The ITO, Ward-14(2),, Ahmedabad v. Shri Vishnuprasad Vijayshankar Mehta, Ahmedabad

ITA 796/AHD/2008 | 2005-2006
Pronouncement Date: 31-01-2011 | Result: Dismissed

Appeal Details

RSA Number 79620514 RSA 2008
Assessee PAN ABHPM8647D
Bench Ahmedabad
Appeal Number ITA 796/AHD/2008
Duration Of Justice 2 year(s) 10 month(s) 28 day(s)
Appellant The ITO, Ward-14(2),, Ahmedabad
Respondent Shri Vishnuprasad Vijayshankar Mehta, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-01-2011
Date Of Final Hearing 27-01-2011
Next Hearing Date 27-01-2011
Assessment Year 2005-2006
Appeal Filed On 03-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER AND SHRI A.N.PHAUJA ACCOUNTANT MEMBER ITA NO.796/AHD/2008 ASSESSMENT YEAR:2005-06 DATE OF HEARING:27.1.11 DRAFTED:28.1.11 INCOME TAX OFFICER WARD-14(2) 6 TH FLOOR NATURE VIEW BUILDING NR. H.K. HOUSE ASHRAM ROAD AHMEDABAD V/S. SHRI VISHNUPRASAD VIJAYSHANKAR MEHTA OPP.MANIKESHWAR MAHADEV NR. MANINAGAR CHAR RASTA AHMEDABAD -8 PAN NO.ABHPM8647D (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI DR. RAJARAM SAH SR-DR RESPONDENT BY:- SHRI P.F. JAIN AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-XXI AHMEDABAD IN APPEAL NO. CI T(A)-XXI/ ABD/ 169 / 07-09 DATED 18-12-2007. THE ASSESSMENT WAS FRAMED B Y ITO WARD-14(2) AHMEDABAD U/S 143(3) OF THE INCOME-TAX ACT 1961 (H EREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30-03-2007 FOR THE ASSESSMENT YEAR 2005-06. 2. THE TWO INTER-CONNECTED ISSUES IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) IN COMPUTING THE LONG TERM CAPITAL GAINS BY ADOPTING ENHANCING VALUE OF COST OF ACQUISITION AS ON 01-04 -1981 AND ALSO SALE ITA 796/AHD/2008 A.Y. 05-06 ITO WD-14(2) ABD V. SH VISHNUPRASAD V MEHTA PAGE 2 CONSIDERATION AS ON THE DATE OF SALE. FOR THIS REV ENUE HAS RAISED THE FOLLOWING THREE EFFECTIVE GROUNDS :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.18 10 836/- MADE BY THE A.O UNDER THE HEAD L ONG TERM CAPITAL GAIN. 2. THE LD. CIT(A) ERRED IN IGNORING THE MARKET VALU E OF THE PROPERTY ADOPTED BY THE D.V.O AT RS.7500/- PER SQ.MT. CONSID ERING12% RISE PER YEAR AFTER CONSIDERING THE JANTRI RATE OF RS.5000/- PER SQ.MT. FIXED IN 1999. 3. THE LD. CIT(A) FURTHER ERRED IN IGNORING THE VAL UE ADOPTED BY THE A.V.O AT RS.10 PER SQ.MT./AS ON 01.04.1981 TO ARRIV E AT THE COST OF ACQUISITION. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSEE IS A PENSIONER AND DURING THE YEAR UNDER CONSIDERATION H E HAS DISCLOSED INCOME FROM PENSION INCOME FROM HOUSE PROPERTY LOSS FROM LONG TERM CAPITAL GAINS AND ALSO INCOME FROM OTHER SOURCES. THE ASSESSEE IS ONE OF THE NINE CO- OWNERS IN RESPECT OF SALE OF LAND BEARING TPS NO.4 FP NO.141 PAIKE HISSA NO.33 & 34 AD MEASURING 1214.19 SQ. MT HAVING 20% S HARE