The ACIT, Circle-5,, Baroda v. Shri Jatinmbhai B.Patel, Baroda

ITA 976/AHD/2008 | 2003-2004
Pronouncement Date: 30-07-2010 | Result: Dismissed

Appeal Details

RSA Number 97620514 RSA 2008
Assessee PAN AHGPP7392F
Bench Ahmedabad
Appeal Number ITA 976/AHD/2008
Duration Of Justice 2 year(s) 4 month(s) 16 day(s)
Appellant The ACIT, Circle-5,, Baroda
Respondent Shri Jatinmbhai B.Patel, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 30-07-2010
Date Of Final Hearing 27-07-2010
Next Hearing Date 27-07-2010
Assessment Year 2003-2004
Appeal Filed On 14-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH D DD D BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AND AND AND AND SHRI SHRI SHRI SHRI MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER DATE OF HEARING :28-7-10 DRAFTED ON: 2 8-7-10 ITA NO. 976 /AHD/ 2008 ASSESSMENT YEAR :2003-04 ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-5 5 TH FLOOR AAYAKAR BHAVA RACE COURSE CIRCLE BARODA. VS. SHRI JATINBHAI B. PATEL B-6 VALLABHNAGAR SOCIETY KARELIBAUG BARODA. PAN/GIR NO. : AHGPP 7392 F (A PPELLANT ) .. ( RESPONDENT ) APPEL LANT BY : SHRI SUDHANSHU S. JHA D.R. RESPONDENT BY: SMT. URVASHI SHODHAN. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-V BARODA DATED 31-12-2007. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) V BARO DA HAS ERRED IN DELETING THE ADDITION OF `. 18 82 441/ - ON ACCOUNT OF LONG TERM CAPITAL GAIN AS THE ADDITION W AS MADE BY THE LEARNED ASSESSING OFFICER ON THE BASIS OF AV ERAGE COST OF ACQUISITION OF LAND AS PER THE REGISTERED VALUER S REPORT FURNISHED BY THE ASSESSEE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSE ES VALUER HAS CHOSEN TO DECIDE THE VALUE OF PROPERTY UNDER CONSIDERATION @ `.100/- PER SQ. FT. WITHOUT OFFERIN G ANY LOGICAL BASIS FOR CHOOSING THE SAME. ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003- -- -04 0404 04 - 2 - 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THE FACT THAT SALE INSTANC ES RELIED UPON BY THE VALUER ARE RELATED TO THE CONSTRUCTED P ROPERTY WHILE THE ASSESSEES LAND WAS AGRICULTURAL LAND AS ON 1-4- 1981 AND THAT THE CONSTRUCTED PROPERTIES IN THE VIC INITY OF THE ASSESSEES PROPERTY WERE SOLD AT THE VALUE AS L OW AS `.43 AND `.57/- PER SQ. FT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE LEARNED ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 4 TO 4.3 O F HER ORDER. DURING THE YEAR THE ASSESSEE HAD SOLD THE PROPERTY SITUAT ED AT SURVEY NO.9 OF NAGAR WADA MEASURING 58 934 SQ. FT. JOINTLY HELD WITH OTHER CO-OWNERS. THE SHARE OF THE APPELLANT WAS OF 12 196 SQ. FT. THE ASSESSEE HAS SOLD THE SAID LAND ON 4-7-2002 FOR `. 76 22 500/-. THE ASSESSEE HAS TAKEN THE COST OF ACQUISITION OF LAND AT `.100/- PER SQ. FT. AS ON 1.4.1981. HE HAS FILED THE REPORT OF A RE GISTERED VALUER IN SUPPORT OF HIS CLAIM. 4. THE LEARNED ASSESSING OFFICER FOUND THAT THE VAL UE OF SALE INSTANCES RELIED UPON BY THE VALUER WAS AS LOW AS ` .43/- PER SQ. FT. THE AVERAGE OF SALE INSTANCES RELIED UPON BY THE VA LUER WORKED OUT TO BE `. 65.47 PER SQ. FT. THE LEARNED ASSESSING OF FICER PROPOSED TO DISREGARD THE VALUE OF `.100/- TAKEN BY THE VALUER AND WANTED TO ADOPT THE AVERAGE SQ. FT. RATE OF `. 