Income Tax Appellate Tribunal - Ahmedabad
Gujarat Lease Financing Ltd., ... vs Department Of Income Tax on 12 January, 2007
IN THE INCOME TAX APPELLATE TRIBUNAL : A' BENCH : AHMEDABAD
(Before Hon'ble Shri T.K. Sharma, J.M. & Hon'ble Shri A.N. Pahuja, A.M.)
W.T.A. Nos. 9, 10, 11 & 12/AHD./2007
Assessment Year : 1996-1997, 1997-1998, 1998-1999 & 1999-2000
Assistant Commissioner of Wealth Tax, -vs.- Gujarat Lease Financing Ltd., Ahmedabad
Circle-4, Ahmedabad (PAN : AAACG 8254 N)
(Appellant) (Respondent)
&
C.O. Nos. 174, 175, 176 & 177/AHD/2007
(arising out of W.T.A. Nos. 9, 10, 11 & 12/AHD./2007)
Assessment Year : 1996-1997 to 1999-2000
Gujarat Lease Financing Ltd., Ahmedabad -vs.- Assistant Commissioner of Wealth Tax,
Circle-4, Ahmedabad
(Cross Objector) (Respondent)
Assessee by : Shri P.M. Mehta
Department by : Shri Rajeev Agarwal, CIT, D.R.
ORDER
Per Bench :
These four appeals filed by the Revenue and Cross Objections by the assessee are against the common order dated 12.01.2007 of Learned Commissioner of Wealth Tax(Appeals)-VIII, Ahmedabad for the assessment years 1996-97 to 1999-2000.
2. All these appeals and Cross Objections were heard on the same date, argued by the common ld. representative, therefore, these are decided by this common order for the sake of convenience.
3. The only common ground raised by the Revenue in its appeals reads as under :-
"The ld. Commissioner of Wealth Tax (Appeals) erred in law and on the facts of the case in determining the value of immovable property at Rs.17,250/- per square meter (A.Y. 1996-97), Rs.17,500/- per sq. mtr.(A.Y. 1997-98), Rs.18,000/- per sq.mtr.(A.Y. 1998-99) and Rs.18,325/- per sq.mtr.(A.Y. 1999-2000)".2
WTA Nos. 9-12/AHD/2007 & CO-174-177/AHD/2007
4. Briefly stated the facts are that the assessee is a Company. It owns urban land measuring 1816 sq. mtr. situated at Plot No. 422, Ellis Bridge, Ahmedabad. For all the assessment years under appeals, the Assessing Officer determined the value of immovable property at Rs.386.40 lakhs as against Rs.271.35 lakhs declared by the assessee on the strength of approved Valuer's report. Earlier the issue regarding valuation of this property was travelled upto Tribunal. The ITAT setting aside the issue against the original assessment directed the Assessing Officer to give fresh opportunity to the assessee to substantiate their valuation in the light of direction of ITAT. In fresh assessment orders, the Assessing Officer again adopted the value as per Departmental Valuation Officer's report at Rs.386.40 lakhs. On appeal in the impugned order, the ld. CWT(A) directed the Assessing Officer to adopt the value at Rs. 17,250/- per sq. mtr., Rs.17,500/- per sq. mtr., Rs.18,000/- per sq.mtr. and Rs.18,325/- per sq.mtr. as on 31.03.1996, 31.03.1997, 31.03.1998 and 31.03.1999 respectively. The detailed reasons given by the ld. CWT(A) are contained in para 4.2 to 4.3, which is as under :-
"4.2. I have carefully considered the arguments and written submissions of the appellant and also examined the valuation report and perused the relevant portion of the assessment order. The A.O. had simply adopted the value estimated by the DVO as in the original order. Thus, it is obvious that all the contentions of the appellant were not examined with reference to relevant facts. In the original appellate order, the CWT(A) referred to the inapplicability of the sale instances quoted by the DVO and approved rate of Rs.15,000/- per sq.mtr. as admitted by the appellant. The same was not approved by the Hon'ble ITAT in further appeal. Now as seen from the records, the value offered by the assessee as on 31.03.1995 at Rs.307.53 lacs works out to Rs.17,000/- per sq.mt. which was accepted by the Department. As on 31.03.1996, the value shown by the appellant at Rs.271.35 lacs is less than the value admitted as on 31.3.1995. As against this, the DVO has estimated the value of Rs.21360/- per sq.mt., the basis