AND RECEIVED AS PER HIS SHARE RS.12.20 LAKH OUT OF TOTAL SALE CONSI DERATION OF RS.61 LAKH AS PER SALE DEED EXECUTED ON 10-09-2004 HAVING REGISTRATIO N NO.3247 AND 1/5 TH VALUE OF LAND AS ON 01-04-1981 WAS DETERMINED AT RS .2 54 910/- AS PER VALUATION REPORT DATED 07-03-2005. THE ASSESSING OF FICER FOR THE PURPOSE OF ASSESSING LONG TERM CAPITAL GAINS REFERRED SALE CON SIDERATION FOR VALUING THE SAME U/S.142(A) OF THE ACT TO IN THE YEAR OF SALE. THE DISTRICT VALUATION OFFICER INCOME-TAX DEPARTMENT VIDE LETTER DATED 10-12-2006 ESTIMATED THE VALUE OF ENTIRE LAND AT RS.91 06 425/- AND ALSO MENTIONED TH AT THE RATE IN THE YEAR 1981 WAS AT RS.10/- PER SQ.MT. ON THIS BASIS THE AO EST IMATED THE LONG TERM CAPITAL GAINS AT RS.18 10 836/- BY GIVING FOLLOWING FINDINGS AT PAGES-4-5 OF HIS ASSESSMENT ORDER:- THE DEPARTMENTAL VALUER HAS TAKEN PRICE OF RS.10/- PER SQ. METRE AS ON 1.4.1981 AND ACCORDINGLY THE TOTAL COST OF ACQUISIT ION WILL BE RS.10 X ITA 796/AHD/2008 A.Y. 05-06 ITO WD-14(2) ABD V. SH VISHNUPRASAD V MEHTA PAGE 3 243=RS.2430/- AS ON 1.4.12981 AND COST OF LAND PER SQUARE YARD SHOWS THE FOLLOWING COMPUTATION OF COST OF ACQUISITION OF THE LAND. AFTER CONSIDERING THE INDEXATION THE INDEXED COST FOR A. Y 2005-06 WORKS OUT TO RS.11 664/- THE DEPTT. VALUERS REPORT OF THE VALUATION OF LAND AS ON 1.4.1981 SHOWS THE FOLLOWING COMPUTATION OF COST OF ACQUISITION OF THE LAND. RATE OF LAND RS.10/- PER SQ.METER LAND OF THE ASSESSEE RS.243 SQ.METRE TOTAL VALUE RS.243 X 10 =2430/- COST OF INDEXATION 2430 X 480 = 11664 100 SIMILARLY THE DEPARTMENTAL VALUER HAS VALUED THE CO ST OF SALE AT RS.7500/- PER SQ. MT. WHICH IS A POSH LOCALITY LIKE MANINAGAR AT AHMEDABAD. CONSIDERING THIS VALUE THE TOTAL SALE V ALUE OF THE LAND WILL BE RS.18 22 500/- ON THE DATE OF SALE. THE WORKING IS AS UNDER:- RATE PER SQ. MT. RS.7500/- RS. 7500 X 243 = RS.18 22 500/- LESS: INDEXATION RS. 11 644/- RS.18 10 836/- 4. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT( A). THE CIT(A) DELETED THE ADDITION BY GIVING FOLLOWING FINDINGS I N AT PAGES-7 TO 9 OF HIS APPELLATE ORDER:- I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER OBSERVATION MADE BY THE A.O. WHILE ARRIVING AT THE COST OF ACQUISITI ON IN 1981. I HAVE ALSO GONE THROUGH THE VALUATION REPORT BY MR. N.P.PARMAR AS WELL AS VALUATION MADE BY THE DEPARTMENTAL VALUER. DURING T HE COURSE OF APPELLATE PROCEEDINGS IT WAS BROUGHT TO MY NOTICE B Y THE COUNSEL OF THE APP THAT HE WAS NOT GIVEN SUFFICIENT TIME TO REPLY TO THE DVOS REPORT AND THE OBJECTION FILED BEFORE THE A.O WAS NOT CONS IDERED BY THE A.O. IN THIS REGARD I WROTE A LETTER DTD. 02.11.2007 TO TH E DVO REGARDING THE ADOPTION OF RATE AT RS.10 PER SQ. METER IN 12981 AN D TO FURNISH SALE INSTANCES REGISTER. SIMILARLY