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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
This appeal by the assessee is directed against the order dated 18.09.2017 of Ld. Commissioner of Income Tax(Appeals) for A.Y. 2007-08. Earlier the appeal of the assessee was disposed of by this Tribunal vide order dated 08.03.2019. Thereafter the assessee filed a Misc. Application in M.A.No.53/Ind/2019 and vide order dated 07.01.2020 this tribunal while disposing of the Misc. Application filed by the assessee has recalled the earlier order dated 08.03.2019 for limited purpose of adjudication of the issue raised in the concise ground no.2 and original ground no.10 in respect of cost of acquisition of the land sold by the assessee giving rise to Page 1 of 6
Ramkanya Bai Page 2 of 6 the dispute of assessment of capital gain. The relevant part of the order dated 07.01.2020 passed in the Misc. application in para 4 is as under:
4. We have heard the rival contentions perused the material available on records. We find force in the contention of assessee that the concise ground no.2(original ground No.10) regarding cost of acquisition of land sold was not specifically dealt with in tribunal order dated 08.03.2019. Therefore, the order dated 08.03.2019 is recalled for limited purpose of deciding concise ground no.2(original ground No.10) regarding cost of acquisition of land sold raised in the appeal of the assessee. Thus, the appeal of the assessee is re-fixed for hearing on 20.02.2020 for the above limited purpose only, for which no separate notice shall be issued as the date of hearing has been mentioned in this order. However, in respect of issue of reopening of assessment, the issue has already been decided by the Tribunal, therefore, this contention of the assessee is rejected.
Thus, this appeal of the assessee was again fixed for hearing and adjudication of the issue of cost of acquisition of land.
At the time of hearing none has appeared on behalf of the assessee despite repeated adjournments granted after the earlier order was recalled for adjudication of particular issue. On the last date of hearing i.e. 12th April 2023 when nobody has appeared on behalf of the assesse a final opportunity was granted to the assessee to argue the case but again when this appeal was taken up for hearing on 01.05.2023 nobody has appeared nor any adjournment application has been filed. Accordingly, the bench proposes to hear and disposed of this appeal ex-parte. This appeal was listed before this bench for limited purpose of hearing and adjudication of ground no.2 which reads as under:
“The ld. CIT(A) erred in not considering cost of acquisition as per report of approved valuer Mr. Deole at Rs.10,38,000/-.”
Therefore, the scope of hearing of this appeal after recalling of the earlier order is limited only to the adjudication of the issue of ascertainment of cost of acquisition. Ld. AR of the assessee has filed the written submissions wherein the arguments have been made on the issue of validity of initiation of proceedings u/s 148 and consequential
Ramkanya Bai Page 3 of 6 reassessment order passed by the AO for want of jurisdiction of the AO. We find that this issue was already adjudicated by this Tribunal while passing the order dated 08.03.2019 and in the Misc. Application the Tribunal vide order dated 07.01.2020 has recalled the earlier order only on the issue of cost of acquisition of land. Therefore, in the present proceedings the scope of hearing and adjudication is confined only on the issue for which the earlier order was recalled in the Misc. Application order. Hence, the written submissions filed by the Ld. AR on the issue other than the issue of cost of acquisition of the land in question are irrelevant and misleading. If the assessee is having any grievance against earlier order of this Tribunal dated 08.03.2019 whereby the appeal of the assessee was decided and subsequent order dated 07.01.2020 whereby Misc. Application of assessee is disposed of then the assessee was free to avail the legal remedy available under law.
