TaxTMI 
TaxTMI 
2016 (11) TMI 1036
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....ket value of land as on April 1, 1981 at Rs. 600 per sq. 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 i....
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....icer proposed a fair market value for this land sold by the assessee at Rs. 400 per 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 128....
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....2010 from the DVO. As per this report, the fair market value as on April 1, 1981 of 1680 sq. yards of the land belonging to the assessee was estimated at Rs. 600 per sq. yard. A copy of this report 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 Asses....
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....pellate Tribunal, Chandigarh Bench, and the hon'ble Income-tax Appellate Tribunal had set aside the matter to the file of the Assessing Officer and the finding has been given by the Income-tax Appellate Tribunal, Chandigarh Bench in paragraph 26 of the order, dated 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 t....
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....f, either by the Assessing Officer or by the DVO before the finalisation of the assessment proceedings. The Assessing Officer was required to look into the objections raised by the assessee and other judgments as relied upon by us and on various other issues and he has only reproduced the earlier order and his finding 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....
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....he rate as on April 1, 1981 by reverse calculation comes to Rs. 7,152 and a separate calculation chart in this respect is being submitted herewith in the paper book at pages 91 and 91A. This is being submitted to prove that our rate of Rs. 8,000 per sq. yard is very much in order. 13. The hon'ble Bench had also directed the Assessing Officer 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 Tribun....
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....efore, there also the average rate as per registered consideration was much lower than the 'fair market value' and the hon'ble Bench held that 'fair market value' has to be considered, which is always higher than the registered sale consideration. 18. We are submitting herewith the location plan of our commercial site, which will give your honour an idea of 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 follo....
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....of Rs. 5,500 per sq. yard as on April 1, 1981 was adopted. Your goodself may, if desire, verify from the concerned Assessing Officer. (e) As regards the back portion is concerned, the cost was originally claimed by the assessee at Rs. 1,000 per sq. yard in the computation of income and was assessed under section 143(3) by the Assessing Officer, but, later on, in the proceedings under section 148, the same was reduced to Rs. 600 per sq. yard as adopted 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 ....
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....een estimated at Rs. 600 per sq. yard. 4.10. The appellant has referred to number of case law and contended that the valuation as per the rates of Sub-Registrar can be one of the factors but cannot be sole basis for fixing the fair market value. The appellant has also contended that the rate at which the property was sold was at average rate of Rs. 35,550 per sq. yard as against the circle rate of Rs. 8,000 to 9,000 per sq. yard and therefore the value as on April 1, 1981 has to be on the basis of fair market value and not on the basis of registered consideration as per the title deeds. I do not 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 prope....
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.... was a co-owner of the property sold through the sale deed referred to in paragraph 4.11 above and was the sole owner of the property sold through sale deed referred to in paragraph 4.12 above. 4.15. It is evident that the reference to the uniformity in the fair market value of properties sold by co-owners pertains to the land measuring 4006.8 sq. yards which were sold jointly by the co-owners. In this joint property, the share of Sh. Birender Singh Gill was 230 sq. yards. As per the copy of the assessment order passed by the Assessing Officer of Sh. Birender Singh Gill, as provided by the appellant, the fair market value of 230 sq. yards as on April 1, 1981 has been adopted at 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 va....
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....s jointly held by all the co-owners. The second sale deed is executed by Shri Birender Singh Gill but since the land was in joint co-ownership, the names of the other co-owners have been mentioned in the second sale deed being confirming parties. Shri Birender Singh Gill has disclosed the cost of the land as on April 1, 1981 of the front portion of the land, which has been held as joint co-ownership and, in which other co-owners were confirming parties and as on April 1, 1981, the cost has been taken at Rs. 5,500 per sq. yard as per PB-94, which is his computation of income and which fact has attained finality. The case of Shri Birender Singh Gill was reopened under section 148 of the Act but no change was made 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 Trib....
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....he assessee have also signed as confirming parties. These facts would clearly disclose that may be Shri Birender Singh Gill executed the second sale deed but other co-owners including the assessee have confirmed the sale transactions conducted by Shri Birender Singh Gill being co-owner of the property in question. This sale deed for a larger area was shown in the map on the backside of the property and the smaller portion is shown through sale deed on the front side of the property at Ferozepur Road. The majority of the area of front side was "no construction zone". It is also highlighted by the learned Commissioner of Income-tax (Appeals) in the map attached in the impugned order. These facts would clearly prove that 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 pape....
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.... accepted the valuation shown by him and the order of the Tribunal was accepted by the Revenue as no further appeal was filed against it. In such circumstances, it would not be appropriate to adopt two different valuations in respect of identical shares in the same property for the same period." 16. When in the case of one of the co-owner, the rate of Rs. 5,500 has been accepted as on April 1, 1981, which was also in respect of "no construction zone" land, the Revenue Department should accept sale rate of Rs. 5,500 per sq. yard on April 1, 1981 in respect of the remaining land for which first sale deed was executed by all the co-owners. When the matter was taken up by the Tribunal earlier, the Tribunal restored the matter 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 iss....