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2021 (7) TMI 205 - AT - Income TaxCapital gain computation - addition made by AO replacing cost of acquisition based on valuation report of registered valuer as 01/04/1981 by arbitrary figure - whether the land in question was jointly held by the assessee and therefore the entire amount of capital gain cannot be taxed in the hands of the assessee? - HELD THAT:- AO himself in his order has recorded the fact that the assessee was the joint owner in the land in dispute after making a reference to the sale deed. The above observation of the AO supports the contention of the assessee that the land in dispute was jointly held. Furthermore, the learned AR has also filed the copy of the sale deed which is available on record and the same was not disputed by the learned DR. Accordingly we hold that, the authorities below erred in taxing the entire amount of capital gain in the hands of the assessee. Valuation of property - As basis adopted by the registered valuer for valuing the property as on 1 April 1981 was the gold rate index fixed by the Reserve Bank of India which was not doubted by the AO. Admittedly, the sales instances were given by the valuer in his report with the remark that these are not comparable and therefore the same cannot be used for valuing the property in question as on 1 April 1981- the authorities below without rejecting the basis adopted by the valuer has referred the sales instances for determining the value of the land in question as on 1 April 1981. As such, these sales instances were rejected by the valuer himself and therefore in our considered view the authorities below erred in using these sales instances in valuing the property in question as on 1 April 1981. Reference to Valuation Officer - Whether the AO can substitute the value determined by the registered valuer as on 1st April 1981? - AO may refer the valuation of capital assets to a valuation officer where he’s of the opinion that the value so claimed by the assessee is less than its fair market value. It is an undisputed fact that the assessee did not claim the value of the impugned land as on 1st April 1981 which is less than the fair market value. As such the assessee has claimed higher value than the fair market value as per the AO. Thus in our considered view, the AO has no power to substitute the value of capital assets in the given facts and circumstances. Accordingly, the AO cannot substitute the value declared by the assessee as on 1st April 1981. No ambiguity that there was no power under the statute to the AO to refer the matter to the DVO or to substitute the value of the impugned land as on 1st April 1981. Therefore we hold that the AO in the given facts and circumstances cannot substitute the value of the impugned land as on 1st April 1981. Scope of amended provisions - Dispute before us relates to the year prior to the amended provisions of section 55A of the Act which is applicable prospectively. Therefore such amended provisions cannot be applied to the case on hand. Thus we are inclined to reverse the order of the learned CIT-A, and accordingly we direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed
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