TMI Blog2019 (6) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... ked huge profit on the transaction in its books of account. The transaction has been done to group concern to whom land was already leased out. CIT(A) s acceptance of the said valuer s report as sacrosanct despite the papable lack of veracity of the valuer or method of valuation is not at all sustainable. The lack of cogency of the valuation report is further highlighted by the huge difference found by the AO when compared to data noted from website of Megabricks. The surrounding circumstances couple with these information clearly indicate towards of lack of veracity in said valuer s determination - the issue needs to be remitted to the file of the Assessing Officer. The Assessing Officer is directed to consider the issue afresh after obtaining valuation report from the departmental valuer. Needles to add assessee should be provided adequate opportunity of being heard. Bogus short term capital loss and long term capital loss on sale of shares - Assessee has got higher price than the NAV of such share - HELD THAT:- We find that the Assessing Officer has no material whatsoever with him to conclude that transactions of sale are not genuine or that the price based on the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd dealing in industrial chemicals. During the course of assessment the assessing officer proceeded to examine the claim of long-term capital loss shown by the assessee in the return of income. The assessing found that the impugned asset was land at Kalyan. The assessing officer found that assessee had purchased the said land on 1947. The assessee had given the said land on lease to West Pioneer properties India private limited a group concern of the assessee on 5/5/2005. The assessee later on entered into an agreement dated 27/3/2012 for sale of reversionary interest in the said land to M/s. West Pioneer properties India private limited. The assessee in the books of accounts have booked a profit of rupees 18,99,18,608/- on the sale of the land. However in the computation for income tax purposes the assessee had shown are long-term capital loss of rupees 19,67,85,586/-. The assessing officer found the situation completely bizarre. The assessee was asked to file the valuation of land as on 1/4/1981. The assessing filed the valuation report done by M/s. Anmol Sekhari consultants private limited with valuation report dated 15/3/2012. The assessing officer also summoned and examined th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany which had already been occupying the same land on the long-term lease of 99 years and had been operating a shopping mall on the same. This lease was entered on 5/5/2005. AO observed that the transaction for sale is only with respect to reversionary interest of the assessee in the said Kalyan property and not the actual sale of land. Therefore the assessing officer held that the valuation of land as such is only two hoodwink the revenue and the valuation report is only a colourable device. He treated the transaction to be sham placing reliance on the decision of honourable apex court in the case of McDowell Co Ltd. The assessing officer further observed that actual asset transfer is reversionary interest and not land therefore the computation of long-term capital loss in respect of the land sold is not reliable and it is false and liable to be rejected. Therefore holding the long-term capital loss to be not genuine and fabricated the same was treated at zero. 7. Upon assessee s appeal Learned CIT-A observed that the land sold by the assessee during the year under consideration was land acquired by it in 1947, small addition was made to it during the year 1974 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sister concern already. Thereafter during continuation of lease transfer of reversionary interest has taken place. Despite showing huge book profit the assessee has shown long term capital loss by putting fair market value as on 1.4.1981 by a valuation report which cannot be accepted. He submitted that valuer has done nothing but to taken stamp duty rate of 2012 and worked it backward taking 10% as growth rate. Learned DR further submitted that in contemporaneous situation reliance by the Assessing Officer on the website of Megabricks cannot be rejected. 11. Per contra, learned Counsel of the assessee relied on the order of learned CIT(A). He submitted that the assessee has duly obtained fair market value of land computed by the registered valuer on 1.4.1981. He submitted that this cannot be substituted by a rate mentioned in the website. Further learned counsel placed reliance upon several case laws in this regard including the following :- Pr. CIT Vs. Smt. Vidhi Agarwal (88 Taxmann.com 306) CIT Vs. Shivakami Co. P. Ltd. (159 ITR 71) CIT Vs. B. Arunkumar Co. (ITA No. 2337 of 2013) Arjun Malhotra Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Smt. Vidhi Agarwal (supra) mentions that opinion of the approved valuer can be said to be sufficient. This case law does not help the assessee on the surrounding circumstances pointed out in this case. The case law from Azadi Bacho Andolan (supra) does not help the case of the assessee. It is the tax planning by legitimate means that is permissible but not any attempt to hoodwink revenue. In our considered opinion on the facts and circumstances of the case, the issue needs to be remitted to the file of the Assessing Officer. The Assessing Officer is directed to consider the issue afresh after obtaining valuation report from the departmental valuer. Needles to add assessee should be provided adequate opportunity of being heard. 14. Apropos deletion of short term capital loss and long term capital loss on sale of shares : In this regard the Assessing Officer observed that the assessee had made sale of Global Trendz Ltd. (GTL) shares. These share were again made to group companies, hence Assessing Officer observed that sale of these shares are also not at arm s length. He further observed that the stock sold are not listed and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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