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2023 (9) TMI 944 - ITAT DELHIRe-computation of the long term capital gains - Reference valuation of capital asset to a Valuation Officer for ascertaining the fair market value of a capital asset - HELD THAT:- As per the provisions of the Act, the AO may refer the valuation of capital asset to a VO for ascertaining the fair market value of a capital asset, if the AO is of opinion that the value claimed by the assessee is at variance with its fair market value. We have gone through the order of the AO and find that no justification has been given by the AO while referring the matter to the DVO. AO mentions that he was not satisfied about the correctness of the report without bringing any material on record as to how the valuation report given by the assessee is not acceptable. Hence, at the outset, the reference to the valuation officer by the AO cannot be upheld. We have gone through the valuation report submitted by the assessee. FMV has been determined by the registered valuer taking into consideration, the sale deeds from the Income Tax Department auction and from the other comparable registries. The land rate has been determined per sq. yards and cost of construction is determined at Rs. 120/- per sq. ft. as on 01.04.1981. On the other hand, the departmental valuation officer determined the cost of land at Rs. 6,895/- per sq. yards and cost construction was determined at Rs. 53/- per sq. ft. DVO has not considered any comparable cases of the relevant year while determining the value.The DVO has worked backwards deducting 1.5%/month for 27 months from the value of 1983 rates. DVO deducted 41.41% from the value of the properties in 1983 for determining the value in 1981. DVO assumed a rise of 41% from 1981 to 1983. Hence, the methodology applied by the DVO has got inbuilt incongruencies, hence cannot be validated. Ergo, we hold that the re-computation of the long term capital gains made by the AO as confirmed by the ld. CIT(A) cannot be sustained.
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