Jai Chand, Kinnaur V. ITO, Rampur Bushahr

ITA 947/CHANDI/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2578 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PARVEEN KAPOOR
• Keywords: Capital asset; Cost of acquisition
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.947/CHD/2014 (ASSESSMENT YEAR : 2007-08) JAI CHAND, VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHR. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: AHFPC0969G ITA NO.948/CHD/2014 (ASSESSMENT YEAR : 2007-08) TEJWANT SINGH NEGI, VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHER. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: BUGPS3635C ITA NO.949/CHD/2014 (ASSESSMENT YEAR : 2007-08) KRISHAN CHAND, VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHER. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: AHFPC0968H ITA NO.950/CHD/2014 (ASSESSMENT YEAR : 2007-08) SURESH CHANDNEGI, VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHER. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: AFAPN3605B 2 ITA NO.951/CHD/2014 (ASSESSMENT YEAR : 2007-08) SHYAMAL SINGH VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHER. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: BIAPS3967H ITA NO.952/CHD/2014 (ASSESSMENT YEAR : 2007-08) DEVI SINGH, VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHER. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: BUVPS2753N ITA NO.953/CHD/2014 (ASSESSMENT YEAR : 2007-08) LALISH CHANDER NEGI, VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHER. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: AEZPN9722R ITA NO.954/CHD/2014 (ASSESSMENT YEAR : 2007-08) RAM GOPAL NEGI, VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHER. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: ACMPN6939E AND ITA NO.955/CHD/2014 (ASSESSMENT YEAR : 2007-08) MANGAT SINGH, VS. THE INCOME TAX OFFICER(KHANERI), VILL. KANAI, P.O. BALTRANG, RAMPUR BUSHAHER. TEHSILL SANGLA, DISTT. KINNAUR. (H.P.) (H.P.) PAN: BUVPS2856N (APPELLANT) (RESPONDENT) 3 APPELLANT BY : SHRI PARVEEN KAPOOR RESPONDENT BY : SHRI MANOJ MISHRA, DR DATE OF HEARING : 10.12.2015 DATE OF PRONOUNCEMENT : 19.01.2016 O R D E R PER RANO JAIN, A.M . : THESE NINE APPEALS FILED BY THE DIFFERENT ASSESSES ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA DATE D 14.8.2014, 14.8.2014, 14.8.2014, 14.8.2014, 25.8.20 14, 25.8.2014, 14.8.2014, 14.8.2014 AND 25.8.2014 RESPECTIVELY FOR ASSESSMENT YEAR 2007-08. THE APPE ALS BEFORE THE CIT (APPEALS) WERE AGAINST THE ORDER OF THE ASSESSING OFFICER MADE UNDER SECTION 143(3) R.W.S. 254 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. SINCE THE FACTS AND CIRCUMSTANCES ARE IDENTICAL IN ALL THE APPEALS, THE SAME WERE HEARD TOGETHER AN D ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. THE DECISION GIVEN IN THE CASE OF J AI CHAND IN ITA NO.947/CHD/2014 SHALL APPLY MUTATIS MUTANDIS TO ALL THE APPEALS. ITA NO.947/CHD/2014 : 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE 4 ASSESSEE HAD FILED RETURN OF INCOME DECLARING INCOM E OF RS.1,07,470/- AND AGRICULTURAL INCOME OF RS.67,46,1 29/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AD GIVEN HIS LAND TO J.P. KARCHAM HYDRO CORPORATION LT D. ON RENT. THE ASSESSEE GOT COMPENSATION FOR CARRYING O UT CHANGES IN THE TOPOGRAPHY AND FOR REMOVING FRUIT BE ARING TREES. HOWEVER, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT, CONSIDERING THE ENTIRE INCOME FROM COMPENSATI ON I.E. RS.67,46,129/- AS INCOME FROM OTHER SOURCES AS AG AINST THE CLAIM OF THE ASSESSEE AS AGRICULTURE INCOME. THE LEARNED CIT (APPEALS) DECIDED THE ISSUE IN ASSESSEE S FAVOUR, HOWEVER, ON AN APPEAL FILED BY THE DEPARTME NT BEFORE THE I.T.A.T., CHANDIGARH BENCH IN ITA NO.1161/CHD/2010 DATED 24.11.2011, THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO COMPUTE THE INCOME IN THE HANDS OF THE ASSESSEE UNDER THE HEAD CAPITAL GAINS. 3. BEFORE THE ASSESSING OFFICER, IN SECOND ROUND, THE ASSESSEE AGAIN RAISED A CONTENTION THAT THE AMO UNT OF COMPENSATION RECEIVED BY HIM MAY NOT BE ASSESSED AS CAPITAL GAINS. BESIDES, THAT A COMPUTATION WAS PRO VIDED TO THE ASSESSING OFFICER AND IT WAS CONTENDED THAT AN AMOUNT OF RS.85,600/- PER TREE BE TREATED AS FAIR M ARKET VALUE AS ON 1.4.1981 AS THE ASSESSEE WAS HAVING FUL L GROWN ORCHARDS ON HIS ANCESTRAL LAND AT THAT TIME AND 5 FURTHER IT WAS PLEADED THAT THE ASSESSEE WAS HAVING 142 NUMBER OF TREES ON HIS LAND. IN THIS VIEW, PRAYER WAS MADE TO COMPUTE THE COST OF ACQUISITION/IMPROVEMENT IN THIS MANNER. REJECTING THE CONTENTION OF THE ASSE SSEE THE ASSESSING OFFICER CONSIDERED THE NUMBER OF TREES IN HIS LAND TO BE 99, ON THE BASIS OF COMPENSATION OF LAND DESCRIBED IN JAMABANDI FILED BY THE ASSESSEE. FURT HER, THE ASSESSEE CONSIDERED THE COST OF ACQUISITION TO BE RS.2500/- PER TREE, BEING THE BASIC VALUE OF TREE A ND EXPENSES INCURRED TO BRING THE TREE TO THE FRUIT BE ARING STAGE. IN THIS MANNER, THE LONG TERM CAPITAL GAIN WAS COMPUTED AT RS.54,62,604/-. 4. AGGRIEVED BY THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT (APPEALS) AND REITERATED THE CONTENTION RAISED BEFORE THE ASSESSING OFFICER. TH E LEARNED CIT (APPEALS) DISMISSED THE APPEAL OF THE A SSESSEE HOLDING THAT THE METHOD OF NPV(NET PRESENT VALUE) SUGGESTED BY THE ASSESSEE IS NOT A PROPER METHOD FO R COMPUTING COST OF ACQUISITION/IMPROVEMENT. FURTHER , THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENCE IN SUPP ORT OF SUGGESTED CALCULATION OF COST OF ACQUISITION. FURT HER HE HELD THAT THE ASSESSING OFFICER HAS ESTIMATED THE C OST OF ACQUISITION AND NUMBER OF PLANTS AS BASED ON COPIES OF JAMABANDI AND BASED HIS CALCULATION OF NUMBER OF PL ANTS AS PER UNIT LAND IN CONSULTATION WITH REVENUE OR HORTICULTURE DEPARTMENT. 6 5. AGGRIEVED BY THIS, THE ASSESSEE HAS COME IN APPEAL BEFORE US, RAISING THE FOLLOWING REVISED GRO UNDS OF APPEAL : 1. THE LEARNED CIT(A) HAS WRONGLY CONFIRMED THE ORDER OF THE LEARNED A.O. DESPITE THE FACT THAT NO CAPITAL GAI NS ARISES ON THE DESTRUCTION OF FRUIT GROWING TREES. 2. THE LEARNED CIT(A) HAS WRONGLY IGNORED THE TEHSILDAR'S REVENUE CERTIFICATE SUBMITTED DURING THE ASSTT. PROCEEDINGS THAT ALL THE LAND WAS HAVING FRUIT BEARING TREES. 3. THE LEARNED CIT(A) HAS WRONGLY CONFIRMED THE LEARN ED A.O.'S REJECTION OF CLAIM OF COST OF IMPROVEMENT OF TR EES DESPITE THE FACT THE FRUIT GROWING TREES WERE GROWN , UP KEPT FOR A PERIOD OF 25 YEAR AT A COST. 4. THE LEARNED CIT(A) HAS WRONGLY CONFIRMED THE LEARNE D A.O.'S REJECTION OF CLAIM OF NET PRESENT VALUE OF THE F RUIT GROWING TREES BECAUSE THE COMPENSATION OF LOSS IN C ASE OF NATURAL CALAMITIES IS ALWAYS CALCULATED ON THIS MET HOD. 5. THAT LD. C1T(A) HAS WRONGLY CONFIRMED THE ENTIRE COMPENSATION AS FULL VALUE OF CONSIDERATION. 6. THAT THE ASSESSEE/APPELLANT RESERVES THE RIGHT T O AMEND/ALTER/ADD ANY GROUND IN SUPPORT OF HIS CLAIM. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. FURTHER, AN EVIDENCE IN THE FORM OF AFFIDAVIT OF ONE SHRI G.S. RATHORE, RETIRED IAS, DEPARTMENT OF H IMACHAL 7 PRADESH WAS ALSO FILED GIVING THE NUMBER OF TREES O N THE LAND OF THE ASSESSEE AT THE TIME OF THE TRANSFER. A NOTE ON JUSTIFICATION FOR MORE COMPENSATION TO SUCH FARMERS , BY ONE DR. D.R. GAUTAM, EX. DIRECTOR-EXTENSIVE EDUCATI ON, UHF, FORMER DIRECTOR HORTICULTURE, UTTRAKHAND WAS A LSO FILED. VEHEMENT ARGUMENTS WERE MADE JUSTIFYING THE NUMBER OF TREES AND COST OF ACQUISITION/IMPROVEMENT OF TREES GIVEN BY THE ASSESSEE, TO BE CORRECT. 7. THE LEARNED D.R. RELIED ON ORDER OF THE ASSESSING OFFICER AS WELL AS THAT OF LEARNED CIT (A PPEALS) AND FURTHER ARGUED THAT THE ASSESSING OFFICER HAS B EEN GENEROUS ENOUGH TO GIVE THE BENEFIT TO THE ASSESSEE IN TERM OF COST OF ACQUISITION/IMPROVEMENT BEING THE C OST OF TREE TILL THE AGE IT BECOMES FRUIT BEARING. IN THI S WAY, IT WAS PRAYED TO CONFIRM THE ORDER OF THE LEARNED CIT (APPEALS). 8. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. THE ASSESSEE HAS CHALLENGED THE ACTION OF THE ASSES SING OFFICER IN TREATING THE SAID RECEIPT AS CAPITAL GA IN. WE CANNOT ADJUDICATE THIS ISSUE AS THE SAME WAS DECIDE D BY THE I.T.A.T. IN THE FIRST ROUND. THE DIRECTIONS GI VEN TO THE ASSESSING OFFICER, WHILE SETTING ASIDE THE CASE WAS TO COMPUTE THE INCOME UNDER THE HEAD CAPITAL GAIN. 8 9. WHILE COMPUTING CAPITAL GAINS UNDER THE SAID CIRCUMSTANCES, TWO DISPUTES, HAVE ARISEN. FIRST IS WITH REGARD TO NUMBER OF TREES. IN THE PRESENT CASE, TH E CLAIM OF THE ASSESSEE IS THAT THERE WERE 142 TREES, WHILE THE ASSESSING OFFICER HAS CONSIDERED THERE BEING ONLY 9 9 TREES. THE SECOND DISPUTE IS WITH REGARD TO COST O F ACQUISITION AND COST OF IMPROVEMENT PER TREE TO BE TAKEN FOR COMPUTING THE INCOME UNDER THE HEAD CAPITAL GA IN. IN THE PRESENT CASE, THE ASSESSEE CLAIMED THE COST OF ACQUISITION AND IMPROVEMENT TO BE RS.85,600/- PER T REE WHILE THE ASSESSING OFFICER HAS ESTIMATED THE SAME AT RS.2500/- PER TREE. 10. AS REGARDS THE NUMBER OF TREES, WE OBSERVE THA T THE ASSESSING OFFICER HAS ARRIVED AT THE NUMBER OF TREES ON THE BASIS OF JAMABANDI PRODUCED BY THE ASSESSEE HIMSELF DURING THE COURSE OF ASSESSMENT. THE CLAIM OF THE ASSESSEE AS TO THE EXISTENCE OF FRUIT TREES IS BASE D ON A CERTIFICATE FROM TEHSILDAR, TEHSIL SANGLA, DATED 29 .4.2011, WHEREBY IT IS CERTIFIED THAT THE ASSESSEE WAS HAVIN G LAND WHICH WAS WHOLLY OCCUPIED BY FRUIT BEARING TREES OF APPLES, GRAPES, CHULLI, ETC. HOWEVER, THE TEHSILDA R HAS NOT GIVEN THE NUMBER OF TREES. THE ASSESSEE CLAIME D THAT HE WAS HAVING LAND MEASURING 5 BIGHAS AND 6 BISWAS, THEREFORE, IT WAS ESTIMATED THAT 142 APPLE TREES WE RE STANDING AT THE TIME OF LEASE. WE OBSERVE THAT THE RE IS NO DOCUMENTARY EVIDENCE WITH REGARD TO THE NUMBER OF T REES. EVEN IN THE LEASE AGREEMENT ENTERED BETWEEN THE ASS ESSEE 9 AND M/S JAYPEE KARCHAN HYDRO CORPORATION, THERE IS NO MENTION OF NUMBER OF TREES. HOWEVER, WE SEE FROM T HE PERUSAL OF COPIES OF JAMABANDI THAT THE CULTIVATION DONE IN THE DIFFERENT KHASRA NUMBERS HAVE BEEN STATED IN THE SAME. JAMABANDI IS SUCH A REGISTER IN WHICH THE DE TAIL OF VILLAGE LAND OWNERS AND CULTIVATORS AND LAND REVENU E IS GIVEN. THIS BOOK IS PREPARED AFTER FIVE YEARS. J AMABANDI IS A PART OF REVENUE RECORD AND PRESUMPTION OF TRUT H IS NORMALLY ATTACHED TO RECORD. OF COURSE, PRESUMPTIO N IS, HOWEVER, REBUTTABLE. NO MATERIAL IS BROUGHT ON REC ORD TO REBUT THE ENTRIES SHOWN IN THE RELEVANT JAMABANDI. THE ASSESSEE HAD NOT PRODUCED ANY COPY OF KHASRA, GIRDA WARI RELEVANT TO THE PERIOD UNDER CONSIDERATION FOR THE REASON BEST KNOWN TO HIM. THE ASSESSING OFFICER HAS MADE A DETAILED ANALYSIS OF CULTIVATION AS SHOWN IN JAMABA NDI OF DIFFERENT KHASRA NUMBERS, DURING THE ASSESSMENT PROCEEDINGS. THE LAND IS EITHER CERTIFIED TO BE HA VING BAGICHAS, I.E. ORCHARDS, OR BEING BANJAR KADIM, I.E . BARREN. WE HAVE EXAMINED THE COPIES OF JAMABANDI A ND TALLIED THE SAME WITH THE ANALYSIS MADE BY THE ASSE SSING OFFICER IN HIS ORDER AND FOUND THAT THE ASSESSING O FFICER HAS RIGHTLY SET ASIDE THE LAND BEING DOCUMENTED AS BANJAR, HAVING NO FRUIT TREES. THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE LAND IS SAID TO B E BANJAR OR UNDER AGRICULTURAL CROP, IS OF NO HELP TO THE AS SESSEE AS EVEN IF SOME CROPS WERE BEING CULTIVATED IN THE SAI D LAND, THE SAME CANNOT BE CLASSIFIED AS APPLE TREES AND NO COST OF ACQUISITION CAN BE ATTRIBUTED TO THE SAME. AFTE R 10 CONSIDERING THE JAMABANDI, THE ASSESSING OFFICER CO ME TO A CONCLUSION THAT THE LAND CONTAINING BAGICHAS WERE 0-63- 98 HECTARES, ON CONVERSION WHICH COMES TO 8.7 BIGHA S AND THE ASSESSEES 1/3 RD SHARE AT 2.9 BIGHAS. AS PER AGREEMENT MADE BY THE ASSESSEE AND HIS 2 BROTHERS W ITH M/S JAYPEE KARCHAMM HYDRO CORPORATION LTD. (JKHCL) NEW SHIMLA, THE KHASRA NOS.494, 496, 499, 500 & 573 /1 WERE TAKEN ON RENT BY THE SECOND PARTY. ON GOING T HROUGH COPIES OF JAMABANDI THE ASSESSING OFFICER HAS NOTIC ED THAT KHASRA NO.494 & KHASRA NO.573/1 MEASURING 0-10-98 & 0- 53-00 ARE REFLECTED AS BAGICHA I.E. APPLE ORCHARD A ND REMAINING KHASRA NOS.496, 499 & 500 ARE EITHER BANJ AR KADIM OR UNDER AGRICULTURE CROPS. WE ARE IN AGREE MENT WITH THIS FINDING OF THE ASSESSING OFFICER, WHICH H E HAS ARRIVED AFTER A TOTALLY SCIENTIFIC METHOD APPLIED O N THE BASIS OF REVENUE RECORDS. AS REGARDS NUMBER OF APP LE TREES TO BE GROWN PER BIGHAS, THE ASSESSING OFFICER HAS APPLIED 25 NUMBER OF APPLE TREES PER BIGHA ON THE B ASIS OF CONSULTATION FROM REVENUE/HORTICULTURAL AUTHORITY, WHICH EVEN THE ASSESSEE HAS NOT OBJECTED TO. ON THIS BAS IS, THE ASSESSING OFFICER HAS ARRIVED AT 99 NUMBER OF TREES . WE DO NOT FIND ANY FAULT IN THIS. THE EVIDENCE FILED BY THE ASSESSEE IN TERMS OF CERTIFICATE OF TEHSILDAR OR TH AT OF A RETIRED IAS OFFICER IS OF NO EVIDENTIARY VALUE, SPE CIALLY IN THE PRESENCE OF JAMABANDI, WHICH IS AN ACTUAL PROOF OF LAND HOLDING AND CULTIVATION THEREON. IN THIS VIE W, WE CONFIRM THE ORDER OF THE LEARNED CIT (APPEALS) TO T HE EXTENT OF NUMBER OF TREES TO BE 99 AS AGAINST 142 C LAIMED 11 BY THE ASSESSEE. 11. THE SECOND QUESTION BEFORE US IS THE COST OF ACQUISITION AND COST OF IMPROVEMENT PER TREE TO BE TAKEN FOR COMPUTING CAPITAL GAIN. IN THE PRESENT CASE, T HE ASSESSEE HAS CLAIMED THE SAME TO BE RS.85,600/- PER TREE WHILE THE ASSESSING OFFICER HAS ALLOWED THE SAME TO BE RS.2500 PER TREE. BEFORE ADVERTING TO THE FACTS OF THE CASE, WE MUST MENTION THAT THE ISSUE IS ONLY THAT O F COMPUTATION OF CAPITAL GAIN. THE MODE OF COMPUTATI ON OF CAPITAL GAIN IS PROVIDED IN SECTION 48 OF THE ACT, WHICH TO THE EXTENT NECESSARY FOR ADJUDICATING THE PRESENT C ASE, READS AS UNDER : 48. THE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' SHALL BE COMPUTED, BY DEDUCTING FROM THE FULL VALUE OF TH E CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE T RANSFER OF THE CAPITAL ASSET THE FOLLOWING AMOUNTS, NAMELY : (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER; (II) THE COST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROVEMENT THERETO: 12. THE FOUR MOST IMPORTANT TERMS IN THIS SECTION ARE FULL VALUE OF CONSIDERATION, EXPENDITURE INC URRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH TRANSFER , COST OF ACQUISITION AND COST OF ANY IMPROVEMENT THERETO . THERE IS NO DISPUTE IN THE PRESENT CASE, AS REGARDS THE FULL VALUE OF CONSIDERATION AND EXPENDITURE INCURRE D WHOLLY AND EXCLUSIVELY IN CONNECTION WITH TRANSFER. THE ONLY DISPUTE IS WITH REGARD TO THE COST OF ACQUISIT ION AND COST OF IMPROVEMENT THERETO. THE BASIS ADOPTED BY THE 12 ASSESSEE AT ARRIVING AT A FIGURE OF RS.85,600/- PER TREE AS COST OF ACQUISITION AND IMPROVEMENT IS THAT HE HAS TAKEN RS.100/- AS THE INITIAL COST OF PLANTING A SINGLE T REE AND FURTHER RS.300/- PER TREE IS TAKEN AS THE RECURRING COST OF MAINTENANCE IN THE TERM OF IRRIGATION, TREATMENT FO R IMPROVEMENT, ETC. THIS AMOUNT OF RS.300/- IS SAID TO BE INCURRED PER TREE PER ANNUM AND IS IN THE NATURE OF RECURRING EXPENDITURE. FURTHER, THE ASSESSEE HAS AS SUMED AVERAGE LIFE OF A TREE TO BE 45 YEARS AND FURTHER A SSUMING THAT THE TREES WERE 15 YEARS OF AGE AT THE TIME OF LEASING THE LAND, THE VALUE OF TREES AT THE TIME OF EVALUAT ION IS ARRIVED AT RS.4600/- PER TREE. ONCE ARRIVING AT TH IS COST PER TREE, THE ASSESSEE DEDUCTED THE NET PRESENT VAL UE OR LIKELY EARNING FOR REMAINING BEARING LIFE OF TREES, I.E. 30 YEARS AND ADDING THE BASIC VALUE OF TREE TO THIS FI GURE, AN AMOUNT OF RS.85,600/- PER TREE IS ARRIVED AT. 13. AFTER GOING THROUGH THE METHOD ADOPTED BY THE ASSESSEE AT ARRIVING AT THE COST OF ACQUISITION AND THE COST OF IMPROVEMENT, WE DO NOT FIND OURSELVES IN AGREEME NT WITH THE SAME. WHAT THE ASSESSEE HAS DONE IS TO AR RIVE AT THE NET PRESEENT VALUE OF LIKELY EARNING FOR THE RE MAINING LIFE OF TREES. THIS METHOD MAY BE IN CONSONANCE WI TH ARRIVING AT AN AMOUNT TO BE ESTIMATED FOR GETTING COMPENSATION FOR LOSS OF REVENUE EARNING APPARATUS OF A PERSON. BUT THIS IS NOT A RIGHT APPROACH TO ESTIMA TE THE COST OF ACQUISITION AND IMPROVEMENT FOR THE PURPOSE S OF COMPUTATION UNDER THE HEAD CAPITAL GAINS. FOR IN COME 13 TAX PURPOSES, ONE HAS TO CONFINE ONESELF TO THE PRO VISIONS AND METHODOLOGY PROVIDED UNDER THE INCOME TAX ONLY AND NO OTHER METHOD CAN BE IMPORTED FROM ANYWHERE ELSE FOR SAID PURPOSE. THE INITIAL COST OF ACQUIRING THE TR EES IN THE FORM OF COST OF LABOUR FOR PREPARATION OF PIT, DIGG ING, FILLING OF PIT, COST OF MATERIAL LIKE FERTILIZER, I NSECTICIDE, PESTICIDES @ RS.100/- PER TREE AS ASKED FOR BY THE ASSESSEE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER . FURTHER, THE MAINTENANCE COST OF TREE OR RECURRING COST TILL THE TREE BECOMES FRUIT BEARING, I.E. FOR 8 YEARS HA VE ALSO BEEN ACCEPTED BY THE ASSESSING OFFICER @ RS.300/- P ER TREE PER ANNUM. THESE EXPENSES ARE IN THE FORM OF IRRIGATION, TREATMENT FOR IMPROVEMENT OF YIELD AND FRUIT QUALITY, WATCH AND WARD, WEEDING, MANURING, FERTILI ZING, MULCHING, PRUNING, BASIN MAKING, PLANT PROTECTION A ND EXPENSES REQUIRED TO MAINTAIN THE ORCHARD IN GOOD S HAPE AND QUALITY. TO THIS EXTENT, THERE IS NO DISPUTE B ETWEEN THE ASSESSEE AND THE ASSESSING OFFICER. WE ALSO FI ND IT APPROPRIATE TO CONSIDER THIS MUCH EXPENDITURE AS CO ST OF ACQUISITION AND COST OF IMPROVEMENT, AS THESE EXPEN SES ARE INCURRED TO BRING THE TREE TO A BEARABLE STAGE, WHERE IT CAN BE ABLE TO BEAR FRUIT. FURTHER EXPENSES THE AS SESSEE IS ASKING FOR ARE THE MAINTENANCE EXPENSES FOR THE REMAINING LIFE OF THE TREE. ONCE THE TREE BECOMES ABLE TO BEAR FRUIT, WHATEVER EXPENSES ARE INCURRED, TO OUR MIND, THESE ARE REVENUE AND RECURRING EXPENSES, WHICH ARE TO BE INCURRED FOR THE MAINTENANCE OF THE TREES ONLY AND ARE NOT IN THE NATURE OF COST OF IMPROVEMENT. TO OUR MIND, THE 14 COST OF IMPROVEMENT, IN CASE OF A TREE CAN ONLY BE THOSE EXPENSES WHICH ARE INCURRED EITHER TO ENHANCE THE L IFE SPAN OF THE TREES OR TO ENHANCE THE FRUIT BEARING C APACITY OF SUCH TREES. THESE FURTHER EXPENSES ARE NOT OF SUCH NATURE AND ARE INCURRED ONLY FOR THE UPKEEP OF THE ORCHARD OR FOR THE MAINTENANCE OF THE TREES ONLY. THEREFORE, WE UPHOLD THE ACTION OF THE ASSESSING OF FICER IN NOT TREATING THESE EXPENSES AS PART OF COST OF ACQU ISITION OR COST OF IMPROVEMENT. WE FURTHER UPHOLD THE ACTI ON OF THE ASSESSING OFFICER IN NOT ALLOWING THE NET PRESE NT VALUE AS COMPUTED BY THE ASSESSEE FOR THE LOSS OF L IKELY EARNING. AS WE HAVE EARLIER MENTIONED THAT THIS AP PROACH MAY BE APPROPRIATE FOR ESTIMATING THE AMOUNT OF COMPENSATION, BUT FOR THE PURPOSE OF COMPUTING THE CAPITAL GAINS, THIS IS NOT THE RIGHT APPROACH. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF THE ASSESSING OFF ICER. 14. IN THE RESULT, APPEALS OF ALL THE ASSESSEES AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JANUARY, 2016. SD/- SD/- (H.L. KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 19 TH JANUARY, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 15