SHRI RATAN KUMAR SAHA,KOLKATA vs. A.C.I.T.,CIRCLE-49(1&2), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCH “B”, KOLKATA BEFORE SHRI MANISH BORAD, HON’BLE ACCOUNTANT MEMBER AND SHRI SONJOY SARMA, HON’BLE JUDICIAL MEMBER ITA No.137/Kol/2020 Assessment Year: 2014-15 Shri Ratan Kumar Saha ACIT, CIR-49(1&2), Kolkata 299, Gorakshabasi Road, Vs. Dum Dum – 700 028. PAN: ALCPS 9290 B (Appellant) (Respondent) ITA No.154/Kol/2020 Assessment Year: 2014-15 ACIT, CIR-49(1), Kolkata Shri Ratan Kumar Saha Vs. 299, Gorakshabasi Road, Dum Dum – 700 028. PAN: ALCPS 9290 B (Appellant) (Respondent) Present for: Appellant by : Shri Amit Agarwal, Advocate Respondent by : Smt. Ranu Biswas, ACIT, DR Date of Hearing : 21.04.2022 Date of Pronouncement : 06.07.2022 O R D E R PER SONJOY SARMA, JM: This is an appeal filed by the assessee pertaining to A.Y. 2014-15 is directed against the order of ld. CIT(A) vide order dated 08.11.2019 which is arising out of the assessment order framed u/s 143(3) of the Income-tax, 1961 dated 30.12.2016. Consequent to that another cross appeal is also filed by the revenue being ITA No. 154/Kol/2020 against the same order passed by the ld. CIT(A). Grounds of appeal raised by the assessee as well as revenue are enumerated as under: Assessee’s Ground: “i. For that on the facts and circumstances of the case and in law, the ld. CIT(a) was grossly unjustified in not deleting the addition of Rs. 13,69,590/- under the head

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LTCG being in the nature of sale of agricultural land in cultivation before sale situated at 35 kms. Away from Kakdwip Municipality. ii. For that on the facts and circumstances of the case and in law, the ld. CIT(A) has erred in not considering all relevant facts and evidences furnished in support of the sale of agricultural land which was under cultivation on and before the date of sale and accordingly ld. CIT(A) was wholly unjustified in not deleting the illegal addition of Rs. 13,69,590/- under the head LTCG. iii. The appellant craves, leave to modify the above grounds of appeal as also to take additional ground(s) either before or during the course of the hearing of the appeal according to the norms and principles laid down in the statute.”

Revenue’s Ground: “i. The order passed by ld. CIT(A)-13, Kolkata is bad in law as well as on facts. ii. For the facts and circumstances of the case ld. CIT(A), Kolkata has erred in allowing partly the appeal of the assessee against the addition of Rs. 14,79,74,644/- under the head LTCG relying on the DVO report whereas the ld. CIT(A) stated in his order that there is a need to seek modification of valuation from DVO in view of material difference. iii. For the fact and circumstances of the case ld. CIT(A) has erred in allowing partly the appeal of the assessee whereas he directed the AO to first check whether the DVO report giving earlier value for sale consideration at Rs. 13,69,590/- is of the Bakkhali Property and after the said confirmation the DVO value has to be accepted to compute the LTCG. iv. For the fact and circumstances of the case, ld. CIT(A) has erred in allowing partly the appeal of the assessee only for the purpose of disposal of appeal in spite of direction for further clarification from DVO. v. The appellant craves leave to add, alter or withdraw any ground/s of appeal before or at the time of hearing.”

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Sec. 10(14). -Capital Asset means:

(iii) Agricultural land in India, not being land situate –

(a) In any area which is ** comprised within the jurisdiction of a municipality (whether known as a municipal, municipal corporation, ** notified area committee, town area committee, town committee, or by 5 any other name) or a cantonment board and which** has a population of not less than ten thousand or b) In any area ** within the distance, measured aerially, - (i) Not being more than two kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (ii) not being more than six kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (iii) not being more than eight kilometers, from the local limits of any municipality or cantonment board 'r-erred to in item (a) and which has a population of more than ten lakh.

Explanation - For the purposes of this sub-clause, “population” means the population according to the last : -seeding census of which the relevant figures have been published before the first day of the previous year.

As per the above provision of the Act., an asset will not be considered as capital asset being an agricultural land on fulfillment of certain conditions. Thus by only showing a land as agricultural land will not automatically entitle a person to claim exemption on capital gain income on its transfer / sale of an agricultural property.

From the assessee’s submission it is evident that the assessee failed to furnish all other related information / document to show that the land under consideration are not only agricultural land, but also same fulfils all other conditions to treat such land not bring a capital asset.

The onus was entirely on the assessee to furnish all relevant information and document to substantiate his claim. It is apparent that assessee had not taken any serious initiative to discharge his onus On the contrary, it appears that assessee being well aware that about the

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fact of his case, which is just opposite to his stated stand, he on different pretext wanted to shift the onus to the AO , which was inappropriate and unacceptable.

Valuation of Land by a the Valuer of the assesse and the Registration Authority : In the computation of capital gain income assessee shown a small gain from such transfer .Against such gain assessee claimed of exemption( u/s 54 F ?) for Rs 15,88 laks in respect to purchase of a residential house property, and finally arrived at a negative figure as shown above.

To support the transfer value of land at Madhyamgram as a fair market value, assessee furnished Valuation report from a Valuer in respect to all the properties at such place. The Valuer determined the value of entire property almost at the same value as mentioned by the assessee in the agreement of transfer Reports of the Valuer found to be merely an estimation, without any reference to any fact , material or any basis. And at the same time the report found to be grossly erroneous for different reasons which have been discussed later on.

So, in order to get a reliable estimation of Fair Market Value of such land (all the plot of land being attached to one another constitutes a single piece of land at the time of it's transfer) a communication was made with the Addl. District Sub-reqistrar(ADSR), Barasat requesting to inform the Fair Market value of such properties on the date of it’s transfer and as on date.

ADSR was also requested to inform whether transfer of land through an unregistered agreement / power of attorney was legal in the eye of the law.

ADSR in his communication on 11.11.2016 informed only the present Market Valuation of the entire property of 644.75 decimal at Rs. 17,81,85,689/- (value per decimal comes to Rs, 2,76,364).The value of such land was determined from Market value database of the E Nathikaran software of the Govt, of West Bengal.

Final Show -cause notice to the assesse: On examination of the record, the valuation report of the assessee and the information received from ADSR, a final show-cause notice was issued to the assessee on 20.12.2016 . Relevant part of that communication is reproduced hereunder. (** Enclosures to such notice are enclosed as “Annexure A - page no 1 to 7).

“ Determination of cost of acquisition of Madhyamgram Land: For the purpose of computation of long term capital gain in respect to the properties at Mollapara Mouza under Madhyamgram Municipality, assessee furnished Valuation reports from the Valuer Smt. Apama Das. B.Sc., M.I.E. (Ind.), C.E.F.I.V. Chartered Engineer .for determining the Fair Market Value of the asset on different dated for taking such value as ‘ cost of acquisition’ for the purpose of computation of long term capital gain income. It is a fact that all the plots of land are adjacent to each other and altogether constitute a single piece of land which was handed over to property developer for further development, laying out roads, to make plots and sale the same.

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The valuer’s report in respect of different plots of land as on 1.4.1981 has been examined. It is seen that in none none of the valuation report the Valuer made any reference to the value of any other property at that locality at the given point of time, or made any reference to any other fact or material for adopting the land Value. Only reference made by the Valuer is the "local enquiry" without any reference to any other document or material in that respect.

The valuation of the land found to be grossly enhanced without any basis and with total disregard even the fact and which is seen available in some purchase documents itself, as in some of those plots were purchased in FY 80-81 or 81-82 only, and purchase deeds are available on record as reference document. The purchase consideration of those land itself is an authentic document for determination of market value of land at that place at such time. For some mysterious reasons the Valuer decided to ignore such value and went on estimating the purchase value on assumption.

