Commissioner Of Income-Tax(International Taxation And Transfer Pricing v. Charusheela M. Bhatia

C/TAXAP/354/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 354 of 2018 ========================================================== COMMISSIONER OF INCOME-TAX(INTERNATIONAL TAXATION AND TRANSFER PRICING)VersusCHARUSHEELA M. BHATIA ========================================================== Appearance:MR.VARUN K.PATEL(3802) for the PETITIONER(s) No. 1========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHIand HONOURABLE MR.JUSTICE B.N. KARIA Date : 17/04/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1.Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 12.07.2017 raising following question for our consideration: “Whether in the facts and circumstances of the case, the learned ITAT has erred in law in not accepting cost of acquisition as on 01.04.1981 of the land sold in the present case as per the certificate of the Mamlatdar (S), Diu & Dadaranagar Haveli submitted by the assessee herself in the assessment proceedings showing the Fair Market Value at Rs.50/- per sq. mtrs. ? 2.The issue pertains to the assessment year 2012-13. During the year relevant to the assessment year under consideration, the assessee had sold certain parcels of land situated in Dadranagar Haveli area and offered the gain to long term capital tax. In this context, the question of the fair market value of the land in question as on 01.04.1981 became relevant. The assessee presented the report of the Government Approved Valuer which suggested that the fair market value of the land as on the said date was Rs.120 per sq.mtr. The Assessing Officer was not prepared to accept this valuation. He did not call for DVO's report, instead, he collected the material pertaining to the sale instances of the land in the nearby areas during the same period. He noticed that no lands were sold in the same village in the year 1981. He referred to sale of land in some other village which sale took place in the year 1981. On the basis of such material, he issued show cause notice to the assessee proposing to assess the fair market value of the land as on 1981 as per Rs.10 per sq.mtr. After rejecting the assessee's objections, he confirmed such valuation. Commissioner of Income Tax (Appeals) confirmed his view, upon which, the issue reached the Tribunal. Tribunal by the impugned judgment, reversed the findings of the Revenue Authorities making following observations: “In the present case though the AO has not specifically made reference to the DVO, but “In the present case though the AO has not specifically made reference to the DVO, but he called for information about sale instance in that area at the relevant point of time. We have perused the finding of ld. Revenue authorities. It is pertinent to observe that evidence collected by the AO relates to nearby village viz. Kharadpada. Even if the AO has power to call for such report, then at least he ought to have collected data of similarly situated land, if any available. He cannot compare rates of land of adjourning area, when the assessee has alleged that her land was situated on the road-side. In other words, the assessee has pleaded that the land sold by her was abutting to the main land of Bhilad-Naroli Road which connects N. H. No.8 Road and Silvassa City. Thus, this land had more potentiality than the one compared by the AO. If that information is excluded, then there is nothing with the AO to suggest that cost of acquisition taken by the assessee is on the higher side. Claim of the assessee is supported by certificate of an expert who is a Government Registered Valuer. He has inspected site, and therefore gave his opinion. His report cannot be brushed aside without any other rebuttal evidence. Therefore, we allow the appeal of the assessee ad direct the Assessing Officer to compute long term capital gain on transfer of non-agriculture land by the assessee after taking into consider the cost of acquisition at the rate of Rs.120/- per sq. meter as on 1.4.1981.” 3.We have perused the orders on record. The Assessing Officer has without any other reference, compared the sale instance of another village and arrived at the valuation of Rs.10 per sq.mtr. As recorded by the Tribunal, the assessee's lands were situated on Bhilad-Naroliroad which connected NH-8 and Silvassacity. Thus, the lands of the assessee were situated abutting on a highway. The assessee therefore had been contending that it had greater potential and therefore market value. We have no data on the situation of the land, sale of which was referred to by the Assessing Officer. While adopting valuation of immovable properties, several factors need to be kept in mind. Situational advantages and disadvantages are important factors. We do not even know how far the two pieces of lands i.e. assessee's land and the nearby land with which the Assessing Officer carried out the comparison. All in all, it is a pure question of fact. Tax Appeal is dismissed. (AKIL KURESHI, J) ANKIT SHAH (B.N. KARIA, J)