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2015 (12) TMI 131 - ITAT CHENNAI

2015 (12) TMI 131 - ITAT CHENNAI - TMI - Adoption of fair market value of capital asset as on 1.4.1981 and also adoption of value u/s.50C(2)for computation of capital gains - Held that:- In this case, the AO adopted the fair market value of the land as on 1.4.1981 at ₹ 30,000/- per ground as against ₹ 3 lakhs adopted by the assessee, on the basis of valuation of Sub- Registrarís office, which was not put before the assessee for comments. Further, the AO adopted the sale consideration .....

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hereupon. The assessee before us pointed out that there are certain discrepancies in the valuation report, which is detrimental to the interest of the assessee and it is appropriate to call for the comments and details from the assessee. Therefore, we are of the opinion that it is appropriate to remit the issue to the file of the AO. Regarding fair market value of the property as on 1.4.1981, the AO shall find comparable cases, which shall be at the vicinity of the property. Accordingly, we remi .....

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nst the order of the Commissioner of Income-tax(Appeals) dated 13.9.2013. 2. The grievance of the assessee is with regard to adoption of fair market value of capital asset as on 1.4.1981 and also adoption of value u/s.50C(2) of the Act for computation of capital gains. 3. The facts of the case are the assessee admitted nil income under the head capital gain as per the working furnished in the return. During the assessment proceedings, the AO found that the assessee adopted ₹ 3,00,000/- per .....

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ost of land sold at ₹ 30,000/- per ground as on 01.04.1981 based on the guideline value furnished by the Sub-Registrar, Purasawalkam, Chennai. Thus the AO arrived at the capital gain at ₹ 2,62,08,368/- by invoking the provisions of sec.50C of the Act. Assessee's share was worked out at ₹ 87,36,122/-. After setting of ₹ 3,00,000/- invested in NABARD bonds u/s 54EC of the Act, the capital gain of the assessee was fixed at ₹ 57f36,122/- and the same was brought to .....

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adopted the sale consideration at the guideline value of ₹ 2,82,18,792/ - as per provisions of sec. 50C of the Act, though the assessee made a request before the AO to seek reference of valuation of property to a Valuation Officer but no reference was made. It was also argued that the assessee sought an opportunity to furnish details in the form of comparative sale instances of other properties in order to substantiate her claim for the sale consideration at ₹ 1,20,00,000/- and the o .....

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essee to prove her case. Based on the above submission, the then CIT(A)-XII, Chennai in his order in ITA No.102/2008-09 dated 01.04.2011 directed the AO to refer the property to the Valuation Cell of the Department and then afford an opportunity to the assessee. Accordingly, the AO in his letter dated 20.04.2011 referred the matter to the DVO, Valuation Cell, Chennai for valuation of the property. The DVO in his report in F. No. DVO/MDS/CG(1)/2011-12 dated 18.11.2011 fixed the fair market value .....

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nd asked him to refer the matter to the valuation cell u/s 50C(2) of the Act and conduct enquiries and to give opportunity to the assessee because assessee objected to the invoking of the provision of sec. 50C of the Act before him. Accordingly the AO requested the DVO to determine the fair market value as on 29.04.2005 and send the report. The AO in his remand report dated 26.02.2013 informed that the fair market value of the property was ₹ 2,25,75,000/- as on 29.04.2005 as per the valuat .....

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imited reveals that the market value of the property was mentioned assessee s ₹ 2,82,18,792/-. The AO found that the value adopted for cost indexation was high and referred the matter to the Registration Department to find out the guideline value of the property as on 01.04.1981. The Sub-Registrar, Purasawalkam, Chennai in his letter dated 13.10.2008 informed the AO the guideline value/ground at ₹ 30,000/- as on 01.04.1981. The AO in his letter dated 07.11.2008 addressed to the asses .....

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orking out capital gain. Therefore, the statement of facts is not correct in stating that the AO concluded that the provisions of sec.50C would apply as per which the sale consideration would be adopted at ₹ 2,82,18,792/- as against the actual sale price of ₹ 1,20,00,000/-. According to the CIT(Appeals), the statement that no opportunity was given to the assessee regarding adoption of ₹ 30,000/- as on 01.04.1981 for cost indexation is also not correct. The CIT(Appeals) observed .....

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aj Kumari Vimla Devi And Anr. [279 ITR 360] (AII.) is not relevant because section 50C was not in the statute at the relevant period i.e. during AY 1981- 82. According to the CIT(Appeals), the case law relied on by the assessee in the case of CIT v. Chandni Buchar [323 ITR 510](P&H) and in the case of CIT vs. Khoobsurat Resorts (P.) Ltd. [211 Taxman 510] (Delhi H.C.) are also not applicable because in those cases the difference between market value adopted for stamp duty and the sale conside .....

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he stamp valuation authority exceeds the fair market value of the property as on the date of transfer. 2.The value adopted by the stamp valuation authority is not disputed in any appeal, revision or no reference has been made before any other authority, court or High Court. 4.3 The CIT (Appeals) observed that in the present case, the assessee herself adopted the value assessed by the stamp valuation authority in computing the capital gains. Perusal of the miscellaneous records for AY 2006-07 by .....

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1,20,00,000/- made by the assessee i.e. almost double. Therefore, he held that the value assessed by the stamp valuation authority adopted by the assessee for computing capital gains needs no modification because assessing officer is bound to follow the mandate of law, where the assessee had not availed the opportunity. Where no claim is made at all by the assessee disputing the substitution of stamp duty value for the consideration declared by the AO, the provision is bound to be applied. The .....

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at that time or value assessable for stamp duty purpose. But the assessing officer obtained the guideline value as on 01.04.1981 from the registration department in order to be fair. There is no arbitrariness in adopting the value of ₹ 30,000/- per ground by the AO for arriving at indexed cost of acquisition as per explanation (iii) to proviso to sec.48 of the Act. Accordingly, he held that no disturbance is required in the cost of asset sold adopted by the AO. Against this, the assessee .....

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