The ACWT., Circle-10, Ahmedabad V. Shri Karsanbhai Khodidas Patel,HUF, Ahmedabad

MA 159/AHD/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7322 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 08-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K VORA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Fair market value; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI MUKUL KUMAR SHRAWAT, JM AND SHRI A. MO HAN ALANKAMONY, AM) MA NO. 159/AHD/2010 (IN WTA NO.31/AHD/2007: A.Y.: 2003-04) THE A. C. I. T., CIRCLE-10, ROOM NO.117, 1 ST FLOOR, NARAYAN CHAMBER, AHMEDABAD VS M/S. KARSANBHAI KHODIDAS PATEL (HUF), NIRMA HOUSE, AHMEDABAD PA NO. AAAHP 7025 G (APPLICANT) (RESPONDENT) APPLICANT BY SHRI R. K. VORA, SR. DR RESPONDENT BY SHRI S. N. SOPARKAR AND MS. URVASHI SHODHAN, AR DATE OF HEARING: 09-12-2011 DATE OF PRONOUNCEMENT: 16-12-2011 O R D E R PER MUKUL KUMAR SHRAWAT: THIS MISC. PETITION OF THE REVENUE HAS BEEN FILED ON 08-07-2010, ARISING FROM THE ORDER OF THE ITAT DATED 22.5.2009, WHEREIN IT WAS STATED THAT TH E AO HAD MADE A REFERENCE TO DVO AND ON THE BASIS OF THE SAID VALUA TION REPORT AN ASSESSMENT WAS MADE. THE SAID ASSESSMENT WAS COMPLE TED U/ 16(3) OF THE IT ACT VIDE ORDER DATED 02-02-2006. AGAINST THE ADDITION, IN THE WEALTH-TAX ASSESSMENT OF THE ASSESSEE, THE MATTER W AS CARRIED UP TO THE SECOND STAGE OF APPEAL AND AS PER THIS MISC. PE TITION OF THE REVENUE, THE TRIBUNAL HAD FAILED TO CONSIDER FEW FA CTS AND, THEREFORE, COMMITTED A MISTAKE WHICH IS POINTED OUT IN THE FOL LOWING MANNER: 2 (I) THE HONBLE ITAT HAS COME TO CONCLUSION THAT THE SAID PLOT IS NOT CHARGEABLE TO TAX MERELY ON THE BASIS OF REPORT OF APPROVED VALUER THAT CONSTRUCTIO N OF BUILDING IS NOT PERMISSIBLE AND NOT ON ANY SUPPORTING DOCUMENTARY EVIDENCE LIKE GOVT. NOTIFICATION ETC. THIS OBSERVATION OF THE ITAT IS N OT CORRECT. (II) THE ASSESSEE HAS ON ITS OWN HAS NOT ONLY OFFER ED THE PROPERTY TO WEALTH TAX IN THE RELEVANT ASSESSMENT YEAR BUT ALSO IN THE EARLIER YEARS, AND SUBSEQUENTLY IT HAS OFFERED TO TAX THE CAPITAL GAIN ARISING OUT OF SALE OF THE SAID PROPERTY (A.YR. 200 5- 06). NOW THE ASSESSEES CLAIM THAT IT IS NOT CHARGEABLE TO TAX IS ONLY WITH THE SOLE INTENTION T O EVADE TAX AND ITS CLAIM THAT THE SAID LAND IS NOT CHARGEABLE TO WEALTH WAS UNSUBSTANTIATED AND HENCE ITATS FINDING THAT THE LAND IN QUESTION HAVE NO VALUE IS TOTALLY OPPOSED TO THE FACTS AND REALIT Y. (III) THE ITAT HAS FAILED TO CONSIDER AND APPRECIAT E THE FACT THAT THE DVOS REPORT WHICH CLEARLY STATES THA T THE PLOT IS NOT UNBUILDABLE AS HAS BEEN CLAIMED BECAUSE THE CONSTRUCTION ON THIS PLOT HAS BEEN PERMITTED WITH THE ONLY RIDER THAT THERE SHOULD BE NO CONSTRUCTION UPTO A DISTANCE OF 9 MTRS FROM THE HIG H TENSION LINES . 3 (IV) THE MOST SIGNIFICANT ASPECT IS THAT THE ITAT H AS NOT CONSIDERED THAT IF THE LAND HAS NO UTILITY VALUE A S CLAIMED, THEN HOW COME THE ASSESSEE HAS SOLD THE PROPERTY AND REALIZED MONEY DURING F. Y. 2004-05 (ASST. YR. 2005-06). (V) THE ITAT HAS NOT CONSIDERED AND APPRECIATED THE FACT THAT THE DVOS VALUATION REPORT IS BASED ON SA LE INSTANCES IN NEARBY AREA. AFTER TAKING INTO ACCOUNT ALL THE ADVERSE FACTORS, THE DVO APPLIED ONLY THE LAND RATES OF RS.5,257/- PER SQ. MTR. FOR THE PLOT NO.227 AND OF RS.5,841/- PER SQ. MTR. FOR PLOT NO.231 FOR VALUATIOIN OF LAND IN QUESTION AS AGAINS T THE HIGHEST SALE RATE AVAILABLE AT RS.10,765.43 PER SQ. MTR. IN RESPECT OF SALE OF NEARBY LAND. WHEREAS VALUATION REPORT OF THE APPROVED VALUED WAS BASED PURELY ON AD-HOC VALUATION WHICH IS NOT AT ALL ACCEPTABLE AS IT IS NOT SUPPORTED BY ANY EVIDENCE. WHEREAS DVOS REPORT IS BASED ON SALE INSTANCES OF NEAR BY PLOT AND FAIR MARKET VALUE HAS BEEN ARRIVED AT AFTER GRANTING DEDUCTION IN RESPECT OF A LL ADVERSE FEATURES AND IMPEDIMENTS OF THE PROPERTY. 2. LEARNED DR, MR. A. K. VORA HAS PLACED RELIANCE O N THE MISC. PETITION AND SUBMITTED THAT DUE TO MISUNDERSTANDING OF FACTS THE TRIBUNAL HAS COMMITTED A MISTAKE WHICH IS RECTIFIAB LE. 4 3. ON THE OTHER HAND, FROM THE SIDE OF THE RESPOND ENT ASSESSEE, LEARNED AR, MR. S. N. SOPARKAR AND MS. URVASHI SHOD HAN APPEARED AND AT THE OUTSET STATED THAT IN THE IMPUGNED ORDER OF THE TRIBUNAL AN ANOTHER ORDER OF THE TRIBUNAL WAS SIMPLY FOLLOWED. HE HAS REFERRED TO PARA 3 OF THE IMPUGNED ORDER OF THE TRIBUNAL WHEREI N THERE WAS A REFERENCE OF THE SAID ANOTHER ORDER OF THE TRIBUNAL IN WTA NOS. 14 TO 18/AHD/2006 DATED 30.1.2009. THE LEARNED ARS HAVE A LSO STATED THAT A CONSCIOUS DECISION WAS TAKEN AFTER DUE CONSIDERAT ION OF THE DVOS REPORT, THEREFORE, NO MISTAKE WAS COMMITTED. 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE PARTIES WE ARE OF THE CONSIDERED VIEW THAT THE SCOPE U/S 254 (2) OF THE I T ACT IS VERY LIMITED AND THERE IS NO POWER OF THE TRIBUNAL TO REVIEW AN EARLIER ORDER. A MISTAKE WHICH SHOULD BE APPARENT AND EX-FACIE RECTI FIABLE CAN ONLY BE ENTERTAINED U/S 254(2) OF THE IT ACT. AS FAR AS THE PRESENT ISSUE IS CONCERNED WE HAVE ASKED A QUESTION THAT WHETHER THE REVENUE HAD DISPUTED THE FACTS BY FILING A MISC. PETITION AGAIN ST THE SAID ORDER OF THE TRIBUNAL DATED 30-01-2009, REFERRED TO ABOVE (S UPRA), WHICH WAS FOLLOWED BY THE RESPECTED COORDINATE BENCH IN THE I MPUGNED ORDER DATED 22-05-2009. THE LEARNED ARS HAVE MADE A STAT EMENT BEFORE US THAT NO MISC. PETITION WAS FILED BY THE REVENUE AGAINST THE SAID ORDER. AS FAR AS THE FACTS ARE CONCERN, WE HAVE NOT ED THAT IN THE SAID ORDER THE FACTS WERE DULY BEING APPRECIATED AS ALSO CONSIDERED AS IS EVIDENT FROM PARA 2 OF THE SAID ORDER, WHICH WAS EX PRESSED IN THE IMPUGNED ORDER OF THE TRIBUNAL, FOR REFERENCE REPRO DUCED BELOW: 5 (2) THE HIGH TENSION ELECTRIC GRID LINE OF 66 K V IS PASSING DIAGONALLY THROUGH THE SAID PLOT OF LAND. A S PER ELECTRICITY REGULATION, NO CONSTRUCTION IS PERMISSI BLE UP TO A DISTANCE OF 9 METERS ON EITHER SIDE FROM THE HIGH TENSION LINES. THIS FACTOR HAS NOT BEEN DISCOUNTED AND SUCH ADVERSE FEATURE DOES NOT APPLY TO THE COMPARAB LE SALE INSTANCES RELIED UPON BY THE DVO. (3) DUE TO BRICK BHATTA ON THE SAID PLOT OF LAND, THE SAME IS 5 FT. BELOW THE SURROUNDING LEVELED LANDS AND WATER LOGS IN DURING RAINING TIMES. SUCH ADVERSE FEATURE ALSO DOES NOT APPLY TO THE SALE INSTANCES RELIED BY THE DVO. (4) DUE TO RESERVATION NO CONSTRUCTION IS PERMISSIBLE. A LAND HAS NO NO BUILDING CAN BE CONSTRUCTED THEREON. THE LAND CAN OTHERWISE BE USED FOR AGRICULTURAL PURPOSES AND IT IF IS USED FOR AGRICULTURAL PURPOSES, THE VALUE CANNOT BE ON THE BASIS OF OTHER COMPARABLE SALE INSTANCES. CONSIDERING ALL THESE ADVERSE FEATURES THE VALUE ADOPTED BY THE APPROVED VALUER IS FAR MORE REASONABLE THAN THE VALUE ADOPTED BY THE DVO ON THE BASIS OF COMPARABLE SALE INSTANCES NEARBY PLOTS, IN FACT THE DVO IS TRYING TO COMPARE LIKE WI TH UNLIKE OR TOTALLY DIFFERENT KIND OF PROPERTY. THE 6 COMPARISON NOT BEING WITH THE SIMILAR FEATURES AS APPEARING IN THE PRESENT PROPERTY CANNOT BE CONSIDERED AS TRULY COMPARABLE. EVEN AFTER A PERIOD OF THREE YEARS, THE ASSESSEE COULD SELL THE LAND ON LY @ RS.3500/- PER SQ. MTR. THE CAPITAL AGAIN OFFERED ON THE BASIS OF SAID VALUATION HAS BEEN ACCEPTED AS SUCH. THIS ALSO INDICATES THAT THE VALUATION ADOPTE D BY THE COMMISSIONER ON THE BASIS OF DVOS REPORT AT THE RATE OF RS.5257/- PER SQ. MTR. AND RS.5841/- PER SQ MTR. IS TOO HIGH. OVER THIS PERIOD OF 3 YEAR S I.E. BETWEEN 2002 AND 2005 THE VALUE OF OPEN PLOT OF LAND HAS INCREASED PHENOMENALLY AND EVEN AFTER SUCH INCREASE THE ASSESSEE COULD REALIZE ONLY RS.3500/- PER SQ. MTR. ALL THESE FACTORS SHOW THAT THE VALUATION AS DONE BY THE APPROVED VALUER IS FAR MORE REASONABLE AND NEEDS TO BE ACCEPTED. WE, THEREFORE, DO NOT FIND ANY ERROR MUCH LESS AN ERROR PREJUDICIAL TO THE INTERESTS OF REVENUE IN THE ASSESSMENT ORDERS FRAMED BY THE ASSESSING OFFICER. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDERS AND RESTORE THAT OF THE ASSESSING OFFICER. 1 5. IN THE RESULT, ALL THE APPEALS ARE ALLOWED. IN THE LIGHT OF THE ABOVE REFERENCE AS ALSO THE DIS CUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT ONCE THE TRIBUNAL HAS FOLL OWED ITS EARLIER ORDER AND THAT ORDER OF THE TRIBUNAL HAS NOT BEEN C ONTROVERTED BY THE REVENUE AND THAT THE FACTS HAVE BEEN DULY APPRECIAT ED AND THEREAFTER 7 ARRIVED AT A JUDICIAL DECISION, THEREFORE, THE MISC . PETITION MOVED BY THE REVENUE DESERVES TO BE DISMISSED. WE HOLD ACCOR DINGLY. 5. IN THE RESULT, THE MISC. APPLICATION FILED BY TH E REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. 16-12-2011 SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (MUKUL KR. SHRAWAT) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER //TUE COPY// D Y. REGISTRAR, ITAT, AHMEDABAD