SALE INSTANCE IN THIS PARTICULAR AREA IN THE YEAR 2004 AS REGISTERED WITH THEIR JANTRI WAS REQUE STED TO BE PRODUCED. I ALSO REQUESTED TO THE DVO TO PRODUCE BEFORE THE UND ERSIGNED SALE ITA 796/AHD/2008 A.Y. 05-06 ITO WD-14(2) ABD V. SH VISHNUPRASAD V MEHTA PAGE 4 INSTANCE REGISTER AND JANTRI AND WAS REQUESTED TO A TTEND THE HEARING IN PERSON TO CLARIFY THE POSITION REGARDING VALUATION IN THE YEAR 1981 AS WELL AS THE RATE OF SALE CONSIDERATION AS ADOPTED I N HIS VALUATION REP0ORT. IN RESPONSE TO THIS LETTER DTD. 2.11.2007 NOBODY RESPONDED FROM THE DVO NOR ANYBODY ATTENDED OR NOT EVEN ANY TIME W AS ASKED TO FURNISH THE REQUISITE INFORMATION ON THE POINTS RAI SED BY THE APPELLANT. UNDER THE CIRCUMSTANCES I AM LEFT WITH NO ALTERNATI VE EXCEPT TO DECIDE THE CASE ON MERITS AND ON THE BASIS OF MATERIALS AV AILABLE ON RECORD. FROM THE PERUSAL OF VALUATION OF MR. N.P.PARMAR IT IS CLEARLY MENTIONED FOUR PROPERTIES IN THE NAME TPS NO. MEASURING 150 S Q. YARDS 69.60 SQ. YARDS & 51 SQ. YARDS. THE AVERAGE PRICE OF ALL THE PROPERTIES IS 720 PER SQ. YARD AND 20% IS FURTHER ADDED DUE TO PRIME LOCA TION AND THREE TPS ROAD SITUATION AND TOTAL LAND COST AVERAGE HAS BEEN GIVEN AT RS.870/- PER SQ. YARD. THE COUNSEL OF THE APPELLANT HAS GIVE N THE COMPLETE SALE INSTANCES DETAILS FOR THE YEAR 2003 2004 & 2005 RE CORDED IN SUB- REGISTRAR OFFICE IN THE GOVT. OF GUJARAT. FROM THE PERUSAL OF REPORT OF DVO I FIND THAT THERE IS NO MENTION OF ANY SALE INS TANCES EITHER FOR THE YEAR 1981 OR FOR THE YEAR 2004. THE OBSERVATION BY THE DVO THAT LAND RATE AS ON 1.4.1981 GIVEN BY THE APPELLANTS VALUER IS ABSURDLY/ABNORMALLY HIGH CARRIES NO SENSE UNLESS TH E DVXO GIVES INSTANCES INDICATING THEREIN THE RELEVANT RATES ON THE BASIS OF WHICH HE COULD COMMENT THAT RATES GIVEN BY THE APPROVED VALU ER OF THE APPELLANT ARE NOT PROPER. SIMILARLY HE HAS MENTIONED THAT JAN TRI RATE OF RS.5000/- PER SQ. METER FIXED 1999 AND PAYMENT MADE FROM JULY 2003 TO APRIL- SEPTEMBER 2004 ANY COMMUNICATION WAS RECEIVED FROM THE DVOS OFFICE. ON THE OTHER HAND I HAVE THE INSTANCES GIVE N BY THE APPROVED VALUER OF THE APPELLANT IN 1981 AS WELL AS IN THE Y EAR WHEN THE PROPERTY WAS SOLD I.E. 2004. THE OBSERVATION MADE BY THE A.O THAT ADVANCE TAX WAS PAID AND THEN REFUND WAS ASKED DOES NOT CARRY A NY MEANING BECAUSE IT IS QUITE POSSIBLE THAT THE APPELLANT WAS ADVISED WRONGLY BY THE ACCOUNTANT AND ACCORDINGLY HE MADE THE PAYMENT OF ADVANCE TAX. IF ADVANCE TAX IS PAID THEN THEE IS NO SUCH PROVISION THAT REFUND CANNOT BE CLAIMED. SINCE THE APPELLANT HAS RELIED DON THE INS TANCES FOR THE YEAR 1981 AS WELL AS FOR THE YEAR 2004 IN WHICH THE PROP ERTY WAS SOLD AND ALL THE INSTANCES ARE GOVERNMENT DOCUMENTS. THESE COULD HAVE BEEN REBUTTED BY THE DVO BY