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TMI Blog2018 (12) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... ,092/- under the head long term capital gain is most arbitrary, unjust, untenable and bad in fact and in law and in the alternative it is highly excessive w.r.t facts and circumstances of the case. 2. That on the facts and circumstances of the case sustaining by the learned Commissioner (Appeals) value of the sold property at Rs. 92,80,201/- as adopted by the AO u/s 50C as against apparent sale consideration of Rs. 75,00,000/- is unjustified and not maintainable in law and in the alternative excessive. 3. That on the facts and circumstances of the case upholding by the learned Commissioner (Appeals) cost of acquisition of the land at Rs. 38,500/- as against cost of acquisition adopted by the appellant at Rs. 5,80,000/- in the return of income while working out long term capital gain is highly unjustified and in the alternative very low. 4. That the learned Commissioner (Appeals) erred in sustaining addition of Rs. 36,000/- made by the AO under the head Salary Income by taking the income from salary at Rs. 1,80,000/- as against the correct income of salary at Rs. 1,44,000/- as declared by the assessee in the return of income, which sustenance of addition of Rs. 36,000/- under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the lower authorities. The ld. AR submitted that the notice given by registering authority for adopting higher valuation than what is mentioned in the sale deed cannot become a valid basis of adopting higher valuation until a formal order is passed by the registering authority. It was submitted that the the ld. CIT(A) further failed to appreciate that even after passing of the revised order by the registering authority, the effected parties are given right of appeal under the law and until the revised order as well as appellate order, if any, are finalized the value already adopted by the registering authority at the time of registration of sale deed cannot be changed. 6. We have heard the rival contentions and purused the material available on record. As per registered sale deed dated 12.01.2011, the sale consideration has been stated as Rs. 75,00,000 and at the same value, the property has been registered and the stamp duty has been paid which has been taken as a basis for declaring sales consideration by the assessee. However, as per Sub-Registrar letter dated 24.12.2013, value as per conveyance deed is Rs. 92,80,201 and a copy of conveyance deed along with copy of order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he final value so determined in respect of impunged property and decide as per law taking into consideration the above discussions. In the result, the ground is allowed for statistical purposes. 7. In respect of Ground No. 2, the assessee has challenged the cost of acquisition of the land taken by the AO at Rs. 38,500/- as against cost of acquisition taken by the appellant as Rs. 5,80,000/- in the return of income while working out long term capital gains on sale of property situated at B-8, Raghunath Colony, Near Galta Gate, Jaipur which was jointly owned by the assessee along with his brother. The assessee has taken the valuation as on 01.04.1981 based on registered valuer's report whereas the Assessing Officer has considered the cost of the acquisition based on the purchase deed dated 17.04.1980 relating to the impunged property wherein the purchase consideration has been shown at Rs. 35,000/- and giving benefit of 10% appreciation for cost of acquisition, the AO has considered Rs. 38,500/- as the cost of acquisition. As per the Assessing Officer, the information was called from the assessee's registered valuer u/s 133(6) and he has submitted that no document/purchase deed was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted as it is. Working of long term capital gain is as under: Sale Consideration Rs. 37,50,000/- Less: 1.Value of the complete house property as on 01.04.1981as per the valuation made by the registered valuer (copy of valuation report enclosed) at Rs. 11,60,000 and assessee's half share comes at Rs. 5,80,000) 5,80,000 2. Indexed cost 41,23,800 Rs. 41, 23,800/- Long Term capital gain (Loss) Rs. 3,73,800/- 4. That the learned CIT(A) erred in not taking into consideration following supporting papers/documents/information before sustaining the addition of Rs. 27,08,092/-. i. That the land in question was purchased by the assessee before the year 1981 and in the year 1981 and upto the year 1981, no DLC rates were published by the Government. ii. That in the assessment order the A.O. has mentioned that the property in question was purchased by the assessee and his brother jointly on 17.04.1980. It is respectfully submitted that this observation of the A.O. is not correct. The factual position is that the property in question was agreed to be purchased by the assessee from the seller as back as on Februar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment proceedings the assessee filed a valuation report of registered valuer. The registered valuer has clearly certified and taken the fair market value of the total land as on 01.04.1981 at Rs. 5,49,780/-. In all humbleness it is submitted that the valuation given by the approved valuer should have been taken on face value and indexed cost of land should have been taken on the basis of valuation made by the approved valuer. Taking of lesser value than the value taken