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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Sudhanshu Srivastava & Shri Amarjit Singh
Revenue by: Shri Santosh Karnani, Sr. D.R. Assessee by: Shri S.N. Soparkar, A.R. Date of hearing : 28-06-2019 Date of pronouncement : 31-07-2019 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee’s appeal for A.Y. 2013-14, arises from order of the CIT(A)-5, Ahmedabad dated 08-08-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
The assessee has raised following grounds of appeal:- “1.1 The order passed u/s.250 passed on 08.08.2017 for A.Y.2013-14 by CIT(A)-5, Abad, upholding the addition of Rs.21,13,956/-towards LTCG on sale of land is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the explanations furnished and the evidence produced by the appellant. Though written Page No 2. Naginbhai Prahladbhai Patel vs. ITO
submission, valuers report with comments etc. were filed, the same have been completely ignored by CIT(A). 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in confirming the land rate of Rs.32 per sqm. as FMV as on 01.04.1981. 2.2 The Ld. CIT(A) has failed to appreciate that the valuation of land determined by DVO was grossly contrary to the well-established principles of valuation as well as the facts of the PUC. 2.3 That in the facts and circumstances of the case as well as in law, the Id. CIT(A) has grievously erred in confirming the land rate of Rs.32 per sqm. as FMV as on 01.04.1981. The Ld CIT(A) as well as DVO ought not have rejected the Registered Valuer's report without giving good and sufficient reasons. 3.1 The Id. CIT(A) has failed to appreciate that the entire reference of valuation as on 01.04.1981 to DVO was illegal and unlawful. It is therefore prayed that the addition of Rs.15,81,973/-made by the AO should be deleted.”
Ground nos. 1.1 and 1.2 are of general nature which do not require any adjudication, therefore, the same are dismissed.
All other ground nos. 2.1 to 3.1 are pertained to the common issue determining the valuation of land as on 1st April, 1981, therefore, all these grounds of appeal are adjudicated together by this common order.
5. The fact in brief is that return of income declaring income of Rs. 2,23,090/- was filed on 5th Dec, 2013. The case was subject to scrutiny and notice u/s. 143(2) of the act was issued on 2nd Sep, 2014. The assessee was engaged in the business of construction/labour work. During the course of assessment proceedings, the assessing officer noticed that assessee had sold jointly owned land property in which assessee was having 1/22 share located at Ahmedabad on 12th Feb, 2013 for Rs. 4.2 crores as per sale deed executed. The assessee has received its share of Rs. 16,75,002/-. The assessee has claimed fair market value as on 1st April, 1981 at Rs. 49,93,829/- as per report of the registered valuer. The assessee has shown capital loss at Rs. - 99220/- after claiming indexed cost of Rs. 17,74,222/- as assessee’s share. The assessing officer observed that the value adopted by the assessee as per Page No 3 Naginbhai Prahladbhai Patel vs. ITO valuation report of the registered valuer as on 01-04-1981 was on higher side. Therefore, the assessing officer has referred the case to the District Valuation Officer for determining the fair market value of the sold property as on 01-04-1981. The assessing officer stated that District Valuation Officer, Ahmedabad has reported vide letter dated 18th March, 2016 that assessee was not extending co-operation to carry out inspection of the impugned property and scrutiny of the documents related to the sold property. The assessing officer has also produced the scanned copy of the aforesaid letter of District Valuation Officer at page no. 2 of the assessment order requesting that the assessee may be directed to co-operate with the valuation officer. Because of non-cooperation of the assessee, the District Valuation Officer has also referred in the said letter that as per the information available, the rate of agricultural land as on 01-04-1981 in the area where the sold property was located was in the range of Rs. 30 to 40 per sq. meter. The Valuation Officer has also mentioned in the letter that Valuation Report will be issued as early as possible on the co-operation of assessee. Thereafter, the assessing officer has also issued show cause notice/ clarification letter to the assessee to co-operate in the valuation proceedings. The assessee was also show caused as to why value of land should not be taken considering the rate of Rs. 35/- per sq. mt. on the basis of information received from the DVO as prevailing rate of land in that area where the land is situated as on 01-04-1981. The assessing officer stated that assessee has not made any compliance to the show cause notice and the DVO could not complete the valuation proceedings because of no-cooperation extended by the assessee. Therefore, after adopting the value of the sold land @ Rs. 35 per sq. mt., the assessing officer has computed long term capital gain to be Page No 4 Naginbhai Prahladbhai Patel vs. ITO taxed in the hand of the assessee on the sale of the aforesaid land at Rs. 15,81,973/-.
6. Aggrieved assessee has filed appeal before the ld. CIT(A). The Ld. CIT(A) has dismissed the appeal of the asssessee.
During the course of appellate proceedings before us, the ld. counsel has submitted paper book containing copies of documents and information furnished before the assessing officer and ld. CIT(A) during the course of assessment proceedings and appellate proceedings. The ld. counsel has contended that the decision of ld. CIT(A) is not justified as the assessing officer has completed the assessment without valuation report of the DVO, therefore, the addition made by the assessing officer is not correct. On the other hand, ld. departmental representative has vehemently contended that the assessee has not extended co-operation to the District Valuation Officer during the course of valuation proceedings. He has also referred various pages of the assessment order demonstrating that in spite of giving a number of opportunities, the assessee has not co-operated with the DVO for timely completion of valuation proceedings. Therefore, because of unnecessary delay occurred on the part of the assessee, the assessing officer has completed the assessment after considering the prevailing rate of sale instances of land in the same area as per the information available with the DVO. The ld. departmental representative has placed reliance on the order of assessing officer and ld. CIT(A).
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We have heard both the sides and perused the material on record. During the course of assessment, the assessing officer noticed that assessee had sold land located at Ambali near PRL Commercial/Ring Road on 12th Feb, 2013 jointly with other for a total consideration of Rs. 4.02 crores out of which the assessee has received Rs. 16,75,000/-. Assessee has taken fair market value as on 01-04-1981 at Rs. 667 per sq. mt. as per registered valuation’s report. However, the assessing officer has referred the valuation of the sold property to the DVO after considering that registered valuer has taken the rate of land as on 01-04-1981 on higher side. During the course of assessment year, the DVO reported the assessing officer that assessee has not been extending co-operation to complete the valuation process of the impugned property. In this regard, the assessing officer has also directed the assessee to extend full co-operation to the DVO to carry out the valuation of the property. The assessing officer has also reported the contents of the letter of the DVO in the assessment order stating that detailed inspection of the property and scrutiny of complete document was pending on account of non-cooperation of the assessee and his authorized representative. The DVO has also shared the information with the assessing officer that the prevailing rate of agricultural land as on 01-04-1981 in village Ambali were in the range of Rs. 30 to 40 sq. mt. Under the circumstances, the assessing officer has adopted the rate quoted by the DVO and assess the long term capital gain in the hand of the assessee at Rs. 15,81,973/-. In the light of the above facts and circumstances, it is clear that assessee has not extended proper co- operation to the DVO during the process of valuation of the impugned property and the assessing officer has completed the assessment without referring the actual valuation report of the District Valuation Officer. We Page No 6 Naginbhai Prahladbhai Patel vs. ITO consider that both the sides assessee and assessing officer were at fault. The assessee has unnecessarily delayed the process of valuation by not extending co-operation to the DVO and as a result the assessing officer has made provisional valuation of the property as per rate suggested by the DVO prevailing as on 01-04-1981 in the village where the land was located. Considering the above cited peculiar circumstances in order to adjudicate the issue in the instant appeal on merit, we are of the considered opinion that it will be appropriate to restore this case to the file of assessing officer for deciding the issue in appeal de-novo on the basis of report of the District Valuation Report Officer and after affording adequate opportunity to the assessee. Accordingly, the matter is restored to the file of assessing officer as directed above. Therefore, the appeal of the assessee is allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 31-07-2019 Sd/- Sd/- (SUDHANSHU SRIVASTAVA) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 31/07/2019 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file.
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