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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
O R D E R
Per Sanjay Arora, AM
This is an Appeal by the Assessee directed against the Order dated 09.6.2022 by the Commissioner of Income Tax (Appeals), NFAC, Delhi [CIT(A)], dismissing his appeal contesting his assessment under section 143(3) of the Income Tax Act, 1961 (‘the Act’) dated 28.10.2010 for Assessment Year (AY) 2005-06.
The appeal has been filed by the assessee in his capacity as the legal representative (LR) of his late mother, Smt. Hirabai Haridas Dattani. On enquiry with Shri Raj, the learned counsel for the assessee; the Valakat in his favour having been signed by the assessee alone, it was explained that the assessee has been pursuing the matter from the assessment stage onwards. His only brother, Shri Arun Dattani, had since expired, and he may accordingly be taken as representing the estate of his late mother for an on behalf of the family, i.e., including his four sisters; his father having already expired. The hearing in the matter was proceeded with on that basis.
ITANo. 796/Coch/ 2022 (AY 2005-06) Hirabai Haridas Dattani vs. ITO 3. The dispute in the instant case is qua the computation of capital gains on his 1/21 share in the 86 cents of land, co-owned by the assessee along with other family members, being the sons and daughters of late Smt. Hirabai Haridas Dattani. Further, as explained, the issue arising is qua the estimation of the fair market value (FMV) as on 01.04.2081;subject property having been acquired prior thereto, so that the same is to be deemed as the cost of it’s acquisition. While the assessee has adopted the same at Rs.75,000 per cent, the Assessing Officer (AO) has applied the rate of Rs.26,923 per cent. The assessee’s objections, as explained, are on two counts, as under: (a) the comparable property (an adjacent land admeasuring 78 cents) having frontage of only 3 feet as against the full road frontage of the assessee’s land; (b) non-consideration of the value of the building, having built-up area of 25,000 sq.ft., in arriving at the FMV of the land.
We have heard the parties, and perused the material on record. At the outset, it was, on query, clarified by Shri Raj that this issue, i.e., FMV of the subject land as on 01.04.1981, arises before the Tribunal for the first time. Though the matter had come up before the Tribunal in the case of other co-owners, it set aside the assessment/s for other reasons. We shall take up both the objections in seriatim, as under; the second being, though raised, not adjudicated by the ld. CIT(A):
A. The findings by the ld. CIT(A) in the matter are as under: - “11. The other issue is the appellant's claim that market value higher than Rs. 26,923/- should have been taken as on 01.04.1981 because the appellant's property had full road frontage vis-à-vis the comparable taken by AO which had road frontage of only about 3 feet.
On this issue, Para 4 of the assessment order is loud and clear. The appellant has not negated the findings of AO in any manner. It is clear from the assessment order that AO had adopted the most suitable comparable to arrive at the market value of the property as on 01.04.1981. The comparable was admeasuring 78 cents as against appellant's 86 cents. The property was adjoining property of the appellant. Both the properties were abutting the Fort Road on their front side. The sale of that comparable property was in 1985 at the rate of Rs. 26,923/-. Moreover, AO duly considered the fact of somewhat better frontage of the appellant's property vis-à-vis the comparable and in the most judicious manner adopted the rate of 33,654/- for Page 2
ITANo. 796/Coch/ 2022 (AY 2005-06) Hirabai Haridas Dattani vs. ITO the year 1985(if the sale had taken place in that year) for the appellant's property and then applying reverse indexation adopted the value of Rs. 26,923/- per cent as on 01.04.1981.” The claim of frontage of the adjacent land being at about 3 feet appears to have been taken before the ld. CIT(A) for the first time, and without any evidence. The same contradicts the AO’s observation, not disputed, of a tourist home being run from the building thereat. The AO has in any case of the matter allowed the assessee a premium of 25% on account of better frontage. What, we wonder, then, is the assessee’s grouse, who has not been able to rebut the clear findings by the Revenue authorities in the matter. The assessee’s objection is without merit whatsoever.
B. The assessee’s second objection is equally frivolous. The issue was, again, raised for the first time before the ld. CIT(A) and, further, without any evidence. On facts, even assuming a structure on the said land, there is no material on record to state of any separate value as having been placed thereon while selling the land. Why, the assessee himself returned capital gain only on land, i.e., by, as apparent, ascribing the entire sale consideration thereto. Even assuming a value for building, the same shall have to be reduced from the total consideration, and capital gain computed thereon, a separate asset from land, separately. That is, there is even in such a case no question of the value of building being added to that of land, a separate asset(CIT v. Alps Theatres [1967] 65 ITR 377 (SC)). The assessee’s objection is, both on facts and in law, without basis.
In the result, the assessee’s appeal is dismissed. Order pronounced in the open court onOctober30, 2023 under Rule 34 of The Income Tax(Appellate Tribunal) Rules, 1963. Sd/- Sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Cochin, Dated:October30, 2023 n.p.
ITANo. 796/Coch/ 2022 (AY 2005-06) Hirabai Haridas Dattani vs. ITO