TMI Blog2013 (9) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee had filed her return of income for the AY 2008-09 on 31/03/2009, declaring the taxable income at ₹ 1,36,36,694/-. From the information available on record, the Assessing Officer noticed that the fair market values of the two properties sold by the assessee were more than the consideration recorded in the registered sale deeds. The market value of the properties was at ₹ 12,56,80,000/- whereas the consideration as per the registered sale deeds was ₹ 11,38,00,000/- only. The Assessing Officer opined that as per section 50C of the Act, for the purpose of determining the long term capital gains, the fair market value of the properties as considered by the registration authorities is required to be adopted. However, the assessee had adopted the actual consideration recorded in the registered sale deeds only for determining the long term capital gains. Thus, the Assessing Officer held that there was an escapement of income and accordingly, he reopened the assessment u/s 147 of the Act. Subsequently, an order u/s 143(3) r.w.s. 147 was passed, by way of which order, the total income of the assessee was determined at ₹ 11,17,39,494/-. 4. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her father vide the gift deed dt. 12/06/1979 and, therefore, the assessee had an option of adopting the market value as on 01/04/1981. It was reiterated that the assessee adopted the rate at ₹ 1800/- per sq. Yard only, whereas the market value as per the valuation certificate of the approved valuer, Mr. Ravinder Rao, dated 29/08/2011 was ₹ 2000/- per sq. yard. 6. After considering the submissions of the assessee, the CIT(A) examined and analysed the issue elaborately with the decisions relied upon by the Assessing Officer as well as the assessee and directed the Assessing Officer to recompute the long term capital gains by adopting the fair market value of land as on 01/04/1981 at ₹ 1200/- per sq. Yard and modify the computation of income of the assessee for the year accordingly. Some of the observations before coming to the said conclusion by the CIT(A) are as follows: 6.9 As regards the observation of the Assessing Officer that the assessee could not cite any comparable instance, it is clear that even the Assessing Officer has not cited any instance of sale/purchase at the rate shown in the basic value register in the vicinity of the appellant s property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantive grounds: 2. The learned CIT(A) erred in adopting FMV of open land @ 1200/- per sq.yard as against Sub- Registrar value of ₹ 150 per sq. Yard oblvious of the fact that the assessee failed to furnish any evidence in support of valuation report of Government Registered Valuer. 3. The learned CIT(A) ought to have appreciated the rationale of decision of ITAT, Visakhapatnam in the case of M. Siva Parvathi Vs. ITO (2010) 129 TTJ (Visakha) 463 in arriving at FMV as on 01/04/1981, the facts of which are similar to the present case. 9. The assessee has raised the following objections in her CO: 1. The impugned order of the learned CIT(A), in so far as it is prejudicial to the interest of the assessee, is against law, weight of evidence and probabilities of the case. 2. The learned CIT(A) erred in adopting the FMV as on 01/04/1981 at ₹ 1200/- per sq. Yard instead of ₹ 2000/- per sq. Yard as determined by the registered valuer in terms of the provisions of section 55(2)(6)(ii). He ought to have accepted the rate per sq. Yard at ₹ 2000/- derived by the Government approved valuer on scientific basis. 3. For the above grounds and such other g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he approximately 18 Kms. from RTC X Roads. He argued that going by the same yardstick, for the SRO value at RTC X Roads of ₹ 150/- per sq. yard, the corresponding market value should be at least 20 times more i.e. around ₹ 3000/-. 14. The representative of the assessee also argued that in view of the decision of the Tribunal Mumbai Bench in the case of ITO Vs. Sri Pratap M. Indulkar (ITA No. 1142/Mum/20 10), the Fair Market Value as on 1.4.1981 as per Registered Valuer's report should be adopted as the cost of acquisition and further indexed cost should be allowed in computation of long Term capital gains. 15. With regard to the Assessing Officer's reliance on the decision in the case of M. Siva Parvathi Vs. ITO (supra), the representative averred that the said case is different on facts as no valuation report of the approved valuer was produced therein and the assessee had only estimated the market value, without any supporting valuation report. He maintained that the decision in the case of Rajyalaxmi Trading Co. Vs. CIT, 125 ITR 581, on which reliance placed by the Assessing Officer is also not applicable to the facts of the assessee s case, as the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2011. 3. Pratap M. Indulkar Vs. ITO, ITA No. 1142/Mum/2010, order dated 9th March, 2011. 18. We have heard both the parties and perused the material available on record. We find that the Bombay High Court in the case of Commissioner of Income Tax vs. Raman Kumar Suri, IT Appeal No. 6962 of 2010, judgment dated 27th November, 2012 has been held that with respect to the determination of the fair market value as on 1st April, 1981 the valuation done by a registered valuer of the Income Tax Department would certainly take precedence over Nabhi s Guide to house tax. The Court had concluded that the determination of fair market value as on 1st April, 1981 is a question of fact and the Tribunal s decision that the fair market value as estimated by the registered valuer on 1st April, 1981 is acceptable. It also held that the finding of the Tribunal is neither perverse nor arbitrarily done so as to raise a substantial question of law. 19. Moreover, we find that similar issue came up for consideration before the coordinate bench of jurisdictional Tribunal, where the AM was one of the party, in case of Ashwin Joshi in ITA Nos. 1428 1269/Hyd/2012 vide order dated 31/07/2013, wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land auction rates in Safdarjung Enclave Area nor the basis of increase of such rates by 66 percent and nor even any reasons for not identifying comparative instances of cost of similarly situate properties in Defence Colony area while the impugned order does not disclose the basis of increase by 40 percent over the average auction rates in Safdarjung Enclave Area, not much reliance can be placed on the valuation report prepared by the registered valuer and partly relied upon by the learned CIT(A). The determination of cost of acquisition of a property is a technical aspect and without having complete facts and details of property, its location, and its surroundings and comparative instances of similarly situate properties, cost of acquisition as on 1.4.1981 cannot be determined in a precise manner. The learned CIT(A) having not adverted to all these aspects now raised, apparently the impugned order suffers from lack of reasoning and is not a speaking order. In view of the foregoing, the matter is restored to the file of the A.O. for deciding the matter afresh in accordance with law, after having a report of District Valuation Officer on the cost of acquisition as on 1.4.1981 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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