Shri.s.h.syed Sultan v. The Income Tax Officer,Ward Ii (5), Coimbatore

In the High Court of Judicature at Madras Dated: 08.09.2014 Coram The Honourable Mr.JUSTICE R.SUDHAKARandThe Honourable Mr.JUSTICE G.M.AKBAR ALI Tax Case (A) Nos.118 and 119 of 2014& M.P.No.1 of 2014 Shri.S.H.Syed Sultan.... Appellant in both T.C.(A)s Vs. The Income Tax Officer,Ward II (5), Coimbatore...... Respondent in both T.C.(A)s APPEALs under Section 260A of the Income Tax Act against theorder dated 26.11.2013 in I.T.A.Nos.027 & 1778/MDS/2013 on the fileof the Income Tax Appellate Tribunal "B" Bench, Chennai preferredagainst the order dt.10/10/12 and 2818/13 in Appeal No.407/11-12 and154/12-13 passed by the Commissioner of Income Tax (Appeal)-I,Coimbatore, preferred against the order of the Income Tax officer,Ward-II(5) dt.27.12.11 and 2112/2013 for the assessment year 2009-10and 2011-12 respectively in P.A.N.BNJPS2534N. For Appellant : Mr.L.MouliFor Respondent : Mr.T.R.Senthil Kumar Standing Counsel for Income TaxC O M M O N J U D G M E N T(Delivered by R.SUDHAKAR,J.) The above Tax Case (Appeals) are filed at the instance of theassessee as against the orders of the Income Tax Appellate Tribunalfor the assessment years 2009-10 and 2011-12 raising the followingsubstantial questions of law:"a) Whether the Income Tax Appellate Tribunal iscorrect in adopting fair market value at Rs.5,000/- percent only on assumption and without evidence?b) Whether the Income Tax Appellate Tribunal iscorrect in holding that there was no sale transactionnearer to assessee's property by not considering thedocumentary evidences produced by the assessee?" 2. The brief facts are as follows: On 02.02.1981, the appellant – assessee inherited 51 cents ofland situated at S.F.No.141 (Part) Palakkad – Pollachi Main Road,Kurichi Village, Coimbatore. On 16.09.2008, the appellant sold 20https://hcservices.ecourts.gov.in/hcservices/ cents of land out of 51 cents to one Hasan Kutty at the rate ofRs.3.75 lakhs per cent, totalling to Rs.75.00 lakhs. The assesseefiled return of income for the assessment year 2009-10 declaringtotal income at Rs.9,70,480/- after making a claim of Rs.65,18,524/-as deduction against the column “Deduction 54/54B/54D/54EC/54F/54G/54GA of the Income Tax Act”. On 13.4.2010, again the appellant soldthe remaining 30.72 cents to the same Hasan kutty at the rate ofRs.3.75 lakhs per cent, totalling to Rs.1,15,20,000/-. For theassessment year 2011-2012, the assessee filed return of incomedeclaring total income of Rs.6,64,747/- after claiming indexed costof acquisition at Rs.1,03,55,253/- and expenditure on transfer atRs.5,00,000/-. 3. For the assessment year 2009-10, the assesee was asked toproduce the copy of the sale deeds and evidence for claim ofdeduction of Rs.65,18,524/-. In response to the notice issued bythe authority, the assessee produced a letter dated 14.10.2010 of theSub-Registrar, Coimbatore showing the guideline value as of01.04.1981 at Rs.300/- per cent for S.F.No.141/12. Time was givento the assessee for furnishing objections till 24.10.2011, sincethere was no objection or any evidence for the claim of deduction asabove was filed. 4. Since the assessee did not file any objection, the AssessingOfficer determined fair market value as per the guideline value as on01.04.1981, namely, period of inheritance of the property by theassessee, at Rs.300/- per cent and allowed the deduction as therein. 4. Since the assessee did not file any objection, the AssessingOfficer determined fair market value as per the guideline value as on01.04.1981, namely, period of inheritance of the property by theassessee, at Rs.300/- per cent and allowed the deduction as therein. 5. For the assessment year 2010-11, the assessee was asked tofurnish the computation of Long Term Capital Gains and evidence forclaim of expenditure on transfer. The assessee had produced a copyof the computation statement, wherein the assessee had adopted thefair market value at Rs.47,410/- per cent as on 1.4.1981 for thecalculation of the indexed cost of acquisition of the property sold.In support of this, the assessee furnished a copy of the documentexecuted by one Mrs.Johara Banu in favour of Mr.R.Dhandabani in theDistrict Registrar's Office at Coimbatore on 12.9.1983. TheAssessing Officer after perusing the documents came to the conclusionthat the document produced by the assessee for adopting the fairmarket value is in respect of the property situated in differentlocality. Hence, the Assessing Officer adopted the value of Rs.300/-per cent as per the details available in Sub-Registrar's record as on1.4.1981, as against the value of Rs.47,410/- adopted by theassessee. 