As regards the issue of cost of acquisition the assessee has filed written submission as under:
The law for that year has been given in sec. 55A and it is well settled that the AO is bound by report of departmental valuer and that the report of registered valuer cannot be changed by the AO towards lower side. This was the interpretation of law as per decision in the cases of Sarala N Sakraney vs ITO (2010) 46 DTR 208 / 130 ITD 167 (Mumbai) (Tribunal). In order to overcome this situation, section 55A was amended to provide that valuation report can be towards both sides that is upward and downward and this amendment came with effect from 1st day of July 2012. This was clearly after the assessment year in question in this appeal. The issue then arose whether such amendment will apply retrospectively or prospectively. In other words, whether this amendment would cover the case of the assessee. This issue was considered in the case of Commissioner of Income Tax-13 vs Puja Prints Hon'ble Bombay High Court held that Section 55A(a) of the Act at the relevant time provided that a reference could be made to the Departmental Valuation Officer only when the value adopted by the assessee was less than the fair market value. In fact, the Assessing Officer referred the issue of valuation to the Departmental Valuation Officer only because in his view the valuation of the property as on 1981 as made by the respondent-assessee was higher than the fair Page 3 of 6
Ramkanya Bai Page 4 of 6 market value. In the aforesaid circumstances, the invocation of section 55(A)(a) of the Act is not justified. Going through Finance Bill 2012, the legislature has mentioned that the amendment should be with effect from the 1st day of July 2012. Furthermore, there were certain other amendments in the Finance Bill 2012 specifically making them applicable retrospectively, e.g., the controversial section 9 (1)(i) which was to nullify the Supreme court decision in Vodafone International holdings (as the amendment was clarificatory). Thus, the decision taken by the legislature to insert the amendment from July 1, 2012 was a conscious one. Similar guidance was given by Hon'ble Apex Court in CIT vs Vatika Township Private Limited. The Apex court also said in above judgement that one of the established rules of interpretation was that unless explicitly stated, a piece of legislation is presumed not to be intended to have a retrospective operation. The idea behind such a rule was that a current law should govern current activities. The principle of "lex prospicit non respicit", which means that The Law looks forward and not backward' was upheld. Also in the absence of clear words indicating that the amending Act was declaratory, retrospective effect could not be resorted to, particularly when the pre-amended provisions were clear and unambiguous and from reading the text it is very clear that there was no issue regarding interpretation of "less than its fair market value" Copy of this decision is enclosed. Hence it is prayed that valuation as per registered valuer be ordered to be adopted 6. On the other hand, ld. DR has submitted that the AO has duly considered this issue and determined the cost of acquisition by taking reverse indexation method which is well recognized and accepted method of determining the cost of acquisition/fair market value as on 01.04.1981. He has further submitted that the Ld. CIT(A) has duly considered this issue while passing the impugned order and since the assessee has not submitted any evidence in support of its claim therefore, the claim of the assessee was rejected and order of the AO was uphold. He has relied upon the orders of the authorities below.
We have considered rival submission as well as relevant material on record. The ld. AO in the assessment order in para no.11 & 12 has recorded the fact that despite various opportunities the assessee has not produced any detail in respect of the cost of acquisition of land in Ramkanya Bai Page 5 of 6 question. The AO consequently determined the cost of acquisition by adopting reverse indexation method from the current market price of the land. The assesse has challenged the action of the AO before ld. CIT(A) and ld. CIT(A) has decided this issue in para 6 & 6.1 as under:
“6.0 This ground of appeal is with regard to not considering valuation report for 01/04/1981 and allowing deduction of index cost at a very lower side. I have carefully gone through the assessment order as well as submission of the appellant in this regard. 6.1 In absence of any credible evidence having been submitted by the appellant in this regard, I don’t find any reason to interfere with the computation of cost of acquisition of the land in question so adopted by the AO. Thus, I have no hesitation in dismissing this ground of appeal.”
8. It is manifest from the impugned order of the Ld. CIT(A) that this ground of the appeal was dismissed by the Ld. CIT(A) on the ground that the assessee has not produced any credible evidence in support of the claim and submission. It is pertinent to note that the assessee has filed the valuation report at page no.16 to 21 of the paper book in support of the claim and as per the certificate all these documents are claimed to have been produced before the Ld. CIT(A). Since neither the AO nor the Ld. CIT(A) has considered the valuation report which is placed at page no.16 to 21 of paper book while determining cost of acquisition/fair market value as on 01.04.1981 therefore, in our considered view this issue requires to be set aside to the record of the AO for adjudication after considering the valuation report filed by the assessee as well as adopting the sale instance if any in the vicinity of the land in question for determination of the fair market value as on 01.04.1981. Accordingly, this issue is set aside to the record of the AO for adjudication in above terms. Before parting with this issue we may point out that the entire arguments of the assessee in the written submissions is focused only on the applicability of section 55A which was amended w.e.f. 1st July 2012 whereas neither the AO nor the CIT(A) has referred the determination of the fair market value of the land in question as on 01.04.2081 to the DVO. Therefore, we do not express any view on these contentions of the assessee which are not germane to the issue under consideration.
9. In the result, ground no.2 of the concise ground or ground no.10 of the original ground is allowed for statistical purposes.
Order pronounced in the open court on 04.05.2023.