ACIT, CHENNAI V. M/s. P.Mohana Rajan (HUF), CHENNAI

ITA 888/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64160 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 01-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 13-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: VIKRAM VIJAYARAGH
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO. 886/MDS/2011 ASST. YEAR : 2006-07 THE INCOME TAX OFFICER BUSINESS WARD XV(3), CHENNAI 600 034. VS. SHRI P. VIJAYAKUMAR (HUF), NO.219, VG PANEER NAGAR, MOGAPPAIR, CHENNAI-600037 PAN : AAAHV0452M (APPELLANT) (RESPONDENT) AND I.T.A. NO. 888/MDS/2011 ASST. YEAR : 2006-07 THE ASST. COMMISSIONER OF INCOME TAX BUSINESS WARD XV(3), CHENNAI 600 034. VS. SHRI P. MOHANARAJAN (HUF), NO.2, CHANDRASEKARAN STREET, SM NARAYANAN NAGAR, MOGAPPAIR, CHENNAI-600101 PAN : AAAHM0773N (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI SHAJI P. JACOB, ADDL.CIT ASSESSEE BY : S HRI R. VIJAYARAGHAVAN, ADOCATE & SHRI VIKRAM VIJAYARAGHAVAN, ADOCATE DATE OF HEARING : 01 AUGUST 2012 DATE OF PRONOUNCEMENT : 29 TH AUGUST 2012 ITA NO.886 & 888/MDS/2 011 2 O R D E R PER S.S.GODARA, JUDICIAL MEMBER: I.T.A. NO. 886/MDS/2011: THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF CIT(APPEALS) DATED 07.2.2011 IN ITA NO.152/2008-200 9 FOR THE ASST. YEAR 2006-07 IN PROCEEDINGS UNDER SEC.143(3) OF THE INCOME TAX ACT 1961, IN SHORT 'THE ACT'. 2. THE REVENUE BEFORE US HAS SUBMITTED THAT THE CIT(APPEALS) HAS ERRED IN DELETING ADDITION OF FAIR MARKET VALUE OF THE PROPERTY SOLD THEREBY ALLOWING ASSESSEE TO GET DISC OUNT @30% DETERMINED BY DVO ON ADHOC BASIS. THE ASSESSEE ON THE OTHER HAND HAS DRAWN SUPPORT FROM CIT(APPEALS)S ORDER AND PRA YED FOR REJECTION OF THE APPEAL. IN VIEW OF THE FACT THAT BOTH PARTI ES ARE AT VARIANCE IN THEIR RESPECTIVE SUBMISSIONS, WE FIND THAT FOLLOWIN G ISSUES ARISE FOR OUR CONSIDERATION:- (A) WHETHER THE CIT(APPEALS) HAS RIGHTLY DELETED ADDITION MADE BY ASSESSING OFFICER REGARDING FAIR M ARKET VALUE OF THE PROPERTY AFTER MAKING REFERENCE TO DVO ? ITA NO.886 & 888/MDS/2 011 3 (B) WHETHER THE CIT(APPEALS)S ORDER ALLOWING 30% DISCOUNT TO THE ASSESSEE QUA PROPERTYS VALUATION AS ADOPTED BY ASSESSING OFFICER IS LIABLE TO BE UPHELD ? SINCE THE ISSUES ARE INTERCONNECTED THEY ARE BEING TAKEN UP TOGETHER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE ( HUF) HAD FILED ITS RETURN ON 31.10.2006 ADMITTING TOTAL INCO ME OF L 23,972/-. IN ENCLOSURES WITH RETURN, IT HAD MENTIONED ABOUT ITS SALE OF ITS LAND (WHEREIN IT A WAS A CO-OWNER TO THE EXTENT OF 1/5 TH SHARE FOR TOTAL CONSIDERATION OF L 51,75,980/-. WHILE WORKING OUT TOTAL CAPITAL GAIN QUA THE ENTIRE PROPERTY OF L 33,21,040/-, IT HAD REDUCE D COMMISSION, INDEXED COST OF ACQUISITION IMPROVEMENT. IN THIS M ANNER, IT HAD COMPUTED NET CAPITAL GAIN AS L 6,64,210/-. FURTHER , IT ALSO RAISED PLEA OF EXEMPTION UNDER SEC.54ED OF THE ACT BY SUBMITTIN G BEFORE ASSESSING OFFICER THAT IT HAD INVESTED IN NABARD CAPITAL GAIN BOND OF L. 10 LAKHS. THE ASSESSING OFFICER