6. Aggrieved by the orders of the Assessing Officer, theassessee filed appeals before the Commissioner of Income Tax(Appeals). For the assessment year 2009-10, the assessee produced acopy of the document showing the sale of property on 14.12.1984 inrespect of S.F.No.165/1,Kuruchi Village. On consideration of the saledeeds, the Commissioner of Income Tax (Appeals), for the assessmentyear 2009-10 held as follows: https://hcservices.ecourts.gov.in/hcservices/ "6.2. I have perused the submissions made by theappellant and the order of the Assessing Officer. TheAssessing Officer has taken the guide line value as per theSub-Registrar's office as the value of the property on1.4.1981 for SF No.141/1. The Assessing Officer has givenan opportunity to the assessee to furnish his objections,if any, regarding adoption of the guide line value as on1.4.1981 at Rs.300/- per cent. However, the assessee hasnot bothered to state his objections before the AssessingOfficer. During the course of appellate proceedings, theappellant filed a document showing the sale of property on14.12.1984 in SF No.165/1 at Kurichi village. Theappellant submitted that the guide line value was fixed atRs.23,985/- for 1303 sq.ft. In the submission made, theappellant stated that the fair market value would be morethan the guide line value at least 5 to 7 times in thosedays. The appellant requested that the fair market valueas on 1.4.1981 should be adopted at least Rs.30,000/- toRs.40,000/- per cent. The submission made by the appellantis very vague without any basis. In his own submissions,the appellant submitted that the fair market value would bemore than the guideline value at least by 5 to 7 times.Taking these into consideration, the property sold by himon 16.09.2008, the guide line value was Rs.56,68,000/-whereas the sale value was Rs.75 lacs. Taking all thesefactors into consideration, the Assessing Officer isdirected to adopt the fair market value at Rs.1,200/- percent. This ground of appeal is partly allowed." 7. For the assessment year 2011-12, the Commissioner of IncomeTax (Appeals) following the order in the case of the appellant forthe assessment year 2009-10, determined the fair market value atRs.1,200/- per cent. 8. Aggrieved by the said orders, the assessee preferred furtherappeals before the Income Tax Appellate Tribunal. 9. The Tribunal, taking note of the original claim made by theassessee, the fair market value determined by the Assessing Officer,Commissioner of Income Tax (Appeals) and the plea of the assesseewith regard to the fair market value of the land, determined the sameat Rs.5,000/- per cent. The Tribunal, while disposing of the appeal,held as follows: 7. For the assessment year 2011-12, the Commissioner of IncomeTax (Appeals) following the order in the case of the appellant forthe assessment year 2009-10, determined the fair market value atRs.1,200/- per cent. 8. Aggrieved by the said orders, the assessee preferred furtherappeals before the Income Tax Appellate Tribunal. 9. The Tribunal, taking note of the original claim made by theassessee, the fair market value determined by the Assessing Officer,Commissioner of Income Tax (Appeals) and the plea of the assesseewith regard to the fair market value of the land, determined the sameat Rs.5,000/- per cent. The Tribunal, while disposing of the appeal,held as follows: "13. We have heard both sides, perused the materials onrecord and gone through the orders of the authorities below.We find that in this case, the assessee had inherited theproperty, which was acquired before 01.04.1981. We alsofind from the assessment order that the assessee had enteredinto an agreement with Mr.Hasan Kutty of Palghat for thesale of his 51 cents of ancestral property at Aathupalam,Coimbatore. On 16.09.2008, out of the 51 cents of land atAathupalam, 20 cents was sold to Mr.Hasan Kutty at the rateof Rs.3.75 lakhs per cent but the transaction was