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2024 (1) TMI 941 - AT - Income TaxCapital gain - Valuation - FMV determination - Conversion of agriculture land - reference to DVO - whether language of section 55A of the Act reference cannot be made to the DVO? - HELD THAT:- No infirmity in the order of ld. CIT(A) so as to call interference. In the instant case, we are of the considered view that ld. CIT(A) has correctly observed that the report of the registered valuer on which reliance has been placed by the assessee is not reliable for various reasons as elaborated in the order passed by ld. CIT(A). Accordingly, looking into the facts of the case, the ld. CIT(A) has correctly held that in the instant case, the Assessing Officer was correct in referring the matter to the valuation officer to determine the value of such asset. Accordingly, we find no merit in the additional ground raised by the assessee. The additional ground raised by the Assessee is hereby rejected. Considering the cost of acquisition of the aforesaid property as non-agricultural land as on 01-04-1981 - Assessee has taken the value of cost of acquisition, by considering the same to be non-agricultural property at the time of purchase. However, we are of the considered view that there is apparently no justification for considering the cost of acquisition of the aforesaid property as non-agricultural land as on 01-04-1981, when such property was agricultural property as on the date of acquisition and such property had been converted into non-agricultural property only during the impugned year under consideration, prior to sale. Valuation adopted by the assessee has not given any comparative sale instances and has simply arrived at value of cost of acquisition of land by adopting reverse formula i.e. by taking sale rate of non-agricultural property in the current year and applying inflation index. CIT(A) has correctly observed that the land sold in current year is non-agricultural land but the land was agricultural land as on 01-04-1981 and therefore cost of land as on 01-04-1981 cannot be determined based on sale rate of non-agricultural land for the current year and thereafter applying reverse formula thereon. CIT(A) has correctly concluded that fair value of land adopted by the valuer appointed by the assessee is incorrect and that too without any supporting evidences. In the case of Meccano Industries [1985 (7) TMI 179 - ITAT MADRAS-A] ITAT held that in case of sale of agricultural land, which was not capital asset at time of its acquisition by assessee but was subsequently converted into capital asset by its division into plots prior to sale, cost of acquisition of such capital asset for working out capital gains would be taken as its original cost of acquisition to assessee and not its market value on date of its conversion into non-agricultural land. - Decided against assessee.
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