Some of the cases are illustrated here under

Land Date of Area Deed Averag Valuer Land Assess purcha purcha of the value of e rate taken the purchas ee se deed se land purchas of valuation/p ed by & receive no (in ed purcha er decimal his/her d the decima property se (in Rs.) relation proper l) (in Rs.) price/p with the ty as er assessee decimal (in Rs.) 6538 08.06.8 218.25 19,500 89.35 5000 Smt. Gift 1 Lilabati from Saha mother (mother of the assessee ) 5936 29.08.8 31 3500 112 5000 -do- -do- 0 6539 08.06.8 80 9000 112.50 4800 Land 1 purchas ed by assessee Average value of land per decimal 104.62 Total value of entire land = ** @Rs.105x645 decimal = Rs. 67,725/-

From the above chart, it is evident that some of the purchase deed of the property by the assessee /by the donor of the assessee was purchased in the F.Y. 1980-81 or in 1981-82. These purchase deeds are undisputed documents about the "Fare market value" of the property around the time being 01.04.1981. The average rate of purchase of land per decimal at such place and around such time is worked out at Rs.104.62 (rounded off to Rs.105-) as above.

It is therefore, considered proper and appropriate to take the fair market value of land at such place @ 105/ per decimal as on 01.04.1981 in place of the Valuer's reported estimation of value between Rs. 4,800 and Rs. 5,000 per decimal, being unjust and highly exaggerated.

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You had transferred 645 decimal of land (6 acres 45 decimal) through an agreement of transfer, which was duly notarized on 9.9.2013, on receiving consideration of Rs. 2,23,00,000 and on handing over the possèssion of the land and original documents related to all the plots of land.

So, the cost of acquisition of entire piece of land is thus determined at Rs. 67,725/, in place of 2,56,12,237/- as determined by you for computation of capital gain income in respect to all the plots of land at Mollapara, Madhyamgram.

Determination of cost of transfer of Madhyam gram land:

In the computation of capital gain, you have taken the transfer value of Mollapara, Madhyamgram land at Rs.2,23,00,000/- being the amount received as per the agreement of transfer. As the agreement of transfer was never been registered, you were asked to furnish the market value of such land on the date of transfer on 9.9.2013.

You have submitted a valuation report from the same Valuer Smt. Apana Das. In that valuation report as on 09.09.2013 the Valuer determined the value of entire land at Rs.2,24,14,000/- on taking the value per decimal of land @ Rs.34,750/-. The basis for such valuation was entirely on "local enquiry” as mentioned against point No. 40 in her report.

On the "method of valuation" in the report it is stated that Valuation of land is estimated at per prevailing market price of identical plot in the locality as on Sept 2013. No sale reference could be collected for identical plot in the locality for the year 2013, although it does not always reflect the actual market price at the time.

Local enquiry was carried out to know the market price. It was collected that, price of land in the locality could vary in between Rs.34,000/- to Rs.35,000/- per decimal as on September 2013.

Based on local enquiry and considering location, position, demand and availability in the market, price per decimal is assessed as price of Rs.34,750/- as on September 2013.

The value of whole property thus determined by the Valuer on 09.09.2013 at Rs.2,24,14,000/- whereas, the assessee admitted receipt of consideration on transfer of such land was Rs.2,23,00,000/-. Thus, the net difference between the values are only Rs.1,14,000/- which is only 0.51%.

No further information was given by the Valuer in support of her findings of local enquiry and there was no other point of reference. Thus, the entire report rests on her personal observation without being specific and backed by any other material or record. So, such report is not reliable or reasonable and thus, not acceptable. So same is rejected.

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h such circumstances, matter was referred to the registration authority of that locality, being the Addl. District Sub-Registrar (ADSR), Barasat for determination of Fair market Value of the property as on 09/09/2013, by this office letter No.950 dated 09/11/2016 (copy of communication enclosed).

In response, the ADSR, Barasat informed vide his memo No. 676 dated 11/11/2016 that the Market Valuaton of such property as on 11/1/2016 is Rs.17,81,85,6894 (Copy of communication is enclosed). However, the ADSR was unable to provide the Market value of the property as on 09/09/2013.

In that communication it is also informed that "transfer of any land through an unregistered power of attorney is not legal as per transfer of property Act.”

It is a fact that the method of valuation of a property by Stamp duty Authority is more appropriate, as if the property had been transierod-4hrough a register deed of conveyance, the

Valuation determined by the stamp duty authority was final and binding while computing the capital gain income from transfer of such land. Again the valuation made by your Valuer found to be grossly undervalued being only Rs.2,24,14,000/- on 9/09/2013, whereas, the ADSR, Barasat determined the valuation of the same land on 11.11.2016 at Rs.Rs.17,81,85,689/- As the valuation of the registrar is more authentic and more relevant in this case, but as the ADSR could not furnish the exact valuation of the property on 09/09/2013, it is considered proper to determine the Fair market value of sale of the property on 9.9.2013 by adjusting the value of the property on 11.11.2016 on adjustment of cost inflation index with such value. It is a fact that all the plots of land are adjacent to each other and altogether constitute a single piece of land, which was handed over to property developer for further development, laying out roads, to make plots and sale the same. Cost inflation index for the relevant years are as follows: F.Y. 2013-14 939 FY. 2014-15 1024 F.Y. 2015-16 1081 F.Y 2016-17 1125 Valuation of land in F.Y. 2016-17 is Rs. 17,81,85,689/- Valuation of land in F.Y. 2013-14 is Rs. 14,87,25,656/- (178185689 x 939/1125) Therefore, following the cost inflation index valuation of the property has been determined at Rs14,87,25,656/- Capital gain in respect of Madhyamgram Property may be re-computed as under: Fare market value of property transferred Rs. 14,87,25,656/- Less, cost of acquisition as determined above Rs.67,725/- (939/100X 67,725) = Rs. 6,35,937 Rs. 14,80,89,719/ And it is a fact that all the plots of land transferred are adjacent plots, which comprises a single piece of land. A. In respect of Bakkhali Property:

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From the site-plan of the property (copy enclosed) it is evident that it is a small plot of land of only 30 satak, with an average length of the plot being 145 feet and breadth of 76 feet. It is a comer plot bounded by a two roads, one being Pradhan Mantri Gramin Sarak Yojana metallic road. One side of the plot is the residential plot of someone Mr. khara.

The site plan shows this plot of land was not purchased for agriculture purpose but for investment. The land was sold for Rs.9.50 lakhs whereas its value for stamp duty purpose was Rs.23,62,500/-, in effect value land per (satak) decimal comes to Rs.78,750/-. The appreciation in the value of the land from Rs.6,81,820/- at the time of its purchase on 17-02- 2011 to Rs.23,62,500/- at the time of its sale on 11-08-2014 is unusually high, within period of about 3 years.

Its appreciation in value within such a short period of time and your decision to purchase such a small plot of land in such a far-off area only confirms that the land was not purchased for agriculture purpose but an investment for its appreciation in value in short term.

You had the onus to produced document to establish that it is an agriculture land and used for agricultural purpose only. You have also not furnished any information regarding the location of the land beyond the limit of any notified area/locality to consider such property "not being a capital asset.

In view of the above, you are requested to explain as to why profit arising from transfer of such land will not be considered as your income from LTCG chargeable to tax." The Land properties at Madhyamgram is a Capital asset: In addition to the above following facts are relevant. Inspectors Report: In order to verify such fact Inspector was deputed to get information about such land at Mollapara, Madhyagram. Sri Saroj Kumar Nandi, Inspector in his report dated 26/10/2016 reported as under:

I have gone for confirmation of location of the below mentioned address plot on 24.10.2016. The details of address of place are as under. J.L. No. Mouza Khatian No. Dag No. 76 Mollapara 238 241 21 243 27 243 250 243 270 247 321 236 312 237 284 238 311 239 268 235 152 230 265 235 98 248 97 248 28 240

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I have gone to the office of the Madhyamgram Municipality and meet with Mr. Sudip Mukherjee who is yard councilor of Madhyamgram Municipality Ward No.12 as well as vice- president of Madhyamaram Municipality. As per record of Madhyamgram Municipality it appears that the locations of the mentioned plot are within the area of Madhyamgram Municipality under Ward No.12.”

Land Transfer documents are conclusive proof:

Assessee in his claimed that all the plots of land are agricultural land, and so, cannot be considered as capital asset as per Section 2(14 ) of the Income Tax Act Assessee was asked to furnish all relevant details to prove that those property fulfils all the conditions to be treated not being a capital asset. Assessee admitted that distance of the property from the local limit of the municipality could not be measured but confirms it being an agricultural land.

Again, from examination of the document of Agreement of Transfer of land itself as furnished by the assessee it is seen that the fact of the case is just against the assessee's stated position. It appears assessee even being aware about such fact tried to mislead the department in order to get exemption of the gain eared from his transaction from the land.

On examination of the very document of agreement of " transfer of right " on the land through Power of Attorney executed by the assessee on 9.9.2013, it is seen that, in page no. 15 of that document it is mentioned that that the entire land is within the area of Madhyamgram Municipal Corporation and comes under Municipal Ward No.12.

Again, in the General Power of Attorney made by the assessee in favour of two of the transferees, in its page No.8, it is mentioned that the entire 6 acres 45 dec land (being 645 decimal land)comprised in Mollapara Mouza, under J.L. No.76, R.S.No.5, in Barasat is "within the local limit of Madhyamgram Municipality, being new Ward No.12, old Ward No. 11 and holding No. 81",

From the above, it is now beyond of any doubt that on the date of transfer the entire asset at Mollapara, Madhyamgram was within a Municipality and fulfils conditions to treat the asset as "Capital asset, liable for Capital Gain Tax. Still, the onus was on assessee to prove his stated stand which he failed to prove.

This fact was communicated to assessee but assessee preferred to remain silent on this issue. It now appears, assessee even being aware about such fact tried to hide such fact and tried to mislead the department in order to get exemption from Capital gain tax arising from such transaction..

Determination of cost of acquisition of Madhyamgram Land_:

In the show cause notice dated 20/12/2016 assessee was intimated that the "cost of acquisition" in respect of the properties, which assessee received by way of gift from close relations, should be computed with reference to the purchase price/cost of acquisition in the hands of the donors. A work-chart of cost of acquisition in respect to some of those properties

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which were furnished by the assessee, were sent to the asseessee showing cost of acquisition in the hands of donors in the year 1980-81/81-82 period. On the basis of such document average cost of land of that locality was determined @ Rs.105 per decimal, whereas the assessee's Valuer estimated cost of acquisition of those properties at the same time in the range of Rs. 4,800/- to Rs. 5,000/- per decimal.

The assessee's Value made the valuation of a property (of 80 decimal ) as on 1.4.1981 which was the only plot of land assessee purchased on 8.6.1981 for Rs. 9,000/-.

Copy of that valuation report in respect to property purchased by assessee and the showing some other plots which were purchased by the donors around the same time is enclosed Annexure-B &C"

The summery of Valuation report of whole property is enclosed as "Annexure-D"

Even after issue of the final show-cause notice the assessee in his submission continued to rely of the Valuers report on the issue of determination of cost of acquisition of the properties which assessee received as girt where cost was determined on the basis of valuation of the property on the date of receipt of and thus, enhanced the cost of acquisition to a much higher figure .The valuation report found to be grossly erroneous on this issue also.

The provisions of Section 48 & 49 of the Income Tax Act is relevant on this issue, which is quoted as under:

Section 48 Mode of computation of capital Gain Income:

The income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely: i. Expenditure incurred wholly and exclusively in connection with such transfer. ii. The cost of acquisition of the asset and the cost of any improvement thereto.

Section 49: Cost with reference to certain modes of acquisition

Where the capital asset became the property of the assessee- i. On any distribution of assets on the total or partial partition of a Hindu Undivided Family ii. Under a gift or will iii. ……then, the cost of acquisition of the asset shall be deemed to be the cost of which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner of the assessee, as the case may be.

From the above it is evident that the "Cost of acquisition" refers only to the “real cost” (deed value) of the asset and not the Market value of the property on the date of acquisition as determined by the registration authority for stamp duty purpose.

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And the “cost in the hand of the donor” shall be taken as the cost of acquisition of the done only.

In view of the above provisions of the law, cost of acquisition of some property have been ascertained in the chart enclosed (as Annexure C).

Assessee's submission in response to notice dt 20.12.2016 In response to show cause dt 20.12.2016 Assessee in his submission dt. 26.12.2016 stated as under:

That, assessee has fulfilled his responsibility long back by way of submitting the valuation report prepared by an income tax approved Valuer in respect of value of acquisition of properties as well as transfer value of property.

It is argued that Law provides that when the assessing officer is not agreeable to the fair market value of property submitted by way of income tax approved Valuer's report the assessing officer is duty to bound to refer the matter to departmental valuation officer, as the valuation is a technical matter.

Assessee also submitted that the properties acquired at Madhyamgram are under 15 different dag number in various location. The land in front of the road side will be higher value than the land at the back side. It is also depends on the availability of approach road and also other various parameters.

It is further mentioned that in the show cause notice the transfer made by the assessee was stated to be not legal, is not a correct legal proposition as per income tax act.

The submission of the assessee is not acceptable and convincing for various reasons:.

Valuation Report prepared by the Valuer of the assessee found to be grossly erroneous, without any bases and misrepresentation of fact. Entire valuations were made only on assumption without reference to any material, fact or document. Valuer even ignored the purchased cost of few properties which are placed on record which were purchased in financial year 1980-81 and 1981-82 by the donor of the assessee or the assessee himself. When the Valuer proceeded to make Fait Market value of those properties on 1.4.1981 in the range of Rs. 4800 to Rs. 5000 /-per decimal land, as per their purchase deed f the cost of such land around such time was only around Rs- 128/-per decimal. Said fact is illustrated in the chart enclosed.

On the date of its transfer of Madhyamgram property on 9.9.2013, the Valuer of the assessee determined its fair market value at Rs-2,24,14,000/-against assessee's shown transfer value at Rs. 2,23,00000/-. Whereas, the Registering Authority (ADSR, Barasat) determined the Fair market value of the same property on 11/11/2016 at Rs. 17,81,85,689/-.

There is no reason or circumstances to explain how a property valued at Rs. 2.24 crore in Sept. 2013 (as valued by the assessee's Valuer) can be increased to 17.81 crore in November

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1016 (i.e. within a period of about 3 years. The Valuation of the ADSR is bcked by the data, in the software but the basis of estimation of the Valuer is only on "Local Enquiry, which has no back up documents or details.

This huge differences in valuations (mainly due to under valuation by the Valuer) only shows that the Assessee's Valuer tried to reduce the value of the property to the maximum extent possible in order to rescue the assessee and to reduce his liability to tax.

In the valuation report, ADSR considered the land as ‘vastu’, as the entire area is in Madhyamgram municipality. It does not require any explanation to understand that no lànd within the limit of a Municipal is marked for agricultural activities . The location of the land is very close to Kolkata Airport and the area is a fast growing urban area close to Kolkata City where all infrastructural developments are going on. And there is evidence on record to show that the land was given to developers for its sale as housing site only.

On the issue of differences in value of different plots of land under different dag numbers as argued by the assessee, it is to place on record that all the plots are adjacent plots, and they all together comprises a single piece of land 645 decimal. Assessee handed over the entire land to developer and allowed them to make a master plan by drawing access road into the property, to make plotting for housing and to sale it. This fact only shows that the entire property at the point of transfer was a single property, and therefore, there should not be any differentiation in valuation of individual plots of land at the time of transfer time with reference to their earlier valuation at purchase point. And in fact, in the Valuation Report the ASDR taken the "width of the Approach Road as 1 ft "in respect to all individual plots of land, and therefore, it cannot be said the ADSR taken the-valuation of the asset on higher side on consideration of any advantageous position to the same.

In view of the fact of the case as discussed above, it is considered proper and fair to take the valuation report of the ADSR of the same property as on 11,11,2016 as reference value to arrive at the Fair Market Value of land on the date of its transfer.

So, the valuation of the land has been reduced on reverse application of cost inflation index to arrive at a Fair Value of the property on 09.09.2013. This working has done later on at Rs. 14,87,25,656/- on 09.09.2016. And after determination and allowing the cost of acquisition and the cost of transfer, income from capital gain from this transfer is determined at computation stage. On such valuation, per decimal land value comes to Rs. 2,30,580/-, which appears to be quite reasonable for residential plot of land in fast developing residential area close to Kolkata City.

