Smt Mangalam Chandra Gupthan, Trivandrum v. ACIT(H), Trivandrum

1 ITA NO. 571/COCH/2009 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.TA NO. 571/COCH/2009 (ASSESSMENT YEAR 2006-07) SMT. MANGALAM CHANDRA GUPTHAN VS THE A.C.I.T. (H) TC-16/1071 NIKUNJAM ESTATE TRIVANDRUM JAGATHY TRIVANDRUM PAN : ADAPC4754E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.M. SREEDHARAN SR COUNSEL RESPONDENT BY : SMT. VIJAYAPRABHA DATE OF HEARING : 21-03-2012 DATE OF PRONOUNCEMENT : 29-03-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(A) TRIVANDRUM DATED 07-09-2009 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ESTIM ATION OF FAIR MARKET VALUE AS ON 01-04-1981 FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN. 3. SHRI T.M. SREEDHARAN THE LD.SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE TOOK THE FAIR MARKET VALUE AS ON 01-04-198 1 AT RS.45 000 PER CENT. HOWEVER THE ASSESSING OFFICER HAS TAKEN THE FAIR MARKET VAL UE AS ON 01-04-1981 AT RS.22 500. THE LD.REPRESENTATIVE SUBMITTED THAT NOW THE ASSESSEE G OT THE VALUATION REPORT FROM THE REGISTERED VALUER WHO FIXED THE VALUE AT RS.27 000 PER CENT. ACCORDING TO THE LD.SENIOR 2 ITA NO. 571/COCH/2009 COUNSEL THE ASSESSEE WAS ABLE TO GET THE VALUATION REPORT FROM THE REGISTERED VALUER ONLY RECENTLY; THEREFORE IT COULD NOT BE PRODUCED BEFORE THE LOWER AUTHORITIES. THE VALUATION OFFICER HAS TAKEN THE COMPARABLE TRANSACT ION IN THE LOCALITY AND ESTIMATED THE FAIR MARKET VALUE AS ON 01-04-1981 AT RS.27 000 PER CENT. THEREFORE THIS REPORT OF THE VALUATION OFFICER MAY BE TAKEN INTO CONSIDERATION. 4. ON THE CONTRARY SMT. VIJAYAPRABHA THE LD.DR SU BMITTED THAT NO DOUBT THE ASSESSEE CLAIMED THE FAIR MARKET VALUE AS ON 01-04- 1981 AT RS.45 000 PER CENT. THE ASSESSING OFFICER AFTER TAKING INTO CONSIDERATION THE LOCATION OF THE PROPERTY ROAD FRONTAGE PROXIMITY TO THE TOWN HAS FIXED THE VALUE AT RS.22 500 AS ON 01-04-1981. ACCORDING TO THE LD.DR THE VALUATION REPORT WAS NO T FILED BEFORE THE LOWER AUTHORITIES; THEREFORE IT COULD NOT BE ACCEPTED AT THIS STAGE. SINCE THE ASSESSING OFFICER HAS TAKEN THE FAIR MARKET VALUE AFTER TAKING INTO CONSIDERATI ON ALL THE FACTORS WHICH ARE NECESSARY TO BE CONSIDERED NO INTERFERENCE IS CALLED IN THE ORDER OF THE COMMISSIONER OF INCOME- TAX(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICE R AFTER TAKING INTO CONSIDERATION THE LOCATION OF THE PROPERTY ROAD FRONTAGE PROXIMITY TO THE TOWN HAS FIXED THE FAIR MARKET VALUE AS ON 01-04-1981 AT RS.22 500 AS AGAINST RS.4 5 000 CLAIMED BY THE ASSESSEE. IT IS WELL SETTLED PRINCIPLES OF LAW THAT FOR THE PURPOSE OF ESTIMATING THE FAIR MARKET VALUE VARIOUS FACTORS SUCH AS THE LOCALITY OF LAND INFRA STRUCTURE FACILITIES AVAILABLE AROUND THE LAND ROAD FRONTAGE PROXIMITY TO THE TOWN OPPORTU NITIES FOR FUTURE DEVELOPMENT COMPARABLE CASES OF THE SAME LOCALITY GUIDELINE VA LUE FIXED BY THE STATE GOVERNMENT FOR THE PURPOSE OF SALE OF THE LAND ETC. HAS TO BE CON SIDERED. IN THIS CASE THE ASSESSING OFFICER HAS TAKEN INTO CONSIDERATION ONLY THE LOCAL ITY OF THE LAND ROAD FRONTAGE AND PROXIMITY TO THE TOWN. THE OTHER FACTORS SUCH AS O PPORTUNITY FOR FUTURE DEVELOPMENT GUIDELINE VALUE COMPARABLE CASES IN THE LOCALITY W ERE NOT TAKEN INTO CONSIDERATION. THEREFORE THE MATTER NEEDS TO BE RECONSIDERED BY T HE ASSESSING OFFICER BY TAKING INTO 3 ITA NO. 571/COCH/2009 CONSIDERATION ALL THE FACTORS WHICH ARE RELEVANT FO R THE PURPOSE OF FIXING THE FAIR MARKET VALUE AS ON 01-04-1981. WE MAKE IT CLEAR THAT THE FAIR MARKET VALUE IS NOT A CONSTANT FIGURE. THE FAIR MARKET VALUE WOULD FLUCTUATE DEPE NDING UPON VARIOUS FACTORS AS NARRATED ABOVE. MARKET PRICE IS NOTHING BUT AN AGR EED PRICE BETWEEN A WILLING SELLER AND WILLING PURCHASER. THEREFORE THE FAIR MARKET VALUE HAS TO BE FIXED NOTIONALLY TAKING INTO CONSIDERATION ALL THE RELEVANT FACTORS. IN TH IS VIEW OF THE MATTER THE REGISTERED VALUERS REPORT CAN ALSO BE TAKEN INTO CONSIDERATIO N BY THE ASSESSING OFFICER AS ONE OF THE FACTORS FOR THE PURPOSE OF FIXING THE FAIR MARK ET VALUE AS ON 01-04-1981. 6. IN VIEW OF THE ABOVE DISCUSSION THIS TRIBUNAL I S OF THE OPINION THAT THE ASSESSING OFFICER HAS TO RECONSIDER THE ISSUE AFRESH AND FIX THE FAIR MARKET VALUE IN THE LIGHT OF ABOVE DISCUSSION. ACCORDINGLY THE ORDERS OF LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSUE OF FAIR MARKET VALUE AS ON 01-04-1981 IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL REC ONSIDER THE ISSUE AFRESH AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MARCH 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN DT : 29 TH MARCH 2012 PK/- COPY TO: 1. SMT. MANGALAM CHANDRA GUPTHAN TC-16/1071 NIKUNJAM ESTATE JAGATHY TRIVANDRUM 2. THE ASSIST.COMMISSIONER OF INCOME-TAX (HQ) TRIVAN DRUM 3. THE COMMISSIONER OF INCOME-TAX(A)-I TRIVANDRUM 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR INCOME-TAX APPELLATE TRIBUNAL COCHIN BENCH