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TMI Blog2016 (11) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... q. yard. 3. That the learned Commissioner of Income-tax (Appeals)-II, has also erred in not considering the facts that the cost of acquisition as on April 1, 1981 of 1708 sq. yards of land sold has been rightly been adopted by the assessee at Rs. 8,000 per sq. yard on the basis of report of Halka Patwari, dated October 26, 2006, countersigned by Sub- Registrar (West), Ludhiana as well as on the basis of Registered Valuer's report dated November 6, 2006. 4. That the Commissioner of Income-tax (Appeals)-II, has failed to appreciate that in the adjoining land of the co-owner, the rate of Rs. 5,500 per sq. yard had been accepted by the Department and, as such, adoption of rate of Rs. 600 per sq. yard is uncalled for. 5. That the abovesaid addition has been confirmed by the learned Commissioner of Income-tax (Appeals)-II, Ludhiana is against the facts and circumstances by not considering our submissions properly." 2. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. 3. Brief facts are that in this case the assessee filed return declaring income of Rs. 14,38,800 on Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sq. yard as on April 1, 1981. The assessee once again referred to the report of the area Patwari dated October 26, 2006 counter signed by Sub-Registrar (West) and contended that the fair market value at Rs. 8,000 per sq. yard was taken correctly. 5. The Assessing Officer collected more information regarding sale of land in and around the residential house sold by the appellant. The details collected by the Assessing Officer are summarised as under : Sl. No. Details of property Vasika No. & Date Area of plot sold Total sale consideration (Rs.) Rate per sq. yard (Rs.) 1. Plot situated in Ghumar Mandi 7063/18.3.1981 90-2/3 18,134 201 2. Plot situated in Krishna Nagar Near Ghumar Mandi 234/8.4.1981 109-1/9 29,460 270 3. Shop situated in Kara Bara (Gurdev Nagar) 3207/20.8.1980 60 30,000 500 4. Plot in Krishna Nagar Near Ghumar Mandi 1133/5.5.1981 642 44,600 70 5. Plot situated in Krishna Nagar Near Ghumar Mandi 1154/6.5.1981 642 44,600 70 6. Plot situated in Feroze Gandhi Market 12810/31.1.1984 181-50 64,070 100 7. Plot situated in Kara Bara Gurdev 4951/1.2.1980 518-5 51,850 100 8. Plot situated in Ghumar Mandi 3345/12.9.1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was brought to the notice of the assessee. The assessee referred to the case of Shri Birender Pal Singh Gill, a co-owner, in whose case the fair market value as on April 1, 1981 had been accepted by the concerned Assessing Officer, i.e., Assistant Commissioner of Income-tax, Circle-I(1), Chandigarh at Rs. 5,500 per sq. yard. The assessee also raised certain objections regarding the Valuation done by the DVO. The Assessing Officer considered the assessee's submissions and held that the situation remained the same as it was during the original assessment proceedings inasmuch as the assessee had failed to rebut the registration deeds on which the Assessing Officer had relied upon for taking the value of land as on April 1, 1981 at Rs. 600 per sq. yard. The Assessing Officer also observed that the assessee had failed to produce any material to the contrary in spite of number of opportunities provided to the assessee. Keeping in view the aforesaid facts and the report of the DVO the Assessing Officer once again held that the fair market value of the property sold by the assessee, as on April 1, 1981 was Rs. 600 per sq. yard. The long-term capital gain were once again recomputed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d April 19, 2011 and which is being reproduced as under : "We shall now turn to the estimation of cost of acquisition being the fair market value of the property as on April 1, 1981. The property sold by the assessee is a part of bigger property sold by other co- owners. It is reported by the learned Departmental representative that the cases of other co-owners have been reopened and the issue as regards the determination of cost of acquisition as on April 1, 1981 is being considered afresh in those cases by the respective Assessing Officers. It is submitted by the parties that the matter of valuation of the property was referred by the Assessing Officer to the Valuation Officer but the valuation report from him was not received by the Assessing Officer with the result that the Assessing Officer had to complete the impugned assessment without having the benefit of valuation report of the Valuation Officer as the assessment was getting barred by limitation. In order to ensure uniformity in adopting the cost of acquisition in the cases of all co-owners, it is concerned appropriate to restore the matter to the file of the Assessing Officer with the direction to decide the issue of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in paragraph 5 that the position remains the same is contrary to the material on record, both on facts and on legal position and rather the Assessing Officer has not applied his mind on the basis of the various submissions filed before him and the case of one of the co-owner and, therefore, the addition made by him deserves to be deleted. 