COMMISSIONER OF INCOME TAX-III, (CENTRAL CIRCLE) v. M/S. DODDANANDI ESTATE
[Citation -2015-LL-0921-1]

Citation 2015-LL-0921-1
Appellant Name COMMISSIONER OF INCOME TAX-III, (CENTRAL CIRCLE)
Respondent Name M/S. DODDANANDI ESTATE
Court HIGH COURT OF KARNATAKA
Relevant Act Income-tax
Date of Order 21/09/2015
Judgment View Judgment
Keyword Tags estimated market value of the estate • coffee estate • standing shade tress
Bot Summary: Learned counsel for the appellants has submitted thatalthough, there are three questions framed in the memo ofappeal, but the only question which requires considerationof this Court is first question, which is as under: 4 Whether the Tribunal is correct in law in directing the Assessing Authority to re-compute the capital gains by taking 70 of the sale proceeds as the market value as on 1-4-1981 when the facts of the case does not require for such direction4. The Tribunal has accepted the case of the assesseeand has arrived at the cost as claimed at 70 relying oncertain earlier decisions of the Tribunal, more particularlyin the case of M/s.Sangameshwar Coffee Estate LimitedV/S Income Tax Officer wherein,for valid reasons, 70 of the sale proceeds has beenaccepted. In view of the aforesaid, we are of the opinion that itcannot be said that the order of the Tribunal is improper as 6it has followed its earlier decision in the case ofSangameshar Coffee Estate as well as other cases, andthus, has recorded a finding of fact, which need not bedisturbed by this Court. Learned counsel for the appellants has relied on thedecision of this Court in the case of Commissioner ofIncome Tax and Another V/S Badra Estates Industries Ltd. reported in 38 DTR 308 tosupport his submission that the matter requires to beremanded back to the Assessing Officer for fresh decision. In the said case, theAssessing Officer had estimated the capital gains at 30 ofthe sale proceeds, which was based on a decision of thisCourt in the case of CIT v/s PULLANGODE RUBBERS ANDPRODUCTS CO. LTD. It was a case similar to the facts ofthe case in TATA Coffee Limited. In thesaid case, there were some reasons given by the AssessingOfficer, which could be tested by the Court, whereas, in the 8present case, no reasons whatsoever have been given by theAssessing Officer and the Tribunal has, for valid reasons,given a finding of fact, which cannot be said to be improper. In the facts and circumstances of thepresent case, we answer the question of law in favour of theassessee and against the revenue.


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IN HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS 21ST DAY OF SEPTEMBER, 2015

PRESENT

HONBLE MR. JUSTICE VINEET SARAN

AND

HONBLE MR. JUSTICE B MANOHAR

ITA No.249/2010
BETWEEN:

1. COMMISSIONER OF INCOME
TAX-III, (CENTRAL CIRCLE)
CENTRAL REVENUE BUILDINGS
QUEENS ROAD
BANGALORE-560 001.

2. INCOME TAX OFFICER
WARD 1, CHIKMAGALUR.
APPELLANTS
(BY SRI.E.I.SANMATHI, ADV.,)

AND:

M/S.DODDANANDI ESTATE
THROUGH ITS PARTNER
SRI.RAMANATHAN CHETTIAR
C/o CRM, SKR
RENGANATHAN, CRM ESTATE
MUDIGERE TALUK
CHIKMAGALUR DISTRICT.
RESPONDENT
(BY SRI.S.P.BHAT & C. BASAVAIAH, ADVS.,)
2




THIS ITA IS FILED U/S 260-A OF I.T. ACT, 1961
ARISING OUT OF ORDER DATED 26-02-2010 PASSED IN
ITA NO.292/BNG/2009, FOR ASSESSMENT YEAR
1997-98, PRAYING THAT THIS HONBLE COURT MAY BE
PLEASED TO:

(i) FORMULATE SUBSTANTIAL
QUESTIONS OF LAW STATED THEREIN;

(ii) ALLOW APPEAL AND SET ASIDE
ORDER PASSED BY ITAT
BANGALORE IN ITA NO.292/BNG/2009,
DATED 26-02-2010, IN INTEREST OF
JUSTICE AND EQUITY.


THIS ITA COMING ON FOR HEARING THIS DAY,
VINEET SARAN,, J., DELIVERED FOLLOWING:

JUDGMENT

assessee had purchased coffee estate in 1961

along with standing shade trees. said estate was sold

by assessee in year 1997. Jungle wood and

silver oak trees were sold for sum of Rs.1,00,00,000/-

which was by way of agreement dated 25-07-1995. The

dispute in present appeal is with regard to capital gains

in respect of sale of trees only. Assessing Officer

assessed same at 10% of estimated value of the
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estate which was taken as Rs.9,60,000/- and thus arrived

at cost of trees at Rs.96,000/-. Challenging same,

the assessee filed appeal which was dismissed by the

Appellate Commissioner. assessee filed further appeal

before Tribunal, which has partly allowed same and

given benefit and remanded matter to Assessing

Officer to recompute capital gains by taking 70% of the

sale proceeds as market value of land as on 1-4-1981.

