The Pr. Commissioner Of Income Tax-1 v. Kotwal, Jj.date: 25[Th] March, 2019

1 / 4 09-ITXA-1875-16.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1875 OF 2016 The Pr. Commissioner of Income Tax-1.... AppellantversusLate Abdul Latif Ismail Kagdi... Respondent ….... •Mr.Sham Walve, Advocate for Appellant. CORAM : AKIL KURESHI &SARANG V. KOTWAL, JJ.DATE: 25[th] MARCH, 2019. P.C. : 1. This Appeal is filed by the revenue to challenge the judgment of Income Tax Tribunal Appellate. Following questions were presented at the time of argument. “A)Whether on the facts and circumstances of thepresent case and in law, the Hon'ble ITAT wascorrect in upholding the Ld. CIT (A) order who inturn erred in accepting the valuation report of theRegistered Valuer as on 01/04/1981 valuing theland sold at Rs.48,80,000/- and deleting theaddition of Rs.2,54,91,600/-?present case and in law, the Hon'ble ITAT wascorrect in upholding the Ld. CIT (A) order who inturn erred in accepting the valuation report of theRegistered Valuer as on 01/04/1981 valuing theland sold at Rs.48,80,000/- and deleting theaddition of Rs.2,54,91,600/-? 2 / 4 09-ITXA-1875-16.odt B)Whether on the facts and circumstances of thepresent case and in law, the Hon'ble ITAT wascorrect in deleting the addition made by AO, whoworked out the capital gain on sale of the land atRs.4,70,90,000/- by considering the value of landas on 01/04/1981 at Rs.5 lakhs and indexed costof acquisition at Rs.29,10,000/- as against the saleconsideration received of Rs.5 crores, after allowingset off of Rs.1,35,008/- for short term loss AOmade addition of Rs.4,69,54,992/- to total incomeon account of Long Term Capital Gain?”present case and in law, the Hon'ble ITAT wascorrect in deleting the addition made by AO, whoworked out the capital gain on sale of the land atRs.4,70,90,000/- by considering the value of landas on 01/04/1981 at Rs.5 lakhs and indexed costof acquisition at Rs.29,10,000/- as against the saleconsideration received of Rs.5 crores, after allowingset off of Rs.1,35,008/- for short term loss AOmade addition of Rs.4,69,54,992/- to total incomeon account of Long Term Capital Gain?” 2. The Respondent-Assessee owned certain agricultural land within the periphery of Nashik Municipal Corporation.Such land was sold during the period relevant to the assessmentyear 2009-2010 for sale consideration of Rs.5 Crores. Theassessee pointed out that in agricultural land, capital gainarising out of sale of such land was not eligible to tax. Thequestion of valuation of the land as on 01/04/1981 for thepurpose of computation of capital gain was also at issuebetween the assessee and the department. The departmentcontended that the land was not agricultural land because grass 3 / 4 09-ITXA-1875-16.odtgrew naturally on said land. With respect to the status of theland and the capital gain arising out the sale of land, thetribunal held that the land was agricultural land, but that thesame was situated within a distance of less than 8 Kms. from theNashik Municipal Corporation and the capital gain arising out ofthe sale of land was assessable to tax. 3. The central dispute that survives between thedepartment and the assessee is with respect to the market valueof the land on 01/04/1981. The Assessing Officer adopted suchvaluation at Rs.5 lakhs relying on the statement of the StampRegistration Authorities, that the land would be valued atRs.14.70 lakhs as on 01/04/1989 upto which the records withthe said authority were available. The Assessing Officerundertook backward integration and believed that the cost ofland would have appreciated three times during the period from01/04/1981 to 01/04/1989, i.e. how he came to arrive at thevaluation of Rs.5 lakhs of the land in question as on 01/04/1981. 4 / 4 09-ITXA-1875-16.odt 3. The central dispute that survives between thedepartment and the assessee is with respect to the market valueof the land on 01/04/1981. The Assessing Officer adopted suchvaluation at Rs.5 lakhs relying on the statement of the StampRegistration Authorities, that the land would be valued atRs.14.70 lakhs as on 01/04/1989 upto which the records withthe said authority were available. The Assessing Officerundertook backward integration and believed that the cost ofland would have appreciated three times during the period from01/04/1981 to 01/04/1989, i.e. how he came to arrive at thevaluation of Rs.5 lakhs of the land in question as on 01/04/1981. 4 / 4 09-ITXA-1875-16.odt 4. The CIT appeals permitted the assessee to place onrecord the Government approved valuer’s report of the marketvalue of the land as on 01/04/1981 and after putting theAssessing Officer to notice, accepted such valuation for thepurpose of computation of capital gain tax. The tribunal whileconfirming this decision of the CIT Appeals held that the CITappeal correctly accepted the valuation as per the report of theRegistered valuer. In exercise of appellate powers, he could havepermitted such additional material to be brought on record. Thetribunal also noted that the valuer had taken into account therelevant considerations such as the fact that the land was anirrigated land, was a Bagayat land and had perennial source ofirrigation. 5. In our opinion, the issue is based on appreciation ofevidence on record. CIT (A) having taken into account therelevant factors, had given partial relief to the assessee. TheTribunal confirmed this view. We do not find any question of lawarising. Income Tax Appeal is dismissed. (SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)