Income Tax Appellate Tribunal - Pune
Edna Victor Samuels, Pune vs Assessee on 29 February, 2016
आयकर अपील य अ धकरण, पुणे यायपीठ "बी" पुणे म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
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BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM
आयकर अपील सं. / ITA No.1015/PN/2012
#नधा&रण वष& / Assessment Year : 2006-07
..........
Late Mrs.Edna Victor Samuels अपीलाथ /
Through Legal Heir Appellant
Mr. Akhtar Jallu Khan
Flat No.101, Shan Ganga,
Salisbury Park,
Pune - 411 037
PAN No.AJNPS5535L
बनाम v/s
ITO, Central-II, Pune ..........
यथ /
Respondent
अपीलाथ क ओर से / Assessee by : Shri Mahavir Jain
यथ क ओर से / Revenue by : Shri Manish Kumar Sinha
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing :17.02.2016 Date of Pronouncement:29.02.2016
आदे श / ORDER
PER R.K.PANDA, AM :
This appeal filed by the assessee is directed against the order dated 20-02-2012 of the CIT(A) Central, Pune relating to Assessment Year 2006-07.
2. Facts of the case, in brief, are that the assessee is an individual. A search operation u/s.132 of the I.T. Act was carried out in the premises of the assessee on 06-05-2005. The original return of income was filed by the assessee on 31-10-2006 declaring 2 ITA No.1015/PN/2012 total income of Rs.6,30,62,010/-. Subsequently, the assessee filed a revised return declaring total income of Rs.6,34,67,010/-.
3. During the course of assessment proceedings the AO noted that the assessee during the impugned assessment year has sold a piece of land admeasuring 48800 sq.mtrs. for a consideration of Rs.9 crores. Cost of acquisition as on 01-04-1981 adopted by the assessee was Rs.53,68,000/- which comes to Rs.110/- per sq.mtr. This is the costing given by the Government approved valuer as on 01-04-1984. The AO, therefore, asked the assessee to justify as to how she is adopting the same value as on 01-04-1981 which is 3 years earlier. The assessee in her response submitted that as under :
"a. The land is located at Kharadi which was on the outskirts of Pune in 1984 as well as in 1981. There was no material change in the circumstances between 1981 & 1984. There was no improvement or development in the area between 1981 & 1984. Hence, the assessee has adopted the value given by the Govt. Approved Valuer as on 01-04- 1984 for 01-04-1981 also.
b. Secondly, when the stamp duty rate was introduced in 1991, the rate for the relevant area was published as below :
i. Rate for S.No.23, H.No.2B, Kharadi was published as Rs.220/- per sw.mt as on 01-01-1991. Considering this rate & indexing backwards as per the Income Tax Index Values, the rate per sq.mt works out to Rs.220 X 100/182 = Rs. 121 per sq.mt.
(Index for F.Y.81-82 =100) (Index for F.Y. 90-91 - 182) Hence, the value for S.No.23, H.No.2B Kharadi, works out to Rs.30,73,400/-.
ii. Rate for S.No.24, H.No. 2A+2B+24/1C, Kharadi, was published as Rs.200/- per sq.mt as on 01-01-1991. Considering this rate & indexing backwards as per the Income Tax Index Values, the rate per sq.mt works out to Rs.200 X 100/182 = Rs. 110 per sq.mt.
(Index for F.Y.81-82 =100) (Index for F.Y. 90-91 - 182) Hence, the value for S.No.24, H.No. 2A+2B+24/1C, Kharadi works out to Rs.25,74,000/-.3 ITA No.1015/PN/2012
iii. It has been submitted that as per the above working, the total cost works out to Rs.56,47,400/-. As against this, the assessee has claimed the cost as on 01-04-1981 at Rs.53,68,000/- only, which is lower. Hence, the assessee has requested that the rate adopted by her for the cost of land as on 01-04-1981 may please be accepted."
4. However, the AO was not satisfied with the explanation given by the assessee. He observed that since the valuer has valued the land @ Rs.110/- per sq.mtr as on 01-04-1984, therefore, considering this rate and indexing backwards as per the Income Tax Index values, the rate per sq.mtr as on 01-04-1981 comes to Rs.88/- per sq. mtr. As against this the assessee has given justification for higher value of R.121 per sq.mtr in respect of S.No.23 and Rs.110/- per sq. mtr in respect of S.No.24 as on 01- 04-1981 based on Government published values. Considering the totality of the facts of the case the AO adopted the value of Rs.100/- per sq.mtr as on 01-04-1981. The AO accordingly determined the long term capital gain of Rs.6,50,21,400/- as against Rs.6,25,96,040/- declared by the assessee.
5. Before CIT(A) the assessee reiterated the same submissions as made before the AO. However, the CIT(A) also was not satisfied with the arguments advanced by the assessee and upheld the action of the AO.
6. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds :
The following grounds are taken without prejudice to each other- On facts and in law, 1] The learned CIT(A) erred in confirming the assessment order passed by the learned Assessing Officer (hereinafter 'AO') in case of the appellant assessing total income at Rs. 6,61,09,897/- as against the returned income of Rs. 6,34,67,010/-.4 ITA No.1015/PN/2012
2] The learned CIT(A) erred in confirming enhanced capital gain as computed by the learned AO at Rs. 6,50,21,400/-.
2.1] The learned AO erred adopting an irrational and arbitrary methodology while computing the fair market value as on 01.04.1981 without accepting the valuation report of the government certified valuer as relied upon by the appellant.
2.2] The learned CIT(A) is not justifying in ignoring the request of appellant to refer the case for revised valuation either to the Government certified valuer or to the Departmental valuation officer instead following the unscientific method of valuation of the asset adopted by the learned AO.
2.3] The learned AO erred in not accepting the opinion/report of the technical person (Government Certified Valuer) instead applying his own unscientific and irrational methods valuation like reverse indexation which is not permissible. He should have refer the case to the DVO for valuation as there is separate technical authority created by the law.
3] The learned AO as well as learned CIT(A) erred in not appreciating that -
a. Though the valuation report by the valuer had valuation date as 01.04.1984, the value derived was actually as of 01.04.1981.
b. There were no comparative transactions in that area during the period from 01.04.1981 to 01.04.1984 and this is the reason that the valuer had taken 01.04.1984 as valuation date.
c. Even the valuer has confirmed that there would not be significant difference in valuation as on 01.04.1981 and 01.04.1984, as the area was in extreme outskirts of Pune where hardly any transactions happened in those period. 4] Without prejudice to the claim that there is no need to reject the value adopted by the appellant, the learned AO further erred in rejecting the alternative valuation provided by the appellant to substantiate its earlier claim where reverse indexation was applied to the stamp duty valuation published for relevant area for the first time in the year 1991.
5] The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal."
7. The Ld. Counsel for the assessee at the outset submitted that there is a typographical error in the valuation report obtained from the registered valuer. He submitted as against 01-04-1981 the date was wrongly typed as 01-04-1984. He accordingly submitted that 5 ITA No.1015/PN/2012 for the purpose of calculation of rate per sq.mtr as on 01-04-1981 if the value determined by the registered valuer at Rs.110/- per sq.mtr is taken, then there is no necessity for disturbing the computation adopted by the assessee for the purpose of calculation of Long Term Capital Gain.
8. In his alternate contention he submitted that the assessee has considered the cost of acquisition as on 01-04-1981 at Rs.110/- per sq.mtr which has been reduced to Rs.100/- per sq.mtr as on 01-04-1981 by the AO without bringing any comparative case. Referring to the 3 valuations given by the assessee before the AO which has already been reproduced by the AO at Para 7.1 of the order he submitted that as per calculation done by the assessee the highest rate per sq.mtr comes to Rs.121/- per sq.mt and the lowest comes to Rs.110/- per sq. mtr. However, the AO ignoring the various calculations made by the assessee has adopted the rate of Rs.100/- per sq.mtr as on 01-04-1981. He submitted that the stamp duty rates came into effect only w.e.f. 01- 01-1991, a fact which has been admitted by the AO at Para 7.2 of the order. Since the rate adopted by the assessee as on 01-04-1981 is on scientific basis, therefore, the capital gain determined by the assessee should be accepted and the grounds raised by the assessee should be allowed.
9. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He submitted that the rate adopted by the AO per sq.mtr as on 01-04-1981 is very reasonable under the facts and circumstances of the case which has been upheld by the CIT(A) and there is no need to interfere in the order of the CIT(A).
6ITA No.1015/PN/2012
10. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find in the instant case the assessee obtained a valuation report from a registered valuer for the purpose of determining the cost of acquisition as on 01-04-1981. However, the valuer gave a report for the purpose of determining the cost of acquisition as on 01-04-1984. Since the valuer's report was for the calculation of cost of acquisition as on 01-04-1984, therefore, the AO brought it down to 1981 rate and adopted the rate of Rs.100/- per sq.mtr as on 01-04-1981 as against Rs.110/- per sq.mtr adopted by the assessee as on 01-04-1981.
11. The submission of the Ld. Counsel for the assessee that there was a typographical error in the report of the valuer and it should be read as on 01-04-1981 instead of 01-04-1984 is not acceptable especially when the report was obtained on 01-07-2005 and the assessee has obtained the clarification from the valuer which is dated 25-04-2015;, i.e. after a gap of about 10 years. In the last 10 years, though the case was argued before the AO and the CIT(A) nobody has pointed out that there was a typographical error. Even before the AO also the assessee has referred to the Government Approved Valuer's report as on 01-04-1984 and it was stated that since there was no improvement or development in the area between 1981 and 1984, therefore, he has adopted the same value as given by the Government Approved Valuer as on 01-04-1984. Even before the CIT(A) also no such argument was taken that there was a typographical error and the assessee wanted to obtain the report from the valuer for the purpose of determining the cost of acquisition as on 01-04-1981. Therefore, the first plank of 7 ITA No.1015/PN/2012 argument of the Ld. Counsel for the assessee that the cost of acquisition determined by the registered valuer as on 01-04-1984 is infact the cost of acquisition as on 01-04-1981 and there was a typographical error cannot be accepted. Accordingly, the first plank of argument is rejected.
12. So far as the second plank of the argument is concerned that adoption of Rs.100/- per sq.mtr as on 01-04-1981 by the AO as against Rs.110/- per sq. mtr adopted by the assessee is not based on any comparative analysis, we find there is some force in the above argument of the Ld. Counsel for the assessee. The AO in the body of the assessment order has admitted that the stamp duty rate as on 01-01-1991 pointed out by the assessee is actual rate as published as on 01-01-1991 for S.No.23, H.No.2B Kharadi for a part of the land sold by the assessee was Rs.220/- per sq. mtr. Similarly, for the land sold at S.No.24, H.No.2A+2B+24/1C, Kharadi the rate as on 01-01-1991 comes to Rs.200/- per sq.mtr. The AO has adopted the mean value by doing backward indexation calculated the rate at Rs.88/- per sq.mtr and thereafter adopted Rs.100/-per sq.mtr as on 01-04-1981 which has been upheld by the CIT(A).
13. Since admittedly there is no comparative sale instance obtained either by the AO or by the assessee in the instant case for determining the cost of acquisition as on 01-04-1981 and the calculation by the assessee as well as the revenue are on estimate basis, therefore, adoption of Rs.105/- per sq.mtr as on 01-04-1981 in our opinion will meet the ends of justice. We accordingly modify the order of the CIT(A) and direct the AO to adopt the rate of 8 ITA No.1015/PN/2012 Rs.105/- per sq.mtr as on 01-04-1981 for the purpose of calculating the cost of acquisition.
14. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 29-02-2016.
Sd/- Sd/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER पण ु े Pune; दनांक Dated : 29th February, 2016. सतीश
आदे श क) *#त,ल!प अ-े!षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. The CIT(A) Central, Pune
4. The CIT Central, Pune
5.
$वभागीय 'त'न(ध, आयकर अपील य अ(धकरण, "बी" पण ु े/ DR, ITAT, "B" Pune;
6. गाड- फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, // True Copy // //स या$पत 'त //Tre Copy // व/र0ठ 'नजी स(चव / Sr. Private Secretary आयकर अपील य अ(धकरण, पुणे / ITAT, Pune