WORKED OUT THE SALE CONSIDERA TION SHOWN BY THE ASSESSEE AND GUIDELINE VALUE OF THE SAME AS UNDER : - DOCUMENT NO. DATE OF REGN. SALE CONSIDERATION VALUE ON WHICH STAMP DUTY PAID @ L. 1397 PER SQ. FT. GUIDELINE VALUE 581/2005 20/05/2005 19,45,980 40,77,900 81,55,666 592/2005 01/06/2005 16,34,000 34,25,600 68,48,094 601/2005 03/06/2005 15,96,000 33,44,500 66,88,836 ITA NO.886 & 888/MDS/2 011 4 4. THE ASSESSEE STATED BEFORE THE A.O. THAT THE CO MPETENT AUTHORITY UNDER SEC.47A OF THE INDIAN STAMP ACT HAD MADE REFERENCE TO THE COLLECTOR FOR DETERMINING VALUE OF PROPERTY SOL D. IN THE SAID PROCEEDINGS, THE ASSESSEE HAD AVAILED BENEFIT OF SA MADHAN SCHEME AND PAID THE ALLEGED DEFICIENT STAMP DUTY. THE ASS ESSING OFFICER FURTHER SOUGHT ASSESSEES EXPLANATION FOR COMPUTING CAPITAL GAINS KEEPING IN VIEW THE VALUE FIXED BY REGISTRATION AUT HORITIES BY WAY OF GUIDELINES (SUPRA). THE ASSESSEE IN ITS EXPLANATIO N CITED REASONS OF CONSIDERATION TO BE LESS THAN GUIDELINE VALUE BY GI VING REASONS OF SLUMP SALE AS BUYER WAS ALREADY A CO-OWNER, LOSS OF ORIGI NAL DOCUMENTS OF PROPERTY, PRICES DATING BACK TO 1999-2000 AND PENDI NG LITIGATION ETC. MOREOVER, BY PLACING RELIANCE ON SEC.50(C)(2) OF TH E ACT, IT PRAYED ASSESSING OFFICER TO MAKE REFERENCE TO DVO. 5. THE ASSESSING OFFICER IN ASSESSING OFFICER IN A SSESSMENT ORDER DATED 26.12.2008 DECLINED THE ASSESSEES PRA YER OF REFERENCE TO DVO BY HOLDING THAT THE ENHANCED VALUE OF PROPERTY STOOD ADMITTED BY ASSESSEE IN VIEW OF THE FACT THAT IT HAD PREFERRED TO PAY STAMP DUTY UNDER SAMADHAN SCHEME TO THE TUNE OF 60% OF THE DIF FERENCE BETWEEN VALUE OF STAMP DUTY FIXED BY REGISTERING AUTHORITY AND THAT ALREADY PAID, THEREFORE, PER ASSESSING OFFICER SEC.50(C)(2) OF TH E ACT COULD NOT BE INVOKED TO MAKE REFERENCE TO DVO. THE ASSESSING OF FICER, THEREFORE, ITA NO.886 & 888/MDS/2 011 5 PROCEEDED TO COMPUTE DEEMED CONSIDERATION OF THE PR OPERTY UNDER SEC.48 OF THE ACT ON THE ASSUMPTION THAT SINCE STAM P DUTY PAID WAS 50% OF THE GUIDELINE VALUE PAID AT THE TIME OF TRANS FER + 60% OF THE 50% STAMP DUTY IN GUIDELINE PAID = PERIOD UNDER SAMA DHAN WORKED OUT TO BE 80% OF GUIDELINE VALUE; SO, THE DEEMED CO NSIDERATION WOULD ALSO BE 80% OF THE GUIDELINE VALUE IE. L.1,73,520,54 0/-. ACCORDINGLY, HE COMPUTED THE VALUE OF THE PROPERTY AS L 1 LAKHS PER GROUND AND CALCULATED ASSESSEES INCOME AS UNDER :- QUANTUM OF CAPITAL GAINS: DEEMED CONSIDERATION AS DISCUSSED ABOVE L 1,73, 52,540 COST (A) INDEXED COST OF 7764 SQ. FT. AT L 1 LAKH PER GROUND L 3,23,500 (B) INDEXED COST OF IMPROVEMENT L 62,437 L 3,85,937 L1,69,66,603 1/5 TH BEING ASSESSEES SHARE L 33,93,321 LESS : DEDUCTION U/S.54ED FOR NABARD BONDS RS.10,00,000 CAPITAL GAIN L 23,93,321 THE TOTAL INCOME IS RECOMPUTED AS UNDER INCOME AS PER RETURN OF INCOME L 23,972 ADD: CAPITAL GAINS AS DISCUSSED ABOVE L 23,93,32 1 L 24,17,293 INTEREST IS CHARGED AS PER CALCULATION SHEET ENCLOS ED THE DEMAND SHOULD BE PAID AS PER DEMAND NOTICE ENC LOSED. ITA NO.886 & 888/MDS/2 011 6 6. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(APPEALS) WHICH HAS BEEN PARTLY ACCEPTED IE. REG ARDING INDEXED COST OF ACQUISITION, THE ASSESSING OFFICER HAS BEEN DIRE CTED TO ADOPT THE SAME AT THE RATE AS COMPUTED BY THE ASSESSEE. REGA RDING ASSESSING OFFICERS REFUSAL IN ASSESSMENT ORDER TO REFER THE MATTER TO DVO, THE CIT(APPEALS) DIRECTED ASSESSING OFFICER TO GET REPO RT OF DVO WHICH WAS SUBMITTED WHEREIN VALUE OF THE PROPERTY WAS SHOWN A S L 98,99,540/- IE. ASSESSEES 1/5 SHARE CAME AS L 19,79,908/-. T HE CIT(APPEALS) THEN ISSUED DIRECTIONS TO ASSESSING OFFICER TO TAKE THE ABOVE SAID VALUE FOR THE PURPOSE OF REVISING THE ASSESSMENT ORDER. IN ADDITION, THE CIT(APPEALS) HAS ALSO ACCEPTED ASSESSEES PLEA OF 3 0% DISCOUNT IN THE VALUE DETERMINED BY DVO (SUPRA). IT IS IN THIS BAC KDROP OF FACTS THAT THE REVENUE IS AGGRIEVED. 7. REGARDING ISSUE (A), THE DEPARTMENTAL REPRESENT ATIVE HAS VEHEMENTLY RE-ASSERTED THE PLEAS RAISED IN GROUNDS THAT THE CIT(APPEALS) COULD NOT HAVE MADE REFERENCE TO DVO U NDER SEC.50(C)(2)(S) OF THE ACT IN VIEW OF THE FACT THAT ONCE THE ASSESSEE HAD PAID THE DUTY UNDER SAMADHAN SCHEME, IT WAS NOT IMP ERATIVE FOR CIT(APPEALS) TO MAKE A FURTHER REFERENCE TO DVO. A CCORDINGLY, HE HAS PRAYED FOR RESTORATION OF A.OS ORDER. ITA NO.886 & 888/MDS/2 011 7 8. OPPOSING REVENUES CONTENTIONS, THE AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT PROVISIONS OF STA MP ACT AND THE ACT ARE ENTIRELY DIFFERENT. UNDER THE ACT, IF AN ASSES SEE OBJECTS TO THE VALUATION ADOPTED BY THE STAMP AUTHORITIES, THE ASS ESSING OFFICER CAN SEND THE CASE TO DVO FOR APPROPRIATE VALUATION. IN SUPPORT OF HIS PLEA, RELIANCE HAS BEEN PLACED ON CHENNAI ITAT, B BENCH DECISION IN THE CASE OF BN PROPERTIES V. ACIT (2010) 6 ITR (TRIBUNA L) PAGE 1. 9. REGARDING 2 ND ISSUE, THE DEPARTMENTAL REPRESENTATIVES PLEA IS THAT WITHOUT ANY REASON OR MATERIAL ON RECO RD, THE CIT(APPEALS) HAS GRANTED RELIEF OF 30% DISCOUNT ON VALUE DETERMI NED BY DVO. THE AUTHORISED REPRESENTATIVE HAS SUPPORTED CIT(APPEALS )S ORDER BY STATING THAT THE ASSESSEE HAD SOLD THE PREMISES AT A LOWER PRICE AND PRIME REASON WAS THAT THE PROPERTY SOLD WAS LAND LOCKED. TO BUTTRESS HIS PLEA, HE HAS ALSO REFERRED TO DVOS REPORT AVAI LABLE IN THE PAPER BOOK. 10. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE ISSUES IN HAND AND ALSO GONE THROUGH THE PAPER BOOK AND CA SE LAW REFERRED. UNDISPUTED FACTS OF THE CASE ARE THAT AFTER EXECUTI ON OF SALE DEED (SUPRA), THE CONCERNED REGISTERING AUTHORITY MADE R EFERENCE TO THE COLLECTOR UNDER SEC.47A OF THE STAMP ACT. DURING P ENDENCY OF THE REFERENCE PROCEEDINGS, THE GOVT . FLOATED SAMADHAN SCHEME OFFERING ONE TIME ITA NO.886 & 888/MDS/2 011 8 AMNESTY TO VARIOUS PARTIES IN THE SALE TRANSACTIONS . INSTEAD OF CONTESTING REFERENCE, THE ASSESSEE CHOSE TO AVAIL T HE BENEFIT OF THE SCHEME TO CUT SHORT THE LITIGATION AND PAID STAMP D UTY AT CONCESSIONAL RATE. THIS ULTIMATELY LED TO TERMINATION OF THE RE FERENCE PROCEEDINGS. WHEN THE SAID EVENT CAME TO THE NOTICE OF ASSESSING OFFICER, THE ASSESSEE CLAIMED THAT A REFERENCE UNDER SEC.50(C)(2 )(B) OF THE ACT BE MADE AS THE STAMP AUTHORITIES VALUATION WAS NOT TH E CORRECT VALUATION. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES PRAYER AND HELD THAT SINCE THE SAID VALUE UNDER THE STAMP ACT HAD A TTAINED FINALITY, NO REFERENCE WAS REQUIRED TO BE MADE. 11. WE NOTICE FROM THE ORDER OF CIT(APPEALS) THAT IN APPEAL, THE LOWER APPELLATE AUTHORITY GOT MADE THE REFERENC E TO DVO THROUGH ASSESSING OFFICER, WHO DETERMINED THE VALUE OF THE PROPERTY AS L 98,99,540/- (WHICH CAME TO BE LOWER THAN THAT ADOPT ED BY ASSESSING OFFICER AS L 1,73,52,540/-). A PERUSAL OF CIT(APPE ALS)S ORDER REVEALS THAT THE DVOS VALUATION HAS BEEN FURTHER REDUCED T O 30% (SUPRA). 12. AFTER HAVING GIVEN OUR THOUGHTFUL CONSIDERATIO N TO THE CASE, WE OBSERVE THAT THE ASSESSING OFFICER HAS NOT APPRECIATED THE CORRECT FACTUAL POSITION. AS IT IS CLEAR FROM CHRONOLOGY OF EVENTS, THE ASSESSEE AVAILED ITS OPTION UNDER THE SAMADHAN SCHEME(SUPRA), THE AS SESSING OFFICER DREW ADVERSE INFERENCE AGAINST THE ASSESSE QUA ABOVE ACT OF ASSESSEE. WE FIND THE SAID STAND OF THE REVENUE TO BE UNJUSTIFIED BEC AUSE THE VERY ITA NO.886 & 888/MDS/2 011 9 PURPOSE OF SAMADHAN SCHEME IS TO CUT SHORT THE PEND ING LITIGATIONS BY WAY OF INTRODUCING RECONCILIATORY MEASURES WHOSE BA SIC AIM IS TO GRANT BENEFITS TO ALL PARTIES AND NOT TO ENTAIL PENAL CON SEQUENCES. IF ADVERSE INFERENCE IS ALLOWED TO BE INFERRED FROM SUCH PROCE EDINGS, THE VERY OBJECT OF SUCH CONCILIATORY GESTURES WOULD BE FRUST RATED. HENCE, WE HOLD THAT THE MERE FACT THAT THE ASSESSEE HAD ADMI TTED STAMP DUTY AND TOOK BENEFIT OF SAMADHAN SCHEME WOULD NOT BAR THE S TATUTORY REMEDY OF GETTING A REFERENCE TO DVO UNDER SEC.50(C)(2) OF THE ACT BY ASSESSING OFFICER AS IN REFERENCE PROCEEDINGS, THE RE WAS NO FINDINGS ON MERITS BY THE COLLECTOR EXERCISING JURISDICTION U/S 47A OF THE STAMP ACT. 13. AS FAR CASE LAW OF BN PROPERTIES IS CONCERNED (SUPRA), WE NOTICE THAT AFTER CONSIDERING CASE LAW OF HONBLE H IGH COURT OF MADRAS IN THE CASE OF K.R. PALANISAMY V. UNION OF INDIA (2 19 CTR 323), THE LD. CO-ORDINATE BENCH HAS DECIDED THE ISSUE IN FAVOUR O F THE ASSESSEE AS UNDER :- THUS IT CAN BE SEEN THAT THE CONSTITUTIONAL VALIDI TY OF SECTION 50C OF THE ACT WAS UPHELD AFTER NOTING THE VARIOUS SAF EGUARDS AVAILABLE TO AN AGGRIEVED PERSON REGARDING VALUATIO N OF A PROPERTY UNDER THE INDIAN STAMP ACT AS WELL AS THE INCOME-T AX ACT. AT PARAGRAPH 33, THE HON'BLE JURISDICTIONAL HIGH COURT HAS SPECIFICALLY HELD THAT SUB-SECTIONS (2) AND (3) OF SECTION 50C A RE FURTHER SAFEGUARDS GIVEN TO THE ASSESSEE. THUS THE SAFEGUAR DS GIVEN AT SUB-SECTIONS (2) AND (3) OF SECTION 50C OF THE ACT ARE IN ADDITION TO THE SAFEGUARDS UNDER THE STAMP ACT. THEREFORE, WE ARE UNABLE TO APPRECIATE THE STAND OF THE REVENUE THAT ONCE A VALUATION HAS BEEN MADE BY THE SPECIAL DEPUTY COLLECTOR (STAMPS), THERE CAN BE NO FURTHER REFERENCE TO THE DEPARTMENTAL VALUER EV EN WHEN THE ITA NO.886 & 888/MDS/2 011 10 