GIVING THE SALE INSTANCES RE GISTER IN HIS SALE REGISTER AND BY PRODUCING JANTRI WHEREIN SALE INSTA NCES IN THE YEAR 2003 2004 WERE RECORDED. BECAUSE NO SUCH EVIDENCE WERE P RODUCED BEFORE THE UNDERSIGNED. I AM OF THE OPINION THAT RATES AS GIVEN BY THE APPROVED VALUER WITH THE SUPPORT OF SALE INSTANCES FOR COST OF ACQUISITION AND SALE CONSIDERATION ARE CORRECT AND ACCORDINGLY THE ADDI TION MADE BY THE A.O OF RS.18 10 836/- IS DELETED. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSE E HAS SOLD HIS ONE/NINE ITA 796/AHD/2008 A.Y. 05-06 ITO WD-14(2) ABD V. SH VISHNUPRASAD V MEHTA PAGE 5 CO-OWNER SHARE IN RESPECT OF SALE OF LAND BEARING T PS NO.4 FP NO.141 PAIKE HISSA NO.33 & 34 AD MEASURING 1214.19 SQ. MT HAVING 20% SHARE AND RECEIVED HIS SHARE OF RS.12.20 LAKH OUT OF TOTAL SA LE CONSIDERATION OF RS.61 LAKH AS PER SALE DEED EXECUTED ON 10-09-2004 HAVING REGISTRATION NO.3247. THE 1/5 TH VALUE OF LAND AS ON 01-04-1981 WAS DETERMINED AT R S.2 54 910/- AS PER VALUATION REPORT DATED 07-03-2005. THE ASSESSIN G OFFICER FOR THE PURPOSE OF ASSESSING LONG TERM CAPITAL GAINS REFERRED SALE CONSIDERATION FOR VALUING THE SAME U/S.142A OF THE ACT TO IN THE YEAR OF SALE. TH E DISTRICT VALUATION OFFICER INCOME-TAX DEPARTMENT VIDE LETTER DATED 10-12-2006 ESTIMATED THE VALUE OF ENTIRE LAND AT RS.91 06 425/- AND ALSO MENTIONED TH AT THE RATE IN THE YEAR 1981 WAS AT RS.10/- PER SQ.MT. WE FIND FROM THE ARGUMENT S OF LD. COUNSEL FOR THE ASSESSEE AND CASE RECORDS THAT THE REFERENCE TO VAL UE WAS REFERRED IN TERMS OF SALE CONSIDERATION AND NOT THE COST OF ACQUISITI ON AS ON 01-04-1981 U/S 142A OF THE ACT. WE FIND THAT THERE IS NO REFERENCE BY ASSESSING OFFICER FOR DETERMINATION OF THE COST OF ACQUISITION AS ON 01-0 4-1981 AS PER VALUATION REPORT SUBMITTED BY DVO IN TERMS OF U/S.142A OF THE ACT. WE FURTHER FIND THAT COST OF ACQUISITION AS DETERMINED BY VALUATION REPO RT OF REGISTERED VALUER SHRI M.P. PARMER MADE ON 07-03-2005 VALUING THE COST OF ACQUISITION AT RS.2 54 910/- IS SUPPORTED BY THE SALE VALUE IN THE OTHER AREA AND RELEVANT LAND VALUE AS SUPPORTED AS PER VALUATION REPORT AS UNDER:- PART : B VALUATION CITY/SUR.NO.______F.P.FO.141 SALE INSTANCE S.R.NO.33+34 FOR THAT YEAR 1981 TPS NO.4 OF VILLAGE MOUZA:RAJPUR-HIRPUR AL:CITY TAL: CITY DIST. AHMEDABAD SL. NO. SUMNO. F.P.NO. S.RNO. TPS NO. PLOT AREA JR YD.SQ.MT. 0 AREA S.YD. S.MT. GATE RS. VOLUME NO. DATE LAND PRICE AVERAGE RS. YET. AS 1. - 118 4 150 SQ.YDS. 81.60 SQ.YDS 1 80 000 13265 10/11/81 870/- 2. - 115 4 69.60 SQ.YDS - 35 000 13115 19/11/81 500/- 3. - 118 PAIKI 4 51 SQ.YDS ` - 40 000 13218 5/12/81 784/- 4. 66 - 4 13 13 SQ.YDS. 10 000 706 17/1/81 726/- TOTAL RS.2880/- AVERAGE LAND PRICE RS.2880/- ITA 796/AHD/2008 A.Y. 05-06 ITO WD-14(2) ABD V. SH VISHNUPRASAD V MEHTA PAGE 6 ADD: 2.0% DUE TO PRIME LOCATION AND THREE TPS ROAD SITUATION HENCE TOTAL LAND AVERAGE IS CONSIDERED TOTAL % 4= RS. 150/- RS.870/- THE REGISTERED VALUER VALUED THE PROPERTY AFTER ADO PTING A SCIENTIFIC METHOD AND TAKING INSTANCES IN THE LOCALITY OF OTHER SALES OF SIMILAR TYPE. THIS IS NOT NEGATED BY REVENUE ANYWHERE AND EVEN THIS VALUATION WAS WITH THE ASSESSING OFFICER AND AO WITHOUT CONSIDERING THE VA LUATION REPORT HAS ESTIMATED THE VALUE AT RS.10/- PER SQ.MT. WE FIND T HAT EVEN THE DVOS VALUATION IS WITHOUT ANY BASIS RATHER IT IS A PASSI NG REFERENCE AND THE RELEVANT PARA OF DVOS REPORT READS AS UNDER:- THE PROPERTY HAS ROAD ON THREE SIDES AND MAY COMME ND LAND RATES IN THE RANGE OF RS 10000/= TO RS 12000/= PER SQ. YDS. AS ESTIMATED BY YOU. THE ASSESSEES VALUER HAS SUBMITTED VALUATION REPORT SHOWING LAND RATE OF RS. 870/- PER SQ. YDS. AS ON 01.04.198 1. AS PER SALE INSTANCE REGISTER OF THIS OFFICE LAND RATE (ABOUT) IN 1981 IN SAME TPS NO.4 LAND RATE OF RS.10/- PER SQ. M. IS STATED. TH E SALE INSTANCE CONSIDERED BY ASSESSEES VALUE ARE OF SMALLER PLOT AREA RANGING FROM 13 SQ. YDS. TO 69 SQ. YDS. AND 1500 SQ.YD. THE LAND RATES ON 01.04.1981 GIVEN BY ASSESSEES VALUER APPEAR TO BE ABSURDLY/ABNORMALLY HIGH. AS PER GENERAL TREND OF R ISE IN RATES FROM 1981 TO THE DATE OF SALE IN YEAR 2003-2004 MARKET RATES OF LAND HAVE GONE UP MORE THAN 200 TIMES TO 400 TIMES. WE FIND THAT DVO HAS BASED HIS OPINION ON THE BASIS OF REGISTRATION VALUER REPORT WHICH IS NOT FAIR AND REASONABLE AT ALL. IN VIEW OF THESE WE ARE OF THE CONSIDERED VIEW THAT CIT(A) HAS RIGHTLY ADOPTED THE COST OF ACQUISITION OF LAND FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAINS @ RS.2 54 910/- AND THE SAME STANDS. 5. AS REGARDS TO ANOTHER ISSUE FOR INCREASE IN SALE CONSIDERATION THE REVENUE ITSELF CONTENTS THAT THE RATE OF LAND HAS B EEN INCREASED AT RS.7500/- PER SQ. MT. INSTEAD OF SALE CONSIDERATION DECLARED BY ASSESSEE @ RS.7000 PER SQ.MT. ACCORDINGLY WE ARE OF THE CONSIDERED VIEW T HAT SALE CONSIDERATION DECLARED BY ASSESSEE IS SUPPORTED BY VALUATION REPO RT OF REGISTERED VALUER AND ITA 796/AHD/2008 A.Y. 05-06 ITO WD-14(2) ABD V. SH VISHNUPRASAD V MEHTA PAGE 7 MOREOVER REVENUE COULD NOT SUBSTANTIATE HOW THE VA LUE DECLARED IN THE SALE DEED IS NOT CORRECT. ACCORDINGLY WE CONSIDER THE S ALE CONSIDERATION DECLARED BY ASSESSEE AS TRUE CONSIDERATION AND ENHANCE MADE BY REVENUE IS WITHOUT ANY BASIS AND ACCORDINGLY CIT(A) HAS RIGHTLY DELETE D THE SAME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31/01/2010 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD DATED : 31/01/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XXI AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD