Income Tax Appellate Tribunal - Chandigarh
Smt. Arvinder Kaur vs Ito on 8 October, 2004
Equivalent citations: [2004]1SOT175(CHD)
ORDER
N.K. Saini, These three appeals by the assessees are directed against the separate orders of the CIT(A) Ludhiana, each dated 9-3-2000. In all these appeals, the issues involved are common and the appeals were heard together. So these are being disposed of by this common order for the sake of convenience.
2. First we will deal with I.T.A. No. 409/Chandi, 2000. Following grounds have been raised in this appeal :--
1. That the impugned order has been passed by the learned CIT(A) without proper application of mind, as such it is not sustainable in law and facts of the case.
2. That the learned CIT(A) is not justified in rejecting appellants appeal and confirming assessing officers action in working out capital gains at Rs. 65,14,080.
3. That the learned CIT(A) has failed to appreciate facts of the case properly, which has resulted in erroneous order and untenable conclusion. The fair market value of land as on 1-4-1981 at Rs. 90,000 per acre adopted by the lower authorities is misplaced, untenable and contrary to law.
4. That the cost of the agricultural land adopted by the appeal at Rs. 11,50,000 per acre as on 1-4-1981 has wrongly been rejected. Evidence and material on records have not been considered and appraised properly, which has resulted in erroneous order and untenable conclusion.
5. That the learned CIT(A) has failed to taken into consideration peculiar circumstances of the case and has ignored to consider that market value of appellants land was quite high even in 1981, as the same was required for industrial purposes by the buver. The buyer M/s. Avon Cycles has offered the price which was more than ten limes of the other agricultural land in the interested in setting up and extension of the existing unit.
6. That various legal and factual contentions raised by the appellant during the course of assessment proceedings and proceeding before the ADI have not been considered properly, which has made the order untenable.
7. Without prejudice to foregoing contentions and without waiving the aforesaid objection that the exemption claimed by the appellant regarding investment in units has wrongly been denied by the authorities below. Provisions of sections 54EA and 54EB of the Income Tax Act, 196I have not been construed properly and benefit available to the appellant has wrongly been denied. It has been ignored to be considered that the appellant has invested the amount on sale of agricultural land in UTI Scheme on the advice of Financial Adviser for availing exemption and has never utilized any amount for other purposes.
8. That the order is devoid of judicious and rational approach.
9. That the order is contrary to law and facts of the case.
10. That interest under sections 234A and 234B has wrongly been charged in the appellants case."
3. The issue vide ground Nos. 1 to 6 relates to the capital gains and the fair market value of land as on 1-4-1981. The relevant facts of the case, in brief, as appearing from the orders of the tax authorities, are that the assessee filed her return of income on 26-12-1997 declaring an income of Rs. 1,15,880. In the statement of income attached with the return, the assessee had shown capital loss of Rs. 4,69,200 on sale of 2.16 acres of agricultural land, which was sold for a consideration of Rs. 71,67,000. From the calculation of the capital loss, the assessing officer noticed that the assessee had adopted market value of the land as on 1-4-1981 (a) Rs. 11.50 lakhs per acre on the basis of which indexed cost of land sold had been worked out at Rs. 75,76,200. On being asked as to how the market price as on 1-4-1981 had been adopted at Rs. 11.50 lakhs per acre, the assessee replied that this value was adopted on the basis of an agreement dated 6-2-1981 whereby four kanals of agricultural land situated in village Giaspura belonging to the assessee was agreed to be sold to one Shri Zora Singh S/o Late Shri Ganga Singh of village Defflon. Photocopy of the agreement was also given to the assessing officer. The assessing officer asked the assessee to produce original agreement. However, the same was not produced. The assessing officer also asked as to whether the agreement was ever implemented and if so, asked the assessee to produce photocopy of the such sale deed. The assessing officer also informed the assessee that mutual agreement which remained unexecuted could not be relied upon until and unless the sale transactions had actually taken place and had duly been registered with the Sub-Registrar. In order to adopt the market value of the land sold as on 1-4-1981, the assessing officer collected information from the State Revenue Department and gave five instances of the sale of property between 5-6-1980 to 8-6-1981 in the nearby area as per the following details Date size Total consideration Remarks 8-6-1981 227 Sq. Yards 13,500 Regn. No. 2193 1-7-1980 900-do-
16,500 Regn. No. 1840 8-6-1981 152-do-
9,000 Regn. No. 3283 5-6-1980 175-do-
3,000
-
5-6-1981 14 Kanal 16 Maria 1,60,000 Regn. No. 3933.
4. The assessing officer wanted to rely on the registration deed which was in respect of large size property as the other deeds were of smaller property. Accordingly, the value of one acre was determined at Rs. 86,486. The assessing officer confronted the assessee and sought to take the cost of land Rs. 90,000 per acre as on 1-4-1981. In response to the above, the assessee replied as under :
"It is established that the land of the assessee was having weightage of 5 to 6 times as compared to other land in the same area because of peculiar circumstances and need to the buyer. It is worth mentioning that the basis method and valuation adopted on behalf of the assessee for working out capital gains in the market is proper and justified. On the contrary the basis adopted by the department is not based on proper appraisal of facts and peculiar circumstances of the case and agreement for sale of land in 1981. For further clarification, it is pointed out that the land in the area has been sold @ Rs. 12,00,000 per acre whereas the assessees land has been sold @ & 34,00,000 per acre. Keeping in view the need of the company for acquiring adjacent land of the assessee the assessee was paid 5 to 6 times the price of the land in the area. The basis adopted at the rate of Rs. 90,000 per kila is not proper as weightage for the assesseels land is to be given upto 6 times."
5. The assessing officer did not accept the explanation of the assessee by stating that due to terrorism in Punjab, the value of the properties did not rise at fast pace. According to him, it was only when the popular government restored in Punjab the value of the property increased. He also stated that in 1981, the area of Giaspura was never a recognized Industrial belt of Ludhiana and, therefore, the rates in that year were very low. According to him it was only in 1983-84, the rates started rising up as the industrial activity started in that year and it took 10 to 12 years to develop the area to an industrial hub. Therefore, the assessing officer totally disagreed that the rate of property was around 12 lakhs per acre in 1981. The assessing officer also mentioned that the assessee had neither produced the original copy of the agreement dated 6-2-1981 with Shri Zora Singh, nor documentary evidence/sale deed to prove that the sale was ever executed as a result of the said agreement. The assessing officer stated that the assessee sought some more time to do the needful in the matter but had not clarified as to which authority the assessee had applied for supply of the copies. The assessing officer opined that the assessee might have referred to the Sub-registrar. He informed the assessee that the assessment was time barring and to grant further time was not possible. According to the assessing officer the submissions ot the assessee were based upon surmises and conjectures. He therefore, did not accept the explanation of the assessee and adopted the value of land ason 1-4-1981 at Rs. 90,000 per acre. The assessing officer worked out the capital gains at Rs. 65,14,080 instead of loss of Rs. 4,69,200 claimed by the assessee.
6. The assessee carried the matter to the CIT(A) and reiterated the submissions made before the assessing officer. It was further stated that the assessing officer had adopted the fair market value on the basis of one instance and other relevant factors were ignored to be considered by him. It was submitted that the assessing officer ignored that in view of the peculiar location of the assessees land, weightage upto 5 to 6 times was required to be given as the sale instance even during the year 1996-97 establishes that the assessees land commanded higher price as the same being adjacent land was required badly for industrial purposes by M/s. Avon Cycles (P) Ltd., Ludhiana. It was stated that the assessee had adopted fair market value of land on the basis of agreement for sale executed with Shri Zora Shigh who had also admitted the contents of the agreement. The original agreement which was not available at the time of the assessment had been filed before the CIT(A). Two instances of sale on 16-1-1981 and 17-8-1981 in respect of property No. B-16-465/2, Mohall Pirtu Banda, Gobind Pura, Ludhiana and property No. B-23-356/74, Dholewali, Ludhiana were mentioned where the rate per sq.yard was Rs. 437 and Rs. 450 respectively. The learned CIT(A) asked the assessing officer, who was present during the course of hearing, to make further enquiries regarding the fair market value prevailing at that time on the basis of another registration deed. The assessing officer pointed out following five instances which took place in the years 1979 and 1981.
S. No. Description of property Reg. Deed No & date Area of land Rate of land 1 Khasra No. 50/1,50/2,50/3 Khata No. 181/204, Giaspura (Shri Satya Nand, Director) 9521 dt. 24-9-81 34 Kanal 11 marla Rs. 25 p.s.y
2. Khasra No. 51/2, 51/1,50/3 at Giaspura 9577 dt. 25-9-81 34 Kanals 19 Marla Rs. 15125 Pk
3. Plot No. 52/2 52/3, 51/2 9578 dt. 25-9-81 34 Kanal 9 Marlas
-do-
4. Plot No Khasra No. 67, Khata No. 56/67, Giaspura 8663 dt. 3-9-81 13 Kanal 8 Marlas
-do-
5. Plot Khasra No. 70, Khata No. 142/150, Giaspura 3554 dt. 23-10-79 28 Kanal 17 Marla 12.65 p.s.y.
7. The assessing officer submitted that the above properties were situated in front and on the G.T. Road whereas the land sold by the assessee was situated at the back of factory of Avon Cycles (P) Ltd. Therefore, the rate of 18 per sq. yd. was correctly applied against Rs. 25 per sq. yd. Shown in respect of the above properties. He further submitted that the fair market value of land as on 1-4-1981 was shown at Rs. 90,000 per acre by Shri Zora Singh and Shri Kapoor of village Giaspura who sold the land measuring 1.458 and 1.381 acres respectively to M/s. Raleo Exports Ltd. in the application filed under Voluntary Disclosure Scheme. The learned CIT(A), after considering the submissions of both the parties, observed that no sate deed was executed on the basis of agreement with Shri Zora Singh wherein sale consideration was Rs. 11.50 lakhs per acre. He also stated that Sale Agreement was not even registered with the Sub-Registrar, nor had been got scribed from a regular scriber. Therefore, the agreement had no sanctity in the eyes of law. On the other hand, value was adopted by the assessing officer on behalf of sale instance which took place on 5-6-1981 under Registration No. 3933. He also pointed out that the assessing officer had been able to further substantiate his claim regarding the fair market value by giving more sale instances, which took place in 1981 itself. He admitted that although in respect of certain properties, the sale consideration was Rs. 25 per sq. yd. but those were in respect of property situated on the G.T. Road, whereas the assessees property was situated on the backside of M/s. Avon Cycles (P) Ltd. He also mentioned that the fact that Shri Zora Singh and Shri Kapoor Singh of Giaspura had declared fair market value at Rs. 90,000 also supported the case of the assessing officer. The contention of the assessee that her property carried more value by 5 to 6 times did not find favour with the CIT(A) who stated that this contention would not weaken the case of the assessing officer as the issue was related to the fair market value in the year 1981 and not in the year under consideration. He also stated that the reason for getting more price than other properties might have been that M/s. Avon Cycles (P) Ltd. was in dire need of the assessees property. The learned CIT(A) opined that the assessing officer had placed sufficient evidence on record to show that the fair market value adopted by the assessee was not correct and the value adopted by him at Rs, 18 per sq. yd. was correct because the property of the assessee was situated on the backside of the factory of M/s. Avon Cycles (P) Ltd. whereas the properties in respect of which sale consideration had been shown at Rs. 25 per sq. yd. were in front of G.T. Road. As regards to the reliance placed by the assessee on sale instance of two other properties wherein the sale rate were at Rs. 437 per sq. yd. and Rs. 450 per sq. yd., the learned CIT(A) stated that those instances could not be accepted because no evidence had been filed. Secondly those properties were not located in the area where assessees property was located. Thirdly the area of land sold was small i.e. small plots of 80 sq. yds and 100 sq. yds. The learned CIT(A) accordingly confirmed the order of the assessing officer. Now the assessee is in appeal.
8. The learned counsel for the assessee reiterated the submission made before the Tax Authorities below. He further stated that the assessee is Non-Resident Indian and inherited agricultural land which is situated adjacent to M/s. Avon Cycles (P) Ltd. and M/s. Avon Cycles (P) Ltd. wanted to purchase the land of the assessee for its expansion. Therefore, the value of the land of the assessee was more in comparison to the others land. He further stated that the assessee entered into an agreement with Shri Zora Singh on 6-2-1981 for 4 kanal i.e., half acre of the land @ Rs. 11.50 lakhs per acre. He further stated that the agreement to sell was on Stamp paper duly witnessed by independent witnesses, which proved that the value of the assessees land as on 1-4-1981 was not less than Rs. 11.50 lakhs per acre and the assessee had rightly adopted that value. Therefore, the learned CIT(A) was not justified in confirming the value taken by the assessing officer as on 1-4-1981 at Rs. 90,000 per acre. He further stated that in the agreement the amount of advance had not been doubted by the assessing officer and also signature of the assessee had not been doubted. So, there was no reason to disbelieve the agreement. He emphasized that the assessing officer ignored the agreement by stating that it was not registered but there was no such requirement of law to get the agreement registered because only Sale Deed was required to be registered. He further stated that the assessing officer issued the summons to Shri Zora Singh almost after 17 years from the date of agreement and in his statement recorded on 27-3-1998, Shri Zora Singh stated that his memory was weak but admitted that thumb impression was put by him on the agreement. He vehemently argued that the assessee produced the person with whom agreement was made to sell the property and also his statement was recorded by the assessing officer. So there was no reason to disbelieve the agreement only on this basis that the original agreement was not produced. He clarified that the original agreement was not found during the course of assessment proceedings. However, the same was produced before the CIT(A). He further stated that there was valid agreement to sell and if the Sale Deed was not executed that would not tantamount that the value of the land was not the same, which was reflected in the agreement to sell. He further stated that the onus casted upon the assessee was discharged by filing the copy of the agreement and producing the purchaser whose statement was recorded by the assessing officer after that the onus shifted to the department to prove that the agreement was false agreement. The reliance was placed on the judgment of the Honble Supreme Court in the case of CIT v. Daulatram Rawatmull (1973) 87 ITR 349 (SC). The learned counsel for the assessee stated that the agreement was hard evidence which should have been considered by the assessing officer while considering the fair market value as on 1-4-1981 and making the calculation of the capital gains. As such, the comparable cases relied upon by the assessing officer and the CIT(A) were not relevant when primary evidence was there. The reliance was placed on the following cases:
(i) D.N Kamani (HUF) v. Dy. CIT (1999) 70 ITD 77 (Pat) (TM)
(ii) Elite Developers v. Dy. CIT (2000) 73 ITD 379 (Nag)
(iii) Smt. Satinderjit Kaur v. ITO (1995) 52 TTJ (Chd) 388.
9. The learned counsel for the assessee further stated that the land of the assessee was more valuable because that land was required by M/s. Avon Cycles (P) Ltd. Therefore, the fair market value should have been seen in the assessees case and not that of comparable cases because for determining the market rate surrounding factors should also be considered. The Reliance was placed on the judgment of Honble Madras High Court in the case of T. Amudha v. Appropriate Authority (2004) 269 ITR 501 (Mad). The learned counsel for the assessee Shri Sudhir Sehgal contended that the market value of the land should be determined after considering the price that a prudent purchaser would pay and in the assessees case prudent purchaser was M/s. Avon Cycles (P) Ltd. who purchased the land @ Rs. 34 lakhs per acre in comparison to the others land purchased by other persons at the rate of Rs. 12 lakhs per acre in the year 1996, which had clearly shown that the market value of the assessees land was more in comparison to those of the comparable cases. The reliance was placed on the following cases :
(i) Smt. Lalita Todi v. CIT (1980) 123 ITR 40 (Pat)
(ii) Joseph Vallooran v. CIT (1977) 108 ITR 544 (Ori).
10. As regards to the cases relied on by the learned CIT(A), the learned counsel for the assessee emphasized that in the first three instances sales were through the court as such the facts were distinguishable because in the assessees case, there was a willing buyer and also the area of land was larger. Regarding the objection of the assessing officer that the agreement was not registered, the learned counsel for the assessee stated that as per the Transfer of Property Act, there was no need to get the agreement registered because the contract for sale may be oral or in writing and when in writing, the writing need not be registered. The reliance was placed on the judgment of the Privy Council in the case of Dayal Singh v. Indra Singh 31 CWN 1251 (PC), wherein it has been laid down that "the contract for sale evidencing payment of earnest of Rs. 100 or more must be registered, and if unregistered cannot be used in evidence, has been rendered obsolete by section 2 of Act II of 1927".
10.1 The learned counsel for the assessee also prayed to admit the additional evidence which was in the shape of Sale Deed dated 24-4-1981 in respect of property situated at Dhandari Kalan, Ludhiana, measuring 23 Kanal 2 Marla comprising of Khasra No. 68/7/69/2/3-3/24/1, Khata No. 30 wherein the property measuring 8 kanal had been sold for Rs. 11.80 lakhs. It was stated that the assessing officer had not given sufficient time to furnish the required evidence because the assessment was framed in haste since the same was becoming time barred. In view of the above submissions, the learned counsel for the assessee stated that the learned CIT(A) was not justified in confirming the action of the assessing officer. Since the value adopted by the assessee as on 1-4-1981 was the correct value and the value which had been adopted by the assessing officer was based on the cases which were not relevant at all.
11. In his rival submission, the learned Departmental Representative strongly objected to the admission of the additional evidence by stating that sufficient time was available with the assessee and if the evidence could not be produced before the assessing officer, the same could had been furnished before the CIT(A) but the assessee had not done so. Therefore the additional evidence should not be accepted. He further stated that the agreement entered into by the assessee with Shri Zora Singh was not a valid agreement because there was no free will since his son said to put thumb on the agreement and Shri Zora Singh complied with. He further stated that there were hindrances to selltheland because the title was not clear due tothe death of the father of the assessee and therefore, the agreement was not a valid agreement. He further stated that the assessee could not clarify as to why the agreenrent was not executed and the property was not sold to the socalled purchaser Shri Zora Singh. As regards to the submission of the learned counsel for the assessee that the value of the land in question was more in comparison to the other surrounding land because the land had been sold at the rate of Rs. 34 lakhs by the assessee while the another land had been sold at the rate of Rs. 12 lakhs by other persons. It was stated that the land of the assessee was purchased by M/s. Avon Cycles (P) Ltd. only in 1996. Therefore, it was not clear whether the land was having edge over the surrounding lands in the year 1981 also. The learned Departniental Representative further stated that the land in question might have value for M/s. Avon Cycles (P) Ltd. but the value was not for the whole market. Therefore, the value adopted by the assessing officer on the basis of comparable cases was a correct value and the value declared by the assessee was fictitious value and not the market value. However, the learned Departmental Representative admitted that there was no need to get the agreement registered but only Sale Deed was required to be recyistered. He also admitted that the value of the land did not depend on the size but depended on the other factors like location, surroundings needs etc. The learned Departmental Representative pointed out that the value of the land of the assessee as per the sales made in 1996 was about 2.83 times to the value of other land because the property had been sold by the assessee at the rate of Rs. 34 lakhs per acre while the other lands had been sold at the rate of Rs. 12 lakhs per acre. Therefore, it was beyond imagination that in the vear 1981 the value of the land of the assessee could be at the rate of Rs. 11.50 lakhs per acre when the other lands were having the value of Rs. 90,000 per acre. He, therefore, argued that the value adopted by the assessing officer was the correct value and the learned CIT(A) was fully justified in confirming the order of the assessing officer.
12. In the rejoinder, the learned counsel for the assessee submitted that there was no hindrance in the title because the land had been transferred in the name of the assessee and her two sisters on the death of their father and as on 6-2-1981, the assessee was the owner and was free to enter into agreement to sell the property in question. It was also stated that the comparable cases were not relevant when there was a prudent purchaser for the property of the assessee in view of the ratio laid down by the Honble Madras High Court in the case of T. Amudha (supra). He further stated that Shri Zora Singh put his thumb impression on the statement which was recorded by the assessing officer in the presence of counsel of Shri Zora Singh. Therefore, there could not be any reason to disbelieve that Shri Zora Singh put the thumb impression on the agreement without knowing the contents of that agreement particularly when his son was present. As regards to the objection of the learned Departmental Representative that the additional evidence should not be admitted, it was stated that the assessee being an NRI was not in a position to collect evidence in a short period. Therefore, the time was sought and in this regard a request was made to the assessing officer and also at the appellate stage, a letter was written to the CIT(A) on 9-3-2000 mentioning as under :
Re : 1. Smt. Jasminder Kaur,
2. Smt. Arvinder Kaur,
3. Smt. Baljinder Kaur., Ludhiana-Asst. Year 1997-98-appeals.
This has reference to hearing of the captioned appeals on 1-3-2000. We are enclosing herewith copies of letters filed during the course of assessment proceedings before the authorities, which are self explanatory.
2. (i) It is submitted that the learned assessing officer has applied fair market value of the land as on 1-4-1981 at the rate of Rs. 90,000 per acre forpurposes of computation of capital gains. The fair market value has been adopted on the basis of one instance and other relevant facts have been ignored to be considered by the learned assessing officer. It has been completely ignored to be considered that in view of peculiar location of the appellants land, weightage 5 to 6 times was required to be given as the sate instance even during the year 1996-97 establishes that the assessees land commanded high price, as the same being adjacent land was required badly for industrial purposes by M/s. Avon Cycles.
(iii) The assessee has adopted fair market value of land on the basis of agreement for sale executed at the relevant time. Further, it is borne out from the records that the statement of Shri Zora Singh was recorded by the learned assessing officer and the facts mentioned in the Agreement have been confirmed by him. It is worth mentioning that the statement was recorded without the presence of the assessee or her counsel. Copy of the statement of Shri Zora Singh and copy of the agreement have already been placed on the records. Original agreement has been traced by the assessee and the same is enclosed for your kind consideration.
(iv) Regarding other relevant sale instances the copies of the Sale Deed are awaited and these shall be filed shortly. It is therefore requested that time for filing the copies of the Sale Deed may kindly be granted."
13. The learned counsel stated that from the above facts, it was evident that neither the assessing officer, nor the CIT(A) had granted the time, so the assessee was not in a position to furnish the evidence in support of her claim. As such, additional evidence furnished at this stage should be admitted.
14. We have heard both the parties at length and carefully gone through the material available on the record. As regards to the additional evidence furnished by the assessee at this stage, we find that the same is not admissible and we, therefore, refuse to entertain the same. The only issue before us relates to the fair market value of the land of the assessee as on 1-4-1981, because on that basis only the amount of the capital gains on the land sold by the assessee can be determined. The assessee for the purposes of cost of acquisition had taken the market value as on 1-4-1981 in accordance with the provisions of Explanation III to section 48 of the Income Tax Act which states as under :
"Explanation-
(iii) "indexed cost of acquisition" means an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for theyear in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the 1-4-1981, whichever is later."
15. The assessee took the market value at Rs. 11.50 lakhs per acre as on 1-4-1981 on the basis of agreement dated 6-2-1981 which she executed with Shri Zora Singh for the sale of half acre agricultural land. It is true that the above agreement was not registered. However, it was signed by the assessee i.e the seller and the purchaser Shri Zora Singh put the thumb impression. There were two witnesses to the above agreement and the agreement was on a judicial stamp paper of Rs. 2.25 during the course of assessment proceedings, the assessing officer recorded the statement of Shri Zora Sing who was questioned regarding the purchase of property. At the first instance he stated that he had not purchased any land but had given on the instance of his son. He also stated that one Shri Sohal Lal Khatri said him to put his thumb impression and that they would purchase the land. When he was questioned that on which document he put his thumb impression and to whom he made the payment, he was ignorant about the name of the person but admitted that he had given money. However, the amount was not known to him. From the above statement, it would be clear that Shri Zora Singh agreed that he had given the money in lieu of agreement to purchase the land. It is also noticed that the statement was read in the presence of Shri Gurdev Singh, counsel of Shri Zora Singh and after hearing all the contents of the statement, Shri Zora Singh put thumb impression therein which clearly establishes that Shri Zora Singh had given the advance to purchase the land. It is not the case of the assessing officer that the signatures of the assessee on the said agreement were fake and the witnesses were not there. So it cannot be said that there was no agreement to sell as on 6-2-1981. It is also noticed that the market value of the land was Rs. 25 per sq.yd. in most of the instances which had been quoted in the assessment order as well as in the impugned order of the CIT(A).
16. On perusal of the orders of the assessing officer as well as of the CIT(A), it would be clear that in most of the comparable cases the rate was Rs. 25 per sq.yd. but the assessing officer had taken the rate at Rs. 18 per sq.yd. for the reason best known to him. The assessing officer also mentioned in the assessment order dated 28-9-1999 at para 4 that he procured five registries from the Revenue Department. However, he had not mentioned that the location of those properties was the same as was of the assessees. It is also noticed that the assessee asked for some more time to furnish the evidence. However, the time was not allowed by the assessing officer which is evident from the noting in para 10 of the aforesaid assessment order wherein it had been mentioned that:
". . . she requested some more time to do the needful in the matter. Here the assessee did not clarify as to which authority she had applied for supply of the copies. She might be referring to the Sub-Registrar. The assessee was informed that as time barring assessment is involved, granting of further time in the case for no valid reasons is not possible."
