Mohd. Rafique, Bhopal V. The ACIT, 3(1), Bhopal

ITSSA 8/IND/2013

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9358 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 16-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K KARAN
• Assessee Lawyers: H P VERMA SHRI N D PATWA; SAKSHI VERM
• Keywords: Gift; Cost of acquisition; Fair market value

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS) A NO. 8/IND/2013 A.Y. 2006-07 MOHD. RAFIQUE BHOPAL PAN APQPM 5910 G :: APPELLANT VS ACIT 3(1) BHOPAL :: RESPONDENT ASSESSEE BY SHRI H.P. VERMA , SHRI N.D. PATWA AND MISS SAKSHI VERM RE VENUE BY SHRI V.K. KARAN DATE OF HEARING 6 . 6 .201 3 DATE OF PRONOUNCEMENT 6.6 .2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER D ATED 9.11.2012 OF THE LD. FIRST APPELLATE AUTHORITY, BHO PAL ON THE GROUND THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ACCEPT ING THE 1/7 TH SHARE 2 OF LONG TERM CAPITAL GAIN AT RS.77,849/- AS CLAIMED BY THE ASSESSEE AND THUS, UPHOLDING THE INCREASE TO RS.13,69,402/- AS ASSESSED BY THE LD. ASSESSING OFFICER. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I H.P. VERMA ALONG WITH SHRI N.D. PATWA & MISS SAKSHI VERMA, LD. COUNSEL FOR THE ASSESSEE AND SHRI V.K. KARAN, LD. CIT/DR. AT TH E OUTSET, IT WAS ASSERTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT T HE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF MOHD. ATIQUE & OTHERS [IT(SS)A NOS.310 TO 316/IND/2012, I T(SS)A NOS.295 TO 299/IND/2012 AND IT(SS)A NOS.285 TO 287/IND/2012 , ORDER DATED 31.1.2013]. THIS ASSERTION OF THE ASSESSEE CO ULD NOT BE CONTROVERTED BY THE REVENUE BEING MATTER OF RECORD. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER OF THE TRIBUNAL DATED 31.1.2013: 34. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FI ND THAT THE ASSESSEE WAS CO-OWNER OF LAND ADMEASURING 25765 SQ. FT. SITUATED AT AHMEDABAD PALACE, KOHEFIZA. BHOPAL. THIS PROPERT Y WAS ACQUIRED BY THE APPELLANT AND CO-PARTNERS AS INHERI TED PROPERTY IT WAS SOLD DURING THE YEAR. WHILE WORKING OUT LONG T ERM CAPITAL GAIN ON SALE OF THIS LAND, THE ASSESSEE CLAIMED THE FAIR MARKET VALUE AS 3 ON 1.4.81 AT RS 100 PER SQ.FT. THE A.O. ADOPTED THE FAIR MARKET VALUE AS ON 1.4.81 AT RS.17 PER SQ. FT. THE ASSESSI NG OFFICER HAS ADOPTED MARKET VALUE AS ON 1.4.1981 AT RS. 17/- PER SQ.FT. ON THE BASIS OF SALE TRANSACTION DATED 23.10.1982 FOR THE PLOT OF 1410 SQ.FT. SOLD FOR CONSIDERATION OF RS. 25,000/- WHICH RESULTED IN RATE OF RS. 17.73 PER SQ. FT. AND ACCORDINGLY WORKED OUT THE LONG TERM CAPITAL GAINS AT RS. 95,85,816/- AND THE SHARE OF T HE ASSESSEE WAS WORKED OUT AT RS. 13,69,402/-. AS THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS AT RS. 77,849/-, THE ASSESSING O FFICER MADE ADDITION OF RS. 12,91,553/-. 