Income Tax Appellate Tribunal - Jodhpur
Wealth Tax Officer vs Surender Singh on 22 January, 2002
ORDER
B.L. Khatri, A.M.
1. In this case the Revenue has filed three appeals against the order of CWT(A), Jodhpur, for asst. yrs. 1987-88, 1988-89 and 1990-91, and the assessee has also filed C.Os. for all the three assessment years, i.e., asst. yrs. 1987-88, 1988-89 and 1990-91. For asst. yrs. 1987-88 the Revenue agitated on the ground that the CWT(A) was not justified in disposing of the appeal by observing that whatever final position remains in asst. yr. 1988-89, the same proportionate value will be followed for asst. yr. 1987-88. For asst. yr. 1988-89 the Revenue agitated on the ground that the CWT(A) erred in setting aside the assessment by placing reliance on the order for asst. yr. 1987-88 wherein reference was made to the future decision of this year. For asst. yr. 1990-91, the Revenue agitated on the ground that the CWT(A) erred in directing the AO that whatever position remains in asst. yr. 1989-90 the same will be followed for this year also with regard to the valuation of three plots situated at Ramesh Nagar, Delhi.
2. For all three years, the assessee has given the following grounds of cross-obiections :
(1) The learned CWT(A) erred in not considering and appreciating the submissions made by the assessee and further erred in not deciding the appeal on merit.
(2) The learned CIT(A) also erred in directing the WTO to valuate the three plots of Late S. Gurbax Singh at Ramesh Nagar, New Delhi, on the basis of comparable sale of plot No. 14/10, corner plot in Ramesh Nagar which is quite in proximity and quite comparable.
(3) The valuation of assessee's three plots on the basis of sale of that plot with plus and minus points worked at about Rs. 5,50,000 and the learned CWT(A) should have directed the WTO to value the plots on that basis.
3. In all the three appeals and in all the three cross-objections for all the three years, the common point of dispute is regarding valuation of three plots at Ramesh Nagar, New Delhi. Therefore, all these appeals and C.Os. are being decided through a consolidated order.
4. The learned Departmental Representative relied upon the orders of the AO.
5. The learned authorised representative filed detailed written submissions. The AVO valued the property on the basis of a built-up property No. J-3/133, Rajori Garden, New Delhi, built on 133.78 sq.mt. freehold plot which was alleged to have been sold on 19th Sept., 1986, for Rs. 11 lacs. The AVO deducted the cost of built-up superstructure at Rs. 2,65,000 and arrived at the sale price of the land at Rs. 9,35,000 giving per sq. mtr. rate of Rs. 6,242. The AVO determined the value of this property at Rs. 18,99,420 as on 31st March, 1988. Therefore, for asst. yr. 1988-89 the WTO has adopted the value of three plots at Rs. 18,99,420 as determined by the AVO. For asst. yr. 1987-88 the WTO has also followed this valuation report. However, keeping in view the increase in prices he estimated the fair market value for asst. yr. 1987-88 at Rs. 17 lacs. For asst. yr. 1990-91 he has estimated the same value as per asst. yr. 1988-89 i.e., Rs. 18,99,420 as determined by the AVO.
6. While adopting the fair market value of these plots on different dates, the AO did not consider the objection of the assessee. The learned authorised representative submitted that the AVO in his report had not denied the fact of sale of plot No. 14 in the same block No. 10 of Ramesh Nagar which was within 200 yards from the assessee's plot and 7th plot after last plot No. 7 of the assessee. It is not denied that it was sold as plot and had the same advantages and disadvantages and was similarly situated. This best comparable case has been ignored though claim was made before the AVO. In view of the Hon'ble Supreme Court decision in R.C. Cooper vs. Union of India AIR 1970 SC 564 and Hon'ble Rajasthan High Court decision in CWT vs. Miss (Dr.) Vinay Rai, valuation made ignoring the best comparable case was not valid.
7. In C.O. the assessee has prayed that the valuation as made by the WTO was against the principles of valuation enunciated by the Hon'ble Supreme Court in R.C. Cooper vs. Union of India (supra) and Hon'ble Rajasthan High Court decision in CWT v. Miss (Dr.) Viney Rae (supra).
8. The assessee's three plots Nos. 5, 6 and 7 were in block No. 10 of Ramesh Nagar, New Delhi. While two plots were of irregular size, one plot had depth of 60' while it was only 15' wide. During the course of assessment proceedings and also before the CIT(A) in all the appeals, the assessee had filed photostat copy of the sale deed of plot No. 14 situated in the same block No. 10 of Ramesh Nagar in the immediate vicinity having same advantages and disadvantages and covered by the same rules of limits of construction. All the plots were leasehold plots which were allotted to the persons migrated from Pakistan after partition. The sale deed of plot No. 14, copy of which is at pp. 18 to 22 of paper book reveals that it was a plot of 200 sq. yd and was a corner plot and was sold for consideration of Rs. 2,50,000 vide sale deed registered on 12th Aug., 1985. Vide submissions dt. 6th July, 1994, the assessee had prayed that the valuation of assessee's plots to be made on the basis of sale of the plot No. 14 giving credit and debit for the factors like plot being of irregular size whereas the sale instance of plot No. 14 being a corner plot and the sale being about 19 months prior to valuation date for the asst. yr. 1987-88. The working given in that submission appearing at p 8 of the paper book would show that on comparison with that sale, the value of the assessee's three plots would be about Rs. 5 lacs for asst. yr. 1987-88 and about Rs. 5.50 lacs for the later assessment years.