On the issue of objection of the assessee on comments of land transferred through unregistered power of attorney as illegal, this is to clarify that in response to a AO's query; ADSR Barasat in his communication date 11/11/2016 to AO communicated that" I am also to state that transfer of any land through an unregistered power of attorney is not legal as per transfer of property act’. In his valuation report on 11/11/2016 (as if, the property is being transfer on that date) the ADSR determined the Stamp duty on such transaction at Rs. 1.24.72.998/- and Registration fees Rs. 19,60,305/-. The assessee not only avoided payment of

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stamp duty, but also evaded payment of income tax through a transaction which is stated to be an illegal transaction.

In respect Bakkhali Agriculture property :

The assessee argued that the schedule in purchase deed as well as in sale deed there is a mention that the property is a shali land,”" i.e. agricultural land , which is stated to be an evidence in favour of the assessee . It is also stated that the Bakkhali agricultural property is about 37 kms away from the nearest municipality of Kakdwep. And a Ggramin Sarak Road on the side of the plot does not change the character of land from agricultural to non- agricultural.

On this issue, the character of the land as per record being agricultural land is not the only issue, but the intention of the assessee to purchase it, post purchase its utilization for agricultural activities and its sale on huge profit in short period only indicates a different fact which was communicated to the assessee in the show-cause notice along with the copy of the its site plan The plan shows the small plot of land as a corner plot two side of which are roads and on another side the residential property .The increase in value of such a small plot of agri land which multiplied in value within a period of three and half years time is unusual, as no person would be interested to purchase an agricultural land on such price for agricultural activity..

The fact of the case shows that this land was never been purchased for agricultural activities but as a good investment opportunity. In the return of income assessee has not shown any agricultural income, which \also confirms that assessee had not used the property for agricultural activity on such land.

Assessee informs that the land is 37 kms away from the nearest municipality of Kakdweep and assessee stays in Kolkata which is again around 100 kms away from Kakdweep . It is very unusual to think that assessee purchased such a small plot of land having such an high valuation and at such a far off place for agricultural purpose. Bakkhali is a popular tourist destination close to Kolkata, where the property having all advantage of developing into a tourist spot can only command such a price.

Intension of the income tax act to allow benefit of exemption from transaction in respect agricultural land used for agricultural activities only. Even if same land not been used for such purpose, this benefit cannot be considered to them and this provision of the act should not be exploited for different purpose.

Onus was entirely on assessee to proof not only the character of the land being an aquaculture but also the entire circumstances of the case to established that the purchase for purchase of the land was only for agricultural activities and the same land was sold for same purpose and not for any different reasons . Site plan of the plot states the fact differently.

14 ITA Nos.137 & 154/KOL/2020 Shri Ratan Kumar Saha A.Y. 2014-15

In view of the fact and circumstances of the case, the asssessee’s submission on the issue found to be insufficient and unsatisfactory, and therefore, profit arising on sale of such land is considered as capital gain, on consideration of the land being a capital asset. Computation of Capital Gain of Madhvamqram land : Valuation of land as determined by ADSR, Barasat as on 11.11.2016 Rs.17,81,85,689/- Valuation of land on 9.9.2013 is determined after reducing the value of land as on 11.11.2016 on applying inflation index in reverse order (Rs. 17,81,85,689X939/1125) = Rs.14,87,25,656/- Fair Market Value of 645 decimal land as on 09.09.2013 is thus taken at Rs.14,87,25,656/- Determination of Cost of acquisition.: Cost of acquisition of the land in the hand of the assessee / the donor has been shown in the proforma enclosed as Annexure- D. Assessee has not furnished all the purchase deeds of land of the donors, who gifted such land plot to the assessee later on. For determination of the cost of acquisition of the land which were received as gift from relatives, assessee was asked to furnish the copy of their purchase deeds to ascertain the cost of acquisition in the hand of the assessee. Assessee furnished some of those documents from where it is seen that all those properties were purchased by the donors in FY 1980-81 or 1981-81 and in earlier years only. In absence of production of the remaining deeds of purchases by the donors, it is assumed that all those properties were also purchased by the donors before 1.4.1981 only. - However, the Valuer of the assessee considered the deed value of the gift document as the cost of acquisition in the hand of the assessee which was improper and thus the Valuer estimated the cost of acquisition at a much higher figure. On examination of the four documents of purchases of different plots of land , three by the donors and one by the assessee himself, the cost of purchase of such lands in F.Y. 1980- 81/1981-82 was found to be Rs.89.35, Rs.112.00, Rs.112.05 and Rs.151.00 per decimal. The mean value of all such purchase prices comes to Rs.116/- per decimal. This valuation of cost of acquisition is more appropriate. As all the plots of land are at same place and all together constitute a single piece of land, the cost of acquisition in respect to entire property at such place as on 01.04.1981 is taken @ 116/- per decimal (whereas in the valuation report the Valuer determined such value in the range of Rs.4,800/- to Rs.5,000/- per decimal without assigning any reason. In addition to such value, the cost of registration and other expenditure incidental to such purchases are taken @7% of the purchase cost of land. Such cost is determined at Rs. 8/- per decimal. Thus, the Fair Market Value of land of that locality as on 01.04.1981 is determined at Rs. 124/- (Rs. 116/- + Rs. 8/-) per decimal. So, the cost of acquisition of entire land 645 decimal is determined at (645 decimal x Rs. 124/- ) = Rs. 79,980/-. After applying inflation index the cost of acquisition is determined at (939/100x79,980) Rs. 7,51,012/-.