65.47 INSTEAD. THE ASSESSEE SUBMITTED BEFORE THE LEARNED ASSESSING OFFICER THAT THE COMPARABLE INSTANCES OF SALE GIVEN BY THE VALUER AR E ONLY INDICATIVE AND SHOULD NOT BE CONSTRUED TO ASSUME TH AT THE VALUATION OF THE IMPUGNED PROPERTY IS MADE ON SUCH VALUATION. THE SALE INSTANCES GIVEN ARE OF PROPERTY LOCATED FAR AW AY FROM THE PROPERTY SOLD. THEY WERE RESIDENTIAL HOUSING SOCIET Y AND THE ASSESSEES PROPERTY HAD COMMERCIAL POTENTIAL. 5. THE LEARNED ASSESSING OFFICER CONSIDERED THE ARG UMENT OF THE ASSESSEE BUT TOOK THE COST OF ACQUISITION AT `. 65.47 PER SQ. FT. ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003- -- -04 0404 04 - 3 - BEING THE AVERAGE VALUE FROM THE VALUERS REPORT FO R THE FOLLOWING REASONS. (A) THE VALUER HAS GIVEN FIVE SALE INSTANCES IN THE VICINITY OF ASSESSEES PROPERTY AND THEN TAKEN `.100/- PER SQ. FT. AS THE VALUE OF ASSESSEES PROPERTY WITHOUT ANY REASON. (B) SALE INSTANCES ARE OF CONSTRUCTED PROPERTY WHI LE THE ASSESSEES PROPERTY IS AGRICULTURAL LAND. (C) NONE OF THE INSTANCES MATCH THE TEMPORAL AND SP ECIAL FRAME TO THE ASSET UNDER CONSIDERATION. (D) NO COGENT REASON GIVEN TO JUSTIFY THE RATE OF ` .100/-. 6. IN THE LIGHT OF THE ABOVE THE LEARNED ASSESSING OFFICER CONCLUDED THAT THE AVERAGE RATE OF 65.47 PER SQ. FT . CAN BE TAKEN AND CALCULATED CAPITAL GAIN AT `.40 53 329/-. 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION. 8. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). HE ALSO RELIED UPON THE DECISION OF THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF MRS. SOSAMMA PAULOSE VS . JT.CIT (2003) 79 TTJ (COH) 573 WHEREIN IT WAS HELD THAT FAIR MARK ET VALUE OF THE LAND AS ON 1ST APRIL 1981 ESTIMATED BY A REGISTER ED VALUER BEING BASED ON SOUND FACTUAL BASIS AND THE PHENOMENAL DEV ELOPMENT IN THAT AREA COULD NOT BE REJECTED BY THE AO WITHOUT A SSIGNING ANY SPECIFIC REASONS. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED O N THE ORDER OF THE LEARNED ASSESSING OFFICER. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE DURING THE YEAR THE ASSESSEE SOLD THE PROPERTY SITUATED AT SURVEY N O.9 OF ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003- -- -04 0404 04 - 4 - NAGARWADA MEASURING 58 934 SQ. FT. JOINTLY HELD WIT H OTHER CO- OWNERS. THE ASSESSEES SHARE WAS OF 12 196 SQ. FT. THE SAID LAND WAS SOLD ON4.7.2002 FOR `. 76 22 500/-. THE ASSESSE E HAS TAKEN THE COST OF ACQUISITION OF LAND AT `.100 PER SQ. FT. AS ON1.4.1981 AND HAS FILED REPORT OF A REGISTERED VALUER IN SUPPORT OF THE CLAIM. THE LEARNED ASSESSING OFFICER FOUND THAT THE VALUE OF S ALE INSTANCES RELIED UPON BY THE VALUER WAS AS LOW AS `.43 PER SQ . FT. THE AVERAGE OF SALE INSTANCES RELIED UPON BY THE VALUER COMES TO `.65.47 PER SQ. FT. THEREFORE THE LEARNED ASSESSIN G OFFICER DISREGARDED THE VALUE OF `.100 ADOPTED BY THE VALUE R AND TOOK THE AVERAGE RATE PER SQ. FT. OF `. 65.47 AND ACCORDINGL Y CALCULATED THE CAPITAL GAIN AT `. 40 53 329/- IN PLACE OF `. 21 70 888/- DISCLOSED BY THE ASSESSEE AND THEREBY MADE AN ADDITION OF `.18 8 2 441/-. IN APPEAL THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) DELETED THE ADDITION OF `. 18 82 441/- WHILE DOING SO HE OB SERVED THAT THE REPORT OF VALUER SHRI A.V. KOTECHA DATED 28-2-2003 INDICATES A SALE RATE RANGE OF `.43 TO `.118 PER SQ. FT. THE VALUER IS AN EXPERT IN THIS FIELD AND HAS BEEN GIVEN A SOUND BASIS FOR HIS CONC LUSION THAT IT SHOULD BE `.100 AND THESE PRICES WITHIN THE PRICE B AND OF `.43 TO 118 SHOWN BY THE VALUER. THE VALUER HAS ALSO GIVEN SPECIFIC REASONS HIGH LIGHTING THE ADVANTAGES OF THE PROPERT Y IN QUESTION SUCH AS LOCATION FRONTAGE AND POTENTIALITY OF DEV ELOPMENT WHICH FACT CAN BE VERIFIED FROM THE LAY OUT MAP OF NAGARW ADA REGISTRATION DISTRICT. THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) ALSO OBSERVED THAT THE PROPERTY IS LOCATED AT A FRONTAGE LOCATION AT THE ENTRANCE OF KARELIBAUG AND IS ON 120 FT. WIDE ROAD. THE PROPERTY HAS NOW ACTUALLY BEEN DEVELOPED INTO A WELL KNOWN C OMMERCIAL COMPLEX. TAKING AVERAGE PRICE FROM THE PRICE BAND A VAILABLE IS NOT SCIENTIFIC. THE VALUE OF THE PROPERTY IS LOCATION S PECIFIC AND AVERAGE PRICE CANNOT BE ADOPTED FOR A PARTICULAR PROPERTY. THE VALUE OF PROPERTY CALCULATED BACKWARD FROM THE OFFICIAL PRIC E OF REGISTRATION AS ON 1-4-99 ALSO PROVES THAT IT COULD BE MORE THAN `.100 PER SQ. FT. WE FIND THAT THE COCHIN BENCH OF THE TRIBUNAL IN TH E CASE OF MRS. SOSAMMA PAULOSE HAS HELD THAT FAIR MARKET VALUE OF THE LAND AS ON ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003- -- -04 0404 04 - 5 - 1ST APRIL 1981 ESTIMATED BY A REGISTERED VALUER B EING BASED ON SOUND FACTUAL BASIS AND THE PHENOMENAL DEVELOPMENT IN THAT AREA COULD NOT BE REJECTED BY THE LEARNED ASSESSING OFFI CER WITHOUT ASSIGNING ANY SPECIFIC REASONS. WE FIND THAT THE LE ARNED ASSESSING OFFICER HAS NOT GIVEN ANY REASON FOR ADOPTING THE A VERAGE RATE FROM THE PRICE BAND OF `.43 PER SQ. FT. TO `.118/-P ER SQ. FT. FOR TAKING A VALUE OF LAND AS ON 1-4-1981. THEREFORE THE DECI SION OF THE COCHIN BENCH SQUARELY APPLIES IN THE INSTANT CASE O F THE ASSESSEE. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF T HE TRIBUNAL WE CONFIRM THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) AND DISMISS THE GROUNDS OF THE APPEAL OF THE REVENUE ARE DISMISSED. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN BY SELLING A PLOT OF LAND WHICH WAS ACQUIRED BY HIM BEFORE 1.4.1981.THE ASSESSEE WHILE CALCULATING LONG TERM CAPITAL GAIN TOOK THE COST OF THE LAND @ `.100/- PER SQ.FT.AS FAIR MARKET VALUE AS ON 1.4.1981 ON THE BA SIS OF REPORT OF REGISTERED VALUER. THE LEARNED ASSESSING OFFICER OB SERVED THAT THE REGISTERED VALUER ADOPTED THE FAIR MARKET VALUE OF `.100 PER SQ.FT. ON THE BASIS OF CERTAIN INSTANCES OF SALE OF THE SI MILARLY SITUATED LAND. THE LEARNED ASSESSING OFFICER OBSERVED THAT T HE SALE PRICE OF SIMILARLY SITUATED LAND RANGED FROM `.43 TO 118 PER SQ. FT. IN THE ABOVE CIRCUMSTANCES THE LEARNED ASSESSING OFFICER OPINED THAT FAIR MARKET VALUE @ `.100 PER SQ. FT. ADOPTED BY TH E REGISTERED VALUER WAS NOT CORRECT AND ACCORDING TO HIM AVERAGE OF ALL SALE INSTANCES SHOULD BE TAKEN AS FAIR MARKET VALUE AS O N 1-4-1981 THEREFORE CALCULATED FAIR MARKET VALUE AT `. 65.47 PER SQ. FT. BEING AVERAGE PRICE AND THEREFORE MADE THE ADDITION OF `. 18 82 441/- TO THE INCOME OF THE ASSESSEE. ON APPEAL LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) DELETED THE ABOVE ADDITION BY OBSERVING AS UNDER:- ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003- -- -04 0404 04 - 6 - 4. I FIND THAT THE ACTION OF THE LEARNED ASSESSING OFFICER IN SUBSTITUTING THE VALUE OF THE LAND AS ON 1.4.198 1 FROM `.100/- PER SQ. FT. AS GIVEN BY REGISTERED VALUER T O `. 65.47 PER SQ. FT. CANNOT BE SUSTAINED FOR THE FOLLOWING F URTHER REASONS. (I) REGISTERED VALUER SHRI A.V. KOTECHAS REPORT DATED 28.2.2003 ON WHICH THE ASSESSEE RELIES INDICATES A SALE RATE RANGE OF `. 