Income Tax Appellate Tribunal - Delhi
Lav Kumar Ramanand Agarwal (Huf), ... vs Department Of Income Tax on 7 March, 2001
1 ITA No.4436/Del/2010
Asstt.Year: 2007-08
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `D' NEW DELHI
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT
AND
SHRI A.T. VARKEY, JUDICIAL MEMBER
I.T.A.No.4436/Del/2010
Assessment Year : 2007-08
Asstt.Commissioner of Income Tax, vs Lav Kumar Ramanand Agarwal
Circle-1, (HUF), B-117, Shastri Nagar,
Meerut. Meerut.
(Appellant) (Respondent)
Appellant by: Shri S.N. Bhatia, Sr. DR
Respondent by : Shri P.C. Kashyap
ORDER
PER G.D. AGRAWAL, V.P. In this appeal by the revenue, following grounds are raised:--
"1. Whether in the facts and circumstances of the case, the Commissioner of Income tax (Appeals) has erred in deleting the addition of Rs. 85,69,488/- made by the AO by adopting the fair market value of land @Rs22/- per square yard as against Rs.135/- per square yard taken by the assessee?
2. Whether in the facts and circumstances of the case, the Commissioner of Income tax (Appeals) has erred in directing the AO to accept the fair market value of land as on 01.04.1981 at Rs. 135/- per square yard as taken by the assessee by ignoring the facts that the copy of order of ADM (Finance), Meerut furnished by the assessee is neither signed by the ADM nor it contains the 2 ITA No.4436/Del/2010 Asstt.Year: 2007-08 circle rate of land situated at village Gesupur Dattawali?
3. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law in applying the circle rate of the urban areas of Meerut City to the land situated at village Gesupur Dattawali which is outside the urban limits?
4. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law in directing the AO to adopt the FMV at Rs.135/- per square yard in spite of the fact that the value of land sold by the assessee as per the sale deed is Rs.18,00,000/- per hectare and average cost of this land as on 01.04.1981 as per the assessee was Rs.16,77,844/- per hectare which means that there is very small increase in the value of in about 26 years. Whether the CIT(A) can ignore the facts that as per the sale deed of land of Shri Nawab Ali in the same village the average market value of the land in the year 1981 was Rs. 22/- per square yard whereas the assessee has adopted the market value at Rs. 135/- per square yard.
5. is it possible that in spite of the difference in the situation of land in the same village, the value of one piece of land is Rs22/- per square yard and the value of another piece of land is Rs. 135/- per square at the same time?
6. In the facts & circumstances of the case, the order of the Ld.Commissioner of Income Tax (Appeals) may be set aside and that of the AO restored."
2. The facts of the case are that during the year under consideration, the assessee has sold land measuring15,500 square yards for a consideration of Rs. 1.03 crore. The above land was owned by the assessee prior to 3 ITA No.4436/Del/2010 Asstt.Year: 2007-08 01.04.1981, therefore, for the purpose of computing capital gain the assessee has taken the fair market value of the land as on 01.04.1981 at Rs.135/- per square yard. The Assessing Officer has adopted the value of land at Rs.22/- per sq. yard. On appeal, the CIT(A) accepted the assessee's contention and directed the Assessing Officer to compute the capital gain by accepting fair market value of the land as on 01.04.1981 at Rs.135/- per sq. yard. The relevant findings of the CIT(A) read as under:-
"4.4 Decision & reasons therefor:
I have gone through the AO's order, the AR's submissions and relevant facts of the case carefully. I find that the AO has distorted glaring facts. It is not possible to agree with the AO for the following reasons:
i. The AO's main reason for not accepting the appellant's adoption of FMV for the property (land measuring 15,500 sq. yard) sold @ Rs.135/- per square yard is that the ADM's letter notifying circle rate was not legible and that a property measuring 90 sq. yard in a neighbouring area was sold for Rs.22 per sq. yard.
ii) The AO ignored, besides the order of the higher authorities on the issue, the following glaring facts:
a. The letter of the ADM (Finance) stated to be illegible is quite decipherable which declares circle rate of Rs.175 to Rs. 275/- per square yard for old locations (purani abadi) and Rs.125 to Rs.2001- per sq. yard for new locations (new abadi).
