Income Tax Appellate Tribunal - Ahmedabad
Zaverbhai R.Rathod L/H Of Late Ramubhai ... vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "B" BENCH AHMEDABAD
Before Shri D.K.Tyagi, Judicial Member and
Shri T.R. Meena, Accountant Member
ITA No. 3352/Ahd/2009
Assessm ent Year :2006-07
Incom e Tax Officer, W ard V/s. Late Ramubhai Govindbhai
6(4), Surat Rathod L/h. Zaverbhai R.
Rathod, Surat
P AN No. AHGPP4283M
(Appellant) .. (Respondent)
अपीलाथȸ कȧ ओर से Ms. Surabhi Sharma, Sr. D.R
By Appellant
ू×यथȸ कȧ ओर से/By Respondent Shri J.P.Shah,A.R,
सुनवाई कȧ तारȣख/Date of Hearing
06.06.2012
घोषणा कȧ तारȣख/Date of Pronouncement 22.06.2012
ORDER
PER : T.R.Meena, Accountant Member
This is an appeal at the behest of the Revenue which has emanated from the order of CIT(A)-IV, Surat, order dated 25.08.2009 for assessment year 2006-
07. The main grounds of appeal are as under:-
"[1] On the facts and in the circumstances of the case and in Law, the Ld. CIT(A)-IV, Surat has erred in substituting the FMV as on 1/4/1981 as the cost of acquisition of the land for the purpose of computing the assessee's share in the long term capital gain as per the provisions of section 55(2)(b) of the Act on the basis of the valuation report dated I T A No . 3 35 2 /A h d/ 2 00 9 A . Y. 20 06- 0 7 Page 2 16/1/2009 of the Govt. approved valuer Shri Sirish Kania which is unreasonable and prepared on the basis of incomparable sale instances and thereby deleting the addition of Rs.15,11,000/- made by the AO on account of capital gain.
[2] On the fats and in the circumstances of the case and in Law, the Ld.CIT(A)-IV, Surat has erred in considering the sale proceeds of land at Rs.48,09,513 instead of Rs.90,66,000 as determined by the Stamp Valuation Authority for the purpose of working of capital gain as per section 50C of the Act."
2. The first and second grounds are against deletion of Rs. 15,11,000/- by the CIT(A) on the ground that sale consideration was taken at Rs. 48,09,513/-.
3. The brief fact of the case is that the assessee had sold his land for consideration of Rs. 48,09,513/- during the year in consideration. In this case, the value of the land taken by the Stamp Valuation Authority at Rs. 90,66,000/-. The A.O. got this information from the Housing Society. It was found that sale deed consideration was shown at Rs. 48,09,513/- but additional stamp duty of Rs. 3,56,544/- was paid @ 8.44%. It is further noticed by the A.O. that there were five other partners in the land. Originally this land was received as Baxis (donation) by the father of the assessee who was Chaukidar. The cost of acquisition in the hands of father was nil. This land was inherited along with his siblings. The cost of acquisition in the hands of all the legal heirs was nil. The A.O. had taken the sale value of this land at Rs. 90,66,000/- being 1/6th share of the assessee in this property. The capital I T A No . 3 35 2 /A h d/ 2 00 9 A . Y. 20 06- 0 7 Page 3 gain worked out at Rs.15,11,000/- and same was added in the income of the assessee.
4. The ld. CIT(A)-IV, Surat, has relied on the decision of Vijaysinh R. Rathod & Ors. Vs. ITO (2007) 107 TTJ (Ahd) (SB) 593 and directed the ITO to allow the assessee to substitute the F.M.V. as on 01.04.1981 as the cost of acquisition of the land for the purpose of computing his share in the long term capital gain, as per the valuation report dated 16.01.2009 of the Government Approved Valuer, Shri Sirish Kania, as submitted by the appellant.
5. Now the Revenue is before us. Ld. D.R. opposed the finding given by the CIT(A) in this order and argued to confirm the addition made by the A.O. The CIT(A) accepted the fresh evidence i.e. valuation report dated 16.01.2009 in respect of the valuation of the land as on 01.04.1981. The comparable cases considered by the Approved Valuer in the valuation report were not matching in respect of the size of land which is not justified. Therefore, the order passed by ld. CIT(A) deserved to be quash.
6. Another side, ld. A.R. of the assessee filed a copy of the written reply submitted to the CIT(A) and contended that the ld. Collector, Surat has revised the valuation of the land at Rs. 48,09,513/- on 23.01.2006 in pursuance of the direction of the Hon'ble High Court in which the rate of valuation of land was taken @ Rs. 1,061/- per sq. mtr. Which has been worked out at Rs.48,09,513/-. The ld. A.R. further submitted that when cost of acquisition is nil in the hands of the assessee, no capital gain is arised. If the F.M.V. as on 01.04.1981 is taken on the basis of the report of the valuer and I T A No . 3 35 2 /A h d/ 2 00 9 A . Y. 20 06- 0 7 Page 4 indexation is provided on it. The capital gain is negative, therefore, he prayed to delete the addition made by the A.O. and dismiss the finding given by the CIT(A) in appeal order.
7. We have perused the orders of authorities below and arguments from both the sides and considered the paper book submitted by the assessee. The ld. Collector, Surat, has revised the rate of land by his order dated 20.01.2006 on direction of the Hon'ble High Court @ Rs. 1,061/- per sq. mtr. which came at Rs. 48,09,513/-. The ld. CIT(A) has rightly held that on page no.7 of the order that sale consideration of the land as per Section 50C is Rs. 48,09,513/- and not Rs.90,66,000/- as considered by the ITO. In this case, the cost to previous owner was not ascertainable. As per Section 55(3) of the IT Act, market value of the land when acquired by the previous owner would be the cost to the previous owner and the appellant was entitled to substitute the fair market value as on 01.04.1981 as he had inherited the same prior to that date. The ld. CIT(A) also relied upon ITAT, Ahmedabad, decision in case of Vijaysinh R. Rathod & Ors. Vs. ITO (2007) 107 TTJ (Ahd) (SB) 593. Therefore, we do not find any reason to intervene in the order of the CIT(A). Accordingly, the order of the CIT(A) is confirmed.
8. In the result, the Revenue's appeal is dismissed. Order pronounced in Open Court on the date mentioned hereinabove at caption page.
Sd/- Sd/-
(D.K.Tyagi) (T.R. Meena)
Judicial Member Accountant Member
True Copy
I T A No . 3 35 2 /A h d/ 2 00 9 A . Y. 20 06- 0 7 Page 5
S.K.Sinha
आदे श कȧ ूितिलǒप अमेǒषत / Copy of Order Forwarded to:-
1. अपीलाथȸ / Appellant
2. ू×यथȸ / Respondent
3. संबंिधत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ- अपील / CIT (A)
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड[ फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद ।
Strengthen preparation & delivery of orders in the ITAT
1) Date of taking dictation 13.06.2012
2) Direct dictation by Member straight on XXX computer/laptop/dragon dictate
3) Date of typing & draft order place before Member 13.06.2012
4) Date of correction 14.06.2012
5) Date of further correction 20.06.2012
6) Date of initial sign by Members
7) Order uploaded on
8) Original dictation pad has been enclosed in this file
9) Final order and 2nd copy send to Bench Clerk on