Aggrieved by said order, Revenue has filed this

appeal.


2. We have heard Sri.E.I.Sanmathi, learned counsel

appearing for appellants as well as Sri.S.P.Bhat along

with Sri.C.Basavaiah, learned counsel appearing for the

respondent-assessee and perused records.


3. Learned counsel for appellants has submitted that

although, there are three questions framed in memo of

appeal, but only question which requires consideration

of this Court is first question, which is as under:
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Whether Tribunal is correct in law in
directing Assessing Authority to re-compute
capital gains by taking 70% of sale
proceeds as market value as on 1-4-1981
when facts of case does not require for
such direction?

4. Assessing Officer, while passing assessment

order has, though after taking into consideration the

various facts, arrived at finding of fact that market

value of estate would be Rs.9,60,000/- as on 1-4-1981,

but has given no reason whatsoever for adopting 10%

thereof, as cost of trees. On being questioned,

Sri.E.I.Sanmathi, learned counsel for appellants-

Revenue could not point out from order of Assessing

Officer, even single reason for arriving at 10% instead of

70% as had been claimed by assessee. Appellate

Commissioner has, on his own, recorded finding that 10%

of estimated market value of estate as on 1-4-1981

was arrived at by Assessing Officer on basis of some

judgments of High Court, which finding of Appellate

Commissioner is absolutely perverse, as no such reason
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has been given by Assessing Officer. Appellate

Commissioner further, affirming order of Assessing

Officer, held that same was reasonable and was based

on facts, which is again wrong as finding was not based

on facts and it was arrived at without giving any reasons or

considering facts relating to case.


5. Tribunal has accepted case of assessee

and has arrived at cost as claimed at 70% relying on

certain earlier decisions of Tribunal, more particularly

in case of M/s.Sangameshwar Coffee Estate Limited

V/S Income Tax Officer (ITA No.402/Bang/85) wherein,

for valid reasons, 70% of sale proceeds has been

accepted. said judgment in case of Sangameshwar

Coffee Estate (Supra) has been affirmed by this Court in

Civil Petition No.302/1988 (Commissioner of Income Tax

V/S M/s. Sangameshar Coffee Estate).


6. In view of aforesaid, we are of opinion that it

cannot be said that order of Tribunal is improper as
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it has followed its earlier decision in case of

Sangameshar Coffee Estate as well as other cases, and

thus, has recorded finding of fact, which need not be

disturbed by this Court.


7. Learned counsel for appellants has relied on the

decision of this Court in case of Commissioner of

Income Tax and Another V/S Badra Estates &

Industries Ltd. reported in (2010) 38 DTR (Kar) 308 to

support his submission that matter requires to be

remanded back to Assessing Officer for fresh decision.

We have gone through said decision, wherein the

matter was remanded to Assessing Officer because

initially Tribunal had held value of timber at

Rs.35/- per cubic feet as on 1st April, 1981. But on a

Miscellaneous petition filed by assessee, Tribunal

allowed claim of assessee in toto and held that 70%

of sale proceeds be treated as cost of timber as on 1st

April, 1981. In such facts and circumstances, where the
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Tribunal had itself given conflicting views, this Court had

directed matter to be remanded to Assessing Officer

for fresh decision. In our view, ratio of said decision

would not be applicable for facts of present case.


8. Learned counsel for appellants also relied upon

another decision of this Court in case of Tata Coffee

Ltd. V/S Joint Commissioner of Income Tax reported in

(2012) 211 Taxman 7 (Karnataka). In said case, the

Assessing Officer had estimated capital gains at 30% of

the sale proceeds, which was based on decision of this

Court in case of CIT v/s PULLANGODE RUBBERS AND

PRODUCTS CO. LTD. It was case similar to facts of

the case in TATA Coffee Limited. However, Tribunal

affirmed finding of Assessing Officer and on an

appeal filed by assessee therein, matter was

remanded to Assessing Officer for fresh decision. In the

said case, there were some reasons given by Assessing

Officer, which could be tested by Court, whereas, in the
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present case, no reasons whatsoever have been given by the

Assessing Officer and Tribunal has, for valid reasons,

given finding of fact, which cannot be said to be improper.

Thus, we are of opinion that no interference is called for

with order of Tribunal.


9. As such, in facts and circumstances of the

present case, we answer question of law in favour of the

assessee and against revenue. Accordingly the

appeal stands dismissed.


There shall be no order as to costs.




Sd/-
JUDGE



Sd/-
JUDGE




mpk/-*
COMMISSIONER OF INCOME TAX-III, (CENTRAL CIRCLE) v. M/S. DODDANANDI ESTATE
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