Income Tax Appellate Tribunal - Delhi
Yogesh Dutt Sharma & Sons, Meerut vs Ito, Ward 2(4), Meerut on 17 November, 2023
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'H', NEW DELHI
Before Dr. B. R. R. Kumar, Accountant Member
Sh. Yogesh Kumar US, Judicial Member
ITA No. 311/Del/2023 : Asstt. Year: 2014-15
Yogesh Dutt Sharma & Sons, Vs Income Tax Officer,
Vista Villa 70, Ansal Town, PH-4, Ward-2(4),
Modipuram Bypass, Meerut, Meerut-250001
Uttar Pradesh-250110
(APPELLANT) (RESPONDENT)
PAN No. AAAHY1119A
Assessee by : Sh. Manu K. Giri, Adv. &
Sh. Bhanu Dutt, Adv.
Revenue by : Ms. Sapna Bhatia, CIT-DR
Date of Hearing: 01.11.2023 Date of Pronouncement: 17.11.2023
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by assessee against the order of Na tional Faceless Appeal Centre (NFAC) dated 10.01.2023.
2. Following grounds have been raised by the assessee:
"1. T hat the impugne d order passed by Id. CIT(A) dated 10.01.2023 is arbitrary, unreaso nable, bad in law hence void ab-initio.
2. That the C IT(A) erred in no t following the binding report of District Valuation Officer date d 24.01.2018, when it was o btained by the Assessing Officer at the specific directions of C IT(A) itse lf.2 ITA No. 311/Del/2023
Yogesh Dutt Sharma & Sons
3. Whether re port of District Valuation Officer dated 24.01.2018 is binding on the AO as well as on CIT(A)?
4. That the CIT(A) on receipt of the report from the Distr ict Valuation Officer, has not provided the appellant an opportunity of being heard, while rejec ting such report as mischievous and perverse hence dismissed the appeal.
5. That the CIT(A) erred in upholding the addition of Rs.90 ,44,594/- on account of Long Term Capital Gain witho ut any cogent justification and dehors the relevant evidence, Valuation re port prepared by M/s Mohan & Associates & submissio ns filed.
6. That the ld. CIT(A) erred in dismissing the appeal witho ut giving proper opportunity to the assesse and also ignoring the settle d law."
3. The assessee filed return of income on 21.03.2015 declaring an income of Rs.3,28,010/- and long term capita l loss of Rs.9,99,701/-. The case was selected for scrutiny under CASS. Notice u/s 143(2) dated 18.09.2015 was issued posting the c ase for hearing on 24.09.2015.
4. The asse ssee has inherited property by way of partition on 05.08.2000. T he property was acquired prior to 01.04.1981. Out of the property inherited by it, the assessee ha d sold 9 plots during the A.Y. 2014-15 and against the pro ceeds of sale declared a long term capital loss of Rs.9,99,701 /-. During the course of assessment proceedings, the Assessing Officer asked the assessee to produce evidence in support of the cost of acquisition adopted by the assessee in its computation of income. In response, the assessee furnished a rate list issued by the Tehsildar Bhagpat, valuing the land at Rs .875/- per Sq. yard as on 18 .11.1978. The A.O has held that the circle r ate is 3 ITA No. 311/Del/2023 Yogesh Dutt Sharma & Sons fixed by ADM (F&R)/DM and no t by the Tehsildar. Accordingly, the AO issued notice u/s 133 (6) to ADM (F&R ), Baghpat on 22.07.2016 and 04.08.2016 calling for circle rate as on 01.04.1981 in respect of all 9 plots sold by the appellant. The ADM (F&R) vide letter dated 14.10.2016 informe d the AO that the circle rate of the said plo ts would be Rs.7.90 per square meter. The AO confronted the said information received from the ADM (F&R) to the appellant. The assesse e in res ponse submitted government registered valuer's report on 04.11 .2016 deter mining value of the plots at Rs.915.86 per s quare me ter as on 01.04.1981. The AO issued summon u/s 131 to the government registered valuer and recorded statement under oath. Based on the replies as give n by the gover nment regis tered va luer in the sworn statement the AO rejected the report since the same is not,
- base d on the circle rates obtained from any go vernment office ;
- the valuation is not based on any doc uments of sale or purchase of similar property confirming the value;
- No proof of the existing market value as on 01.04.1981 has been take n into co nsideration by the valuer.