of which is not explained in the order. It is this aspect which the appellant contends vehemently. The sale instances quoted by the DVO as approved by the appropriate authority and comparable with the property of the appellant is not dealt in detail. One of the properties compared was shown as Appeal No. Learned Commissioner of Income Tax(Appeals)-VIII/AC-4/227/05-06 (A.Y. 1996-97), Appeal No. Learned Commissioner of Income Tax(Appeals)- VIII/AC-4/228/05-06 (A.Y. 1997-98), Appeal No. Learned Commissioner of Income Tax(Appeals)-VIII/AC-4/229/05-06 (A.Y. 1998-99), Appeal No. Learned Commissioner of Income Tax(Appeals)-VIII/AC-4/230/05-06 (A.Y. 1999-2000), sold at Rs. 14,713/- per sq.mt., which is lower than the value declared by the appellant but the other 3 instances show higher value, which one of the property was lying close to the appellant's property for making the 3 WTA Nos. 9-12/AHD/2007 & CO-174-177/AHD/2007 fair comparison is not detailed in the order of DVO. Thus it is to be concluded that the properties in the TPS-3 scheme in the locality varied in their value from about Rs.15,000/- sq.mt. to Rs.23,000/- sq.mt. In the absence of specific comparison the value adopted at Rs.21,360/- per sq. mt. as on 31.3.1996 and Rs.26,186/- per sq.mt. as on 31.3.1997 is not corroborated with any verifiable evidence. In that view of the matter, the adoption of the value as such by the A.O. is erroneous read with directions of the Hon'ble ITAT in this regard. At the same time, the value adopted by the appellant which is less than that declared as on 31.3.1995 is not acceptable. As rightly observed by the learned predecessor, the valuation of the property of this nature cannot be done with any mathematical and scientific precision. All the relevant factors and the market conditions have to be taken into account in deciding this issue. As already noted in the preceding para, the value of the immovable properties in the scheme area varied between Rs.5000 to Rs.23000 per sq.mt. Tak9ing into account the value as on 31.3.1995 at Rs.307.53 lacs worked out to Rs.17000 per sq.mt. being accepted by the Department, the value for the succeeding 4 assessment years which are in appeal will have to be determined taking into account the following aspects :-
(1) The value adopted by the A.O. is not on a fair comparison.
(2) The value declared by the assessee in the subsequent years is less than that declared as on 31.3.1995.
(3) The value as on 31.3.1999 at Rs.82.5 per sq.mt. as the value cleared as per Form No. 37-I which is at Rs.329.87 lacs as against the value adopted by the A.O. at Rs.525 lacs for AY 1999-2000. This only explains the exorbitant valuation adopted by the A.O. based on the report of the DVO.
4.3. Hence, I proceed to fix the value of the immovable property for the 4 assessment years in appeal by placing the value between Rs.17,000/- per sq.mt. as on 31.3.1995 and Rs.18235 per sq.mt. as on 31.3.1999 as relatable parameters. There is no specific finding on record to show that the value of the property in the locality varied sharply either upward as estimated by the DVO or came down as declared by the appellant in the subsequent wealth tax returns. In that view of the matter, the gradual appreciation in value of the property from Rs.17000 per sq.mt. to Rs.18235/- per sq.mt., the latter being approved by the competent authority, is considered as fair and reasonable approach in deciding this issue. An increase of 23% each year from 31.3.1996 as adopted by the A.O. in any case is not justifiable and not supported by facts in this regard. In the light of the above, I fix the value as on different valuation dates as under :-
31.03.1996 Rs.17,250/- per sq.mt.
31.03.1997 Rs.17,500/- per sq.mt.4
WTA Nos. 9-12/AHD/2007 & CO-174-177/AHD/2007 31.03.1998 Rs.18,000/- per sq.mt.
31.03.1999 Rs.18,235/- per sq.mt.
(the value declared in Form 37-I and as approved by the competent authorities).
5. Aggrieved by this order of ld. Commissioner of Wealth Tax (Appeals), the Revenue is in appeals before us.
6. At the time of hearing, on behalf of Revenue Shri Rajeev Agarwal, CIT, D.R. appeared and contended that as on 31.3.1995 relevant to the assessment year under appeal, the assessee offered the value of the urban land in question at Rs.306.53 lacs which works out to Rs.17,000/- per sq.mt., which was accepted by the Department. Looking to this figure, the value adopted by the A.O. on the basis of Departmental Valuation Officer's report at Rs.386.40 lakhs is fair and reasonable and the ld. CWT(A) erred in directing the A.O. to adopt the value in four assessment years under appeals ranging from Rs.17,250/- per sq.mtr. to Rs.18,235/- per sq.mtr.
7. On the other hand, Shri P.M. Mehta, appearing on behalf of the assessee supported the order of ld. CWT(A). The ld. counsel of the assessee submitted that looking to the value accepted by the Department at the rate of Rs.17,000/- per sq.mt. as on 31.3.1995, the direction of the ld. CWT(A) to adopt the value at Rs.17,250/- per sq.mt. as on 31.3.1996, Rs.17,500/- as on 31.3.1997, Rs.18,000/- as on 31.3.1998 and Rs.18,235/- as on 31.3.1999 is fair and reasonable. The ld. counsel of the assessee further submitted that the property in question was purchased from the Income Tax Department in 1991 at the rate of Rs.9,563/- per sq. yard and was sold for Rs.18,235/- per sq. yard in 1999 after eight years. The assessee's Valuer valued the property at the rate of Rs.15,000/- per sq.mtr. As against this, in the impugned order, the ld. CWT(A) has directed the Assessing Officer to value the property in question for all the four assessment years ranging from Rs. 17,250/- per sq. mtr., Rs.17,500/- per sq. mtr., Rs.18,000/- per sq.mtr. and Rs.18,325/- per sq.mtr. as on 31.03.1996, 31.03.1997, 31.03.1998 and 31.03.1999 respectively is fair and reasonable. Therefore, the view taken by the ld. CWT(A) be upheld.
8. Having heard both the sides, we have carefully gone through the orders of authorities below. It is pertinent to note that the urban land in question was purchased by the assessee from the Income Tax Department in 1991 at the rate of Rs.9,563/- per sq. yard and was sold for Rs.18,235/- per sq. yard in 1999 after eight years. The sale price has been ultimately accepted by the Department. In our considered opinion, the actual sale price is the best indicator for valuing 5 WTA Nos. 9-12/AHD/2007 & CO-174-177/AHD/2007 the property in question for the purpose of wealth-tax in all the four assessment years. Keeping in view the totality of the facts and circumstances of the case and the fact that in the year 1999, the urban land in question was sold at the rate of 18,235/- per sq. yard, we are of the view that the ld. CWT(A) has given cogent reason for valuing the urban land in question as on different valuation dates as under :-
31.03.1996 Rs.17,250/- per sq.mt.
31.03.1997 Rs.17,500/- per sq.mt.
31.03.1998 Rs.18,000/- per sq.mt.
31.03.1999 Rs.18,235/- per sq.mt.
(the value declared in Form 37-I and as approved by the competent authorities). It is also pertinent to note that in the impugned order, the ld. CWT(A) has clearly mentioned that the value declared in Form No. 37-I was approved by the competent authorities. These being the facts, in our opinion, no interference is called for. We are, therefore, inclined to uphold the order of ld. CWT(A) in this regard. Resultantly, the common ground raised by the Revenue in all the four appeals is rejected.
9. The grounds of Cross Objections filed by the assessee are not pressed by the ld. counsel of the assessee at the time of hearing. Therefore, these are being dismissed as not pressed.
10. In the result, the appeals filed by the Revenue as well as Cross Objections by the assessee are dismissed.
The Order was pronounced in the Court on 05.03.2010
Sd/- Sd/-
(A.N. Pahuja) (T.K. Sharma)
Accountant Member Judicial Member
DATED : 05/ 03 / 2010
Copy of the order is forwarded to :
1) The Assessee
(2) The Department.
3) CIT(A) concerned, (4) CIT concerned, (5) D.R., ITAT, Ahmedabad.
True Copy By Order Deputy Registrar, ITAT, Ahmedabad Laha/Sr.P.S.