registeredhttps://hcservices.ecourts.gov.in/hcservices/record and gone through the orders of the authorities below.We find that in this case, the assessee had inherited theproperty, which was acquired before 01.04.1981. We alsofind from the assessment order that the assessee had enteredinto an agreement with Mr.Hasan Kutty of Palghat for thesale of his 51 cents of ancestral property at Aathupalam,Coimbatore. On 16.09.2008, out of the 51 cents of land atAathupalam, 20 cents was sold to Mr.Hasan Kutty at the rateof Rs.3.75 lakhs per cent but the transaction was registeredhttps://hcservices.ecourts.gov.in/hcservices/ for a value of only Rs.38,00,000/- while the balance wasreceived as on money in cash. Further, it was stated by theassessee that the balance 31 cents of land was also sold tohim at the same rate of Rs.3.75 lakhs in April, 2010. Ithas been stated that the difference between the registeredamount and the amount agreed upon as per agreement wasreceived in cash prior to the registration and ultimatelydeclared the total sale price of Rs.75.00 lakhs. Accordingto the assessee, the fair market value for the purpose ofcalculation of cost of indexation as on 01.04.1981 should beat Rs.30,000/- to Rs.40,000/- per cent. However, theAssessing Office has adopted the guideline value as fairmarket value of the property at Rs.300/- per cents in theabsence of any evidence furnished by the assessee, whereasthe ld. CIT (Appeals), after considering the submissions ofthe assessee, has enhanced fair market value at Rs.1,200/-per cents. There was no sale transaction nearer toassessee's property. Keeping in view of the facts andcircumstances, we direct the Assessing Officer to adopt thefair market value at Rs.5,000/- per cent and the groundraised on this issue is partly allowed for statisticalpurpose." 10. Aggrieved by the order of the Tribunal, the assessee isbefore this Court by filing the present Tax Case (Appeals). 11. Heard learned counsel appearing for the assessee and thelearned standing counsel appearing for the Revenue and perused thematerials placed before this Court. 10. Aggrieved by the order of the Tribunal, the assessee isbefore this Court by filing the present Tax Case (Appeals). 11. Heard learned counsel appearing for the assessee and thelearned standing counsel appearing for the Revenue and perused thematerials placed before this Court. 12. Normally, we would expect the Revenue to challenge the orderof the Tribunal on the fair market value. But in this case, theassessee apparently is stretching his claim further before this Courtand has chosen to file these appeals, which we find as not justified.There is absolutely no basis for the claim made by the assessee fordetermining the fair market value. The documents produced before theAssessing Officer clearly shows that the guideline value as on01.04.1981 is Rs.300/- per cent; before the Commissioner (Appeals),the document of the year 1984 was submitted and based on that theCommissioner of Income Tax (Appeals) fixed the fair market value atRs.1,200 per cent. The Tribunal has fixed the same at Rs.5,000/- percent, however, without any discussion. We find that the documentdated 14.2.1984 in respect of S.F.No.165/1 at Kurichi Villagecorrectly shows the fair market value at Rs.8,393/- and the Tribunalafter allowing certain deductions for the three year period, i.e, thedifference between the date of acquisition by theassessee, namely, 02.02.1981 and till the date of the noted document,to come to a conclusion that Rs.5,000/- should be fair market price.We find that such a determination by the Tribunal does not warrantany further modification or interference. 13. Accordingly, we find no question of law much less anysubstantial question of law arises for consideration in the aboveappeals. Hence, both the Tax Case (Appeals) stand dismissed. Nocosts. Consequently, M.P.No.1 of 2014 is closed. Sd/-Assistant Registrar(CO)Dated: 7.10.2014//True Copy//Sub Assistant RegistrarTo1. The Income Tax Appellate Tribunal "B" Bench, Chennai.2. The Commissioner of Income Tax (Appeals) - I, Coimbatore.3. The Income Tax Officer, Ward - II (5), Coimbatore.+1 cc to Mr.T.R.Senthilkumar,Advocate,SR.42398+2 cc to Mr.L.Mouli, Advocate,SR.42598, 42600.ggk(co)krd 8/10T.C.(A) Nos.118 and 119 of 2014& M.P.No.1 of 2014