SHRI GULBAHAR SINGH ,HOSHIARPUR vs. INCOME TAX OFFICER, DASUYA, DASUYA

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. No. 335/Asr/2018 Assessment Year: 2008-09

Gulbahar Singh s/o Gurdial vs. Income Tax Officer, Singh [through L/H Dasuya Gursharanjit Kaur, w/o Gulbahar Singh], Proprietor, Parmindera Medicine Centre, Miani Road, Teh. Dasuya, Distt. Hoshiarpur (144205) [PAN: ANAPK 5537B] (Appellant) (Respondent)

Appellant by : Sh. Vinod Kumar (C.A.) Respondent by: Sh. Charan Dass (D.R.) Date of Hearing: 20.02.2019 Date of Pronouncement: 30.04.2019

ORDER Per Sanjay Arora, AM: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-1, Jalandhar ('CIT(A)' for short) dated 29.3.2018, dismissing the assessee’s appeal contesting his assessment u/s. 143(3) r/w s .254 of the Income Tax Act, 1961 ('the Act' hereinafter) dated 08.11.2017 for the Assessment Year (AY) 2008-09.

2 ITA No. 335/Asr/2018 (AY 2008-09) Gulbahar Singh v. ITO (fmv) as on that date (01.4.1981) would stand to be deducted in computing the long-term capital gain (LTCG) arising on it’s transfer. While the assessee has applied a rate of Rs.9000 per Marla, supporting the same with a registered valuer’s report dated 20.1.2013, opining a rate of Rs.8500 per marla, the Revenue has applied a rate of Rs. 2000 per marla. The basis of the Revenue’s rate are the sale instances in the vicinity of the assessee’s plot at the relevant time. The valuation report being relied upon by the assessee is, on the other hand, undocumented in-as- much as it is admittedly based on hear-say, i.e., as stated, interview/s by the Valuer with the resident/s of the area. The assessee had in fact itself agreed to a rate of Rs.2,000/- per marla in the first round. The matter had in fact been set aside by the Tribunal to allow the assessee an opportunity to demonstrate the peculiarity of his land in-as-much as it was his plot that stood acquired and compensated for by the Government (in ITA No. 23/Asr/2015, dated 04/7/2016), which he has been unable to in the second round. This sums up the cases of both the sides.

3 ITA No. 335/Asr/2018 (AY 2008-09) Gulbahar Singh v. ITO which the question arising for determination – a matter of fact, is to be addressed and decided. The assessee’s case that the fair market value (fmv) is generally more than the stamp valuation, i.e., under the Stamp Act, so that the latter could not be assumed to be the fmv, is well taken. This is as while the circle rate is normally taken conservatively, the fmv is of a particular asset, with all its’ peculiarities, which contribute to determining its’ fmv. This in fact is the basis of the tribunals’ order in the first instance (copy on record), restoring the matter back to the file of the Assessing Officer (AO), so as to allow the assessee an opportunity to show as to why, in the facts and circumstances of the case, the stated rate (Rs. 9,000 per marla), being much higher than the circle rate, be adopted. Two, the circle rates are declared after intervals of time, while the market rate keeps changing constantly in response to the market conditions, seeking equilibrium of the supply and demand forces. It is in fact in cognizance of the changed market rate – as arising over a period of time, that the circle rate of an area is changed. However, to suggest that the two, i.e., the stamp valuation and the fmv, are not positively correlated, is completely incorrect; the former being premised on the latter (fmv). Further, for a fact to be taken judicial notice of, it has to be, in the very least, documented and, of course, reliably sourced. In the present case, the valuation report is based on the supposed interviews (by the Valuer) with the residents of the area, none of which is on record. Two, it is difficult to remember with accuracy the rate/s over three decades ago. What sanctity, then, could be placed on these supposed interviews, with the valuer also having since expired (on 31/12/2016). In fact, it is the actual seller (of the property) who could, if so, state the correct rate, and the reliability of the information gathered from others, even assuming so, is suspect. This is as it being not declared (in the sale deed), it is only the parties to the transaction who know for sure the price negotiated. Thirdly, the fmv stands admittedly declared (in

4 ITA No. 335/Asr/2018 (AY 2008-09) Gulbahar Singh v. ITO the valuation report) on the basis of the fmv obtaining in the area, while it is that of a particular piece of land – the capital asset under reference, that is relevant. Needless to add, no peculiarity of his land has been, even in the second round of the proceedings, stated by the assessee, even as this is precisely the reason for the restoration by the tribunal in the first instance. The claim of the subject land being commercial in nature, in-as-much as it is adjacent to a petrol pump, can hardly be given any credence as, as admitted by the ld. counsel for the assessee, Sh. Kumar, the petrol pump came up much after 01.04.981, the fmv on which date is to be deducted (after indexation). While this order discusses the arguments as advanced during hearing, it may be clarified that the orders by the Revenue authorities are based on definite findings, not rebutted, drawn on the basis of cogent reasons. Continuing further, of all the different sale instances being relied upon, only one, i.e., of 2 Marlas, 3 Sarsai of land, on GT Road (Opp. Railway Station, Dasuya), is comparable in terms of location – being on the GT Road, and time, being during 1981. The same, at Rs.3220 per marla, thus, gives a fair idea of the fmv of the assessee’s land at the relevant time. The two plots of land, though 6 kilometers apart, there is yet nothing to suggest of the market value either increasing or decreasing over the said distance, though, without doubt, the location of the comparable land is more central. In fact, instances of the property further down, i.e., as one travels from the comparable land, itself at a distance of 6 Km from the assessee’s land, i.e., at a distance of 6 to 6 ½ km from the subject land, are also comparable, even as these are not on the GT Road, but about half a kilometer off the main road. The assessee’s plot is, however, much larger than the comparable plot. A discount of about 20%, i.e., with reference to smaller plots, is normal and reasonable. Adopting a discount of 20% gives a rate of Rs. 2576 per marla. A fmv of Rs.2500 per marla should obtain, and is thus in order.

5 ITA No. 335/Asr/2018 (AY 2008-09) Gulbahar Singh v. ITO Accordingly, the fmv of the assessee’s plot (as on 01.4.1981), i.e., the capital asset under reference, is, under the given facts and circumstances and the material on the record, directed to be taken at Rs. 2500 per marla. I decide accordingly.

The ld. CIT(A) has issued definite findings in the matter, as indeed he had qua the first issue. No improvement in his case stands made by the assessee before me; in fact, no arguments were raised during hearing on this aspect. The assessee’s claim,

6 ITA No. 335/Asr/2018 (AY 2008-09) Gulbahar Singh v. ITO accordingly, continues to be no more than a bald claim. The disallowance is accordingly confirmed. I decide accordingly.