The Dy. Commissioner of Income Tax, Central Circle-1, Baroda V. Shri Ramanbhai Bhailal Patel, Mumbai

ITSSA 222/AHD/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3700 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 03-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDRA UPAMANYU
• Assessee Lawyers: M K PATEL
• Keywords: Capital asset; Cost of acquisition; Fair market value; Valuation report
• Section: 153A; 133(6); 37; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CENTRAL CIRCLE - 1, BARODA - 390007 (APPELLANT) VS 1. SMT. PRABHABEN M. PATEL. PAN:AAFPP3707Q 2. LATE MANUBHAI BHAILAL PATEL, LEGAL HEIR SMT. PRABHABEN M. PATEL PAN: AADPP7766K 3. SHRI RAMANBHAI B HAILAL PATEL PAN: AADPP7762P 4. SMT. LOPA PANKAJ DAVE PAN: AACPD0399P (RESPONDENT) REVENUE BY : S MT. VASUNDRA UPAMANYU, CIT - D . R. ASSESSEE BY: S H RI M.K. PATEL , A.R. DATE OF HEARING : 27 - 03 - 2 018 DATE OF PRONOUNCEMENT : 18 - 04 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THE S E FOUR APPEALS FILED BY REVENUE FOR DIFFERENT ASSESSEES FOR A.Y. 2011 - 12 , AR ISE FROM ORDER OF THE CIT(A) - 12 , AHM EDABAD DATED 02 - 04 - 2016 AND 04 - 04 - 2016 , IN PROCEEDINGS UNDER SECTION 153A R.W.S. 1 43(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - IT(SS)A NO. 220/AHD/2016 I T (SS) A NO S. 220 TO 223 / A HD/20 16 ASSESSMENT YEAR 2011 - 12 I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADD ITION OF RS. 56,29 , 453/ - MADE BY THE AO IN RESPECT OF LONG TERM CAPITAL GAIN ON THE SALE OF ATLADARA LAND, BY IGNORING THE FACT THAT THE SALE DEEDS OBTAINED FROM THE SUB - REGISTRAR'S OFFICE REVEALED THAT LANDS ADJACENT TO THE LANDS OF APPELLANT WERE SOLD AT A LOWER PRICE THAN THE RATE OF RS.15/ - PER SQ. FT. ADOPTED BY THE ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 56, 29,453/ - MADE BY THE AO ON ACCOUNT OF LONG TERM CAPITAL GAIN BY IGNORING THE FACT THAT FAIR MARKET VALUE OF RS.15/ - PER SQ.FT. AS ON 01.04.1981 WAS TAKEN INTO CONSIDERATION DURING SEARCH PROCEEDINGS SUBJECT TO FURTHER VERIFICATION DURING ASSESSMENT PROCEEDINGS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS IGNORED THE FACT THAT THE VALUATION ADOPTED BY THE STATE REVENUE AUTHORITIES IN SALE DEEDS OF LAND VALUED AT AS LOW AS RS.0.37 PER SQ. FT. ADJACENT TO THE IMPUGNED LAND. HOWEVER, LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE TH E FAIR MARKET VALUE AS ON 01.04.1981 WAS ESTIMATED BY THE AO AT RS.8/ - PER SQ. FT. INSTEAD OF RS.0.37 PER SQ.FT. 3. AS THE FACTS IN ALL THE FOUR APPEALS ARE SIMILAR, SO, WE TAKE IT (SS)A NO. 220/AHD/2016 AS THE LEAD CASE AND DECIDE ALL THE FOUR APPEAL S A CCORDINGLY FOR THE SAKE OF CONVENIENCE. 4 . IN THIS CASE, SEARCH U/S. 143(2) OF THE ACT WAS CARRIED OUT ON 3 RD JULY, 2012. THEREAFTER D URING THE COURSE OF AS SESSMENT U/S. 153A R.W.S.143(3) OF THE ACT, T HE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS SOLD A LAND ALONG WITH THREE CO - OWNERS AT ATLADARA, BARODA BEARING SURVEY NO. 417 AND 434 DURING THE ASSESSMENT YEAR 2011 - 12 ADMEASURING 124106 SQ. FT. FOR R S. 11,28,58,114/ - . THIS LAND WAS PURCHASED BEFORE FIRST APRIL, 1981 AND THE FAIR MARKET VALUE AS ON 01 ST APRIL, 1981 WAS TAKEN @ RS. 84.8 0 SQ. FT . BY THE ASSESSEE. SUBSEQUENTLY, DURING T HE SEARCH PRECEDING , THE REVENUE HAS QUESTION ED THE FA I R MARKET VALUE ADOPTED BY THE ASSESSS EE AS ON 1 ST APRIL, 1981 AND HAS TAKEN THE RATE OF R S. 15 P ER SQ. F T. AS F AIR MARKET VALUE AS ON 1 ST APRIL, 1981 SUBJECT TO FURTHER VERIFICATION. THEREAFTER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS COLLECTED INFORMATION U/S 133(6) OF THE ACT FROM THE SUB - REGISTRAR OFFICE (CITY - 1) , BARODA AND OBTAINED A COPY OF SALE DEED REGISTERED ON 4 TH JUNE , 1981 IN RESPECT OF SURVEY NO.433 WHEREIN A CONSTRUCTED HOUSE OVER A LAND IN ATLADARA, BARODA ADMEASURING 52 SQ. MT. ADJACENT TO SURVEY NO . 