5. Accordingly, the AO has adopted the circle rate as intimated by the ADM (F&R), Baghpat and passe d an assessment or der u/s 143(3) dated 07.12.2016 determining the long term capital gain at Rs. 90,44,594/-. Accordingly, the said order the assessee had instituted an appeal before the Ld. CIT (Appeal), Meerut. The Ld. CIT(Appeal), Meerut had directe d the ITO to refer the matter to the District Valuation Officer for 4 ITA No. 311/Del/2023 Yogesh Dutt Sharma & Sons obtaining a re port determining the value of the s aid plots as on 01.04.1981. As per the valuation report the property was inspe cted on 12.01.2018 in the presence of the assessee. A sale deed for 86.61 sq. mtr. land which was sold to Sh. Deepak Saro ha S/o Sh. Devichand Saroha & Sh. Pankaj Sharma S/o Sh. Rameshwer Dayal Sharma by the appellant during 2013-14. In this sale deed, the circle rate adopted at Rs. 8 600/- per sq. mtr. as per circle rate list of that area for reside ntial land. The land was acquired before 01.04.1981. Hence the fair market value of this land as o n 01.04.1981 is to be worked out. As on 01.04.1981, this land w as agriculture land but during the sale it was sold as re sidential land. He nce the District Valuation O fficer inquired about the circle rate/fair market rate fro m Tehsil Office situated at Baraut. However, this area was the part of Distt- Meerut but during 2013-14 it was in Distt- Baghpat. Hence the rate for 01.04.1981 is not available in the Tehsil. More over the land originally was agr iculture but sold as residential. The rate of the agriculture land is not applicable in this matter . The valuation report prepared by M/s Mohan & Assoc iates the circle rate of land calculated by backward indexation method is Rs. 915.86 per sq. mtr. but the fair market rate as on 01.04.1981 is to be worked out as per the backward indexation method based on the CBDT circular no. 636 dt. 31.08.1992. As per the report of the District Valuatio n Officer the fair market rate of the land as on 01.04.1981 is Rs. 859/- per sq. mtr.
6. The District Valuation Officer, as can be seen from the above, makes a statement that the rate of agric ultural la nd is not applicable in the instant case. The ld. CIT(A) held that "this statement of the District Valuatio n Officer is 5 ITA No. 311/Del/2023 Yogesh Dutt Sharma & Sons mischievous and perverse". The ld. CIT(A) held that as per the facts in the present case the land wa s acquired as agric ultural land.
7. The ld. CIT(A) held that if the cost of acquisition is to be worked out as per the backward indexation method based on the CBDT circular no. 636 dt. 31.08.1992 then the fair market value of agric ultural land on the date of transaction has to be taken for computing the same. The ld. CIT(A) erred in holding that the FMV of the agriculture land has to be taken while the land sold was residential land. The DVO who is departmental consultant has rightly resorted to backward indexation method as per the CBDT guidelines. In the instant case, both the Distr ict Valua tion Officer and the Government Registered Valuer have taken the current marke t value of the re sidential land. Consequently, the cost of acquisition arrived at by using the backward indexation method w as inherently acceptable due to the adoption of the fair market value of land for residential purpose. We do not find any infarction of pro cedure or law adopted by the DVO. Hence, we decline to interfere with the valuation of the DVO.
8. In the re sult, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 17/11/202 3.
Sd/- Sd/-
(Yogesh Kumar U.S) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 17/11/2023
*Subodh Kumar, Sr. PS*
6 ITA No. 311/Del/2023
Yogesh Dutt Sharma & Sons
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR