Gujarat High Court
Pr. Commissioner Of Income ... vs Ambalal Sarabhai Enterprises ... on 24 March, 2017
Author: M.R. Shah
Bench: M.R. Shah, B.N. Karia
O/TAXAP/104/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 104 of 2017
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PR. COMMISSIONER OF INCOME TAX-VADODARA -
1....Appellant(s)
Versus
AMBALAL SARABHAI ENTERPRISES LTD....Opponent(s)
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Appearance:
MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1
MR SN SOPARKAR, SENIOR ADVOCATE with MR B S SOPARKAR,
ADVOCATE for the Opponent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 24/03/2017
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE M.R. SHAH)
1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal, "D" Bench, Ahmedabad (hereinafter referred to as "the learned tribunal") dated 11/04/2016 in 2694/Ahd/2012 for the Assessment Year 2009-10, revenue has preferred the present Tax Appeal with the following proposed questions of law;
(A) Whether on the facts and circumstances of the case, the ITAT was right in holding in directing AO to re-compute the capital gain by adopting the cost of acquisition of the property at Rs.980/- per sq meter?
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O/TAXAP/104/2017 ORDER
(B) Whether on the facts and circumstances of
the case, the ITAT was right in holding that in our considered view, it is incumbent upon the AO to call for report from DVO for ascertaining the fair market value of the asset, in the event, if he is not satisfied about the claim of the assessee, without considering the decision of Hon'ble Gujarat High Court in the case of Commissioner of Income-tax Vs. Gauranginiben S. Shodhan (Indl.), without appreciating that the case of the assessee did not fit in the conditions laid down in Section 55A(a) of the IT Act?
(C) Whether on the facts and circumstances of the case, the ITAT was justified in law in directing the AO to take cost of acquisition as on 01/04/1981 at Rs.980/- per sq meter ignoring the fact it had worked out cost of acquisition at Rs.980/- by taking the average, which includes cost of acquisition claimed by the assessee at Rs.1940/- per sq meter, though the ITAT held that the valuation adopted by the Government approved valuer cannot be adopted?
(D) Whether on the facts and circumstances of the case, the ITAT was justified in holding that both the authorities below are not justified in adopting the rate, as the assessee had furnished a report from an expert i.e. Govt. approved valuer, when the ITAT had not accepted the valuation adopted by the Page 2 of 6 HC-NIC Page 2 of 6 Created On Tue Aug 15 05:28:36 IST 2017 O/TAXAP/104/2017 ORDER Government approved valuer?
(E) Whether on the facts and circumstances of the case and in law, the ITAT erred in holding that "the Revenue has also not placed any material on record, demonstrating the prevalent market rate as on 01/04/1981 in the close vicinity of land in question", without appreciating that the AO estimated value of the land as on 01/04/1981 on the basis of information collected from Sub Registrar and other factual information and parameters and the AO in the assessment order recorded comparable instances of the value of property as on 01/04/1981 in the assessment order?
(F) Whether on the facts and in the circumstances of the case, the tribunal was right in law in disallowance made under Section 14A r.w.r. 8D of the Act, without appreciating the fact that the expenses which are relatable to earning of exempt income have to be considered for disallowance, irrespective of the fact whether any such income has been earned during the financial year or not?
2. The present Tax Appeal is ADMITTED to consider the following questions of law;
(A) Whether on the facts and circumstances of the case, the ITAT was right in holding in directing AO to re-compute the capital gain by adopting the Page 3 of 6 HC-NIC Page 3 of 6 Created On Tue Aug 15 05:28:36 IST 2017 O/TAXAP/104/2017 ORDER cost of acquisition of the property at Rs.980/- per sq meter?
(B) Whether on the facts and circumstances of the case, the ITAT was right in holding that in our considered view, it is incumbent upon the AO to call for report from DVO for ascertaining the fair market value of the asset, in the event, if he is not satisfied about the claim of the assessee, without considering the decision of Hon'ble Gujarat High Court in the case of Commissioner of Income-tax Vs. Gauranginiben S. Shodhan (Indl.), without appreciating that the case of the assessee did not fit in the conditions laid down in Section 55A(a) of the IT Act?
(C) Whether on the facts and circumstances of the case, the ITAT was justified in law in directing the AO to take cost of acquisition as on 01/04/1981 at Rs.980/- per sq meter ignoring the fact it had worked out cost of acquisition at Rs.980/- by taking the average, which includes cost of acquisition claimed by the assessee at Rs.1940/- per sq meter, though the ITAT held that the valuation adopted by the Government approved valuer cannot be adopted?
(D) Whether on the facts and circumstances of the case, the ITAT was justified in holding that both the authorities below are not justified in adopting the rate, as the assessee had furnished a report Page 4 of 6 HC-NIC Page 4 of 6 Created On Tue Aug 15 05:28:36 IST 2017 O/TAXAP/104/2017 ORDER from an expert i.e. Govt. approved valuer, when the ITAT had not accepted the valuation adopted by the Government approved valuer?
(E) Whether on the facts and circumstances of the case and in law, the ITAT erred in holding that "the Revenue has also not placed any material on record, demonstrating the prevalent market rate as on 01/04/1981 in the close vicinity of land in question", without appreciating that the AO estimated value of the land as on 01/04/1981 on the basis of information collected from Sub Registrar and other factual information and parameters and the AO in the assessment order recorded comparable instances of the value of property as on 01/04/1981 in the assessment order?
3. Now so far as the proposed question no.(F) reproduced hereinabove is concerned, the learned tribunal has relied upon the decision of the Division Bench of this Court in the case of Commissioner of Income-tax Vs. Corrtech Energy P. Ltd. reported in [2015] 372 ITR 97 (Guj.). Considering the fact that there was no claim of the assessee for exemption of income for payment of tax, and therefore, relying upon the decision of the Division Bench of this Court in the case of Corrtech Energy P. Ltd. (Supra), the learned tribunal has rightly held that no disallowance can be made under Section 14A of the Income Tax Act. In view of the aforesaid, it cannot be said that the learned tribunal has committed any error in deleting the addition made by the Page 5 of 6 HC-NIC Page 5 of 6 Created On Tue Aug 15 05:28:36 IST 2017 O/TAXAP/104/2017 ORDER Assessing Officer on disallowance under Section 14A of the Act. Under the circumstances, the present Tax Appeal qua question no.(F) is hereby dismissed.
4. As observed hereinabove, the present Tax Appeal is admitted qua question nos.(A) to (E) reproduced hereinabove.
Shri B.S. Soparkar, learned advocate waives service of notice of admission on behalf of the respondent.
To be heard with Tax Appeal Nos.80/2017, 105/2017, 106/2017 & 107/2017.
(M.R. SHAH, J.) (B.N. KARIA, J.) Siji Page 6 of 6 HC-NIC Page 6 of 6 Created On Tue Aug 15 05:28:36 IST 2017