434 WAS CHARGED WITH A I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 3 STAMP DUTY OF RS. 5 00 ON A TOTAL C ONSIDERATION OF R S. 500 ONLY. IN VIEW OF THIS , THE ASSESSING OFFICER OBSERVED THAT THE PREVAILING RATE OF LAN D INCLUDING THE CONSTRUCTED PRO PERTY FOR STAMP VALUE WAS LESS THAN RS . 9 SQ . FIT. ACCORDINGLY , THE ASSESSEE WAS ISSUED SHOW CAUSE FOR RE - CALCULA TION O F COST OF ACQUISITION AS ON 01 - 04 - 1981 AND RE - CALCULATION OF CAPITAL GAIN ON THE LAND SOLD. ASSESSEE RESPONDED THAT HE COULD NOT OBTAIN COP IES OF SALE DEED PERTAINING TO LAND SURROUNDINGS THE LAND OF SURVEY NO.434 & 417 RELATING TO THE YEAR OF 19 81 FROM THE SUB - REGISTRAR, BARODA. THEREFORE, HE HAS REQUESTED THE ASSESSING OFFICER TO ACCEPT THE RA TE OF 15 PER SQ. F T . FO R AR RIVING AT FAIR MARKET VALUE AS ON 1 ST APRIL, 1981 FOR COMPUTATION OF CAPITAL GAIN ON SALE OF ATLADARA LAND AS MUTUALLY AG REED BETWEEN THE ASSESSEE AND INCOME TAX DEPARTMENT. . T HEREAFTER, THE SUB - REGISTRAR , BARODA HAS PROVIDED ANOTHER SALE DEED WHICH WAS REGISTERED ON 01 - 04 - 1 981 STATING THAT LAND BEARING SURVEY NO. 456 IN ATLADARA, BARODA MEASURING 36875 SQ. MT . ADJACENT TO IMPUGNED LAND SURVEY NO. 434 WAS CHA RGED WITH A STAMP DUTY OF RS. 1 7 , 660/ - ON A TOTAL CONSIDERATION OF RS. 1 , 47 , 504/ - ONLY .THE ASSESSING OFFICER OBSERVED THAT FROM IT APPEARED THAT THE PREVAILING RATE OF AGRICUL TURAL LAND FOR STAMP DUTY WAS RS . 0.3718 SQ . FT . O N THE BASIS OF THIS INFORMATION THE ASSESSEE WAS ISSUED ANOTHER SHOW CAUSE NOTICE AS TO W H Y RATE OF RS. . 3718 PER SQ . F T . MAY NOT BE ADOPTED AS COST OF ACQUISITION AS ON 04/04/1981 FOR CALCULATION OF CAPITAL GAIN ON THE LAND SOLD. THE ASSESSEE R ESPONDED THAT ABOVE STATED SALE DEED FOR SURVEY NO. 456, 458 PERTAINED TO AGRICULTURAL LAND AND THERE IS A T ENANCY ACT APPLICABLE TO THAT LAND. THERE IS A LIABILITY TOWARDS GOVERNMENT FOR PREMIUM AND GOVERNMENT OF GUJARAT HAS DIRECTED THE RA T E OF PREMI UM TO BE LEVIED U/S. 43 OF THE B.T. AND I ACT, 1 948 IN THE CASE OF TRANSFER OF LAND , T HEREFORE , THE ASSESSEE REQUESTED THAT NOT TO CONSIDER THIS SALE DEED FOR THE PURPOSE OF FAIR MARKET VALUE AS ON 0 1 - 04 - 1981. THE ASSESSING OFFICER HAS N OT ACCEPTED THE EXPLANATION OF THE ASSSESSEE AND STATED THAT ASSESSEE HIMSELF HAS ADMITTED THAT DUE TO HUG E VOLUME OF RECORD IT WAS NOT POSSIBLE TO SEARCH THE RECORD OF SALE DEED OF THE VALUE OF MORE THAN RS. 15 PER SQ . FT FROM THE S UB - R EGISTRAR, BARODA . HE HAS FURTHER STATED T HAT ASSESSEE HAS I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 4 FURNISHE D A TABLE OF FOUR REGISTERED SALE DEED S ACQUIRED FROM THE REGISTRAR OFFICE AS FOLLOWS: - S. NO RS NO. DATE REGISTRATIO N NO SALES VALUE AREA IN SQ. MT. RATE PER SQ. MT. AREA IN SQ. FT. RATE PER SQ. FT 1 386 21.11.1981 6443 8000 60 133 646 12 2 604 22.01.1981 281 7999 30 267 323 25 3 504 06.07.1981 4018 5000 40 125 430 12 4 703 28.04.1981 2427 7999 63 127 678 12 IT WAS SUBMITTED THAT THE RATE AS PER SALE DEED OBTAINED FROM SUB - REGISTRAR ARE BETWEEN RS.12/SQ. FT AND RS.25/ SQ.FT THEREFORE IT WAS REQUESTED THAT AVERAGE RATE OF RS. 15 SQ. FT MAY BE ADOPTED FOR CALCULATING FAIR MARKET VALUE AS ON 01 - 04 - 1981. HOWEVER, THE ASSESSING OFFICER HAS STATED T HAT MOST COMPARABLE COST IN THE CASE OF T HE ASSESSEE IS THE SA LE DEED OF SURVEY NO. 456 WHICH I S AN AGRICULTURAL LAND SITUATED ADJACENT TO THE IMPUGNED LAND OF THE ASSESSEE AT SURVEY NO. 434. HOWEVER AFTER TAKING IN TO CONSIDERATION THE ISSUE OF TENANCY RIGHT AND TRIBAL L AND THE ASSESSING OFFICER HAS ESTIMATED THE RATE AT RS . 8 PER SQ. FT . OF THE SAID LAND OF T H E ASSESSEE ON WHICH LONG TERM CAPITAL GAIN IS CALCULATED. THEREFORE, THE ASSESSING OFFI CER HAS ADOPTED RATE OF RS. 8 / PER SQ . AND CALCULATED THE NET CAPITAL GAINS ON SALE OF THE ATLADARA LAND AT RS.8,55,83,5 11/ IN PLACE OF RS.7,99,54,058 TAKEN BY THE ASSESSEE. THE DIFFERENCE IN NET CAPITAL GAIN OF RS. 56 , 29 , 45 3 / - WAS ADDED TO THE INCOME OF THE ASSESSEE. 5 . AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DELETED THE ADDITION MADE B Y THE ASSESSING OFFICER BY STATING THAT THE VALUATION ADOPTED BY THE ASSESSE IS BASED ON REPORT OF REGISTERED VALUER. HE HAS FURTHER STATED THAT ASSESSING OFFICER HAS WITHOUT ANY REASON REJECTED THE SUBMISSION OF THE ASSESSEE AND ALSO THE SALE INSTANCES R ELIED UPON BY THE ASSESSEE. THE RELEVANT PART OF THE DECISION O F THE LD. CIT(A) IS RECORDED AS UNDER: - 7.1 AFTER CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES AND MATERIAL ON RECORD, I AM OF THE CONSIDERED VIEW THAT MY ANSWER TO EACH OF THE ABOVE THREE QUESTIONS IS IN THE NEGATIVE. I OBSERVE THAT THE VALUATION ADOPTED BY THE APPELLANT IN RETURN FILED U/S 139 IS I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 5 INDEED BASED ON THE REPORT OF A REGISTERED VALUER AND THE FIVE SALE INSTANCES RELIED UPON BY THE REGISTERED VALUER ARE AVAILABLE ON PAGE NO .74 OF THE PAPER BOOK. BASED ON THESE INSTANCES AND A FURTHER DETAILED COMMENT AS GIVEN BY THE LD. REGISTERED VALUER AND AVAILABLE ON PAGE NO.66 TO 69 OF THE PAPER BOOK, THE APPELLANT HAS ARRIVED AT THE FAIR MARKET VALUE OF THE LANDS UNDER REFERENCE AS ON 1/4/1981 AT A TOTAL OF RS.1,68,62,000/ - (@ RS.950 AND RS.850 PER SQ. METRE I.E. RS.84.50 PER SQ. FEET). NOTWITHSTANDING THIS, AND BASED ON 'THE DETAILS OF INSTANCES OF SALE OF LANDS IN THE VICINITY OF THE LAND SOLD BY THE APPELLANT FOR THE PERIOD 1980 TO 1 984, ACCORDING TO WHICH THE SALE RATE FOR LANDS SITUATED IN VICINITY OF THE APPELLANT'S LAND WAS RANGING FROM RS.L TO RS.15 PER SQ. FEET IN THAT PERIOD' (QUESTION NO.20 OF STATEMENT U/S 132(4) DATED 4/7/2012), THE AUTHORISED OFFICER CALLED UPON THE APPELLA NT TO EXPLAIN WHY THE CAPITAL GAINS SHOULD NOT BE RECALCULATED AND 'THE CONCEALED INCOME' BE BROUGHT TO TAX. NEITHER THE AUTHORISED OFFICER, NOR THE ASSESSING OFFICER THEREAFTER, HAS BROUGHT THE EXACT DETAILS OF THE SALE INSTANCES REFERRED TO IN THIS QUEST ION ON RECORD. DESPITE THIS, THE APPELLANT VIDE ANSWER NO.20 AGREED FOR UPWARD REVISION OF CAPITAL GAINS BY ADOPTING 'THE FAIREST RATE I.E. RS.15 PER SQ. FEET' (ANSWER 20) AS ON 1/4/1981, AND FOLLOWED IT UP BY DULY FILING THE RETURN IN RESPONSE TO NOTICE U /S 153A DISCLOSING THEREIN AN ADDITIONAL CAPITAL GAINS OF RS. 10 CRORES. THUS, I AGREE WITH THE LD. AR THAT IN VIEW OF THE 'AGREED TO' UPWARD REVISION OF TAXABLE CAPITAL GAINS FULLY HONOURED BY THE APPELLANT IN RETURN U/S 153A, THERE REALLY IS NO JUSTIFICA TION FOR THE AO IN LAW AND ON FACTS TO PROCEED ON A FURTHER AND EXTRA - LEGAL ENQUIRY U/S 133(6) IN OBTAINING THE COPY OF FURTHER SALE DEEDS FROM THE SUB - REGISTRAR AS REFERRED TO BY HIM IN PARA 6.1. THUS, I FIRSTLY HOLD THAT THERE IS NO BASIS TO DISPUTE WHAT HAS NOT BEEN DISPUTED BY THE LD. AUTHORISED OFFICER DURING THE COURSE OF STATEMENT U/S 132(4). IN OTHER WORDS, THERE IS NO JUSTIFICATION FOR THE AO TO FURTHER PROBE THE RATES AS ON 1/4/1981 AS FIRSTLY SUGGESTED BY THE DEPARTMENTAL OFFICER AND AGREED TO BY THE APPELLANT NOTWITHSTANDING A CONTRARY AND FAVOURABLE VALUATION REPORT AVAILABLE WITH THE APPELLANT, WHICH COULD, IN LAW, BE CHALLENGED ONLY AND EXCLUSIVELY BY A DVO'S REPORT, PARTICULARLY WHEN NO DEFECTS TO BEGIN WITH HAVE BEEN POINTED OUT IN THE REPOR T OF THE REGISTERED VALUER. 7.2 THE SECOND ISSUE IS THAT THE VALUATION AGREED TO BY THE APPELLANT DURING THE COURSE OF STATEMENT U/S 132(4) WAS FURTHER ARGUED TO BE JUST, FAIR AND REASONABLE BY RELYING ON, APART FROM THE SALE INSTANCES REFERRED TO BY THE R EGISTERED VALUER ON PAGE NO.74 OF THE PAPER BOOK (WHERE THE RATE PER SQ. FEET RANGES BETWEEN RS. 101.81 TO RS.29.99 PER SQ. FEET AS UNDER), ON THE FURTHER INSTANCES OF SALE OBTAINED BY THE APPELLANT AND REPRODUCED BY THE AO IN PARA 6.4 OF HIS ORDER (TABLE 2) AS PER WHICH THE RATE PER SQ. FEET WAS RS. 12 IN THREE INSTANCES AND RS.25 IN ONE INSTANCE: TABLE 3 SR. NO. R.S. NO. AREA (IN SQ. METRE) DATE RATE PER SQ. FOOT) 1 450 148364 19/11/1981 RS.29.99 2 124 479 16/11/198 RS.63.00 3 114 154. 64 6/2/1981 RS.39.00 4 83 416 29/5/1981 RS.27.49 5 27 144 28/8/1981 RS.101.81 THE LD. AO HOWEVER, IS CLEARLY AND EXCLUSIVELY FIXATED ON RATE IN ONE OF THE TWO INSTANCES, OBTAINED BY HIM FROM THE SUB - REGISTRAR, NAMELY RATE IN THE DEED OF SU RVEY NO.456, WHICH HE FEELS IS 'MOST COMPARABLE' TO THE LAND SOLD BY THE APPELLANT. THE LD. AO OBSERVES IN PARA 6.5 THAT THE APPELLANT IS RIGHT IN SUBMITTING BEFORE HIM THAT THE LAND CHARACTERISTICS OF SURVEY NO.456 (RATE OF RS.0.3719 PER SQ. FEET) AND 458 (RATE OF RS.9 PER I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 6 SQ. FEET), BOTH OBTAINED BY HIM FROM SUB - REGISTRAR ARE MATERIALLY DIFFERENT FROM THE LAND SOLD BY THE APPELLANT IN AS MUCH AS THOSE LANDS ARE PROTECTED UNDER THE TENANCY ACT, ARE SUBJECT TO LIABILITY OF PREMIUM AND WERE TRANSFERABLE ONLY TO THE MEMBER OF SCHEDULED TRIBE AS PER THE SUBMISSIONS REPRODUCED BY THE AO IN PARA 6.3 OF THE ORDER, NEVERTHELESS, HE PROCEEDS TO MAKE AN ESTIMATE ON THE BASIS OF RATES OF THESE VERY SALE INSTANCES, AND, AFTER CONSIDERING 'ALL RELEVANT FACTS', HE ARRIVE S AT THE 'ESTIMATED RATE' OF RS.8 PER SQ. FEET AS ON 1/4/1981. THE AO, HOWEVER, IGNORES THE SALE INSTANCES AVAILABLE BOTH IN THE SUBMISSION OF THE APPELLANT (TABLE 2) TABULATED BY HIM IN PARA 6.4 AND ALSO THE SALE INSTANCES RELIED UPON BY THE REGISTERED VA LUER, AVAILABLE ON PAGE NO.74 OF THE PAPER BOOK (TABLE 3). AFTER' CONSIDERING THE FACT TH AT THE AO HAS, WITHOUT ANY REASON, BRUSHED ASIDE AND REJECTED THE SUBMISSIONS OF THE APPELLANT AND ALSO THE FOUR SALE INSTANCES AS RELIED UPON BY THE APPELLANT, I HAVE UNHESITATINGLY TO ANSWER QUESTION NO.2 IN NEGATIVE, AND HOLD THAT THE RATE OF RS.8 PER SQ. FEET AS ADOPTED BY THE AO IS NOT FOUNDED ON ANY SOUND MATERIAL AND IS INDEED ARBITRARILY ARRIVED AT WITHOUT POINTING OUT ANY ERROR/DEFECT THOUGH EXISTENCE OF SUCH D EFECT/DISSATISFACTION OF THE AO IS A SINE - QUA - NON AND A JURISDICTIONAL REQUIREMENT EVEN FOR MAKING A REFERENCE U/S 55A. AS SUCH, THOUGH THE SALE INSTANCES OF THE REGISTERED VALUER (TABLE 3) GAVE AN AVERAGE RATE FAR HIGHER THAN THE RATE OF RS. 15 'AGREED TO ' BY THE APPELLANT DURING THE COURSE OF STATEMENT U/S 132(4), THE APPELLANT ALSO FURTHER SUCCESSFULLY JUSTIFIED THE RATE OF RS. 15 PER SQ. FEET 'AGREED TO* BY HIM ON THE BASIS OF FOUR SALE INSTANCES (TABLE 2) WHICH HAVE NOT ONLY BEEN NO: CONTROVERTED BY TH E LD. AO, THERE IS NO REASON AS TO WHY THE SAME NEEDED TO BE REJECTED. IN MY CONSIDERED OPINION, EVEN IF AN AVERAGE OF THE RATES OF SALE INSTANCES AVAILABLE IN THE REPORT OF THE REGISTERED VALUER AND IN THE INSTANCES RELIED UPON BY THE APPELLANT IS TAKEN, THE VALUATION RATE AS ON 1/4/ 1981 WOULD GO HIGHER THAN THE RATE OF RS. 15 PER SQ. FEET. MOREOVER, THE LD. AO HIMSELF HAS ACKNOWLEDGED THE FACTORS WHICH WOULD REQUIRE HIS OWN SALE INSTANCES OF SURVEY NO.433, 456 AND 458 TO GO OUT OF THE RECKONING FOR ARRIV ING AT THE FAIR MARKET VALUE. ON TOP OF THIS, THE ONLY STATUTORY PROVISION ENABLING THE AO TO.DISPUTE AND SUBSTITUTE THE VALUATION ADOPTED BY THE APPELLANT, NAMELY SECTION 55A, HAS NOT BEEN RESORTED TO BY THE AO. IN VIEW OF THESE FACTORS, I AM OF THE CONSI DERED VIEW THAT THE AO HAS INDEED EXCEEDED HIS AUTHORITY IN FIRSTLY WANTING TO GO BEYOND AN AGREED TO ESTIMATE OF FAIR MARKET VALUE DURING ACTION U/S 132, SECONDLY IN NOT CONSIDERING THE INSTANCES REFERRED TO IN THE REGISTERED VALUER'S REPORT AND IN THE TA BLE REPRODUCED BY HIM IN PARA 6.4 OF THE ORDER (TABLE 2 AND 3) AND FURTHER ALSO IN RELYING ON HIS OWN INSTANCES OF SALE HAVING AS PER HIS OWN ACKNOWLEDGEMENT CLEARLY DISTINGUISHABLE FEATURES COMPARED TO THE LAND SOLD BY THE APPELLANT, RENDERING THEM COMPLE TELY INCOMPARABLE. THUS, THERE IS NO MERIT AT ALL IN THE ACTION OF THE LD. AO IN BRINGING THE ADDITIONAL CAPITAL GAINS TO TAX BASED ON HIS OWN ARBITRARY ESTIMATE OF FAIR MARKET VALUE FOR WHICH THERE IS NO AUTHORITY IN LAW. THUS, I ANSWER QUESTION NO.2 ALS O IN NEGATIVE. 7.3 TURNING TO THE LAST QUESTION, IT IS A SETTLED LAW BY NOW THAT NEITHER THE AO NOR ANY OTHER AUTHORITY INCLUDING APPELLATE AUTHORITIES ARE COMPETENT TO DISPUTE OR DISCREDIT THE OPINION OR REPORT OF EXPERT IN TECHNICAL MATTERS WITHOUT FIRST LY HAVING A FOUNDATION TO DOUBT THE VERACITY OF SUCH REPORT AND SECONDLY BY BRINGING IN A CONTRARY REPORT OR OPINION OF SIMILAR EXPERT. AS SUCH, WITH REGARD TO VALUATION OF IMMOVABLE PROPER TY, SECTION 55A REQUIRES THE AO TO FIRSTLY DISBELIEVE THE REPORT OF A REGISTERED VALUER ONLY ON THE BASIS OF SOUND AND COGENT MATERIAL AND AFTER SUCH OBJECTIVE SATISFACTION, THE AO IS MANDATED U/S 55A TO NECE SSARILY MAKE A REFERENCE TO THE DVO IN CASE HE VALIDLY ENTERTAINS DOUBTS ABOUT THE VERACITY OF REGISTERED VALUER'S REPORT. THIS HAS BEEN CATEGORICALLY SO HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF MANJULABEN M. UNADKAT, 55 TAXMANN.COM 62, I AM ALSO OF THE CONSIDERED OPINION THAT WHEN THE APPELLANT HAS 'AGREED TO' DURING ACTION U/S 132, FOR AN UPWARD REVISION OF 'DEEMED COST OF ACQUISITION', THAT DOES NOT IN ITSELF EMPOWER THE AO TO UNDERTAKE AN EXERCISE OF 'ESTIMATING THE FAIR MARKET VALUE AS ON 1/4/1981' ON THE BASIS OF WHATEVER MATERIAL HE GATHERS AND THAT TOO COMPLETELY DISREGARDING THE SALE INSTANCES FURTH ER BROUGHT ON RECORD BY THE APPELLANT. I THEREFORE, FULLY AGREE WITH THE LD. AR THAT THE AO HAS CONTRAVENED THE MANDATE OF SECTION 55A AND I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 7 THE JUDICIAL AUTHORITIES AVAILABLE INCLUDING BINDING AUTHORITIES OF HIGH COURT AND SUPREME COURT IN HIS ENDEAVOUR IN REJECTING THE APPELLANT'S (AND AUTHORISED OFFICER'S) VALUATION AND SUBSTITUTING THE SAME BY HIS OWN FOR WHICH HE HAS NO AUTHORITY. IN CONCLUSION, I ALSO ANSWER QUESTION NO.3 IN NEGATIVE WHILE QUOTING FROM THE AUTHORITIES AS UNDER: [2011] 10 TAXMANN.COM 4 5 (JODH.) MANJULA SINGHAL* 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE RECORD OF THE CASE. THE SHORT DISPUTE IS WHETHER THE VALUATION AS ON 1 - 4 - 1981 DETERMINED BY THE ASSESSING OFFICER AT RS. 1,91,000 IS TO BE ACCEPTED OR THE VALUATIO N AS PER REGISTERED VALUER'S SECOND REPORT HAS TO BE ACCEPTED. THERE CANNOT BE ANY QUARREL WITH THE POSITION THAT SINCE THE VALUER IS AN EXPERT OF HIS FIELD, THEREFORE, HIS OPINION CANNOT BE SUBSTITUTED BY THE OPINION OF A NON - TECHNICAL PERSON. ADMITTEDLY, THE ASSESSING OFFICER IS NOT A TECHNICAL PERSON TO DETERMINE THE VALUATION OF PROPERTY AND THEREFORE, UNDER THE NORMAL CIRCUMSTANCES, THE VALUATION AS PER REGISTERED VALUER'S REPORT HAS TO BE GIVEN WEIGHTAGE THAN THAT DETERMINED BY THE ASSESSING OFFICER. THIS IS ALSO EVIDENT FROM THE OBSERVATIONS OF THE TRIBUNAL WHICH ARE REPRODUCED HEREUNDER : '18. INSOFAR AS ASSESSEE'S CLAIM FOR ADOPTING COST AS ON 1 - 4 - 1981 ON THE BASIS OF APPROVED VALUERS' REPORTS WHO ARE TECHNICAL IN THE MATTER OF VALUATION IS CONCERNE D, IT CAN BE SEEN FROM THE RECORD THAT THE ASSESSEE ACTED BONA FIDELY BY TAKING OPINION FROM EXPERTS AND TAKING LEAST OF THE COST AS ON 1 - 4 - 1981 ESTIMATED BY THE TWO APPROVED VALUERS. THE SECOND VALUATIONREPORT SUBMITTED BY ARUN KUMAR GOYAL WAS A VALID REP ORT AS THE SAME MERELY CORRECTED THE CALCULATION ERRORS IN HIS FIRST REPORT. THE ASSESSING OFFICER HIMSELF IS NOT A PERSON COMPETENT TO COMMENT ON TECHNICAL MATTERS. THIS VIEW ADMITTEDLY HAS BEEN TAKEN BY SUPREME COURT IN THE CASE OF SARSWATI INDUSTRIAL SY NDICATE LTD. V. CTT237RRA I (SC). THE ASSESSING OFFICER DID NOT MAKE REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER AND PLACED HIMSELF IN THE SHOES OF AN EXPERT WHICH IS CONTRARY TO THE LAW STATED BY HON'BLE SUPREME COURT. THE SOLITARY EXAMPLE OF THE LAND RATE IN AREA COULD NOT BE TAKEN AS A BASIS FOR DISCARDING THE EXPERT'S OPINION ON WHICH THE ASSESSEE HAS RELIED. THE ORDER OF THE ASSESSING OFFICER AS WELL AS ID. C1T(A) DOES NOT STAND FOR LEGAL SCRUTINY IN REJECTING THE EXPERTS' OPINION ON WHICH THE ASSE SSEE HAS RELIED AND PLACING COST OF THE PROPERTY AS ON 1 - 4 - 1981 ON THE BASIS OF A SOLITARY EXAMPLE, WHICH IN FACT COULD NOT BE APPLIED TO THE CIRCUMSTANCES AND THE FACTS OF THE ASSESSEE'S CASE. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO ADOPT THE COST AS ON 1 - 4 - 1981 AS PER SECOND VALUATION REPORT OF THE APPROVED VALUER OF SHRI ARUN KUMAR GOYAL AND WORK OUT INDEX COST ACCORDINGLY FOR WORKING OUT THE INCOME FROM CAPITAL GAINS. GROUND OF THE ASSESSEE ON THIS REASONING STANDS ALLOWED.' [2015] 55 TAKMANN.COM 62 (GUJARAT) MANJULABEN M. UNADKAT* 5. WE HAVE HEARD LEARNED ADVOCATE FOR BOTH THE PRATIES AND PERUSED THE MATERIAL ON RECORD. WHILE DECIDING THE APPEAL, THE TRIBUNAL IN PARAGRAPH NO.6 OF ITS ORDER OBSERVED AS UNDER: '6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS. A REFERENCE TO THE VALUATION OFFICER IS TO BE MADE UNDER SECTION 155A OF THE ACT. CLAUSE(A) OF SECTION 55A HAS A BEARING ON MAKING SUCH A REFERENCE. IT READS AS UNDER: 55.A. WITH A VIEW TO ASCERTAINING THE FAIR MARKET VALUE OF A CAPITAL ASSET FOR THE PURPOSES OF THIS CHAPTER, THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER: - (A) IN A CASE WHERE THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MADE BY A REGISTERED VALUER, IF THE ASSESSING OFFICER IS OF OPINION THAT THE VALUE SO CLAIMED IS LESS THAN ITS FAIR MARKET VALUE; THE PROVISION SPECIFICALLY PROVIDES THAT IF THE ASSESSING OFFICER IS OF THE OPINION THAT THE VALUE DISCLOSED BY THE ASSESSEE IS LESS THAN THE FAIR MARKET VALUE ONLY, THEN HE CAN MAKE A REFERENCE TO THE DVO. NOW THE MOOT QUESTION IS AS TO HOW THE OPINION IS TO BE FORMED BY THE ASSESSING OFFICER. WHETHER THIS OPINION IS SUBJECTIVE OR GUIDED BY SOME JUDICIOUS ACTIONS? THE FORMATION OF OPINION SHOULD HAVE RATIO NAL CONNECTION WITH THE MATERIAL I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 8 BROUGHT ON RECORD. IT SHOULD NOT BE BASED ON EXTRANEOUS OR IRRELEVANT REASONS. IN THE PRESENT CASE, THE ASSESSING OFFICER BEFORE MAKING A REFERENCE TO THE VALUATION OFFICER HAS NOT BROUGHT ANYTHING ON THE RECORD INDICATING THAT THE ASSESSEE HAS DISCLOSED LESSER SALE PRICE. THERE IS NOTHING ON THE RECORD WHICH CAN SUGGEST TO IGNORE THE REPORT OF THE REGISTERED VALUER AND TO ADOPT THE REPORT OF THE VALUATION OFFICER. BOTH THESE PERSONS ARE TECHNICAL PERSONS AND BEFORE ACCEPTIN G THE EVIDENCE OF AN EXPERT, THERE SHOULD BE CORROBORATION OF SOME OTHER MATERIAL. TAKING INTO CONSIDERATION THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE ID. ASSESSING OFFICER OUGHT TO HAVE NOT MADE A REFERENCE TO THE DVO FOR DETERMINATION OF THE FAIR MARKET VALUE OF THE PROPERTY IN DISPUTE. THE REPORT OF THE DVO ALONE IS NOT SUFFICIENT FOR ESTIMATING THE CAPITAL GAINS AT RS.12,28,907/ - ,' [1999] 103 TAXMAN 395 (SC) SARASWATI INDUSTRIAL SYNDICATE LTD. 6. WE CAN UNDERSTAND T HAT THE AUTHORITIES DECLINED TO RELY THE EXPERTS' OPINION BECAUSE HE WAS NOT PRODUCED FOR CROSS - EXAMINATION. BUT NEITHER THE ITO NOR, INDEED, THE HIGH COURT WERE ENTITLED TO MAKE STATEMENTS ON TECHNICAL MATTERS FOR WHICH NO BASIS HAD BEEN LAID ON THE RECOR D BY EITHER THE REVENUE OR THE ASSESSEE. IF THE HIGH COURT WAS OF THE VIEW THAT FURTHER MATERIAL WAS REQUIRED, THE APPROPRIATE COURSE WAS TO REQUIRE THE TRIBUNAL TO TAKE FURTHER EVIDENCE AND DRAW UP A SUPPLEMENTAL STATEMENT OF CASE. [EMPHASIS IN ALL THE TH REE EXTRACTS SUPPLIED BY ME] 8. IN VIEW OF THE DISCUSSION AS ABOVE, AND IN VIEW OF MY REPLIES TO ALL THE THREE QUESTIONS IN NEGATIVE AS DISCUSSED SUPRA, IT IS AXIOMATIC THAT THE APPELLANT SUCCEEDS WITH REGARD TO GROUND NO.2 AND 3. IN CONCLUSION, IT IS HELD THAT THE ADDITIOJWAADE BY THE AO IS ARBITRARY AND IN CONTRAVENTION OF LAW AS UNAMBIGUOUSLY PRESCRIBED U/S 55A AS ALSO OF LAW AS LAID DOWN BY JURISDICTIONAL AUTHORITIES. THEREFORE, I UNHESITATINGLY AGREE WITH THE SUBMISSION OF THE LD. AR THAT THE ADDITION IS NOT SUSTAINABLE. THE ADDITION OF RS.98,97,063/ - IS THEREFORE, DELETED. THE APPELLANT GETS EQUIVALENT RELIEF. GROUND NO.2 AND 3 ARE ALLOWED.' 6 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE ASSESSEE ALONG WITH THREE OTHER CO - OWNERS HAVE SOLD LAND AT ATLADRA SURVEY NO. 417, 434 ON 25 TH NOV, 2017, THE ASSESSEE HAS TAKEN THE DEEMED COST OF ACQUISITION AS ON 01 - 041981 @ R S, 84.80 PER SQ. FT BASED O N A REGISTERED VALUER REPORT. SUBSEQUENTLY, THERE WAS A SEARCH A CTION U/S. 132 OF THE ACT ON 3 RD JULY, 2012 AND AT THE TIME OF RECORDING STATEMENT U/S. 132(4) OF THE ACT SH. RAMANBHAI B. PATEL WHO WAS CONFRONTED BY THE AUTHORIZED OFFICER WITH SALE INSTANCES WAS AGREED FOR DOWNWARD REVISION OF DEEMED COST OF ACQUISITI ON @ 15 PER SQ. FT. INSTEAD OF RS. 84.80 PER SQ. FT. ADOPTED BY HIM IN RETURN U/S. 139. CONSEQUENTLY, HE ADMITTED AN AMOUNT OF RS. 10 CRORE AND FULLY PAID THE TAXES A ND FILED RETURN I N RESPONSE TO NOTICE U/S. 153A OF THE