43/- TO `.118/- PER SQ. FT. T HE VALUER IS AN EXPERT IN THIS FIELD AND HE HAS GIVEN A SOUND BASIS FOR HIS CONCLUSION THAT IT SHOULD BE `. 100/-. THIS PRICE IS WITHIN THE PRICE BAND OF `. 43/- TO ` .118/- SHOWN BY THE VALUER. (II) THE VALUER HAS GIVEN SPECIFIC REASON HIGHLIGHTING T HE SPECIFIC ADVANTAGES OF THE PROPERTY IN QUESTION SUC H AS LOCATION FRONTAGE POTENTIALITY OF DEVELOPMENT. TH IS FACT IS VERIFIABLE FROM THE LAYOUT MAP OF NAGARWADA REGISTRATION DISTRICT. (III) PROPERTY IN QUESTION IS LOCATED AT A FRONTAGE LOCAT ION AT THE ENTRANCE OF KARELIBAUG AND IS ON120 FT WIDE ROA D. THE FRONTAGE AVAILABLE IS A HUGE SPAN. (IV) ACTUALLY THE PROPERTY NOW HAS BEEN DEVELOPED INTO A WELL KNOWN COMMERCIAL COMPLEX. (V) TAKING AVERAGE PRICE FROM A PRICE BAND AVAILABLE IS NOT SCIENTIFIC. THE VALUE OF THE PROPERTY IS LOCATION S PECIFIC AND AVERAGE PRICE CANNOT BE ADOPTED FOR A PARTICULA R PROPERTY. (VI) THE VALUER HAS GIVEN VARIOUS OTHER SPECIFIC ADVANTA GES OF THE PROPERTY SUCH AS LOCATION NEIGHBOR-HOOD SI ZE AND SHAPE OF LAND FRONTAGE UTILITY NATURE OF THE SOIL TYPOGRAPHY MEANS OF ACCESS CIVIC AMENITIES WHICH REINFORCE THE CONCLUSION OF RATE ADOPTED BY THE VAL UER. (VII) THE VALUE OF THE PROPERTY CALCULATED BACKWARDS FROM THE OFFICIAL PRICE OF THE REGISTRATION AS ON 1.4.19 99 ALSO PROVE THAT IT COULD BE MORE THAN `. 100/- PER SQ. F T. 4.1. IN VIEW OF THE ABOVE REASONING THE ENHANCED C APITAL GAIN DETERMINED BY THE LEARNED ASSESSING OFFICER AM OUNTING TO `.18 82 441/- IS DELETED. 12. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD N OT POINT OUT ANY ERROR IN THE ORDER OF THE LEARNED COMMISSIO NER OF INCOME TAX(APPEALS) AND SIMPLY RELIED UPON THE ORDER OF TH E LEARNED ASSESSING OFFICER. WE FIND THAT IT IS NOT IN DISPUT E THAT SIMILARLY SITUATED LAND WAS ALSO SOLD @ `.118 PER SQ. FT. AT THE RELEVANT TIME. IN THE ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 ITA.976/AHD/08 JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL JATINBHAI B. PATEL ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003 ASSESSMENT YEAR 2003- -- -04 0404 04 - 7 - CIRCUMSTANCES IT CANNOT BE SAID THAT FAIR MARKET V ALUE OF `.100/- PER SQ. FT. AS ADOPTED BY THE ASSESSEE WAS NOT CORR ECT AND THE ACTUAL FAIR MARKET VALUE OF THE LAND IN QUESTION WA S LESSER THAN THAT. WE THEREFORE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IT IS CONFIRMED. THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 12. IN THE RESULT THE APPEAL OF THE APPEAL OF THE REVENUE IS DISMISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 30TH JULY 2010 SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTAN T MEMBER AHMEDABAD; ON THIS 30TH DAY OF JULY 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-V BARODA. 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 28-7- 2010 ------------- ------ 2. DRAFT PLACED BEFORE AUTHORITY 28-7-2010 ---- --------------- 3. DRAFT PROPOSED & PLACED 28-7-2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER ----------- ----- ------------------- JM 5. APPROVED DRAFT COMES TO P.S ---------------- -- ------------------ 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK ---------------- -------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- --------------- 9.DATE OF DISPATCH OF ORDER ---------------- ---- ---------------