M/s. Natraj, Ahmedabad V. The Dy.CIT, Circle-10, Ahmedabad

MA 5/AHD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1556 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 13-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA SRDR
• Assessee Lawyers: R C SHAH
• Keywords: Fair market value; Valuation report

Judgement Text

, , , , A, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) MA NO.05/AHD/2014 IN ITA NO.3063/AHD/2010 [ASSTT.YEAR : 2007-2008] M/S.NATRAJ 23, THAKOREBHAI TOWERS OPP: KHADI SARITA LAW GARDEN, ELLISBRIDGE AHMEDABAD. /VS. DCIT, CIR.10 AHMEDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI R.C. SHAH + 2 3 )/ REVENUE BY : SHRI O.P.BATHEJA, SR.DR 5 2 &(*/ DATE OF HEARING : 21 ST MARCH, 2014 678 2 &(*/ DATE OF PRONOUNCEMENT : 27-03-2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: BY THIS MISC. APPLICATION, THE ASSESSEE HAS REQUESTED FOR RECTIFICATION IN THE ORD ER OF THE TRIBUNAL IN ASSESSEES APPEAL FOR A.Y.2007-08 DATED 4.1.2013 IN ITA NO.3063/AHD/2010. 2. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THAT THERE WERE TWO APPARENT MISTAKES COMMITTED BY THE TRIBUNAL WHI LE PASSING THE MA NO.05/AHD/2014 -2- IMPUGNED APPELLATE ORDER. THE FIRST MISTAKE, AS PO INTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT, SOMEHOW THE TRIB UNAL HAS GATHERED AN IMPRESSION THAT THE APPROVED VALUER HAS NOT MADE AN Y DEDUCTION ON ACCOUNT OF THE ASSESSEE HAVING ONLY LEASE HOLD RIGH TS AND NOT FULL OWNERSHIP RIGHTS, WHILE VALUING FAIR MARKET VALUE A S ON 1.4.1981. HE POINTED OUT THAT THE APPROVED VALUER OF THE ASSESSE E HAS WORKED OUT THE CAPITALIZED VALUE OF THE ANNUAL LEASE RENT AT RS.3, 23,500/- OF THE PROPERTY IN QUESTION, BEING A LEASEHOLD PROPERTY AND THE SAM E WAS DULY DEDUCTED FROM THE TOTAL VALUE OF FREE HOLD LAND WORKED OUT A T RS.60,98,400/- BY ADOPTING THE RATE OF RS.1200/- PER SQUARE YARD IN R ESPECT OF THE LAND MEASURING 5082 SQ.YARDS. HE REFERRED TO SOME COLUM NS OF THE VALUATION REPORT OF THE APPROVED VALUER WHEREIN IN THE DESCRI PTION OF THE PROPERTY THE WORDS LEASEHOLD LAND WERE MENTIONED. THE LEARNED DR HAS RELIED ON THE ORDER OF THE TRIBUNAL. 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS WITH RESPEC T TO THE FIRST MISTAKE, AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE. WE FIND THAT THE TRIBUNAL IN PARA-8 OF ITS APPELLATE ORDER, HAS RECORDED THAT THE APPROVED VALUER OF THE ASSESSEE HAS NOT MADE SUITAB LE DEDUCTION ON ACCOUNT OF THE ASSESSEES RIGHT IN THE LAND BEING O NLY THAT OF LEASE FOR 98 YEARS AND THE ASSESSEE NOT BEING THE OWNER THEREOF. WE FIND THAT THE APPROVED VALUER OF THE ASSESSEE HAS DETERMINED THE MARKET VALUE OF THE LAND IN QUESTION AS ON 1.4.1981 OF THE LEASE HOLD R IGHTS OF THE ASSESSEE AT RS.57,75,000/-, WHEREAS THE TOTAL VALUE OF 5082 SQU ARE YARDS OF THE FREE HOLD LAND HAS BEEN DETERMINED AT RS.60,98,400/- BY MULTIPLYING 5082 SQ.YARDS WITH RS.1200/- PER SQUARE YARD. THIS DEDU CTION OF RS.3,23,500/- OUT OF TOTAL LAND VALUE OF RS,.60,98,400/- ON ACCOU NT OF LAND BEING LEASE HOLD LAND AND THE ASSESSEE BEING A MERELY A LESSEE, IS CLEARLY UNJUSTIFIED, SINCE VERY LITTLE DEDUCTION HAS BEEN MADE ON ACCOUN T OF THE ASSESSEE BEING MA NO.05/AHD/2014 -3- LESSEE ONLY, SO AS TO CLAIM A HIGHER VALUATION OF THE LAND VALUE, AS COST AS ON 1.4.1981. THE TRIBUNAL HAS PASSED A WELL REASO NED ORDER ON THIS ISSUE AND MODIFICATION THEREIN SHALL AMOUNT TO REVIEW OF THE TRIBUNAL ORDER, WHICH IS NOT PERMISSIBLE UNDER THE SCHEME OF THE AC T. ACCORDINGLY, THERE BEING NO MISTAKE APPARENT FROM THE RECORD, ON THIS ISSUE, THE FIRST MISTAKE POINTED OUT BY THE ASSESSEE IS REJECTED. 4. THE SECOND MISTAKE, APPARENT FROM THE ORDER OF T HE TRIBUNAL, AS PER LEARNED COUNSEL FOR THE ASSESSEE WAS THAT, ON THE D ATE OF SALE, 40 YEARS HAD ELAPSED FROM THE DATE OF LEASE DEED, WHEREAS, ON TH E RELEVANT VALUATION DATE OF 1.4.1981, ONLY 15 YEARS HAD ELAPSED AND 83 YEARS WERE REMAINING FROM THE DATE OF LEASE DEED, AND THEREFORE, BASED O N THE NUMBER OF YEARS OF LEASE PERIOD ELAPSED AND REMAINING, THE FULL RATE O F RS.1200/- PER SQ.YARD SHOULD HAVE BEEN ADOPTED PRO-RATA I.E. 83/98 IN FAV OUR OF THE ASSESSEE, WHICH COMES TO RS.1016/- AS AGAINST RS.800/- ADOPTE D BY THE TRIBUNAL. THE LEARNED DR HAS RELIED ON THE ORDER OF THE TRIBU NAL. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS ON THIS ISS UE. WE FIND THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL ON THIS ISSUE. THE TRIBUNAL IN PARA-8 OF THE APPELLATE ORDER HAS CONSIDERED ALL THE FACTS AND HAS SPECIFICALLY NOTED THAT THE ASSESSEE WAS HAVING ONL Y LEASEHOLD RIGHTS IN THE LAND, AND WAS NOT THE OWNER THEREOF, AND THAT THE V ALUE OF THE LAND ESTIMATED AT RS.1200/- PER SQUARE YARD AS ON 1.4.19 81, MAY BE REASONABLE FOR FREE-HOLD LAND BUT THE VALUE OF THE FREE HOLD LAND COULD NOT BE EQUATED WITH THE VALUE OF LEASEHOLD RIGHTS OF LESS EE IN A PARTICULAR PIECE OF LAND. THE TRIBUNAL HAS CONSIDERED ALL THE FACTS AND CIRCUMSTANCES OF THE CASE IN DETAIL IN THE ORDER AND HAS SPECIFICALLY ME NTIONED IN PARA-8 OF ITS APPELLATE ORDER THAT LEASE PERIOD OF 15 YEARS ONLY HAS PASSED AS ON THE RELEVANT VALUATION DATE OF 1.4.1981, AS THE LEASE D EED WAS EXECUTED ON MA NO.05/AHD/2014 -4- 15.9.1966 CONVEYING THE LEASE HOLD RIGHTS ON THE AS SESSEE FOR A PERIOD OF 98 YEARS. THE TRIBUNAL HAS, IN THE SAME PARA-8 OF ITS APPELLATE ORDER, HELD THAT CONSIDERING ENTIRE FACTUAL MATRIX OF THE FACTS OF THE CASE THAT FAIR MARKET VALUE OF THE LAND IN QUESTION AS ON 1.4.1981 HAS BEEN REASONABLY ESTIMATED AT RS.1200/- BY THE APPROVED VALUER AS ON 1.4.1981, IT SHALL BE FAIR AND JUSTIFIED TO VALUE THE LEASEHOLD RIGHTS OF THE ASSESSEE IN THE LAND AS ON 1.4.1981 AT RS.800/- PER SQUARE YARD AFTER MAKIN G SUITABLE DEDUCTION ON ACCOUNT OF THE LAND NOT BEING FREE HOLD AND THE AS SESSEES RIGHT BEING THAT OF LESSEE FOR LONG PERIOD OF TIME. THE CONTENTIO N OF THE ASSESSEE IS THAT, FULL VALUE OF THE LAND AT RS.1200/- PER SQUARE YARD SHOULD BE ADOPTED PRO- RATA I.E. 83/98 IN FAVOUR OF THE LESSEE WHICH COM ES TO RS.1016/- AGAINST RS.800/- ADOPTED BY THE TRIBUNAL, IS DEVOID OF ANY MERIT FOR THE REASON THAT FULL RATE OF RS.1200/- PER SQUARE YARD AS ON 1.4.19 81 OF THE LAND IN QUESTION WAS DETERMINED AS JUSTIFIED BY THE TRIBUNAL WITH RE GARD TO FREE HOLD LAND, AND CONSIDERING ENTIRE FACTUAL MATRIX OF THE FACTS, AND IN PARTICULAR, THE FACT THAT THE ASSESSEE IS MERELY LESSEE OF THE LAND, W ITH 83 YEARS OF REMAINING PERIOD OF LEASE, THE VALUE WAS ESTIMATED BY THE TRI BUNAL OF THE LEASE HOLD RIGHTS IN THE LAND IN QUESTION AT RS.800/- PER SQUA RE YARD. THE TRIBUNAL HAS PASSED A WELL REASONED ORDER, AND ANY MODIFICATION THEREIN SHALL AMOUNT TO REVIEW OF THE SAME, WHICH IS OUTSIDE THE JURISDICTI ON OF THE TRIBUNAL, AND ACCORDINGLY, THE SECOND MISTAKE POINTED OUT BY THE ASSESSEE, BEING WITHOUT ANY MERIT IS REJECTED. 6. IN THE RESULT, THE MA PREFERRED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT