TMI Blog2018 (7) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... should have referred not only the value of the property as on 01.04.1981 but also the fair market value as on the date of sale. As relying on the decision of the Hon’ble High Court in Sumit Kr. Agarwal [2014 (6) TMI 13 - CALCUTTA HIGH COURT] we set aside the order of the DVO/AO and remand the matter back to the AO with a direction to refer the valuation to DVO for determination of the fair market value as on the date of sale of the property as well as on 01.04.1981’after giving opportunity to the assessee and thereafter to compute LTCG in accordance to law - Appeal of assessee is allowed for statistical purposes. - I.T.A. No. 2157/Kol/2016 - - - Dated:- 10-7-2018 - Shri J. Sudhakar Reddy, AM And Shri A. T. Varkey, JM For The Revenue : Shri Miraj D. Shah, AR For The Assessee/Cross Objector : Shri Saurabh Kumar, Addl. CIT, Sr. DR ORDER Per Shri A.T.Varkey, JM The appeal preferred by the assessee is against the order of the Ld. CIT(A)-10, Kolkata dated 17.08.2016 for AY 2012-13. 2. The only ground of appeal of assessee is against the action of Ld. CIT(A) in upholding the addition of ₹ 98,82,643/- on account of Long Term Capital Gain on sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deduction u/s. 48: : 1. Cost of acquisition after indexation : ₹ 3,23,13,460/- Balance : ₹ 2,04,941/- Deduction u/s. 54/54B/54D/54EC/54F/54GA : Nil Net Balance : ₹ 2,04,941/- 5. Cost of acquisition and indexation thereon adopted by the assessee on the basis of a valuation report of the property as on 01.04.81 which was valued at ₹ 1,64,65,457/-. The copy of valuation report filed shows the date of valuation as 14.02.13. Thus as stated above, ₹ 2,04,941/- was offered by the assessee as Long Term Capital Gain in the return of income. However, AO had a difference of opinion in respect to the valuation of the property as adopted by the assessee as on 01.04.1981. Therefore, the case was referred to the DVO by AO u/s. 55A of the Act on 25.03.2014 to ascertain fair market value as on 01.04.1981. Acting on such reference, the AO notes that the DVO issued letter to the assessee on 31.03.2014 to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property resulted in discounted sale of the property on 'as is where is basis'. The assessee offered value of consideration being 1/4th of stamp duty value of ₹ 13,00,73,603/- or ₹ 3,25,18,401/- in view of provisions of section 50(c) of Act in the return of income for the Assessment Year 2012-13. Since the property in question was an inherited property prior to 01.04.81, the assessee has taken into consideration the fair market value of the property as per valuer's report as on 01.04.81 at ₹ 12,92,53,440/- and 1/4th of such fair- market value or ₹ 3,23,13,460/- has been treated as cost of acquisition. Thus the difference between proportionate value of sales consideration of ₹ 3,25,18,401/- and proportionate value of cost of acquisition of ₹ 3,23,13,460/- worked out to ₹ 2,04,941/-, which was offered as long term capital gain for the assessment year 2012-13. However, the AO referred to DVO the fair market value of property as on 01.04.1981 and DVO estimated it at ₹ 1,15,34,144/- for the entire joint property. Thus, the value as on 01.04.1981 on assessee s 1/4th share was at ₹ 28,83,536/- (without indexation). After ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority. This has been observed by the Hon ble Supreme Court in Grindlays Bank Vs. Central Govt. Industrial Tribunal 1980(Supp) SCC 420. The Hon ble Supreme Court in ITO Vs. CH. Atchaiah (1996) 218 ITR 239 (SC) has held ) has held that the income should be assessed on the right person, right year and it should be on the right income. 10. The Hon ble Gujarat High Court in S. R. Costhi Vs. CIT (2005) 276 ITR 165 (SC) held, inter alia, the authorities under the Income-tax Act, 1961 are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is overassessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. 11. Therefore, the short question is whether the DVO ought to have acceded to the request of the assessee to ascertain the fair market value of the property on the date of sale also. This issue is no longer res integra. The Hon ble Calcutta High Court in the case of Sunil Kr. Agarwal Vs. CIT in GA No.3686 of 2013 ITAT No.221 of 2013 vide judgment dated 13.03.2014, wherein it was h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who may not have been properly instructed in law, the assessing officer, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. (emphasis given by us). 12. Therefore in the light of the aforesaid facts and circumstances of the case and relying on the decision of the Hon ble High Court in Sumit Kr. Agarwal, Supra, we set aside the order of the DVO/AO and remand the matter back to the AO with a direction to refer the valuation to DVO for determination of the fair market value as on the date of sale of the property as well as on 01.04.1981 after giving opportunity to the assessee and thereafter to compute LTCG in accordance to law. 9 In the result, the appeal of assessee is allowed for statistical purposes. Order is pronounced in the open court on 10/07/2018 - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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