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2006 (11) TMI 357 - AT - Income TaxComputation of Long term capital gain - reference to DVO u/s 55A - agricultural land - estimation of the fair market value - assessee is an "individual" in status - HELD THAT:- Nothing has been said by the DVO in respect of this sale instance except merely saying that it is not substantiated by any evidence nor submitted for examination before him. He has also stated that the sale instance has been highly valued and cannot be compared with assessee’s land. We are unable to agree with the DVO. The entire land of about 1,75,000 sq. yds. fell to the share of late Shriman Bawa Maharaj Singhji and on his death on 24-8-1982, his children succeeded to the land. There was also a family settlement on 15-1-1992 under which land admeasuring 19,133 sq. yds. in Plot Nos. 1199, 1120, 1201 etc., Plot No.1169 measuring 1,384 sq. yds. in all and a 44 per cent share in 1,365 sq. yds. of land fell to the share of the assessee and Bawa Abhai Singh, each having 50 per cent share. If a part of the entire holdings of late Shriman Bawa Maharaj Singhji, when sold on 24-3-1981, could fetch a price of Rs. 828 per sq. yd., we do not see why this sale instance cannot form the basis of the estimate of the fair market value of the assessee’s land as on 1-4-1981. We are afraid that the DVO has not attached due importance and weight to this sale instance and has brushed it aside unreasonably. In our view, there is no justification for adopting the fair market value of the land as on 1-4-1981 at Rs. 19,96,000 being 50 per cent of the estimated value of Rs. 39.92 lakhs as per the DVO. Taking into consideration all the circumstances and the factors stated elaborately in the two valuation reports filed by the assessee and having regard to the huge potential of the land for being converted into residential use and being fully aware of the fact that as on 1-4-1981, the land has not been officially converted into non-agricultural use, we are of the view that a reasonable estimate of the fair market value would be that estimated by the registered valuer at Rs. 1,42,53,000 on the basis of the sale instance dated 24-3-1981 of a part of the lands originally owned by late Shriman Bawa Maharaj Singhji. No strong grounds have been made out by the income-tax authorities or the DVO as to why this figure cannot be adopted as a fair estimate of the value. The assessee’s valuation being supported by the aforesaid report, we hold that the same requires to be accepted and the computation of the capital gains may be made on that basis. In the result, the assessee’s appeal is partly allowed with no order as to costs.
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