9. Though with letter dt. 24th May, 1989, the assessee had filed with the AVO, New Delhi, photostat copy of the sale deed of plot No. 14 and requested him to determine the fair market value of the plots on the basis of that comparable sale instance the AVO had ignored the comparable sale.
10. The AVO has valued the assessee's plots on the basis of sale of property No. J-3/133, Rajori Garden, New Delhi. The AVO had admitted that reference of this sale was recorded in his office. It means that the AVO had not seen the sale deed and the entire exercise was without any basis and unreliable. Rajouri Garden, New Delhi, is a different locality and there was no comparison with the plots of the assessee which are in Ramesh Nagar. The learned authorised representative submitted that the AVO had not supplied a copy of sale deed of comparable case and the valuation report based on that sale was in violation of natural justice. He referred to the case of Sona Builders v. Union of India (2001) 251 ITR 197 (SC). In this case it was held that the appropriate authority gave most inadequate time to the appellant and no copy of document relating to the sale instance was furnished by the appropriate authority to the appellant along with notice or at any time whatsoever. The Court held that on both the counts there had been gross breach of principle of natural justice. The AVO has submitted that no reliance can be placed on the registered sale deed of sale instance in view of Delhi Admn's Land & Building Department's letter dt. 3rd May, 1990. The learned authorised representative submitted that it is suffice to say that the sale consideration shown in the registered sale deed is real unless otherwise proved. The apparent is real unless otherwise proved. The sale consideration was accepted by the Sub-Registrar for the purpose of registration and stamp duty and even the ITO assessing the seller S. Inder Singh accepted the sale consideration for the purpose x>f capital gain. The seller is assessed to income-tax in Ward-A, Sriganganagar, and the return of income for the relevant year had been accepted. At the end the learned authorised representative requested that the issue should be decided on merit and the following value on the basis of sale instance may be adopted :
Comparable sale instance of 200 sq. yd. plot sale price Rs. 2.5 lac. Rate comes to Rs. 1,250 per sq. yd.
Less : (1) The plot No. 14/10 was a corner plot having 25 per cent higher value as compared to two side open plots (-)25 per cent (2) For irregular size (-)18 per cent (3} The sale of plot No. 14/10 was in Aug., 1985 while valuation date for 1987-88 is 31st March, 1987 rise in value @ 12 per cent p.a. for 19 months ' (+)19 per cent Net (-)24 per cent The value will be 1,250x76/100 i.e., Rs. 950 per sq. yd. or about Rs. 1,220 per sq. mtr.--value Rs. 4,58,000.
11. We have considered the rival submissions. We have perused the records. The assessee is owner of three plots in Ramesh Nagar, New Delhi, the value of which has been determined by the AVO on the basis of a sale instance of a constructed plot i.e., a building situated in Rajouri Garden. Rajouri Garden is opposite to Ramesh Nagar. The learned authorised representative has relied upon the case of CIT v. Miss '(Dr.) Vinay Rae (supra). In this case it was held that for the purpose of valuation of land the established principle of comparable cases of the vicinity should be followed. We find that the AVO has not relied upon any sale instance of the same vicinity and he has compared a built-up plot with open plot whereas the assessee has quoted a sale instance of the same locality. Instance of sale should be of similar plot' of land in similar locality. It was thus held in the case of CIT v. Leatherite Industries Ltd. (1984) 147 ITR 655 (P&H). Instance of plots in different areas cannot be compared when the sale instance comparable with the same area is filed by the transferee.. It. was also thus held that in the case, of Mani Singh Avtar Singh v. IAC (Acqn.) (1985) 151 ITR 233 (P&H). In this case it was also held that price of a plot of land which has been built upon cannot compare favourable with that of an unbuilt area. Therefore, we hold that the AVO and the WTO/CWT(A) should have decided the case on the basis of sale instance of the plot of the same vicinity given by the assessee. The learned authorised representative while comparing the deduction of valuation with plot of sale instance has asked for deduction of 25'per cent as the plot No. 14/10 was a corner plot and he has also asked deduction of 18 per cent for his plot being of irregular size. We are of the opinion that these two plots are situated in the same locality, that is, Ramesh Nagar. Therefore, no such deductions can be allowed. However, we direct the AO to adopt the value of these three plots on the basis of sale instance as under:
Area of plot No. 14/10 at Ramesh Nagar 449 sq. yd. x 1,250 Rs. 6,61,250 The sale of plot No. 14/10 was in August, 1985 where valuation date of asst. yr. 1987-88 is 31st March. 1987, Rise in value @ 12 per cent p.a. for 19 months i.e., 9 per cent Rs. 1,06,637 As on 31st March, 1987 (Asst. yr. 1987-88) Rs. 6.67.887 The value of the above plot with 12 per cent increase in asst. yr. 1988-89 comes to Rs. 7,48,033. In this way, the value of the above plot with 12 per cent increase in asst. yr. 1990-91 comes to Rs. 9,38,333. Therefore, the WTO is directed to allow necessary relief to the assessee for all the three years. This also disposes of the three C.Os. of the assessee.
12. In the result, the appeals for all the three years by the Revenue are allowed in part and the C.Os. of the assessee are allowed in part.