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TMI Blog2014 (10) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... and the fact is evidenced by the certificates of Urban Development Authority and Revenue Divisional Officer and that agricultural operations are possible only when there is no water in the Lake. 4. In the facts and circumstances of the case and disputes among 14 owners, authorities below ought to have upheld that Fair Market Value of the land determined by the Valuer at Rs. 26.15 lakhs per acre is correct against estimated value of the departmental valuation officer at Rs. 43.41 lakhs per acre and of the AO at Rs. 82.00 lakhs. 5. Authorities below ought to have noted that in quick succession of, about two years, guideline value of the land from Rs. 10 lakhs per acre on 01/10/2006 was estimated at Rs. 82 lakhs per acre at registration on 31/10/2008 which is highly unrealistic and hypothetical. 6. Authorities below ought to have considered that on sale agreement in September 2007 owners received advance Rs. 83 lakhs through 10(Ten) Account Payee Cheques when guideline value was Rs. 35 lakhs per Acre against Rs. 82.00 lakhs adopted for capital gains. 7. Authorities below erred in not following the decisions, of Supreme Court, jurisidictional High Court and Hyderabad Bench Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal consideration of Rs. 4,50,00,000/-. Further, it was noticed that as per the family settlement dated 11/06/2001, the assesee's share in the property is 1/12th. Accordingly, the assessee after deducting indexed cost of acquisition and development cost had computed his share of capital gains at Rs. 34,99,624/- and claimed the same exempt u/s 54EC towards investment in REC bonds on 30/06/2009. The AO on verifying the registered sale deeds found that the sub-registrar, Medchel, before whom the documents were registered, has determined the value of the property for the purpose of stamp duty at Rs. 14,76,00,000/-. Accordingly, the assessee's 1/12th share worked out to Rs. 1,23,00,000/-. As the total sale consideration shown by the assessee was Rs. 4,50,00,000/- as against Rs. 14,76,00,000/- determined by the Stamp Valuation Authority, the AO prima-facie was of the view that there being understatement of sale by the assessee provisions of section 50C(1) gets attracted and capital gain has to be computed accordingly. Therefore, the AO issued a show cause notice to the assessee. Though the AO objected to the adoption of value determined by the SRO, but, the AO rejecting the objection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per section 50C(1) of the Act. 7. The learned AR submitted before us that the land sold by the assessee and other co-owners was not only agricultural land, but, was a part of fak sagar lake and is a waterbody. In this context, he referred to the letter dated 08/06/2005 of Vice-Chairman, HUDA and letter dated 13/05/2008 of Special Deputy Collector and Revenue Divisional Officer, Ranga Reddy, East Division. It was submitted that as the land was part of the water body no development could be made either before the sale or after the sale by the purchasers. It was submitted that as there were disputes among the co-owners for sale of the land, with a view to avoid misunderstanding amongst them, they got the land valued through a registered valuer and as per the report of the registered valuer the value of land was Rs. 26.50 lakhs per acre. It was submitted that on the basis of the value determined by the Registered valuer, the coowners negotiated for sale and finally sold the property at the rate of Rs. 25 lakhs per acre on 04/09/2007 on receiving advance of Rs. 83 lakhs through 10 account payee cheques. It was submitted that during the same calendar year upto 01/11/07 the co-owners r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, the computation of capital gain made by AO is correct. 9. We have considered the submissions of the parties and perused the orders of the Revenue authorities as well as other materials on record. At the outset, we may observe that there is no dispute to the fact that land sold is a capital asset as defined u/s 2(14) of the Act. Though, the assessee has disclosed the total consideration received on sale of property by all the coowners at Rs. 4,50,00,000/- but the Registering Authority has valued the property for stamp duty purpose at Rs. 14,76,00,000/-. Therefore, understatement in sale value in terms of section 50C(1) is prima-facie established. However, as revealed from facts on record, considering the objections raised by the assessee against adoption of SRO value, the AO in terms with section 50C(2) did refer the valuation of the property to the DVO. It is also a fact that DVO submitted a report to the AO on 25/10/2012 by determining the value of the property at Rs. 7,93,80,483 by estimating the fair market value of the property as on the date of registration at Rs. 43.41 lakh per acre. Surprisingly, the AO ignoring the statutory mandate as contained u/s 50C(2) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale deed, amount disclosed by assessee should be accepted. iv) Even as per the SRO guideline the value of the property in same survey No. as on 01/01/2007 being Rs. 35 lakhs per acre, same should be adopted. 10. However, in our view, section 50C being a deeming provision, assessee is required to establish that sale consideration shown by him is the actual fair market value as on the date of execution of agreement of sale cum GPA on 30/10/2008. On a perusal of registered valuer's report, a copy of which is at page 4 of assessee's paper book, shows that value of Rs. 26.50 lakh per acre adopted by him is purely on estimate basis without supported by any evidence. Similarly, DVO's valuation at Rs. 43.41 lakhs per acre is also on estimate only. Neither the assessee nor the department has brought any substantive evidence on record to justify the value adopted by them. In these circumstances, we are left with no other options but to remit the matter back to the file of the AO for deciding the issue afresh after making necessary enquiry for ascertaining the fair market value of the property and examining all materials on record. Still, if there are no evidence to indicate the actual ..... 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