9. The adoption of value of land as on April 1, 1981 at Rs. 600 per sq. yard is contrary to the material facts with regard to the "fair market value" of the land as, defined in section 2(22B) of the Act and copy of the objections along with paper book was submitted to the Assessing Officer and which have been summarily ignored by him. Thus, the finding of the Assessing Officer that the assessee has not submitted any explanation or led any evidence is contrary to the material facts on record and, thus, the addition as made by him deserves to be deleted. 10. It is also submitted that the rate on which the land was sold is at average rate of Rs. 35,550 per sq. yard and which is against the circle rate of Rs. 8,000 to Rs. 9,000 per sq. yard and therefore, the reliance by the DVO and the Assessing Officer on the basis of registered consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer in their order to look into the rates as adopted in the case of co-owners as on April 1, 1981 and which fact has totally been ignored by the learned Assessing Officer because it never suited to the Assessing Officer. 14. In the case of one of the co-owner namely, Sh. Birender Singh, the cost of acquisition as on April 1, 1981 has been adopted in respect of front portion and the major portion is in "no construction zone", the cost has been adopted as on April 1, 1981 at Rs. 5,500 per sq. yard and even during the course of proceedings under section 148, the same value as on April 1, 1981 has been adopted and, which fact, was brought to the notice of the Assessing Officer in our reply submitted to him during the course of assessment proceedings, after the case had been remanded from the hon'ble Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh. The same has been ignored summarily and the finding of the hon'ble Bench in the order that uniformity should be ensured in adopting the cost of acquisition in the cases of other co-owners and which have not been considered at all and, therefore, since the cost of acquisition in the case of other co- owner have been acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the location of the property in question and it is, therefore, requested that as per the direction of the hon'ble Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, the valuation be adopted as claimed by the asses see, because the comparable case of the co-owner, which is immediate adjoining, wherein the rate of Rs. 5,500 has been accepted by the Department in which on 75 per cent. portion of that area, no construction can be raised and comparing the same with our area, which has the 100 per cent. constructed area, the valuation as adopted as on April 1, 1981 is extremely fair and deserves to be accepted and also on the basis of the case law as narrated above." 10. The learned Commissioner of Income-tax (Appeals) after perusing the reply of the assessee directed him to file the following details : "(i) Site plan of the total property indicating the share of each of the co-owners. (ii) The cost of acquisition adopted by the Assessing Officers of the respective co-owners in proceedings under section 148 of the Income-tax Act along with evidence. (iii) Evidence regarding the cost of acquisition of Rs. 5,500 per sq. yard having been adopted by the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted in our case and, this has been discussed in some extracts of the order under section 143(3) of Sh. Birender Singh as filed by us and the same may be verified by your goodself, if desired from Circle-I(1), Chandigarh. Lastly, it may be stated that the hon'ble Income-tax Appellate Tribunal has observed in paragraph 26 of the order that in order to have uniformity of cost of acquisition, the cost as adopted in the case of other co-owners may be taken into consideration. Your goodself's attention is also invited to section 2(22B) of the Act with regard to 'fair market value' and the judgment of the Cochin Bench, confirmed by the Andhra Pradesh High Court and which have elaborately been discussed by us in paragraph 11 of our submissions, dated November 13, 2013 and the judgment of the Chandigarh Bench of the Income-tax Appellate Tribunal as per paragraph 16 that 'fair market value' cannot be equated with the registered consideration." 12. The learned Commissioner of Income-tax (Appeals), however, did not accept the contention of the assessee and dismissed the appeal of the assessee holding as under : "4.9. I have carefully considered the appellant' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t agree with this contention of the appellant. As discussed above, the fair market value adopted by the Assessing Officer as on April 1, 1981 is not based merely on the title deeds or on the basis of rates of Sub-Registrar. The Assessing Officer has specifically referred to the cases of property sold/allotted by the Ludhiana Improvement Trust in the year 1981-82. Such sale/allotments by the Government agencies are a fair indicator of the market rate of prop erty in that area during the relevant period. Moreover, the Assessing Officer has collected number of instances of sale of property in that area during the relevant period. From these instances of sale it is evident that the rate as per the registered title deeds varied from Rs. 70 per sq. yard to Rs. 500 per sq. yard. It is therefore incorrect to assume that the Assessing Officer has estimated the fair market value on the basis