TaxTMI 
TaxTMI 
2015 (9) TMI 283
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....d to building. Rs.36,08,000/- Rs.68,83,000/- 3. The sale consideration relating to building was reduced from the block of building available with the Assessee. However, the capital gain of Rs. 12,63,766/- was worked out in respect of sale consideration relating to land as under:- "Long term capital gain on Land Sale consideration relatable Less: Indexed cost of land Land area 5241 MB MV [App.] on 81-82 at the rate of Rs. 125/- per sq.mt. 32,75,000 M. V. 5241 x 125 6,55,125 Indexed cost 655125 x 307 100 20,11,234 Long Term Capital gain taxable. 12,63,766" 4. The Assessing Officer did not accept the allocation of sale consideration between the land and building by the Assessee. He allocated only Rs. 1,24,001/- towards factory building and remaining towards the land and accordingly worked out the long term capital gain of Rs. 47,47,765/- as under:- "Total sale consideration as shown by the Assessee. Rs. 68,83,000/- Less: Cost of factory building as discussed above. Rs. 1,24,001/- Sale consideration pertaining to land. Rs.67,58,999/- &nbs....
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....led before the Assessing Officer. However, the CIT (A) considered those material/letters and decided the issue on those materials and evidence without providing opportunity of hearing to the Assessing Officer. The jurisdictional High Court in the case of CIT v/s. Valimohmed Ahmedbhai 134 ITR 214 (Guj.) wherein it has been held that if the Assessee produces evidence it is necessary to provide opportunity of hearing to the Assessing Officer to oppose it and to test the additional evidence or counter the effect thereof or to produce evidence in rebuttal. In the light of above discussion and keeping in view the principle of natural justice, we think it proper to send back this matter to the file of the CIT (A) with the direction to decide the issue afresh in accordance with law after providing opportunity of hearing to both sides." 7. CIT (A) passed the order dated 28-11-2011 in pursuance to the order of the ITAT. In this order he slightly modified the allocation of sale consideration between the land and building as under:- Sale consideration relating to gross Block of building. Rs. 4,17,847/- Sale consideration relating to land. Rs.64,65,153/- Rs.68,83,....
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....he basis of GIDC certificate. Admittedly, GIDC certificate was produced for the first time before the CIT (A) and he has not called for the Remand Report from the Assessing Officer. Therefore, the ITAT set aside the matter back to the file of CIT (A) with a direction to him to provide opportunity to the Assessing Officer in this regard. After the order of the ITAT, the CIT (A) called for the remand report from the Assessing Officer and in the remand report the Assessing Officer reiterated the stand taken in the assessment order. The relevant portion of the Remand Report reads as under:- "3.1. In respect of price of land and factory building, the assessee relied upon the letter issued by Gujarat Industrial Development Corporation dated 27/2/2000. The Ld. CIT (A) has also deleted the addition relying upon the above letter. 3.2. It may be mentioned here that, the purchaser of the said land and factory building M/s. Bearing Mfg. Co. purchased the factory building mainly with the intention of setting up of their own manufacturing unit. It is evident that the factory building is an old shed which was completely dismantled by the new owner as the same was of no use or having nil mar....
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.... land when the GIDC was selling the plot in the Industrial estate @ Rs.,550/- per sq. mt. + frontage charges, then the value determined by the Assessing Officer and the CIT (A) at almost double the rate as per GIDC can be justified. In our opinion, the WDV of the building or construction cost cannot be proper base for determining the Fair Market Value of the factory building. If the historical cost is to be considered then the cost of the plot of the land of the Assessee was only Rs. 75,589/-. Therefore, historical cost whether of the land or of the building is not relevant for allocating the sale consideration of the factory premises which included land and building both. We find that CIT (A) in his first order accepted the Assessee's contention with the following finding:- " It is further mentioned that the Assessing Officer has no contrary material available to show that the rate in the GIDC was higher than that specified by the GIDC above even though these figures were not available to the Assessing Officer as they were submitted late. It is however stated that this being the specified rate of GIDC the question of valuing the land at a higher figure does not arise. As regard....
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....s end a very fair and reasonable basis for valuation of the building. Even otherwise, the lumpsum consideration minus the value of land would certainly have to be taken as the value of the building." 13. The above finding of the CIT (A) was set aside by the ITAT on the limited ground that the certificate of GIDC was not available with the A. O. and the CIT (A) has not allowed any opportunity to the A. O. to rebut the above additional evidence furnished before him. Now after the set aside CIT (A) has confronted the A. O. with the certificate of GIDC. The Assessing Officer in his remand report has not given any cogent reason why the certificate of GIDC should not be accepted for determining the value of the land but reiterated whatever was mentioned in the assessment order. However, the CIT (A) in the subsequent order i.e. the order impugned in this appeal before us has rejected the GIDC certificate as under:- "As far as value of land is concerned, appellant relied upon GIDC rates as per GIDC's letter dt. 23-2-2000. On going through the said letter, I am of the view that much weightage cannot be assigned to GIDC's letter, where it was simply mentioned that 'land price of Makarp....