COMMISSIONER OF INCOME-TAX(INTERNATIONAL TAXATION AND TRANSFER PRICING) vs. CHARUSHEELA M. BHATIA

Revenue is in appeal against the judgment of the Income   Tax   Appellate   Tribunal   dated   12.07.2017 raising following question for our consideration: “Whether in the facts and circumstances of the case, the learned ITAT has erred in law in not accepting cost of acquisition as on 01.04.1981 of the land sold in the present case as per the certificate   of   the   Mamlatdar   (S),   Diu   & Dadaranagar   Haveli   submitted   by   the   assessee herself   in   the   assessment   proceedings   showing the Fair Market Value at Rs.50/­ per sq. mtrs. ?

The issue pertains to the assessment year 2012­

During the year relevant to the assessment year under   consideration,   the   assessee   had   sold   certain parcels of land situated in Dadranagar Haveli area and offered the gain to long term capital tax. In C/TAXAP/354/2018 ORDER this context, the question of the fair market value of   the   land   in   question   as   on   01.04.1981   became relevant.   The assessee presented the report of the Government Approved Valuer which suggested that the fair market value of the land as on the said date was Rs.120   per   sq.mtr.     The   Assessing   Officer   was   not prepared to accept this valuation.  He did not call for DVO's report, instead, he collected the material pertaining to the sale instances of the land in the nearby areas during the same period.  He noticed that no lands were sold in the same village in the year 1981. He   referred   to   sale   of   land   in   some   other village which sale took place in the year 1981. On the   basis   of   such   material,   he   issued   show   cause notice to the assessee proposing to assess the fair market value of the land as on 1981 as per Rs.10 per sq.mtr.   After rejecting the assessee's objections, he confirmed such valuation.  Commissioner of Income Tax   (Appeals)   confirmed   his   view,   upon   which,   the issue reached the Tribunal.  Tribunal by the impugned judgment,   reversed   the   findings   of   the   Revenue Authorities making following observations: “In the present case though the AO has not specifically made reference to the DVO, but C/TAXAP/354/2018 ORDER he   called   for   information   about   sale instance in that area at the relevant point of time.  We have perused the finding of ld. Revenue   authorities.     It   is   pertinent   to observe   that   evidence   collected   by   the   AO relates to nearby village viz. Kharadpada. Even if the AO has power to call for such report,   then   at   least   he   ought   to   have collected data of similarly situated land, if any available.   He cannot compare rates of   land   of   adjourning   area,   when   the assessee   has   alleged   that   her   land   was situated on the road­side.  In other words, the assessee has pleaded that the land sold by   her   was   abutting   to   the   main   land   of Bhilad­Naroli Road which connects N. H. No.8 Road and Silvassa City.  Thus, this land had more potentiality than the one compared by the AO.   If that information is excluded, then there is nothing with the AO to suggest that   cost   of   acquisition   taken   by   the assessee is on the higher side.   Claim of the assessee is supported by certificate of an   expert   who   is   a   Government   Registered Valuer. He   has   inspected   site,   and

We   have   perused   the   orders   on   record.     The Assessing   Officer   has   without   any   other   reference, compared   the   sale   instance   of   another   village   and arrived at the valuation of Rs.10 per sq.mtr.   As recorded by the Tribunal, the assessee's lands were C/TAXAP/354/2018 ORDER situated on Bhilad­Naroli  road which connected NH­8 and Silvassa city.  Thus, the lands of the assessee were situated abutting on a highway.   The assessee