of the rates as per the title deeds or the rates as per the Sub-Registrar only. Moreover, the Assessing Officer had also referred the matter to the DVO who has estimated the fair market value at Rs. 600 per sq. yard. In these facts and circumstances of the case the case law referred to by the appellant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 600 per sq. yard. 4.16. Keeping in view the aforesaid facts and circumstances of the case, the contention of the appellant that the cost of land adopted in the case of joint property sold by Sh. Birender Pal Singh Gill has been adopted by Assessing Officer at Rs. 5,500 per sq. yard is factually incorrect. It is also seen from the copy of the assessment order in the case of Sh. Birender Pal Singh Gill that the only issue before the Assessing Officer was with respect to the fair market value of 230 sq. yards of joint property sold by Sh. Birender Pal Singh Gill. Sh. Birender Pal Singh Gill had adopted a rate of Rs. 1,000 per sq. yard for this property as against which the Assessing Officer held the fair market value to be Rs. 600 per sq. yard. 4.17. In any case, the cost of land, i.e., the fair market value of property as on April 1, 1981 adopted by the Assessing Officer of Sh.Birender Pal Singh Gill for the front portion of property of which Sh. Birender Pal Singh Gill was the sole owner and which was sold separately through a separate sale deed is not the deciding factor for this purpose. Keeping in view the evidences collected by the Assessing Officer as referred to abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade in the cost as on April 1, 1981, which he adopted for front portion, which majority the area was in no construction zone. The only change was made in respect of sale proceeds of land measuring 230 sq. yards for which the cost was adopted as Rs. 600 per sq. yard. This share of Birender Singh Gill was thus in joint co-ownership. The Commissioner of Income-tax (Appeals), therefore, wrongly gave the finding that Birender Singh Gill was sole owner of the property earlier the Tribunal has directed to adopt the cost of acquisition in all the cases of co-owners uniformly. Since in the case of Birender Singh Gill, one of the co-owner, the rate of land has been accepted at Rs. 5500 per sq. yard, in which 70 per cent. of the area fell under no construction zone, therefore, the same rate should have been adopted by the Assessing Officer. The learned counsel for the assessee relied upon the judgment of the hon'ble Punjab and Haryana High Court in the case of CIT v. Mrs. Ravinder Kaur in ITA No. 240 of 2009, dated August 21, 2014, in which the hon'ble High Court was seized of the valuation of some property in the case of one co-owner and it was held that once the Department has acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee along with others including Shri Birender Singh Gill were the co-owners of both the properties under sale through two separate sale deeds. Therefore, there is no question of holding that Shri Birender Singh was sole owner of the property in reference to second sale deed. Shri Birender Singh Gill filed his return of income for the assessment year 2006-07 under consideration. Copy of the acknowledgment of filing of the return is filed at page 92 of the paper book along with computation of total income, filed at pages 93 and 94 of the paper book supported by the report of Registered Valuer, in which the land value as on April 1, 1981 of 1825 sq. yards was shown at Rs. 5500 per sq. yard. This value was disclosed in the computation of income filed along with the return of income. The Revenue did not dispute this fact while assessing the income of the assessee Shri Birender Singh originally. When his case was reopened under section 148 of the Act, all the facts were mentioned in the reassessment order and the issue was examined in respect of land measuring 230 sq. yards only. The income earlier assessed was taken into consideration and to the returned income the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back to the file of the Assessing Officer because the cases of other co-owners have been reopened for determining the issue of cost of acquisition as on April 1, 1981 and that the report of Valuation Officer was not received by the Assessing Officer. The Tribunal, therefore, directed to ensure the uniformity in adopting the cost of acquisition in the cases of all co-owners. Therefore, the authorities below were bound to follow the directions of the Tribunal issued earlier and should have adopted the uniform approach in adopting the cost of acquisition in cases of all co-owners as on April 1, 1981. 17. The learned Departmental representative contended that the facts were same as were pleaded earlier before the Tribunal. However, the Tribunal did not accept the valuation adopted by the Assessing Officer on the basis of details collected by the Assessing Officer earlier as well as information collected from Improvement Trust Ludhiana. Therefore, there is no merit in the submissions of the learned Departmental representative that the same facts were there earlier, which have not been contradicted by the assessee in the subsequent proceedings. The assessee in the subsequent proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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