TMI Blog2019 (10) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... r was not right in discarding the report of the registered valuer without having made a reference to the DVO and, therefore, the rate adopted by the Assessing Officer for the purpose of computation of fair market value cannot be upheld. Accordingly, we set aside the order of the Ld. CIT (A) and direct the Assessing Officer to re-compute the fair market value of the land as on 1.4.1981 by taking into account the rate as adopted by the registered valuer. - Decided in favour of assessee. - ITA No. 2041/Del/2016 (Assessment year: 2011-12) - - - Dated:- 26-8-2019 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER Assessee by: Shri Rakesh Gupta, Sr. Advocate, Shri Somit Aggarwal, Advocate Department by: Ms Ashima Neb, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, J.M. This appeal is filed by the assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)-2, Gurgaon {CIT (A)} dated 28.01.2016 for assessment year 2011-12. 2.0 Brief facts of the case are that during the year under consideration, the assessee had sold a reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the rate fixed by Ahmedabad Urban Development Authority was @1000 per sq mtr. Accordingly, the indexed cost of acquisition was computed at ₹ 18,18,112/- and the long term capital gain was computed at ₹ 1,61,81,888/-. The Assessing Officer also did not allow the exemption u/s 54 claimed by the assessee completely by noting that there were three co-owners of the property purchased in Mumbai and, therefore, only 1/3rd of the investment in the property was to be allowed. Accordingly, the exemption u/s 54 was restricted to ₹ 33,87,032/- and long term capital gain for the purpose of taxability was computed at ₹ 1,27,94,856/-. 2.2 Aggrieved, the assessee approached the Ld. First Appellate Authority and challenged the computation of long term capital gains as well as the partial disallowance with respect to exemption u/s 54. The Ld. CIT (A) directed the Assessing Officer to refer the valuation of property to the DVO for ascertaining correct fair market value as on 1.4.1981. The Assessing Officer was also directed to examine the assessee s contention regarding the claim of deduction u/s 54. 2.3 With respect to the assessee s claim u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the matter, action of Ld. CIT(A) in confirming the F.M.V. as on 01.04.1981 at ₹ 2,55,712/- is bad in law and against the facts and circumstances of the case. 3. That in any case and in any view of the matter action of Ld. CIT(A) in confirming the action of Ld. A.O in making the impugned addition is bad in law and against the facts and circumstances of the case. 4. That the appellant craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other. 3.0 The Ld. Authorised Representative (AR) submitted that the fair market value adopted by the assessee was correct as the same was based on the report of the registered valuer who was a technical expert and who had duly taken note of the fact that the impugned property was located in a highly developed area and was amenable for residential/commercial development. It was submitted that the registered valuer had specifically mentioned that although the circle rate was ₹ 1160/- per sq mtr but he had taken the fair market value at five times of the said circle rate because of several special features of this p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that the lower authorities have erred in overriding the report of the registered valuer without supporting evidence and, therefore, the same is bad in law. It is also the contention of the assessee that the Assessing Officer should have referred the matter to the DVO if he was not in agreement with the valuation as computed by the registered valuer and that in absence of any evidence on record, the report of the registered valuer should have been accepted with regard to fair market value as on 1.4.1981 for the purpose of computing the capital gains. It is seen that the Assessing Officer while rejecting the registered valuer s estimate at ₹ 5800/- per sq mtr has noted that the average rate at which the sales deeds were being executed was ₹ 1160/- per sq mtr. However, it is our considered opinion that valuation done by the empanelled registered valuer of the Income Tax Department would certainly take precedence over a value which the Assessing Officer might adopt on his own without making a reference to the DVO. The fact of the matter remains that the Assessing Officer, during the course of assessment proceedings, did not make any reference to the DVO even thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a registered valuer is a valid piece of evidence in deciding matters of valuation. Such report can be modified or questioned or rebutted by the AO only in the light of reliable materials available with him. In the present case, the AO himself has not referred the matter to valuation. In the facts and circumstances of the case, the AO as well as the CIT(A) have erred in coming to their conclusions regarding the valuation of the property as on 1st April, 1981. Fair market value of the land as on 1st April, 1981, estimated by a registered valuer being based on sound factual basis and the phenomenal development in that area could not be rejected by the AO without assigning any specific reasons. 5.1 Similarly, in the case of Pyare Mohan Mathur HUF Vs ITO (in ITA No. 471/Agra/2009 vide order dated 21/04/2011) the Agra Bench of the ITAT has held that in view of the provision of section 55A once the assessee has submitted the necessary evidence by way of the valuation report made by the registered valuer, the onus gets shifted on the AO to contradict the report of the registered valuer. The registered valuation officer is a technical expert and the opinion of an exper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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