35. AFTER APPLYING RATE OF RS. 17/- PER SQ. FT., TH E ASSESSING OFFICER HAS COMPUTED THE ADDITION ON ACCOUNT OF LON G TERM CAPITAL GAINS IN THE HANDS OF 7 CO-OWNERS AS UNDER :- 1 PLOT/AREA (IN SQ.FT.) 23.70 2 COST OF ACQUISITION PER SQ.FT. AS ON 1.4.1981 17.00 3 TOTAL COST OF ACQUISITION AS ON 1.4.81 292.190 4 YEAR OF TRANSFER 2005-06 5 INDEXEDNCOST OF ACQUISITION 1949184 6 MARKET VALUE ON THE DATE OF TRANSFER PER SQ.FT. 500 7 TOTAL SALE CONSIDERATION 11535000 8 CAPITAL GAIN 9585816 SHARE OF CAPITAL GAIN OF CO-OWNERS 1 MOHD SHAKEEL 1369402 2 MOHD YUSUF 1369402 3 MOHD. UMAR 1369402 4 MOHD. RAFIQUE 1369402 4 5 MOHD. DANISH 1369402 6 MOHD. RUMMAN 1369402 7 MOHD. SHAYAN 1369402 TOTAL 9585816 THEREFORE, AS PER ABOVE TABLE, FOLLOWING ADDITIONS WERE MADE IN THE RELEVANT ASSESSMENT YEAR I.E. A.Y. 2006-07 AS LONG TERM CAPITAL GAIN :- NAME OF PERSONS ACTUAL CAPITAL GAINS CAPITAL GAIN SHOWN ADDITION ON ACCOUNT OF LTCG 1 MOHD. SHAKEEL 1369402 77849 1291553 2 MOHD. YUSUF 1369402 77849 1291553 3 MOHD. UMAR 1369402 77849 1291553 4 MOHD. RAFIQUE 1369402 77849 1291553 5 MOHD. DANISH 1369402 77849 1291553 6 MOHD. RUMMAN 1369402 77849 1291553 7 MOHD. SHAYAN 1369402 77849 1291553 MOHD. DANISH, MOHD. RUMMAN & MOHD. SHAYAN ARE MINOR S AND FATHER OF THESE THREE MINORS IS MOHD. SHAFIQUE. 36. IN THE CASE OF MOHD. DANISH, MOHD. RUMMAN & MO HD. SHAYAN, ASSESSEE SUBMITTED THAT ALL OF THE ABOVE AR E MINORS AND HAVING NO INCOME. THEREFORE, INCOME OF THESE MINORS I.E. RS. 38,74,659/- (1291553 X 3) WILL BE CLUBBED AS INCOME OF THEIR FATHER SHRI MOHD. SHAFIQUE. 37. THE SUBMISSIONS OF THE ASSESSEE BEFORE THE LEA RNED CIT(A) WERE AS UNDER :- THE MINOR SONS OF THE APPELLANT MOHD. DANISH, MOHD . RUMAN 5 AND MOHD. SHAYAN AND THEIR 4 CO-OWNERS OWNED THE PL OT AT 23070 SQ. FT. WHICH THEY HAD RECEIVED IN HIBA FROM THE AP PELLANT SH. MOHD. SHAFIQUE. ALL THE CO-OWNERS ESTIMATED THE MARKET V ALUE AS ON 1.4.1981 AT RS. 100/- AND WORKED OUT THE SHARE OF L ONG CAPITAL GAIN AT RS. 77849/- AS THE PROPERTY WAS SOLD IN THEA.Y. 2006-07 FOR THE CONSIDERATIONOF RS. 1,15,35,000/- WHICH WORKED OUT TO RS. 500 PER SQ. FT. THE LD. A.O. ADOPTED THE MARKET VALUE AS ON 1.4.1981 AT RS. 17/- ON THE BASIS OF THE SALE TRANSASCTION DATED 23 .10.1982 FOR THE PLOT OF 1410 SQ. FT @ 17.73 SQ.FT. I.E. FOR THE CON SIDERATION OF RS. 25,000/- AND ACCORDINGLY WORKED OUT THE LONG TERM C APKITAL GAINAT RS. 95,85,816/- AND THE SHARE OF THE MINOR SONS OF THE APPELLANT IS RS. 41,08,206/-. SINCE THE APPELLANT HAS SHOWN THE LONG TERM CAPITAL GAIN AT RS. 2,33,547/- THE ASSESSING OFFICE R MADE THE ADDITION OF RS. 38,74,659/- AND TAXED THE SAME AS I N NORMAL INCOME. IN THIS CONNECTION, IT IS SUBMITTED THAT T HE LAND OF THE APPELLANT AND HIS CO OWNERS WAS ON THE MAIN ROAD LE ADING TO AHMEDABAD PALACE OF NAWAB AND JUST OPPOSITE OF THE FLAT HOUSE WHICH WAS AGAINST THE HOUSE OF NAWAB. WHILE THE TRA NSACTION CITED BY THEA.O. RELATES TO THE SMALL PATCH OF LAND FAR B EHIND FROM THE MAIN ROAD WITH A SMALL SERVICE OF LAND. IN VIEW OF THE ABOVE, BOTH THE TRANSACTIONS CANNOT BE TREATED AS IDENTICAL AND THE MARKET VALUE AS ESTIMATED BY THE A.O. AT RS. 17/- PER SQ.FT. IN THE YEAR 1981 IS TOO LOW. IT IS REQUESTED THEREFORE THE MARKET VALUE AT RS. 100 PER SQ. FT. BE KINDLY ACCEPTED OR THE SAME BE KINDLY INCREASED SUITABLY FROM RS. 17/- PER SQ.FT. AND THE SHARE OF LONG TERM CAPI TAL GAIN BE KINDLY WORKED OUT AND THE ADDITION OF RS. 12,91,553/- BE K INDLY SUITABLY REDUCED. IT IS SUBMITTED THAT THE A.O. HAS LEVIED THE INCOM E TAX ON THE LONG TERM CAPITAL GAIN AT THE NORMAL RATE. BUT THE SAME SHOULD BE @ 20% AS PER PROVISIONS OF SEC.112 OF THE IT ACT. THE A.O. BE KINDLY DIRECTED ACCORDINGLY. 38. THE ACTION OF THE ASSESSING OFFICER WAS CONFIR MED BY THE CIT(A) AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFO RE US. 39. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIN D FROM RECORD THAT SEVEN CO-OWNERS OWNED THE PLOT OF 23,070 SQ. F T WHICH THEY RECEIVED IN HIBA (GIFT) FROM THEIR FATHER, MOHD. SH AFIQUE. IN THE A.Y. 2006-07 THIS PLOT WAS SOLD FOR A CONSIDERATION OF RS. 1,15,35,000/- WHICH WORKED OUT TO RS. 500/- PER SQ. FT. WHILE WORKING OUT THE LONG TERM CAPITAL GAINS, THE ASSESS EE HAS ESTIMATED FAIR MARKET VALUE AS ON 1.4.1981 AT RS. 1 00/- AND WORKED OUT THE SHARE OF LONG TERM CAPITAL GAINS AT RS. 77,849/- SINCE THE PROPERTY WAS SOLD IN THE A.Y. 2006-07. H OWEVER, THE 6 ASSESSING OFFICER DID NOT AGREE WITH THE FAIR MARKE T VALUE ARRIVED AT BY THE ASSESSEE AS ON 1.4.1981 AND AFTER COMPARI NG TRANSACTION WITH THE SALE TRANSACTION DATED 23.10.1982 IN RESPE CT OF A PLOT OF 1410 SQ. FT. @ RS. 17.73 PER SQ. FT. I.E. FOR CONSI DERATION OF RS. 25,000/-, WORKED OUT THE LONG TERM CAPITAL GAIN AT RS. 95,85,816/- WHEREIN THE ASSESSEE WAS HAVING HIS SHARE OF RS. 13 ,69,402/-. THUS, WE FIND THAT AS ON 1.4.1981 THE ASSESSEE HAS TAKEN VALUE OF PLOT AT RS. 100/- PER SQ. FT. WHEREAS THE ASSESSING OFFICER HAS TAKEN IT AT RS. 17/- PER SQ.FT. BY REFERRING TO AN EXAMPLE WHICH IS NOT AT ALL COMPARABLE. THE COMPARABLE CASE TAKEN BY THE ASSESSING OFFICER IS OF ONE SHRI GYAS HUSSAL SARAF. THE PLOT WAS MEASURING 1410 SQ. FT. ONLY WHEREAS THE ASSESSEES PLOT WAS O F 23070 SQ. FT. WE ALSO FIND THAT THE ASSESSEES PLOT WAS LOCATED B Y THE SIDE OF AHMEDABAD PALACE, RESIDENCE OF ERSTWHILE RURAL OF B HOPAL ESTATE WHEREAS THE COMPARABLE CASE TAKEN BY THE ASSESSING OFFICER WAS FAR BEHIND THE PALACE. FURTHERMORE, THE ASSESSEES PLOT WAS ON THE MAIN ROAD WHEREAS COMPARABLE CASE TAKEN BY THE ASSE SSING OFFICER WAS FAR AWAY FROM THE MAIN ROAD SERVED WITH SMALL S ERVICE LANE. THE ASSESSEES LAND WAS JUST OPPOSITE THE FLAG HOUS E WHEREAS THE COMPARABLE CASE TAKEN BY THE ASSESSING OFFICER WAS NOT AT ALL CONCERNED WITH THIS. THERE IS NO DISPUTE TO THE FA CT THAT THE VALUE OF LAND IS ALWAYS DETERMINED AS PER ITS LOCATION WH ETHER ON THE MAIN ROAD OR ON SERVICE ROAD, NEAR TO THE LAND-MARK S OR AWAY FROM LAND-MARKS. THUS, WE FIND THAT COMPARISON MADE BY THE ASSESSING OFFICER WAS NOT PROPER AND HE HAS TAKEN T HE VALUE OF PLOT WHICH WAS SITUATED AT A VERY POOR POSITION AS DISCU SSED HEREINABOVE. KEEPING IN VIEW THE LOCATION OF THE AS SESSEES PLOT WHICH WAS ON THE MAIN ROAD, JUST OPPOSITE THE FLAG HOUSE AND BY THE SIDE OF AHMEDABAD PALACE RESIDENCE OF ERSTWHILE RURAL OF BHOPAL ESTATE, THE FAIR MARKET VALUE OF THIS PLOT T AKEN BY THE ASSESSEE AT RS. 100/- PER SQ. FT. AS ON 1.4.1981 WA S QUITE JUSTIFIED. THE APPLICATION OF METHOD OF COST INFLATION INDEX B ACKWARDS ALSO SUPPORTS THE RATE OF RS. 100/- PER SQ. FT. TAKEN BY THE ASSESSEE AS ON 1.4.1981. ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. XXXXXXXXXX XXXXXXXXX.. 48. FINALLY, THE APPEALS OF THE ASSESSEE ARE ALLOWE D IN PART, IN TERMS INDICATED HEREINABOVE WHEREAS APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED ON 31.1.2013. 7 IN THE LIGHT OF THE ABOVE, WE FIND THAT SEVEN CO-OW NERS OWNED THE PLOT OF 23070 SQ.FT., WHICH THEY RECEIVED IN HIBA ( GIFT) FROM THEIR FATHER I.E. SHRI MOHD. SHAFIQUE. THE TRIBUNAL HAS A LREADY DELIBERATED UPON THE FACTS AND SINCE THE ISSUE IS A RISING OUT OF THE SAME PLOT, THE TRIBUNAL HAS ALREADY DELETED THE ADD ITION MADE BY THE LD. ASSESSING OFFICER (AS REPRODUCED HEREINABOV E). IN THE ABSENCE OF CONTRARY FACTS/DECISION, FOLLOWING THE A FORESAID ORDER, WE FIND MERIT IN THE APPEAL OF THE ASSESSEE. THE ORDER OF THE LD. CIT(A) IS REVERSED ON THIS ISSUE. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT THE CONCLUS ION OF THE HEARING ON 6.6.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6.6.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYAS!