TMI Blog2015 (8) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeded with the assessments adopting the amount of ₹ 2.45 crores received by the assessee in terms of settlement deed in the assessment year 2008-09. There is a prescribed rule of valuation of asset being land and building as per Wealth Tax Act. As per the said rule, the value of asset shall be taken at the valuation date by resorting to any of the modes specified in the said rule. In the instant case, the Assessing Officer has taken the received by the assessee in the year 2008-09, as the fair market value of asset for the preceding three years without any basis, which in our opinion is not correct. The Assessing Officer could have referred the issue of valuation of the property to the valuation officer under S.16A of the Act and find out the market value of the asset for each of these years separately. Without doing so, he adopted the amount received by the assessee in terms of settlement in the assessment year 2008-09, as the value of the property on the relevant valuation dates of the preceding three years, without any basis. The assessee, on the other hand, rightly adopted the circle rate of properties being the fair market value of the assets for the purpose of weal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In response to this notice, the assessee has filed its reply, stating that higher value of ₹ 2.45 crores cannot be considered as the market value as on the relevant valuation dates of the assets, as the title/interest of the assessee in those assets was under dispute and under litigation and therefore, the same cannot be included as belonging to the assessee as on the relevant valuation date. The assessee also explained that he has acquired certain lands, being Plots 16A, 49A, 232A and 232B (aggregating to 1,017 sq. yards) in survey No.172 of Hydernagar Village, RR district vide Sale deed No.919/90 dated 22.1.1990 and 2202/90, 17.2.21990 from Satyasai Cooperative Housing Building Society, Hyderabad. Subsequently, Goldstone Exports Pvt. Ltd. and 15 others claimed that 98 Acres 10 Guntas in Survey No.172 of Hydernagar Village as belonging to them. It was also explained that the assessee filed petition in High Court in connection with his claim against Gold Stone Exports P. Ltd., but the Hon'ble High Court has dismissed the assessee s petition vide judgment dated 23.6.2006. Against this, the assessee filed a Special Leave Petition before the Hon'ble Supreme Court. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years for the purpose of Wealth Tax Act. There are special provisions and rules to determine the value in the Wealth Tax Act. 6.2 Circle rate is the official index of fair market value of a piece of land. Hence, the value adopted by the assessee for the assessment year under consideration was prima facie correct. If the Assessing Officer believed that the FMV exceeded that, it was incumbent on him to show that, if sold in open market, and that also for the assessment years under consideration, the asset would have fetched the price of ₹ 2.45 crore. There is nothing on record to substantiate such view. In fact there is nothing to suggest that even the same buyer would have paid that price to the assessee if it had acquired his right/title/interest in the assessment years under consideration. If that were the case, the asset could have been transferred in assessment year 2005-06 itself. If, after protracted litigation, it thought it preferable to pay ₹ 2.45 Crore to the assessee in assessment year 2008-09, it would be reasonable to hold that the apparently excess price paid by it was in lieu of the opportunity cost. Such opportunity cost may be specific to the buyer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45 crores received by the assessee in terms of settlement deed in the assessment year 2008-09. According to the assessee, his ownership over the property in question was under dispute during the relevant period, and even the Hon'ble A.P. High Court dismissed the petition filed by the assessee, and therefore, the market value of the prope in question on the relevant valuation dates would be less than the settlement amount received by him on compromise. In support of this plea, assessee is also claimed to have furnished the Assessing Officer the comparative sale instances with documents. It is for this reason, it is claimed that the assessee has returned the values of the property in question as per the values fixed by the State Government authorities for purpose of determining the stamp duty for registration. We find merit in the contention of the assessee that the settlement amount received by the assessee as per the compromise deed entered into in assessment year 2008-09, cannot form the basis for determining the value of the properties in question, as on the valuation dates relevant to assessment years 2005-06 to 2007-08, more so, when the interest of the assessee in the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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