b. It was on the basis of the same order of the ADM (Finance) that Hon'ble ITAT, New Delhi in the case of Seth Sabamal Trust had ordered for adoption of FMV @ Rs.175 per square yard in Village Nagla Tashi, Kankerkhera and Delhi 4 ITA No.4436/Del/2010 Asstt.Year: 2007-08 Road. The Hon'ble Supreme Court has also ordered a rate of Rs.175/- per square yard for land situated at Village Quassimpur, Nagla Tashi. The said order has been duly referred to by ITO, Ward 2, Meerut in his order dated 7.3.2001 in the case of one Shri V.C. Rajpal which was before the AO and a copy of which was also filed during appellate proceedings. ' iii. The AO relied on the sale deed of one Nawab Ali in respect of a land situated at Village Gesupur, Datawali, Meerut wherein the cost of land was only Rs.22 per sq. yard. This land measures only 90 sq. yards. The appellant's land measured 15,500 sq. yard. The location/situation of the land referred to by the AO was not known. The appellant's land, as clearly shown by the sale deed, was situated on National Highway. It is very close to Medical College and is covered under new abadi area.
iv. AR's submission that based on the circle rate the total consideration should have been Rs.22,09,860/- whereas the land was actually sold for Rs.l,03,00,000/- carries weight in terms of showing the actual value of land. The land also had 62 trees on it, each being of the value of Rs. 10,000/- as per the deed. In my view, the appellant could have calculated FMV even at the rate of Rs.200/- per square yard which would have been permissible. It was, however, taken at Rs.135/- only.
In view of all relevant facts, I find no basis on the part of the AO for having calculated FMV by adopting the rate of Rs.22 per square yard. It amounts to flagrantly ignoring facts and flouting directions of higher authorities. The AO is directed to take the FMV as on 1.4.1981 @ Rs.135/- per square yard as shown by the appellant. The ground is allowed."5 ITA No.4436/Del/2010 Asstt.Year: 2007-08
3. We have heard both the parties and perused the material placed before us. After considering the facts of the facts and arguments of both the sides, we entirely agree with the findings of the CIT(A). He has noted that the circle rate of the land in the area was Rs.125 to Rs.200/- per sq yard for new location and Rs.175to Rs.275/- per sq yard for old location. He also noted that the above land rate was adopted by the ITAT in the case of Seth Sabamal Trust. From the perusal of the assessment order, we find that the Assessing Officer did not accept the circle rate on the ground that the order of the ADM(Finance) furnished by the assessee is without signature and the present incumbent of that office has refused to provide a certified copy of the notification. At the time of hearing before us, ld. Counsel of the assessee pointed out that now, the assessee could get the notification of circle rate under the Right to Information Act. Copy of the same is produced before us and we find that the circle rate of Meerut at Ramgarghi, University Road was Rs. 125 to 200/- per sq yard for new location and Rs. 175 to Rs.275/-
per sq yard for old location. That the assessee has adopted rate of Rs.135/- per sq yard. The above information which is obtained by the assessee under Right to Information has not been controverted by the revenue. In fact, a copy of notification was already produced by the assessee before the Assessing Officer who refused to accept it because the same was not signed 6 ITA No.4436/Del/2010 Asstt.Year: 2007-08 by ADM(Finance). Now, this dispute does not survive because the assessee has obtained the certified copy of the notification under the Right to Information Act. Considering the circle rate fixed by ADM (Finance) for the purpose of levy of stamp duty on sale of land in that area, the fair market value of land adopted by CIT(A) at Rs.135/- per sq. yard cannot be said to be excessive or unreasonable. We, therefore, find no justification to interfere with the order of the CIT(A). The same is upheld and the revenue's appeal is dismissed.
4. In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on 16.5.2014.
Sd/- Sd/-
(A.T. VARKEY) ( G.D. AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
DT. 16th MAY 2014
'GS'
Copy forwarded to:-
1. Appellant
2. Respondent
3. CIT(A)
4. CIT 5.DR By Order
5.
Asstt. Registrar