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TMI Blog2015 (9) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee filed its return of income for AY 2008-09 on 25.7.2008 declaring total income at Rs. 3,64,627/- including agricultural income of Rs. 80,850/-. The assessment order was passed under section 143(3) of the I.T. Act, 1961 (herein after referred to as the Act) on 11.10.2010. During the year under assessment apart from other income shown by the assessee loss from long term capital gains from sale of 7456 sq. meter of agricultural land at village Ringanwada, Nani Daman was shown at Rs. 3,89,841/-. This land was acquired by assessee's father in the year 1930 and, therefore, for calculation of long term capital gains cost of acquisition of the said property on 1.4.1981 was required. The assessee has shown the cost of acquisition of said property @ Rs. 165/- per sq. meter and accordingly calculated long term capital gain which figured out to be long term capital loss at Rs. 3,89,841/-. Whereas AO on the basis of information available with him adopted average rate of Rs. 43 per sq. meter as on 1.4.1981 and accordingly calculated long term capital gain at Rs. 50,12,072/- as against loss of Rs. 3,89,841/- shown by the assessee and thereby made addition of Rs. 45,22,231/- to the income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33(6) of the Act from Sub-Registrar, Daman on 3.9.2010 to provide the fair market value/jantri rate prevailing on in the year 1981. In response to the same the Sub-Registrar, Daman vide letter dated 15.9.2010 replied that the sales statistics rates between Rs. 33/- to Rs. 53/- per sq.mtrs. for land in the year 1981. Therefore, the AO adopted the average rate @ Rs. 43/- per sq.mtrs. (53 + 33 = 86/2 = 43) and worked out capital gain accordingly. 6. Aggrieved, the assessee went in appeal before CIT(A). During the course of appellate proceedings before the CIT(A) assessee submitted a copy of valuation report dated 28.2.2008 of Government Approved Valuer "Parekh & Associates". As per the said valuation report fair market value of agricultural land at Ringanwada as on 1.4.1981 was shown at Rs. 108/- per sq. mtrs. In the written submissions made by the assessee's AR it was stated that in arriving at the fair market value of land as on 1.4.1981 at Ringanwada the approved valuers have taken into consideration the said value of Rs. 165/- as well as instance of sales/transfers of Ringanwada. The assessee's submissions about the relevant extracts from the valuation report of the govt. approve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same Sub-Registrar indicated prevailing rate at Rs. 33 to 55/- in 1981. However, the ld. AR submitted other alternative i.e. a sale deed of 1988 and valuation report from an independent valuer. The rate per sq.mtr indicated in the sales deed in the year 1988 was Rs. 99/- and the rate as per valuer's report was Rs. 106/- for the year 1981. The ld. AR also offered another alternative that the average of the value of Rs. 43 adopted by AO and that of Rs. 165 adopted by the appellant which comes to Rs. 104 (Rs.43 + 165/2) and is closer to the value of Rs. 108 determined by the approved valuer Parekh & Associates may be adopted. From the perusal of various alternatives put forth by the ld. AR, it is certain that if the rate in 1988 was Rs. 99/- per sq. mtr. In that case the rate in 1981 cannot be Rs. 105/- per sq.mtr. as reported by the Sub- Registrar to Dhanpatbhai J. Ranka. Therefore, after considering all the alternatives against the finding of the AO I am of the opinion that there is a merit in reworking of FMV of the land in 1981. The AO heavily relied on the certificate from the Sub-Registrar to adopt the average rate at Rs. 43/- per sq.mtr. On the other hand the ld. AR offere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l valuation report is available on record. Merely on the basis of other general enquiries the valuation declared by the registered valuer cannot be substituted. We, therefore, set aside the orders of Revenue authorities on this issue and direct the AO to adopt the valuation of the flat as on 1.4.1981 as declared by the assessee." 8. On the other hand, the ld. DR relied on the order of AO and asserted upon to maintain the rate of Rs. 43 only for the purpose of calculation of capital gain. 9. We have heard the rival contentions and gone through the facts and circumstances of the case as well as Paper Book and submissions made by the assessee and submissions of ld. DR. From the perusal of records, this is a fact that there have been different rates available as on 1.4.1981 in relation to arrive at the cost of acquisition of the piece of land sold by the assessee. These rates can be summed up - 1. Rate given by Sub-Registrar, Daman vide letter 15.9.2010 in reply to letter of AO dt. 3.9.2010 Between Rs. 33 to 53/- per sq.meter 2. Rate obtained from Sub-Registrar, Daman vide certificate of valuation dated 22.1.2007 Rs.165/- per sq. meter. 3. Rate given by the Govt. approved valuer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A) erred in deleting the addition made on account of long term capital gain of Rs. 13,55,724/-. 11. The facts of the case have already been dealt with by us in our order in ITA No.373/Ahd/2012 against the addition made by the AO at Rs. 46,33,231/- due to application of fair market value of the piece of land as on 1.4.1981 at Rs. 43/- per sq. meter against rate of Rs. 165/- per sq. mtr. claimed by the assessee in his return of income. Aggrieved, assessee went in appeal before the CI(T(A) who was provided a copy of Govt. approved valuer's report giving the rate of Rs. 108/- per sq. meter. The ld. CIT(A) partly allowed the appeal of the assessee by adopting fair market value on 1.4.1981 at Rs. 76 per sq. meter which was worked out by averaging the rates taken by AO at Rs. 43/- and the rate given by Govt. approved valuer at Rs. 108/- (Rs.43 + Rs. 108)/2 = Rs. 75.5 per sq. meter so Rs. 76/-. Aggrieved, the Revenue has preferred the appeal before the Tribunal. 12. We have dealt the issue in ITA No.373/Ahd/2012 (assessee's appeal) and given the finding of adopting the fair market value of Rs. 102/- by averaging minimum and maximum rate given by Sub- Registrar, Daman and the rate g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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