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2016 (5) TMI 623 - AT - Income TaxValuation of property for the purpose of computation of capital gain - estimation of fair market value as on 1.4.1981 - adoption of report from an expert, i.e. Government Approved Valuer - Held that:- After considering the totality of the facts of the case and material available on record, we are of the view that both the authorities below are not justified in adopting the rate as the assessee had furnished a report from an expert, i.e. Government Approved Valuer. The sale instances as considered by the AO are pertaining to residential properties and such valuation cannot be adopted in respect of the Industrial Land. The estimation of fair market value depends on various factors; namely, location of property, nature of property, usage of property and also future prospects of such property. As per the Government Valuer, the property has potential of appreciation and of commercial usages. The Revenue has not placed any material on record for rebutting this contention of the valuation. Therefore, after considering the totality of the facts and material available on record, it would be proper that an estimation of fair market value as on 01/04/1981 is to be made on the basis of material on record. The Valuer in earlier year, had adopted a higher rate of fair market value and in the subsequent year, he adopted a lower rate. Therefore, the valuation adopted by the Government Approved Valuer, cannot be adopted as the valuation is made solely on the basis of potential of the land but not on the basis of the actual prevalent rate in the close vicinity. The Revenue has also not placed any material on record, demonstrating the prevalent market rate as on 01/04/1981 in the close vicinity of the land in question. The AO has adopted the cost of acquisition as on 01/04/1981 at ₹ 250/- per sq.mtr. and the ld.CIT(A) adopted the cost of acquisition as on 01/04/1981 at ₹ 551/- per sq.mtr., whereas the assessee has claimed the cost of acquisition as on 01/04/1981 at ₹ 1940/- per sq.mtr. Therefore, it can be fairly inferred that the cost of acquisition would be at ₹ 980/- per sq.mtr to ₹ 1050/- per sq.mtr. taking the average. Hence, we direct the AO to adopt a cost of acquisition at ₹ 980/- per sq.mtr. calling for report from expert at his stage would further delay the disposal of the matter. Therefore, in the interest of justice and considering the material available on record, we direct the AO to take the cost of acquisition as on 01/04/1981 at ₹ 980/- per sq.mtr and recompute the gain
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