15 ITA Nos.137 & 154/KOL/2020 Shri Ratan Kumar Saha A.Y. 2014-15

Fair Market Value of land as on 09.09.2013 is determined as above Rs. 14,87,25,656/- Less: cost of acquisition of such land as worked out Rs. 7,51,012/- Long Term Capital Gain income Rs. 14,79,74,644/- -A Long Term Capital Gain income in respect to Bakkhali land Cost as per sale deed Rs. 9,50,000/- Sale value and as per stamp duty as per S-50C of the Act Rs. 23,62,500/- Less: indexed cost to purchase as computed by assessee Rs. 9,92,910/- Long Term Capital Gain Rs. 13,69,590/- -B Total Long Term Capital Gain income (A+B) Rs. 14,93,44,234/- Less: exemption u/s 54F Rs. 15,88,008/- (investment in residential houses registered on 12.12.2013 and purchase of a garage space. Assessee has not claimed the section under which exemption is claimed)

Thus, Net Long Term Capital Gain Income chargeable to tax Rs. 14,77,56,226/-

Which is added to the disclosed income of the assessee

Case is heard and discussed, assessment is made u/s 143(3) of the IT Act.

Income of the assessee is re-determined as under:

Income from Business Rs. 3,32,615.50 Income from other sources Rs. 3,92,472.60 Add: income from long term capital gain Rs. 14,77,56,226.00 Gross Total Income Rs. 14,84,81,314.10 Less: Deduction u/s 80C, 80D, 80TTA Rs. 1,03,796.60 Total Income Rs. 14,83,77,517.50

Penalty Proceedings u/s 271(1)(C)

I am convinced that it is a fit case for initiation of penalty proceedings u/s 271(1)(C) of the IT Act for concealment of particulars of income and for evasion of payment of tax against capital gain income. So, penalty proceeding u/s 271(1)(C) is initiated.

Assessment is completed u/s 143(3) of the I.T. Act. Computation sheet is attached as per separate sheet. Issued DN with copy of order, penalty notice u/s 271(1)(C) read with section 274.”

16 ITA Nos.137 & 154/KOL/2020 Shri Ratan Kumar Saha A.Y. 2014-15

17 ITA Nos.137 & 154/KOL/2020 Shri Ratan Kumar Saha A.Y. 2014-15

Order pronounced in the open court on 06.07.2022.

Sd/- Sd/- (MANISH BORAD) (SONJOY SARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Kolkata, Dated: 06.07.2022. Biswajit, Sr. P.S. Copy to: 1. The Appellant: Shri Ratan Kumar Saha. 2. The Respondent: ACIT, CIR-49 (1 & 2), Kolkata. 3. The CIT, Concerned, Kolkata 4. The CIT (A) Concerned, Kolkata 5. The DR Concerned Bench

//True Copy// [ By Order

Assistant Registrar ITAT, Kolkata Benches, Kolkata