17. From the above, it would be clear that the assessing officer had not given time to the assessee to furnish the evidence. Now the question before us is as to whether the value adopted by the assessee as on 1-4-1981 on the basis of Sale Agreement was correct or the value taken by the assessing officer was right. For determining the market value certain factors are required to be kept in mind like location, neighbourhood, need of the purchaser/seller, approach etc. Admittedly, the property in question was adjacent to the factory owned by M/s. Avon Cycles (P) Ltd. who was not having any scope of expansion except in the land of the assessee. Therefore, the land in question was having the more value in comparison to other cases quoted by learned CIT(A) as well as the assessing officer. The Honble Madras High Court in the case of T Amudha (supra) observed as under :
"The measure with reference to which the value is to be treated is the market value. Merely because the Act does not define market value and does not lay down the guidelines as to how to arrive at the market value, the appropriate authority cannot utilize this situation and decide any figure of its choice as the market value. The determination must be by adopting a fair and objective standard, and that fairness and objectivity should be evident from the order that the authority makes. It is convenient for the appropriate authority to take one instance which had occurred within a reasonable time from the date of the agreement and hold that the amount so arrived at is the market value. Mere convenience cannot be a justification for claiming a particular value as the market value. The exercise has to go much deeper and has to cover a wider area."
18. In the instant case also, the assessing officer adopted the value of Rs. 90,000 per acre only on this basis that he procured some registries wherein the value was around that figure. However, that figure cannot be considered as the market value because the assessing officer no where mentioned that the land was having the same characteristics as that was of assessees land. The Honble Orissa High Court in the case of Joseph Valloran (supra) held as under :
"The expression market value has not been defined in the Act. Market value means the price that a willing purchaser would pay to a willing seller for a property having due regard to its existing condition, with all its existing advantages and its potential possibilities when laid out in its most advantageous manner."
In the present case, the willing purchaser was M/s. Avon Cycles (P) Ltd. Therefore, the willing seller i.e., the assessee was in advantageous position to get the higher rates in comparison to the other properties because there was no option with M/s. Avon Cycles (P) Ltd. except to purchase the land of the assessee for the purposes of its expansion.
19. In the present case, the learned CIT(A) confirmed the rate adopted by the assessing officer of Rs. 18 per sq.yd. in spite of the fact that in other comparable cases quoted by the assessing officer, the rate per sq.yd. was Rs. 25. However, no cogent reason has been given why the rate of Rs. 18 per sq.yd. had been adopted. The learned CIT(A) also stated that the land of the assessee was situated at the backside of the factory of M/s. Avon Cycles (P) Ltd. whereas the other properties where the sale consideration had been shown at Rs. 25 per sq.yd. were in front of G.T. Road. In our opinion, the above situation was not sufficient to determine that the value of the land of the assessee was not the same or higher than those quoted by the assessing officer.
20. In the instant case, it is not in dispute that M/s. Avon Cycles (P) Ltd. was in need of the land for its expansion and the land available for that purpose was only of the assessee. Therefore, it was a vital factor to determine the market value of the land of the assessee. But this fact had been ignored by the learned CIT(A). The learned CIT(A) also mentioned that the assessee placed reliance on the two properties where the rate was at Rs. 437per sq.yd. and Rs. 450per sq.yd. He stated that the area sold in those properties was small. In our opinion, the smallness of the area cannot be a factor to determine the fair market value because in certain cases even the larger area can have the more value if the location is favourable to the buyer. The learned CIT(A) stated that the contention of the assessee that her land was sold at the rate of Rs. 34 lakhs per acre in comparison to the land of other persons which was sold at Rs. 12 lakhs per acre, was not acceptable because there was terrorism in Punjab and the prices rose only when the popular government was restored. He also mentioned that the rate of the land started rising only in 1983-84. The above stand of the CIT(A) is contradictory because on the one hand he was saying that due to terrorism there was no rise in the prices, on the other hand, he said that the prices started rising in the year 1983-84. In fact, the terrorism was at peak in the year 1984 when operation Blue Star occurred. However, in the year 1981, the conditions were almost normal, in other words, there was normalcy not the terrorism. However, in the year 1983-84, the terrorism was at peak but the learned CIT(A) stated that the prices started rising. It is also noticed that the assessing officer had not accepted the copy of the agreement dated 6-2-1981 because the original agreement was not furnished before him. However, the original agreement was available at the appellate stage and was furnished before the learned CIT(A) but no cognizance had been given by him for the same while deciding what was the fair market value of the properly of the assessee as on 1-4-1981. In the instant case, it is not in dispute that the agreement dated 6-2-1981 was signed by the seller as well as by the proposed purchaser and was duly witnessed by two witnesses. Therefore, that agreement cannot be brushed aside but the learned CIT(A) as well as the assessing officer has not considered that agreement while determining the fair market value as on 1-4-1981. In the present case, the CIT(A) relied on the cases which were quoted by the assessing officer. However, the agreement of the assessee had not been considered. It had also not been considered that there was a prudent purchaser for the land of the assessee i.e., M/s. Avon Cycles (P) Ltd. The Honble Supreme Court in the case of Daulatram Raivaimull (supra) held as under :
"(v) That the onus of proving that the apparent was not the real was on the party who claimed it to be so. As it was the department which claimed that the amount of fixed deposit receipt belonged to the respondent-firm even though the receipt had been issued in the name of B, the burden lay on the department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of B"
21. In the instant case also, the assessing officer considered the fair market value by ignoring the sale agreement which was apparent. However, the onus to prove that the apparent was not real was not discharged. The learned CIT(A) confirmed the order of the assessing officer wherein the fair market value as on 1-4-1981 was taken at Rs. 18 per sq.yd. or Rs. 90,000 per acre on the basis of comparable cases but ignored the agreement furnished by the assessee as well as other comparable cases where rate was Rs. 25 per sq.yd. and also this fact that the rates of the land of the assessee were higher because there was a willing purchaser. In this regard, the Honble Patna High Court in the case of Smt. Lalita Todi (supra) held as under :
"The prices which an immovable property may fetch if sold in the open market would be the price that a prudent purchaser would be willing to pay necessarily taking into account the extent and the quality of title as well as all the factors which tend to push up the value or depress it. In ascertaining the price which a willing, reasonable and prudent purchaser would pay for the property, all factors having any depressing or appreciating effect on the value of the property have to be taken into account. If considerations germane for such ascertainment have not been taken into account or if irrelevant considerations have entered the inquiry, the finding becomes vitiated in law."
22. As we have already observed that in the instant case M/s. Avon Cycles (P) Ltd. was the prudent purchaser. Therefore, this aspect should have been kept in mind while ascertaining the fair market value of the property. We also find force in this argument of the learned counsel for the assessee that the learned CIT(A) should have considered the argument which was ignored by the assessing officer because the original agreement was filed before him as the same was not traceable so could not be filed before the assessing officer, it is so because in the hierarchy of the Income Tax Authority, the CIT(A) is much higher than the assessing officer and the powers of the CIT(A) are coterminus with that of the assessing officer and the CIT(A) can do all those acts which the assessing officer ought to have done in the assessment proceedings. However, in the present case, the assessing officer ignored the agreement to sell furnished by the assessee. In our opinion, the learned CIT(A) was not justified to confirm the fair market value of the land in question at the rate of Rs. 90,000 per acre as on 1-4-1981 when other cases of higher value were available with him. The learned CIT(A) also ignored the agreement to sell furnished by the assessee while determining the fair market value of the land. He also had not considered this aspect that the market value of the property of the assessee was higher because there was prudent willing purchaser i. e., M/s. Avon Cycles (P) Ltd. who ultimately purchased the land in 1996. In our opinion, the learned CIT(A) was not justified in stating that the rate of the land of larger size should be preferred in comparison to the land of smaller size while determining the fair market value as on 1-4-1981. We, therefore, considering the entire facts as discussed here-in-above, think it proper to set aside the order of the learned CIT(A) and restore this issue back to the file of the assessing officer for fresh adjudication in accordance with law. We also direct him to afford due and reasonable opportunity of being heard to the assessee and the assessee is also free to adduce the evidence which could not be produced at the time of original assessment because as per the assessing officer the assessment was going to become time barred and, therefore, the opportunity was not given to the assessee. Accordingly, ground Nos. 1 to 6 are disposed of and the issue is restored to the file of the assessing officer.
22.1 Ground Nos. 7 to 9 were not pressed before us and as such, the same are dismissed as not pressed.
23. As regards to ground No. 10, it was the common contention of both the parties that it is consequential in nature. We order accordingly.
24. In other appeals i.e., I.T.A. No. 408 & 410/Chd./2000, similar issues are involved and even the grounds are the same. The only difference is that in the case of Smt. Arvinder Kaur i.e., I.T.A. No. 408/Chd./2000, the amount of capital gains worked out by the assessing officer was Rs. 61,39,650 and in the case of Smt. Jasminder Kaur i.e., I.T.A. No. 410/ Chd./2000, the amount was at Rs. 66,23,810 otherwise the facts are identical vis-a-vis to the case of Smt. Baljinder Kaur in I.T.A. No. 409/Chd./2000 (supra). In that view of the matter, our findings given in I.T.A. No. 409/Chd./2000 shall apply mutatis mutandis in I.T.A. Nos. 408 & 410/Chd./2000.
25. In the result, all the appeals are partly allowed for statistical purposes.