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2015 (11) TMI 1276 - ITAT AHMEDABAD

2015 (11) TMI 1276 - ITAT AHMEDABAD - TMI - Valuation of the assessee’s plot sold and building erected thereupon as on 01-04- 1981 - computation of long term capital gains of assessee-an HUF - Held that:- It is evident that the assessee’s registered valuer took into account file sale instances (supra) for evaluating its plots value to be ₹ 800 per sq. yd as on 01-04-1981. The plot in question measures 1032.15 sq. yd. The Assessing Officer adopted average value of two sale deeds having area .....

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king necessary reference to the DVO. We hold in these peculiar fact that a remand order simplicitor would not be in the interest of justice. More so, when they impugned long term capital gains on both plots sold and constructed portion are of ₹ 11,63,540/- only to be assessed @ 20%. We take into account all these facts and circumstances and conclude that both the Assessing Officer as well as CIT(A) has wrongly rejected assessee’s valuation of the plot sold based on a registered valuer’s re .....

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s an old construction raised in 1952 and 1967 having been renovated from time to time. We reiterate that ascertaining cost of construction; and that too from back date may not be always accurate. And it may also require some guess work. We feel it appropriate in larger interest of justice that this cost of construction @ ₹ 700/- per sq. yd would be justifiable. Ordered accordingly. The Assessing Officer shall accordingly frame the necessary computation. - Decided partly in favour of assess .....

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ls raises following substantive grounds:- 1.1 The order passed u/s. 250 on 26.4.2011 for A.Y.2006-07 by CIT(A),vi, Abad, partly confirming the order u/s. 143(3) dated 28.11.2008 passed by AO is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in passing the impugned order without considering fully and properly the submissions made and evidence produced by the appellant. 2.1 The Ld. CIT(A) has grievously erred i .....

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yard as against Rs.l 550/- per sq. yard estimated by regd. valuer. 3.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have estimated of his own the valuation of cost of construction at ₹ 500 per sq. yard. 4.1 The estimate of fair market value as on 1.4.1981 of the house property in question (both land and building) made by both the lower authorities of their own is grossly illegal, unlawful and in excess of the provisions of section 55A. Bot .....

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(A) ought to have held the profit on sale of shares of ₹ 61,448 as short term capital gain rather than directing AO to work out the same in accordance with the decision in the case of Shri Sugamchand C. Shah. 3. The assessee does not press for its grounds no. 1.1, 1.2, 5.1 and 5.2. This leaves us with the sole issue of valuation of the assessee s plot sold and building erected thereupon as on 01-04- 1981 for the purpose of computing its long term capital gains. The assessee-an HUF co-owned .....

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7; 800.06, ₹ 635.39, ₹ 1,174.48 and ₹ 600 respectively. The value of the built up area was taken as ₹ 1550/- sq. yd coming to ₹ 5,44,050/- with further addition of ₹ 29,000/- for compound wall and gate etc. The Assessing Officer rejected the said valuation. We find that the CIT(A) s order under challenge comprises of Assessing Officer s findings as under:- 4. The ground No.3 is against reworking of Long Term Capital Gain in making addition of RS 1163 540. 4.1 .....

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d of FP.No.478/P is ₹ 519.66 only and another sale instances of FP No.495 is ₹ 600 dated 23-03-81. In this circumstances the correct sale instances is adopted at ₹ 560/- on average basis and the same is worked out as under. Land price ₹ 560/- per yard x 1032 sq. yard =Rs.5,77,920/- The building value is taken at ₹ 1550/- per sq. yard on estimated basis without any working. The value of building is taken at ₹ 574000/- on date 01-04-81and the same is indexed for .....

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; 5,75,960/-. Thus capital gain is arrived at ₹ 28,38,000/- (-) 5,75,960/- = 22,62,040/-. The long term capital gain chargeable to tax is declared at ₹ 1098500/- where in correctly it is ₹ 22,62,040/-. The difference of ₹ 11,63,540/- added to the Long term capital gain chargeable to tax amounting ₹ 11,63,540/-.". 4.2 The appellant has submitted in its written submission, which is as under: 'To calculate taxable capital gain, appellant relied on chartered ci .....

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ring that period. Valuer had quoted five instance of such transaction within the range of 590 to 1174. From the number of transfer instances of surrounding area at that time the valuer certified the cost of land at 800 per sq. yard and construction at 1550 per sq yard. The valuation of property as on 1/4/81 is arrived at by valuer as under (Part II of Report) . LAND : 8,26,000 BUILDING : 5,74,000 TOTOAL 14,00,000 AO considered share of indexed cost at 5,75,960 on the basis of some imaginary figu .....

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A.O. (Copy enclosed) Initiation of penalty U/s. 271(l)(c) shows the prejudiced approach of the A.O. The working of A.O. is purely surmises and conjectures. With these facts and submission it is prayed to give justice to the assessee by deleting the addition made on wrong footing and to consider the retuned income intact." 4.3 I have considered the facts of the case, assessment order and appellant's submission. Appellant disputed assessing officer's action of taxing long-term capital .....

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uilding separately. The land was valued at the rate of RS 800 per square yard and building was valued at RS 574000 by applying the rate per square yard at RS 1550. Valuer cited five sale instances. Out of these sale instances one sale instances is in respect of very large plot of land admeasuring 10,006 43 yd.2 the location of this plot of land was also different therefore the selling rate was RS 1174.48. Since this is not a normal sale rate, this sale instance is not to be considered. Apart fro .....

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appellant's valuation at RS 574000. The appellant valued the building at RS 1550 per square yard. As on 1-04-1981, the cost of construction cannot be RS 1550 which was there around 2001. The cost of construction at that point of time could not be more than RS 500 per square yard. Assessing officer is therefore directed to apply the rate of RS 500 per square yard for 351 square yard construction. The value of building as on 1-04-1981 comes to RS 175500. Assessing officer is directed to comput .....

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tion of such value. Therefore assessing officer is directed to allow the benefit of indexation on the value of property determined as on 1-04-1981 in previous para. As regards allowance of deduction under section 54 EC, assessing officer is directed to allow the same after examining the relevant details and considering relevant provisions. 4. We have heard both the parties and gone through the case file. Relevant facts stand narrated hereinabove. The same are not repeated for the sake of brevity .....

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ssing Officer adopted average value of two sale deeds having area of 1019 sq. yd with rate of ₹ 519.66 sq. yd executed on 03-01-1980 and the other one dated 23-03-1981 involving area of 1034.18 sq. yd with sale price of ₹ 600 sq per yd; coming to ₹ 560 per sq. yd. The other three sale instances forming part of record stand totally brushed aside without any finding to the contrary. We observe in these circumstances that both the authorities below have erred in overruling assesse .....

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