ASSESSEE SPECIFICALLY DISPUTED THE VALUE FIXED BY THE STAMP VALUATION AUTHORITY. THE LEARNED AUTHORISED REPRESE NTATIVE HAS RIGHTLY POINTED OUT THAT, EXCEPT THE COLLECTOR, NO AUTHORITY OF THE REGISTRATION DEPARTMENT CAN FIX THE MARKET VALUE AN D STAMP DUTY PAYABLE IN RESPECT OF AN INSTRUMENT, AS HELD BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF RL. REV. LAWRENCE V. STATE OF TAMIL NADU [1998] 1 CTC 334. AS LONG AS THE PRO PER AUTHORITY FOR VALUATION UNDER THE STAMP ACT IS THE SPECIAL D EPUTY COLLECTOR (STAMPS), WE CANNOT SAY THAT SUCH A VALUATION MADE BY THE SAID AUTHORITY ON A REFERENCE BY THE REGISTRAR IS EQUIV ALENT TO A 'REFERENCE, APPEAL OR REVISION MADE BY AN ASSESSEE BEFORE ANY OTHER AUTHORITY OR HIGH COURT' AS MENTIONED IN CLAU SE (B) OF SUB- SECTION (2) OF SECTION 50C OF THE ACT. THERE IS NO DISPUTE THAT THE ASSESSEE HAD OBJECTED TO THE ADOPTION OF THE VALUE AS FIXED BY THE SPECIAL DEPUTY COLLECTOR (STAMPS) AS THE FULL V ALUE OF CONSIDERATION RECEIVED ON TRANSFER AND REQUESTED T HE ASSESSING OFFICER FOR A REFERENCE TO THE DEPARTMENTAL VALUATI ON OFFICER. IN THE CASE OF MEGHRAJ BAID V. ITO [2008] 114 TTJ 841, THE JODHPUR BENCH OF THIS TRIBUNAL HAS HELD AT PARAGRAPH 4 OF I TS ORDER AS UNDER : '4. AFTER EXAMINING THE PROVISION EXTRACTED HEREINA BOVE IN ITS LETTERS AND SPIRIT, WE ARE OF THE OPINION THAT IN C ASE THE ASSESSING OFFICER DOES NOT AGREE WITH THE EXPLANAT ION OF THE ASSESSEE WITH REGARD TO LOWER CONSIDERATION DISCLO SED BY HIM THEN HE SHOULD REFER THE MATTER TO THE DEPARTM ENTAL VALUATION OFFICER FOR GETTING ITS MARKET RATE ESTA BLISHED AS ON DATE OF THE SALE TO ARRIVE AT THE CORRECT SALE C ONSIDERATION. IF THIS PROVISION IS READ IN THE SENSE THAT IF THE ASSESSING OFFICER IS NOT SATISFIED WITH THE EXPLANATION OF TH E ASSESSEE THEN HE `MAY' OR `MAY NOT' SEND THE MATTER FOR VAL UATION TO THE DEPARTMENTAL VALUATION OFFICER THEN IN THAT CA SE THIS PROVISION WOULD BE RENDERED REDUNDANT. THE WORD `M AY' USED IN THIS SUB-SECTION SIGNIFIES THAT IN CASE TH E LEARNED ASSESSING OFFICER IS NOT SATISFIED WITH THE EXPLANA TION OF THE ASSESSEE, HE `SHOULD' REFER THE MATTER TO THE DEPAR TMENTAL VALUATION OFFICER FOR THE MENTIONED PURPOSE. THE LE ARNED AUTHORISED REPRESENTATIVE HAS RELIED ON THE DECISI ON OF THE HON'BLE SUPREME COURT RENDERED IN THE CASE OF ASHO K LEYLAND LTD. V. UNION OF INDIA [1997] 105 STC 152 WHEREIN IT HAS BEEN HELD THAT THE DEEMING PROVISIONS ARE RE BUTTABLE ONE. WE HAVE EXAMINED THE ENTIRE FACTS OF THIS CAS E IN THE LIGHT OF THE PROVISIONS AND PRECEDENTS RELIED ON BE FORE US. IN OUR CONSIDERED OPINION THE BEFITTING REPLY OF ALL T HE QUERIES ITA NO.886 & 888/MDS/2 011 11 AROSE IN OUR MINDS AS WELL AS RAISED BY THE PARTIE S IS THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER WITH A DIRECTION THAT HE SHALL RE FER THIS MATTER OF VALUATION IN THE LIGHT OF SUBSECTION (2) OF SECTION 50C TO THE DEPARTMENTAL VALUATION OFFICER FOR DETE RMINING THE CONSIDERATION OF THIS PLOT SOLD BY THE ASSESSEE UNDER SECTION 50C