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2019 (11) TMI 366 - AT - Income TaxCapital gain computation - adoption of fair market value of the impugned land - HELD THAT:- We have held that the valuation report furnished by the assessee was rightly rejected by the AO and at the same time, we have also held that the fair market value as on 1.4.1981 determined by the AO on the basis of sub-registrar rates was also not correct. There should not be any dispute that the industrial land located outside municipal limits, far away from the developed areas would certainly command lower rate. Further the market rate of a plot/land is dependent upon various factors. We have noticed earlier that, even between the plots/land having same characteristics, the bigger plot/land would command low rates than the smaller plot/land. Size of the plot/land, location, access to main road, availability of other amenities etc. would also determine the market rates. Both the parties could bring on record any comparable sale instances of similarly placed land. Hence, we have no other option, but to estimate the probable fair market value of the land as on 1.4.1981 on the basis of available material. The valuer has adopted the rate of ₹ 33.19 per sq.ft. on the basis of sale instances of developed housing sites located within the municipal limits. Further, the impugned land is located within 2.50 kms of municipal limits. These factors could be taken as a guidance, in the facts and circumstances of the case, particularly in the absence of any other sale instances for land of identical nature. There should not be any dispute that an industrial land would command higher rate than an agricultural land. Hence, on a conspectus of the matter, we are of the view that this controversy may be put to rest by adopting the fair market value of impugned land at 1/3rd value of rate determined by the approved valuer, i.e., at ₹ 11/- per sq.ft. Accordingly, we set aside the order passed by CIT(A) and direct the AO to determine the fair market value of impugned land by adopting the rate of ₹ 11/- per sq.ft - Appeal of the assessee is partly allowed.
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