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Income Tax Appellate Tribunal, “D”, BENCH
Before: SHRI S.S. GODARA, JM & DR. A.L.SAINI, AM
आदेश / O R D E R
Per Dr. Arjun Lal Saini, AM: The captioned appeal filed by the assessee, pertaining to assessment year 2006-07, is directed against the order passed by ld. Commissioner of Income Tax (Appeals)-Siliguri in Appeal No.67/CIT(A)/SLG/2015-16 dated 12.04.2016 which in turn arises out of an order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act ‘) dated 31.03.2015.
We have heard both the parties. Case file perused. It emerges at the outset that the sole dispute between the parties in the instant case is qua correctness of both the lower authorities action making LTCG addition of Rs.59,68,094/- after invoking section 50C of the Act. Other aspects of the issue i.e. nature of capital asset, its location as well as its transfer in the relevant previous year are not question. We proceed in view of this admitted factual background to find that the CIT(A) has affirmed the AO’s action vide following discussion :
“4. From the submission of the assessee it emanates that his only grudge against the AO was for not sending the matter to the DVO again for reconsideration. The assessee inferred that by not doing so, the AO violated
2 Late Mahendra Kumar Agarwal (L/H of Susmita Agarwal) ITA No.1162/Kol/2016 A.Y: 2006-07 the order of the Hon'ble ITAT. I am not inclined to accept assessee's version. Nowhere in the order of the Tribunal was the AO directed to take up the valuation with DVO again. The Hon'ble Tribunal was under impression that 'the objection of the assessee has not. been considered by the DVO or the AO' and therefore, AO was asked to grant opportunity to the assessee to substantiate his case and re-adjudicate the matter after considering the objection of the assessee in respect of DVO' report. However, it clearly appears from the record that the DVO had determined the fair market value of the property at Rs.4,65,70,000/-, vide notice U/s. 55A of the Act, dated 19/05/2010. The assessee had filed an objection letter to the DVO on 30/06/2010. The objections were on the grounds of (i) irregular shape of the plot of land, (ii) large land size, (iii) Co-ownership of land, (iv) sloping ground below the road· level, (v) unauthorized structures at the frontage. The DVO had dealt with all objections in his final report dated 20/07/2010 and found the objections were already considered in his first report or not valid reasons for consideration and accordingly made no change to the original valuation. It is pertinent to quote from the 'reply to the objections' by the DVO to the assessee as below:
" The assessee has submitted his objections vide his letter no. Nil dated Nil, received by this office on 30.06.2010 on NS-6 issued vide this office letter of even no. 92 dated 19.05.2010.
The para-wise reply of the objections is as under: 1. Irregular Shape of the Plot of Land:- The assessee has claimed a 10% discount on this account. The shape of the plot is irregular but the frontage of the plot is 324' which is a very good frontage. Hence, the discount allowed of 3% is quite fair and justified. 2. Large Land Size:- Nowadays such big plots of land are not easily available, since such plots are required for construction of Shopping Malls, Residential Complex etc. The assessee has claimed a 15% discount on this account. As such big plots of lands are not easily available even then this office has allowed a discount of 2% on this account which is fair and justified especially since these days easy finance from banks and financial institutions is available and also development agreement is easily resorted to.
3 & 4. Co-ownership of land, Sloping ground below the road level:- The assessee has claimed a 10% discount for co-ownership and 5% for low lying land, but this office has already allowed a discount of 3% for co-ownership and 2% for low lying. Although the plot is not situated on much low lying area, also the low lying plots from the road has the advantage that the basement can be constructed at a lower cost. Hence the discount allowed by this office is fair and justified.
Unauthorized structures at the frontage:- The assessee has claimed a 25% discount on this account, but failed to submit any conclusive and clinching evidences of UNAUTHORIZED structures at the frontage. The assessee has submitted a letter dated 27.03.2009, from the Councilor of the Siliguri
3 Late Mahendra Kumar Agarwal (L/H of Susmita Agarwal) ITA No.1162/Kol/2016 A.Y: 2006-07 Municipal Corporation which indicates that few structures were present but on PWD land. The land was sold during January, 2006. It is not clear from assessee's letter whether the structure was constructed before the sale or after the sale. There is no encumbrances inside the plot. Hence discount cannot be allowed on this account.
Accordingly, NS-7, i.e. the final valuation report is issued as per NS-6, without change."
Thus the crux of the issue is that contrary to assessee's claim before the Hon'ble Tribunal that his points of objection were not considered by the DVO, it emanates beyond doubt that the assessee indeed filed objections before the AO and the DVO had not found any merit in such objections of the assessee and therefore, did not change the original valuation. As it can be seen from the DVO's reply as quoted hereinabove that in the first valuation, the assessee was already allowed certain percentages of discounts on account of (i) irregular shape of the plot of land, (ii) large land size, (iii) co- ownership of land and (iv) low lying of land. The DVO did not allow discount for unauthorized frontage structures, as the assessee could not establish this point. Due to these very reasons, the AO did not consider it necessary to refer the matter again to the DVO and adopted the final valuation of the DVO. The assessee cannot be allowed to play innings after innings as per his sweet will. The AO neither had violated the directions of the Hon'ble Tribunal nor completed the assessment on surmises. I, therefore, do not find any reason to disturb the assessment. The assessment made by the AO is upheld.”
It is thus clear that the authorities below have rejected the assessee’s challenge to the DVO’s valuation based on various aspects. The same appear to be the shape of the relevant capital asset, land size, co-ownership, sloping ground below the road level and unauthorized structures at the frontage. It is an unadmitted fact that the assessee had claimed the said factors to be having 10%, 15%, 10% , 5% and 25% depreciating value on the relevant capital asset. The DVO accepted the former four issues to the extent of 3% in first and 3rd , 2% each qua second and 4th whereas 5th issue of unauthorized structures stands rejected. It is therefore more a case of quantification of the said depreciation factors in the former four issues only. The authorities below have gone by this tribunal former remand order (supra) in rejecting the assessee plea to this effect. We do not find any merit in the same as the said issue of quantification was never adjudicated in remand directions earlier. It appears that there is a lot of difference between assessee’s claim of quantification vis-à-vis as that accepted by the lower
4 Late Mahendra Kumar Agarwal (L/H of Susmita Agarwal) ITA No.1162/Kol/2016 A.Y: 2006-07 authorities. It ranges between 3 to 10% qua 1st and 3rd aspects, going as high as i.e. 15% and 2% qua the second aspect of large land size and 5% and 2% qua the fourth aspect of sloping ground. We therefore deem it appropriate to treat this issue to conclude that larger interest of justice would be met in case the AO is directed to adopt fair market price of the relevant capital asset to be average of assessee’s and DVO’s valuation ‘s issue. We further clarify that our instant averaging based on relevant facts should not be taken as a precedent. Necessary computation to follow as per law after affording adequate opportunity of hearing in consequential proceedings. 5.. In the result the appeal of the assessee is partly allowed in above terms. Order pronounced in the open court on 29.08.2018. Sd/- Sd/- (S.S.GODARA) (DR. A. L. Saini) �या�यक सद�य / Judicial Member लेखा सद�य / Accountant Member कोलकाता /Kolkata; Dated: 29.08.2018. RG, SPS
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :
अपीलाथ� / The Appellant- Late Mahendra Kr. Agarwal (L/H of Susmita Agarwal) 2. ��यथ� / The Respondent.- ITO, Ward-2(1), Kolkata 3. आयकर आयु त(अपील) / The CIT(A)-Siliguri. 4. आयकर आयु त / CIT-Siliguri 5. !वभागीय �$त$न%ध, आयकर अपील�य अ%धकरण, कोलकाता / DR, ITAT, Kolkata 6. गाड( फाईल / Guard file.
//True Copy// By Order
Senior Private Secretary, Head of Office/D.D.O, I.T.A.T, Kolkata Benches,Kolkata
5 Late Mahendra Kumar Agarwal (L/H of Susmita Agarwal) ITA No.1162/Kol/2016 A.Y: 2006-07