Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (8) TMI 1087 - ITAT CHANDIGARH

2015 (8) TMI 1087 - ITAT CHANDIGARH - [2015] 40 ITR (Trib) 39 (ITAT [Chand]) - Valuation of agricultural land and commercial land - book value v/s market value - CIT (Appeals) held that the AO had wrongly applied the circle rate of commercial land without evidence in valuing the value of land at ₹ 20,82,712 and that the circle rate for agriculture land was to be taken, ignoring the fact that the land was being used for commercial purposes and that circle rate of ₹ 900 per sq.yd. whic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

whereas the land and building has been transferred at a consideration of ₹ 25 lakhs in September, 2008. The learned Commissioner of Income-tax (Appeals) has given logic why the valuation adopted by the Assessing Officer for valuing the building at ₹ 30 lakhs is not correct because buildings would generally depreciate over a period of time. He has also rightly observed that if depreciation at 25 per cent. was granted, then the value of the machinery would be ₹ 41,13,281 which is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

INI AND SHRI T.R.SOOD, JJ. For the Appellant : Shri Manjit Singh For the Respondent : Shri Sudhir Sehgal ORDER T. R. Sood (Accountant Member).- In this appeal, the Revenue has raised the following grounds : 1. That the learned Commissioner of Income-tax (Appeals) has erred in law and on facts in holding that the Assessing Officer had wrongly applied the circle rate of commercial land without evidence in valuing the value of land at ₹ 20,82,712 and that the circle rate for agriculture land .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2,712 in the month of April, 2005 ignoring the fact that the Assessing Officer has clearly brought out that in the registration deed there is no mention of building on the land. 3. That the learned Commissioner of Income-tax (Appeals) has erred in law and on facts in holding that the value of land taken at ₹ 30,00,000 by the Assessing Officer is highly excessive without giving any reasons for the same. 4. That the learned Commissioner of Income-tax (Appeals) has erred in law and on facts i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t the learned Commissioner of Income-tax (Appeals) has erred in law and on facts in holding that the value of machinery should be adopted at ₹ 55 lakhs as against ₹ 66 lakhs adopted by the Assessing Officer without giving any reasons. 2. After hearing both parties, we find that during the assessment proceedings the Assessing Officer noticed that there was a firm known as M/s. Balaji Spinning Mills and the firm was dissolved on March 31, 2005. The business was taken over by the assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g with this issue in detail. 3. It was further noticed that land, building and machinery were transferred at the book value and not at the market value. The assessee has itself shown the market value which becomes clear from the following chart : Book value as on 1-4-2005 Appreciation Appreciated value as on 31-3-2007 (i) Land 5,80,480 28,90,520 34,70,480 (ii) Building 11,79,520 62,74,480 74,54,000 (iii) Machinery 44,93,873 91,91,676 1,32,19,550 4. It was further noticed that the land was regist .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

further noticed that value of the assets was shown at a much higher value to the bank. Therefore, the assessee was asked to justify the valuation on the transfer of the assets. In reply, it was mainly stated that the valuation was submitted to the bank on higher rates to show higher net worth of the company for obtaining bank limits and therefore, the report submitted to the bankers could not be relied on. Further, there was a lot of increase in the value of these assets in the assessment year 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

this method, the valuation comes to ₹ 41,33,766 on December 30, 2008 which was much less than the earlier valuation report. The valuation report for the machinery was also filed. 6. The Assessing Officer, after considering the submissions observed that different assets were valued at various points of time as under : Assets Book value at which the assets are transferred on April 1, 2005 Value as per valuation reports submitted to the bank and taken in the balance-sheet as on March 31, 2007 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

8377; 30,00,000, value of machinery at ₹ 66,00,602 and the total value of the assets, according to him was ₹ 1,16,83,314. Since the assessee has shown the value for the purpose of transfer at ₹ 53,89,833, the balance sum of ₹ 62,93,481 was held to be the amount paid outside the books of account and was added to the income of the assessee. 8. On appeal before the learned Commissioner of Income-tax (Appeals), it was mainly submitted that the Assessing Officer has referred t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ome-tax (Appeals), after examining the submissions found force in the same and deleted the addition. 9. Before us, the learned Departmental representative strongly supported the order of the Assessing Officer and carried us through various observations made by the Assessing Officer and pointed out that valuation of the assets, i.e., land, building and machinery was valued at a higher rate for the bank, then the same value should have been adopted for the purpose of transferring the assets to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

any material on record to show that higher consideration was paid. He pointed out that the decision in case of B.T. Steels (supra) is not applicable because in that case, bank authorities have verified the stock as shown in the statement given to the bank and same was found to be correct whereas in the present case, the bankers have not verified the valuation. He strongly relied on the following decisions : 1. CIT v. Sidhu Rice and General Mills [2006] 281 ITR 428 (P&H). 2. CIT v. Smt. Raj K .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Tribunal by referring to the decision of the hon'ble Supreme Court in the case of K. P. Varghese v. ITO [1981] 131 ITR 597 (SC). In the present case also, there is no evidence with the Department that higher consideration has been paid. Therefore, the learned Commissioner of Income-tax (Appeals) has correctly deleted the addition. 12. We have considered the rival submissions carefully. The learned Commissioner of Income-tax (Appeals) has adjudicated this issue vide paras 4.11 to 4.16, w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al and not commercial. The authorised representative has drawn my attention to page 53 of the paper book which is a purchase deed dated December 17, 2002 of the aforesaid factory comprising land and building for ₹ 17,60,000 on which stamp duty of ₹ 1,05,600 is stated to have been paid at 6 per cent. The authorised representative has stated that 6 per cent. stamp duty is applicable to agricultural land and not to the com mercial land. According to the authorised representative circle .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

above company in the month of September 2008 at ₹ 25 lakhs including stamp duty which according to the authorised representative includes land and building. When the value of the land and building has been registered by the Registrar at ₹ 25 lakhs in the month of September 2008, I find force in the authorised representative's contention that the value of the land cannot be taken at ₹ 20,82,712 in the month of April 2005. 4.12 As regards building, the Assessing Officer has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, 2008. Therefore, the value of the building cannot be taken at ₹ 30 lakhs in the month of April, 2005 which has been adopted by the Assessing Officer. 4.13 The authorised representative has stated that the valuer has valued the building at ₹ 1,77,516 as on December 30, 2008 which includes addition of ₹ 24,68,276 between the period from April 1, 2007 to December 27, 2008. If the same is reduced from the valuation of ₹ 31,77,516 adopted by the approved valuer on December 3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and, building and machinery the same is for the purposes of bank which has been certified by the valuer. Therefore, no reliance can be placed on the same in view of the various decisions relied upon by the authorised representative in his submissions. 4.15 Regarding valuation of machinery, same has been adopted by the Assessing Officer at ₹ 66,00,602 by reducing the depreciation at 10 per cent. from the value of machinery of ₹ 90,54,324 in the year 2002. The valuer has valued the mac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed December 30, 2008 in which he has valued the total machinery at ₹ 1,73,50,000 which includes machinery purchased for ₹ 76,00,000 in the year 2006. After excluding ₹ 76,00,000 the value of the machinery purchased in the year 2006, i.e., after the company succeeded the firm in April 2005 value of the old machinery shown comes to ₹ 97,50,000 as on December 30, 2008. The authorised representative has submitted that by reducing depreciation at 25 per cent. for three years t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version