO THE DISCRETION OF THE BENCH. 3. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE REG ISTERED VALUER ADOPTED THE RATE OF ADJACENT PROPERTY, WHICH IS A HOUSING SITE, TO 4 I.T.A. NO.817/CHNY/19 THE ASSESSEES PROPERTY. WHEREAS, THE ASSESSEES P ROPERTY IS AN AGRICULTURAL LAND. THEREFORE, ACCORDING TO THE LD. D.R., THE RATE ADOPTED IN THE COMPARATIVE SALE INSTANCE FOR HOUSIN G SITE IN THE YEAR 1985 CANNOT BE ADOPTED FOR THE AGRICULTURAL LAND. ACCORDING TO THE LD. D.R., THE GUIDELINE VALUE AS ON 01.04.1981 WAS ONLY 25,000/-. THE ASSESSING OFFICER HAS TAKEN THE VALUE OF APPREC IATION AT 10% PER YEAR AND ESTIMATED THE FAIR MARKET VALUE AS ON 01.04.1981 AT 57,500/-. THEREFORE, ACCORDING TO THE LD. D.R., TH E CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OF FICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. DETERMINATION OF FAIR MARKET VALUE OF THE LAND INVOLVES VARIOUS FACT ORS SUCH AS LOCATION OF PROPERTY, INFRASTRUCTURE FACILITIES AVA ILABLE AROUND THE LAND, POTENTIAL FOR FUTURE DEVELOPMENT, ETC. THE R EGISTERED VALUER, WHILE CONSIDERING THE VALUE OF THE PROPERTY HAS TAK EN INTO CONSIDERATION THE FOLLOWING FACTORS IN HIS REPORT:- NOTE : THE PROPERTY IN QUESTION WAS INSPECTED BY ME ON 01 ST JUNE 2010 TO VALUE AND FIX THE FAIR MARKET RATE AS ON 1.4.1981. WITH THIS VIEW I HAD MADE THE INSPECTION, WH ILE ARRIVING AT THE FAIR MARKET VALUE I HAD TAKEN NOTE THAT. 5 I.T.A. NO.817/CHNY/19 1), THE PROPERTY THROUGH AGRICULTURAL LAND IS VERY CLOSE TO RESIDENTIAL AREA AND SUBSEQUENTLY IT HAS BEEN CO NVERTED HAS RESIDENTIAL AREA WELL CONNECTED TO THE BITUMEN ROAD ADJACENT TO KORIMEDU TO KURUVAMPATTI ROAD AND THEN OFFER SID E BITUMEN ROAD. 2). THE PROPERTY IS ON THE WELL LAID ROAD AND IN A L OCALITY WHERE ALL SITES AREA RESIDENTIAL SITE. 3). THE PROPERTY IN QUESTION IS ADJACENT TO THE KORIMEDU TO KURUVAMPATTI ROAD AND IN A DEVELOPING A REA. 4). ON ENQUIRING AT THE SUB-REGISTERS OFFICE NO SALE S HAS BEEN EFFECTED IN THE SAID SURVEY NUMBER DURING 1981. 5). I HAD MADE ENQUIRIES WITH THE NEIGHBORS AND RESIDENTS OF THE AREA, I ARRIVED AT RS.2,4O,O0O.OO/AC RE. (OR) R.S.5,50 PER,SQ.FT, (APPROXIMATELY) AS THE FAIR MARKETA BLE VALUE AS ON 01.04.1981. 6). IT IS CLOSE TO THIRUVENI GARDEN. NGO COLONY, TEM PLE AND KORIRNEDU TO KURUVAMPATTI BITUMEN ROAD WHICH IS THE VERY MUCH IN CONVEYANCE AND ARE MARKETABLE VALUE AS ON 01 .04.1981. 7). SALE DOCUMENT IN DOCUMENT NO. 2885/1985 IN S.NO 39, PLOT NO 43 & 44 MEASURING AN AREA: 2586 SQ.FT. PER RS.15,516. WHICH IS ADJACENT TO THE DATA LAND. I HAVE ALSO CONSIDERED THE DEVELOPMENT BETWEEN 01.04.81 AND 1985 TO ARRIVE AT THE FAIR MARKET VALUE. 5. THEREFORE, IT IS OBVIOUS THAT THE REGISTERED VAL UER HAS TAKEN INTO CONSIDERATION ALL THE RELEVANT FACTORS AND EST IMATED THE VALUE AT 2,40,000/- PER ACRE. THE COMPARATIVE SALE INSTANCE TAKEN BY THE REGISTERED VALUER IS ADMITTEDLY A HOUSING PLOT ADJA CENT TO THE SUBJECT LAND. THERE MAY BE VARIATION OF PRICE WITH REGARD TO SMALL 6 I.T.A. NO.817/CHNY/19 SIZE OF HOUSING SITE AND A LARGE EXTENT OF AGRICULT URAL LAND. IT IS ALSO AN ADMITTED FACT THAT THE GUIDELINE VALUE FIXED IN 1968 WAS NOT CHANGED TILL 1981 AND IT CONTINUED TO BE THE SAME V ALUE. THE COST OF LAND ALSO APPRECIATED CONSIDERABLY FROM 1968 TO 1981. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 HAS T O BE ESTIMATED BY TAKING INTO CONSIDERATION OF THE LATEST DEVELOPM ENTS AROUND THE PROPERTY. 6. IT IS NOT IN DISPUTE THAT THE SUBJECT AGRICULTUR AL LAND IS SITUATED VERY CLOSE TO RESIDENTIAL AREA AND THE POTENTIAL FO R CONVERSION OF THE SAID LAND INTO RESIDENTIAL AREA CANNOT BE RULED OUT . THE PROPERTY IS WELL CONNECTED BY ROAD. THEREFORE, CONSIDERATION O F THE GUIDELINE VALUE FIXED IN 1968 ALONE CANNOT BE A FACTOR FOR DE TERMINING THE FAIR MARKET VALUE. BY TAKING INTO CONSIDERATION OF THE LOCATION OF THE PROPERTY, AREA OF THE PROPERTY, POTENTIAL FOR FUTUR E DEVELOPMENT AND INFRASTRUCTURE FACILITIES AVAILABLE AROUND THE LAND , THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ESTIMATION OF FAIR MARK ET VALUE AS ON 01.04.1981 AT 1,50,000/- PER ACRE WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO TAKE THE FAIR MARKET VALUE AS ON 7 I.T.A. NO.817/CHNY/19 01.04.1981 AT 1,50,000/- PER ACRE AND THEREAFTER RECOMPUTE THE CAPITAL GAIN. 7. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMEN T ON THE BASIS OF THE RETURN FILED BY ONE OF THE LEGAL HEIRS OF THE ASSESSEE. THEREFORE, THIS TRIBUNAL FINDS THAT THE ASSESSING O FFICER HAS RIGHTLY REOPENED THE ASSESSMENT. HENCE, THIS TRIBUNAL DO N OT FIND ANY REASON TO INTERFERE WITH THE DECISION OF THE ASSESS ING OFFICER TO REOPEN THE ASSESSMENT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 10 TH MAY, 2019 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 10 TH MAY, 2019. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A), SALEM 4. CIT, SALEM 5. 69 ,1 /DR 6. :' ; /GF.