OF THE ACT. THE OTHER CONNECTED GROUNDS ARE ALSO RELATE TO THIS MAIN GROUND.THEREFORE, THE ENTIRE A PPEAL IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT HE WOULD DO AS DIRECTED ABOVE AND A LSO GIVE AN OPPORTUNITY OF HEARING TO THE ASSESSEE AS PER L AW.' THUS THE FAILURE OF THE ASSESSING OFFICER TO REFER VALUATION TO THE VALUATION OFFICER DEFINITELY PREJUDICED THE ASSESSE E TO ITS DETRIMENT AND ALSO TOOK AWAY FROM IT, A VALUABLE RIGHT VESTE D IN IT UNDER THE STATUTE. THEREFORE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER WITH A DIRECTION TO HIM FOR REFERRING THE VALUATION OF THE PROPERTY TO THE VALUATION OFFICER IN ACCORDANCE WITH SUB-SECTION (2) OF SECT ION 50C OF THE ACT, AND THEREAFTER FOR PROCEEDING IN ACCORDANCE WI TH THE EDICT OF THE STATUTE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. 14. TAKING CUE FROM THE ABOVE CASE LAW AS WELL AS IN VIEW OF PECULIAR FACTS OF THIS CASE, WE HOLD THAT IN GETT ING VALUATION REPORT OF THE DVO THROUGH ASSESSING OFFICER, THE CIT(APPEALS) HAS NOT COMMITTED ANY ERROR OF LAW OR FACT. 15. NOW, COMING TO ISSUE(B) SO FAR AS THE CIT(A PPEALS)S DIRECTIONS TO ASSESSING OFFICER TO CONSIDER ASSESSEES CASE FOR 30% DISCOUNT AS FAR AS THE VALUATION MADE B Y DVO IS CONCERNED, WE SEE FROM THE PROCEEDINGS BOOK OF THE APPEAL THAT SINCE THE ITA NO.886 & 888/MDS/2 011 12 VALUATION REPORT SUBMITTED BY ASSESSING OFFICER BEF ORE CIT(APPEALS) WAS NOT ON RECORD, THEREFORE, THE PARTIES WERE ASKE D TO PRODUCE THE SAID REPORT WHICH HAS BEEN DULY COMPLIED WITH. THE RELEVANT EXTRACTS OF THE REPORT READ AS UNDER :- 7.1 INTIMATION TO THE ASS ESSEE THE PRELIMINARY VALUATION REPORT ESTIMATING THE FAI R MARKET VALUE OF THE PROPERTY AS ON 25-5-2005 IN RESPECT OF THE VACANT LAND SITUATED AT 300/301, VAIIUVAR KOTTAM HIGH ROAD , CHENNAI : 34 WAS COMMUNICATED TO THE ASSESSEE VIDE THIS OFFICE LETTER NO . DVO/MDS/CG(I/)/2008-09 DATED 24-11-2009 WITH A REQUEST TO STATE OBJECTION IF ANY IN WRITING ON OR BEFORE 8-12-2009 . 7.2 RESPONSE FROM THE ASSESSEE THE ASSESSEE HAD TRIED OBJECTION TO THE PRELIMINARY VALUATION VIDE HIS LETTER DATED 9-12-2009. OBJECTION 1: THE PROPERTY IS JOINTLY OWNED BY MORE THAN TWO PERSONS MOST OF WHOM ARE FAMILY MEMBERS . REPLY: WHILE TAKING THE MARKET RATES OF THE FLATS W HICH CAN BE DEVELOPED IN THIS SITE HAS BEEN MODERATED TAKING INTO CONSIDERATION O F THE FACTS . OBJECTION 2: THE BUYER IS ONLY ONE PERSON . THE BUYER BECAME A EO-OWNER WHEN HE PURCHASED THE SHARE IN THE PROPERTY OF ONE OF THE DECEASED EO- OWNERS . REPLY: THIS ASPECT HAS BEEN CONSIDERED WHILE ARRIVI NG AT THE F . MV . OBJECTION 3: THE PR I CE WAS AGREED UPON BETWEEN THE YEARS 2000 TO 2003 BETWEEN THE BUYERS AND SELLERS . TO ADOPT THE VALUES PREVAILING IN 2004 AND 2005 IS NOT JUSTIFIED. IN OTHER WORDS, THE SELLING PRICE HAS BEEN FIXED MUCH BEFORE THE SALE DEED WAS EXECUTED AND REGISTERED . REPLY: THE ASSESSEE HAS NOT PRODUCED ANY ' DOCUMENTARY EVIDENCE FOR HAVING ENTERED INTO ANY SUCH AGREEMENT DURING 2002 AS CLA IMED BY THEM. HENCE , THE FMV HAS BEEN ASSESSED BASED ON THE DATE OF DOCUMEN TATION . ITA NO.886 & 888/MDS/2 011 13 OBJECTION 4: THERE HAS BEEN A LAND LOCK AFFECTING T HE ACCESSIBILITY OR APPROACH TO THE PLOT . DUE TO THE LAND LOCK THE LANDS SOLD DURING THE PREV IOUS YEAR HAVE BEEN SANDWICHED BETWEEN THE PLOTS OF LANDS WHICH H AVE ALREADY BEEN SOLD . THUS, NO ACCESS WILL BE AVAILABLE TO ENTER THE LAND S SOLD AND NO BUYER WOULD COME FORWARD TO PURCHASE THESE PLOTS OF LANDS . THIS HAS BEEN EXPLAINED IN DETAIL AT THE TIME OF INSPECTION. IN A LAND LOCK SI TUATION, THE LANDS WOULD NOT COMMAND NORMAL MARKET PRICE. THUS, THE MARKET PRICE OF THE LANDS WOULD BE NEGLIGIBLE . HOWEVER , IN THE FACTS AND CIRCUMSTANCES RELATING TO THE ASSE SSEE'S CASE , THE SALE PRICE OF THE PROPERTY WOULD REPRESENT THE MARKET VALUE . IT IS SUBMITTED THAT THE GUIDELINES VALUE FIXED BY THE RE GISTRATION AUTHOR I TY WOULD NOT INDICATE THE MARKET VALUE . REPLY: THE PMV F I XED BY M E I S N OT THE GU I DE LI NE VA L UE . EVEN THOUG H TH I S PROPE RT Y I S SUR R OUNDED BY THE PLO T S WHIC H ARE A L READY PURCHASED BY THE SAME PURCHASER , I N DEAL SENSE I T CANNOT BE CLA I MED AS LAND LOCKED AS THE SURROUND I N G PROPERTI ES ALS O BELONG TO TH E SA ME PURCHASER , BUT THE RATES CAN BE DICTATED BY HIM . THIS ASPECT HAS BEEN DULY CONSIDERED AND THE FMV HAS BEEN ARR I VED AT . OBJECTIVE 5: THE PRO P ERTY SOLD SUFFERS FROM ACCESSIBILITY TO THE UNSOLD PORTIONS IN THE WHOLE PROPERTY W I TH THE RESUL T THAT IT WAS D I FFICULT TO SELL . REPLY: I T IS A FACT THA T THE PRESENT PURCHASER HAS PURCHASED A LL THE PLOTS SURROUNDING THE PLOT EAR L IER AND HENCE THE PLOTS HAVE BEEN MADE ARTIFICIALLY AS LAND LOCKED AS THE PURCHASER IS THE ONE AND THE SA ME. OBJECTION 6 : T H E BUYER BEING A SINGLE PERSON ALLOTMENT WAS MADE AS PER H I S CHO I CE. THIS ALSO MADE THE ACCESSIBILITY MORE DIFFICULT . REPLY: ALL THESE ASPECTS HAVE AL R EADY BEEN CONSIDERED WHILE ARR I VING AT THE F . MV . OBJECTION 7 : THE ORIG I NAL DOCUMENTS WERE NOT AVAILABLE I N SOME CASES . REPLY: DUPLICATE DOCUMENTS CAN BE OBTAINED FROM SUB - REGISTRAR OFF I CE. HENCE THIS ASPECT COULD HAVE BEEN I NFLUENCING THE F . MV . OBJECTION 8: THE FACT THAT THE APPELLANT WOULD HAVE LITTLE BARGA INING POWER IN THE SALE CONSIDERATION WOULD BE EVIDENCED BY THE MA NNER IN WHICH PLOTS HAVE BEEN SOLD . THE APPELLANT HAD NO CONTROL OVE R THE CONSIDERAT I ON . REPLY: THIS ASPECT HAS BEEN CONSIDERED WHILE ARRIVING AT T HE F . MV . OBJECTION 9: AS ALREADY SUBMITTED THERE IS PENDING LITIGAT I ON FOR MORE THAN TEN YEARS ON ACCOUNT OF THE CLAIM OF SOME OF THE WOMEN MEMBERS OF THE FAMILY I . E . ITA NO.886 & 888/MDS/2 011 14 TO SAY SISTERS OF THE CO-OWNERS. REPLY: THIS ASPECT HAVE ALSO BEEN CONSIDERED WHILE ARRIV I NG AT THE F . MV . 8.0 FINAL VALUATION HAVING CONSIDERED ALL THE EVIDENCE PRODUCED BY THE ASSESSEE AND HAVING TAKEN INTO ACCOUNT ALL THE RELEVANT MATERIALS GATHE RED BY ME THE FAIR MARKET VALUE OF THE PROPERTY AT VACANT LAND SITUATED AT 300/301 , VALLUVAR KOTTAM H I GH ROAD, CHENNAI : 34 I S FIXED AS RS . 