ACT. HOWEVER, DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CONFRONTED THE ASSESSEE WITH OTHER TWO SALE INSTANCES FOR FURTHER DOWNWARD REVISION OF DEEMED COST OF ACQUISITION AS ON 01 - 04 - 1981. IN RESPONSE , THE ASSESSEE HAS ALSO PRODUCED FURTHER FOUR SALE INSTANCES TO JUSTIFY THE RATE AGREED UPON BY THE I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 9 ASSESSEE DURING ACTION U/S. 132(4) AND ADOPTED IN RETURN U/S. 153A OF THE ACT. HOWEVER, THE ASSESSING OFFICER INSISTED OF ADOPTING THE OWN RATE OF RS. 8 PER SQ. FT. IN PLACE OF 15 PER SQ. FT. TAKEN BY THE ASSESSEE IN RETURN U/S. 153A OF THE ACT. T HE ASS E ESSING OFFICER HAS IGNORED THE ABOVE SALE INSTANCES REFERRED BY THE ASSESSEE AND ESTIMA TED RATE OF RS . 8 PER SQ. FT . AS ON 01 - 04 - 1981. WE OBSERVE THAT TO DISPROVE THE TECHNICAL REPORT OF THE REGISTERE D VALUATION OFFICER OR IN CASE OF FINDING VARIANCE WITH THE FAIR MARKET VALUE IN THE CASE OF IMMOVABLE PROPERTY THE ASSESSING OFFICER MAY REFER THE MATTER TO THE DVO AS PROVIDED UNDER THE PROVISION OF SECTION 55A OF THE ACT. THE RELEVANT PROVISION OF SECTION 55A OF THE ACT IS REPRODUCED AS UNDER: - 55A. WITH A VIEW TO ASCERTAINING THE FAIR MARKET VALUE OF A CAPITAL ASSET FOR THE PURPOSES OF THIS CHAPTER, THE [ASSESSING] OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER ( A ) IN A CASE WHERE THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MADE BY A REGISTERED VALUER, IF THE [ASSESSING] OFFICER IS OF OPINION THAT THE VALUE SO CLAIMED [IS AT VARIANCE WITH ITS FAIR MARKET VALUE]; ( B ) I N ANY OTHER CASE, IF THE [ASSESSING] OFFICER IS OF OPINION ( I ) THAT THE FAIR MARKET VALUE OF THE ASSET EXCEEDS THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE BY MORE THAN SUCH PER - CENTAGE OF THE VALUE OF THE ASSET AS SO CLAIMED OR BY MORE THAN SU CH AMOUNT AS MAY BE PRESCRIBED IN THIS BEHALF ; OR ( II ) THAT HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY SO TO DO, AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB - SECTIONS (2), (3), (4), (5) AN D (6) OF SECTION 16A, CLAUSES ( HA ) AND ( I ) OF SUB - SECTION (1) AND SUB - SECTIONS (3A) AND (4) OF SECTION 23, SUB - SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957), SHALL WITH THE NECESSARY MODIFICATIO NS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE [ASSESSING] OFFICER UNDER SUB - SECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION. IN THIS SECTION, 'VALUATION OFFICER' HAS THE SAME MEANING, AS IN CLAUSE ( R ) OF SECTION 2 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957).] AFTER CONSIDERING THE ABOVE PROVISION WE OBSERVED THAT ASSESSING OFFICER IS NOT JUSTIFIED IN ESTIMATING THE FAIR MARKET VALUE OF THE PROPERTY W IT HOUT MAKING REFERENCE U/S. 55 A TO THE DVO. WE HAVE ALS O NOTICED THAT THE ASSESSING OFFICER HAS ALSO FAILED TO CONTROVERT THE SALES INSTANCES REFERRED BY THE ASSESSEE. THEREFORE, WE CONSIDER THA T THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT I.T(SS).A NOS. 220 TO 223 /AHD/20 16 A.Y. 2011 - 12 PAGE NO DCIT VS . DIFFERENT ASSESSEES 10 ACCORDING TO THE PROVISION PRESCRIBED U/S. 55A OF THE ACT. THEREF ORE , AFTER CONSIDERING THE DETAILED FINDING OF THE LD. CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE IN HIS DECISION. IN THE RESULT, THE APPEAL OF T HE REVENUE IS DISMISSED. 7. IN THE RESULT, ALL THE FOUR APPEALS FILED BY REVENUE ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 18 - 04 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 18 /04 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,