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Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The Revenue filed this appeal against the order of the Commissioner of Income Tax (Appeals)-12, Chennai in dated 26.03.2019 for assessment year 2008-09.
There is a delay of 13 days in filing the appeal. The AO filed a condonation petition explaining the reason for the delay. After hearing the parties, we condone the delay.
Shri R. Ramadoss, the assessee, and co-owners sold a property for a consideration of Rs. 5,18,23,000/-, of which the assessee’s shares was Rs. 2,46,62,500/-. After brokerage, the same was declared by the assessee and accepted by the department. As the property was inherited prior to 1981, the assessee had adopted the fair market value of the property @ 100 per sq.ft. as on 01.04.1981 while arriving the indexed cost of acquisition for the purpose of computing the long term capital gains. While making the assessment, inter alia, the AO based on communication received from the Sub-registrar adopting the rate at 15
per sq.ft. as on 01.04.1981. Aggrieved, the assessee filed an appeal before the CIT(A).
4. Before the Ld. CIT(A), the assessee brought to his notice, the decision of this tribunal in the co-owners cases viz., Mr. S.S.
Manthirikumar & Smt. Banumathy, in & 1970/Chny/2016 for assessment year 2008-09 dated 07.03.2019. This Hon’ble tribunal by considering the location and potential for future development accepted the fair market value as on 01.04.1981 at Rs.
:-3-: 100 per sq.ft. Therefore, the Ld. CIT(A) following that decision directed the AO to adopt the rate at Rs. 100 per sq.ft. as on 01.04.1981 and re- computed the capital gains.
Aggrieved against that order, the Revenue filed this appeal with the following grounds:
“1. The order of the Ld. CIT(A) is contrary to law and facts and circumstances of the case.
2. The CIT(A) has erred in directing the AO to re-compute the Long Term Capital Gains by adopting the rate on similar lines in the case of co-owners of the same property as held by the Hon’ble ITAT.
3. The CIT(A) has erred in directing the AO to adopte the Fair Market Value @ 100/- per sq.ft. as per ITAT’s order in the case of other co-owners.
The CIT(A) has not considered the fact that there was no documentary evidence furnished by the assessee at any stage for adoption of Rs. 100 sq.ft.
5. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the ld. CIT(A) may be set aside and that of the Assessing Officer be restored.”
The Ld. DR argued the case on the lines of grounds of appeal, supra.
Per contra, the Ld. AR relied on the decision of the CIT(A).
We heard the rival submissions carefully. The relevant portion of the order of this tribunal, supra, is extracted as under:
:-4-: “5. We have considered the rival submissions on either side and perused the relevant material available on record. Valuation of property as on 01.04.1981 has to be made on the basis of the location of the property, potential for future development, availability of infrastructure around the property, access to the infrastructure facilities, etc. In this case, the Assessing Officer has simply followed the guideline value fixed by the Sub-Registrar for registration of property at G1.38 per sq.ft. It is well settled principles of law that the guideline value is only to guide the Sub-Registrar to find out market value of the property for the purpose of collection of stamp duty. The guideline value may not always represent the market value. The market value is something different from guideline value, which is prescribed for guiding the Sub-Registrar to find out the market value. This Tribunal is of the considered opinion that market value is not a constant figure. It would fluctuate depending upon various factors such as the area of the land, location of land, availability of infrastructure facilities around the land, potential for future development, access to the infrastructure facilities to the land, etc. The Assessing Officer without considering any of these factors, has simply adopted the guideline value of the Registration authority.
6. From the Departmental Valuation Officer’s report in the case of one of the co-owners, it appears that the property is located in prime location of Cuddalore. The property appears to have been located on the eastern side of link road to railway over bridge and Cuddalore main bus stand. The Departmental Valuation Officer has also noted that it is located on the rear side of busy Lawrence Road and even in the year 1981, the Departmental Valuation Officer found that there was high potential for development of property as commercial campus / cinema theatres / Kalyana Mandapam, etc. The frontage of the building is admittedly 178 ft. By considering the nature of building, future development and potential for establishing commercial campus / cinema theatres, this Tribunal is of the considered opinion that the value of the property could naturally be :-5-: G100 per sq.ft. as estimated by the assessees. Even though the Valuation Officer has taken three instances, this Tribunal is of the considered opinion that by considering the location and potential for future development, it would easily fetch G100/- per sq.ft. as on 01.04.1981. Therefore, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, orders of both the authorities below are set aside and the Assessing Officer is directed to take the market value as on 01.04.1981 at G100/- per sq.ft. and thereafter recompute the capital gain.”
From the above, it is clear that the Ld. CIT(A) followed the decision of this tribunal in the co-owners case, supra. Therefore, we do not find any reason to interfere with the order of the Ld. CIT(A). The corresponding grounds of the Revenue’s appeal is dismissed.
In the result, the Revenue’s appeal is dismissed.
Order pronounced on 23rd December, 2019 at Chennai.