98 , 99 , 540 AS ON 25 - 5 - 2005 , 1I5 T H SHARE OF THE ASSESSEE IS WORKED OUT TO RS . 1 0 , 70 , 908/ - DEVELOPMENT MET HOD (AS NO RELEVANT SALES INSTANCES ARE AVAILABLE TO AR RIVE AT FAIR MARKET VALUE, THE DEVELOPMENT METHOD IS ADOPTED) LAND AREA UNDER CONSIDERATION (95% AS PER TOTAL AREA ) 7764 . 35 SQ . FT. ( PERMISSIBLE FSI AT 1 . 5 TIMES OF LAND AREA PERMISSIBLE BUILD UP A R EA 11,646.53 SFT PREVAILING SELLING PRICE / SQ . FT L2,500 SQFT TOTAL SALEABLE VALUE L 2,91,16,312/- LESS THE DEVELOPERS PROFIT @ 25% L72,79,078/- NET SALEABLE VALUE L 2,18,37,234/- LESS COST OF CONSTRUCTION AT RS.1025/SQ . FT L1,19,37,693/- NET COST OF LAND L 98,99,540/- 1/5 T H SHARE OF ASSESSEE IS RS.19,79,908 16. THE PRINCIPAL ARGUMENT OF REVENUE IS THAT CIT(A )S DIRECTION TO A.O. TO GRANT 30% DISCOUNT ON DVOS VALUATION IS WI THOUT ANY REASON OR BASIS. FURTHER, DRS SUBMISSION IS THAT THE BENEFI T OF LANDLOCKED NATURE OF PROPERTY HAS ALREADY BEEN GRANTED BY DVO IN REPL Y TO OBJECTION NO.4 (SUPRA) REPRODUCED HEREIN ABOVE. AFTER NOTICING TH E REVENUES ITA NO.886 & 888/MDS/2 011 15 CONTENTION AND ASSESSEEES OBJECTION IT BECOMES CRY STAL CLEAR THAT THE PROPERTY SOLD IS LANDLOCKED. IT IS ALSO EVIDENT TH AT PER DVOS REPORT AS WELL, THE PECULIAR LOCATION OF THE PROPERTY IS ENTI TLED TO BE CONSIDERED FOR SOME REASONABLE REBATE WHICH ALLEGEDLY HAS BEEN TAK EN INTO ACCOUNT. AT THE SAME TIME, IN DEVELOPMENT METHOD (SUPRA), TH E SAID REBATE IS NOWHERE SPELT OUT IN COMPUTATION. FACED WITH THIS SITUATION WE HOLD THAT NEITHER THE DVO HAS SPECIFICALLY COMPUTED ANY REBATE NOR THERE IS ANY MATERIAL BEFORE CIT(A) TO REACH TO THE SAID CON CLUSION. THEREFORE, IN THE LARGER INTEREST OF JUSTICE, WE DEEM IT APPRO PRIATE THAT THE A.O. SHOULD RE-EXAMINE THE MATTER AFRESH QUA THE ISSUE O F DISCOUNT ONLY AND FIND OUT AS HOW MUCH REBATE IN VALUATION OFFERED BY DVO QUA THE LANDLOCKED NATURE OF THE PROPERTY WOULD BE REASONAB LE. WHILST DOING SO, THE ASSESSE WOULD ALSO BE AFFORDED OPPORTUNITY OF ADEQUATE HEARING WITH LIBERTY TO PRODUCE ALL ITS EVIDENCE IN SUPPORT . WE ALSO MAKE IT CLEAR THAT THE A.O. WOULD ALSO BE AT LIBERTY TO SEEK ASSI STANCE OF DVO FOR FURTHER NECESSARY PROCEEDINGS. 17. TO SUM UP, THE ISSUE NO.1 IS DECIDED IN FAVOUR OF ASSESSE AND ISSUE NO.2 STANDS REMITTED TO A.O. HENCE, APPE AL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO.888/MDS/2011 : ITA NO.886 & 888/MDS/2 011 16 18. BOTH THE REPRESENTATIVES ARE AD IDEM THAT OUR FINDINGS AND DECISION HEREINABOVE ALSO COVERS THE INSTANT APPEAL AS WELL AS THE PROPERTY IS THE SAME AND BOTH ASSESSES ARE JOINT OW NERS. THEREFORE, WE ALSO PARTLY ACCEPT THIS APPEAL FOR STATISTICAL PURP OSES IN ABOVE TERMS. 19. THIS ORDER IS PRONOUNCED IN THE OPEN COURT AFT ER HEARING ON WEDNESDAY, THE 29 TH DAY OF AUGUST 2012. SD/- SD/- (N.S.SAINI) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED : 29 TH AUGUST 2012. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT (A) (5) D.R. (6) GUARD FILE