TMI Blog2006 (2) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... able. Therefore, the value on 1-4-1981 had to be made on the basis that the restrictions of ULCA were not applicable. It is further mentioned that the assessee had shown the value of the land on 1-4-1972, for the purpose of the levy of Wealth-tax, at Rs. 2,90,971 and, therefore, the value claimed on 1-4-1981 was reasonable. It is also mentioned that the value of the property shown in the wealth-tax return on 1-4-1981 ought not to have been taken as the fair market value on that day for the purpose of computing capital gains and that the value declared in that return did not act as estoppel against the assessee. Certain case laws were also cited in support of the aforesaid proposition. In view thereof, it was also mentioned that the learned CIT(A) erred in rejecting the grounds of appeal of the assessee before him. 2.1 From the assessment order, it is found that the assessee purchased land situated at Sassoon Road, Pune in the year 1963. This land was converted into stock-in-trade on 26-4-1989 and the value for the purpose of conversion was taken at Rs. 53,72,157. The assessee developed the land and constructed ownership flats, shops, etc. under the project name "Sharadaram Park". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regarding conversion of land into stock-in-trade, its development and sale of flats. In regard to computation of capital gains, it was pointed out that the registered valuer valued the land at Rs. 27 per sq.ft. The Assessing Officer reduced the value by taking into consideration the value shown in the corresponding Wealth-tax return and the restrictions placed under the ULCA. However, the learned CIT(A) allowed the value of Rs. 2.10 lakhs on the basis of wealth-tax assessment. The registered valuer of the assessee had valued the land at Rs. 27 per sq.ft. In the report, it was inter alia mentioned that as per the scheme sanctioned under section 21 of the ULCA, 1976, there were various impediments such as restriction on sale, scheme for weaker sections, plinth area restricted to 40 sq.mtr. for 45 tenements and 80 sq.mtr. for 22 tenements and restriction of 10 per cent of dwelling units for sale at the rate of Rs. 130 per sq.ft. to the Government allottees etc. The impact of these restrictions was taken into consideration, however, he valued the land as if it was a freehold land and, thus, impact of the ULCA was not taken into consideration. Taking a comparable instance of sale in B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT [2003] 79 TTJ 572 in which it was inter alia held that in absence of any cogent evidence in possession of the Assessing Officer, value determined by the registered valuer cannot be disturbed or questioned. 2.6. As against the aforesaid, the learned DR relied on the orders of the Authorities below. 3.1 We have considered the facts of the case and the submissions made before us. The facts of the case are that in the previous year, the assessee sold a part of land, which was earlier converted into stock-in-trade. The assessee opted to substitute the market value of the property on 1-4-1981 in place of its cost of acquisition. For this purpose, a report from the registered valuer was filed, in which the value was worked out at Rs. 27 per sq.ft. The Assessing Officer rejected this report without assigning any reason as to why this value was not acceptable. But, he relied on the value shown by the assessee in the wealth-tax return for assessment year 1981-82. The learned CIT(A) neither accepted the value of the Assessing Officer nor the value of the registered valuer but he placed the value at Rs. 2.10 lakhs, being the value assessed for c W.T. purpose by the Assessing Officer. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which remained constant. The fact that by the time the assessee sold them, they were to be put to use for non-agricultural purposes did not involve any additional cost being incurred by the assessee. What was to be ascertained was the real profits earned by the assessee, which had to be brought to tax as capital gains. The real extent of gain was obviously the difference between the price at which the assessee sold the property and the price which the assessee paid for acquiring the property. The actual cost of acquisition of agricultural land is material and not the notional cost on that date, on the basis that the lands were to put to non-agricultural use. The ratio of this case is completely contrary to the arguments made by the learned counsel that the property should be valued as if it was free from any encumbrance as on the date of conversion into stock-in-trade or on the date of sale, it was free from encumbrance of ULCA. The question regarding valuation of an immovable property, subject to statutory restrictions, was also discussed by the Hon'ble Rajasthan High Court in the case of CWT v. RajKumari Bhuvaneshwari [1995] 215 ITR 198. The court pointed out that the Rajasthan U ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