by the approved valuer for valuation purposes is not justified under any circumstance and under any law. vii That in above regard it is further submitted that the valuation of a land depends on many factors including its size, situation, width of the road, living standards of the locality, public facilities like light, water, sanitation, roads, commercial use etc. viii That the other reason in appreciation of the value of the sold property is attributed to the fact that the plot area of the purchased property is 1078 sq mtr, and it is an ideal size of a good residential/commercial plot. Moreover the sold house property is very close and in immediate vicinity of Surajpole Anaj Mandi which came i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957(27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under subsection (1) of section 16A of that Act. Explanation - In this section, "valuation officer' has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 It was submitted by the ld AR that from reading the above sections 55(2)(b)(i) and 55A, it clearly transpires that the concept of fair market value for the purpose of Chapter-IV of the Act pertaining to computation of income from capital gain can be found under section 55(2)(b)(i) of the Act, where under, an assessee has the option to take the actual cost of the acquisition of the asset or the fair market value of the asset on the 1.4.1981 for the purpose of Sections 48 and 49 of the Act. In other words, for arriving at the taxable figure of capital gain while deducting the cost of acquisition from the sale consideration, an assessee may either adopt the figure of cost of acquisition actually incurred or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of acquisition has been shown at Rs. 11.60 lacs which included Rs. 5,49,780/- for cost of land whereas as per the purchase deed dated 17/04/1980 the plot was purchased for Rs. 35,000/- on 17/04/1980 that is within a period of 11 ½ months the cost of acquisition has enhanced from Rs. 35,000/- to Rs. 5,49,780/-. In support of the acquisition cost, the valuation report of an approved valuer had been filed in which the AO noted that while the property is recorded as residential but commercial rates have been taken for the purpose of valuation. The AO after discussing in detail and as per the following reasons: "(i) The assessee's contention that the agreement to purchase by the assessee was made in Feb. 78 and the sale deed registered on 17.4.1980. Nowhere in the deed dated 17.4.1980 it has been mentioned by the registrar that the agreement was made on Feb. 78. Without any evidence the assessee may show the purchase prior to 17.4.1980 any time. Further the registrar has also taken the value at Rs. 35,000/- as on 17.4.1980. (ii) As per information called from the registered valuer under sec. 133(6) regarding the value, he vide his letter dated 10.01.2014 has stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the discussion as above, the cost of acquisition has been correctly arrived at by the AO as well as application of section 50C and the long-term capital gain arrived at by the AO are confirmed. Ground of appeal is dismissed." 11. We have heard the rival contentions and perused the material available on record. Firstly, on perusal of the purchase deed dated 17.04.1980, the recital talks about verbal agreement to purchase the impunged property in February 1978 and an advance of Rs. 500 has been shown as paid. However, the said recital alone nowhere leads to a conclusion that the assessee has actual purchased the property in February 1978. The reason for the same is two-fold. Firstly, the assessee has only paid an amount of Rs. 500 as against the final sale consideration of Rs. 35,000 and it is unbelievable by any standard that a person will handover his property on mere receipt of Rs. 500 as against the stated consideration of Rs. 35,000 as finally agreed. Secondly, as per the sale deed, the possession over the property was handed over by the seller to the assessee on the date of execution of the sale deed that is, on 17.04.1980 and not at any time prior to the execution of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in sharing a copy of the registered purchase deed with the valuer. This shows the conduct of the assessee and his intention of seeking a valuation report which supports his case of a higher value instead of determining a fair market value which is the mandate of law. Therefore, we are of the considered view that the lower authorities have rightly rejected the valuation report and do not agree with the contention of the ld AR that the AO could not have rejected the valuation report and ought to have accepted the same. The approach of the AO has however been found acceptable to us. To our mind, he has taken a sound basis of taking the value as per actual purchase deed dated 17.04.1980 and taking an average appreciation in the value of property @ 10% per annum, determined the fair market value at Rs. 38,500. In the result, the ground no. 3 of the assessee's appeal is hereby dismissed. 13. In Ground No. 4, the assessee has challenged the sustenance of addition of Rs. 36,000/- made by the AO under the head "salary" wherein the income was taken at Rs. 1,80,000/- as against income of Rs. 1,44,000/- as declared by the assessee. The ld. CIT(A) has stated that as per the salary certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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