Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (11) TMI 366

..... the same time, we have also held that the fair market value as on 1.4.1981 determined by the AO on the basis of sub-registrar rates was also not correct. There should not be any dispute that the industrial land located outside municipal limits, far away from the developed areas would certainly command lower rate. Further the market rate of a plot/land is dependent upon various factors. We have noticed earlier that, even between the plots/land having same characteristics, the bigger plot/land would command low rates than the smaller plot/land. Size of the plot/land, location, access to main road, availability of other amenities etc. would also determine the market rates. Both the parties could bring on record any comparable sale instances of similarly placed land. Hence, we have no other option, but to estimate the probable fair market value of the land as on 1.4.1981 on the basis of available material. The valuer has adopted the rate of ₹ 33.19 per sq.ft. on the basis of sale instances of developed housing sites located within the municipal limits. Further, the impugned land is located within 2.50 kms of municipal limits. These factors could be taken as a guidance, in the fac .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ue of ₹ 2,70,975/- adopted for book purposes is only a notional value and hence, the same cannot be taken as Fair Market Value as on 1.4.1981 for the purpose of computation of capital gain. Accordingly, the Tribunal restored the issue to the file of the AO. In the second round, the AO adopted the very same value of ₹ 2,70,975/- as on 1.4.1981 and accordingly computed long term capital gains. In the second round, the Tribunal observed that the AO has not followed the direction given by it in the first round. Accordingly, the issue was restored again to the file of the AO. 3. In the third round of proceedings, the AO called for details of fair market value from various sub-registrar office located around the impugned land. The AO noticed that the impugned land was located in 7th mile, 4th furlong, Kanakapura Main Road, Khata No.1004/832/1015/1, Sy No.46/2A1B, which fell in the jurisdiction of Doddkalasandra Village. The extent of land was 2 acres and 3 guntas and the same was converted into industrial land from the status of agricultural land. The sub-registrars reported that the guide line rates fixed by Government of Karnataka was available only from 1989 onwards in res .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... provided. If the assessee so wished to prove that the Valuer is genuine, it is his right to produce the Valuer and explain to the Assessing Officer, the authenticity of his Valuation. The Office has never debarred the assessee from exercising his rights to produce the Valuer. No request has been receive in this regard from the assessee. Fourthly, when the Sub Registrars themselves stated that the converted value for such lands were not available in their records and assessee himself had said that there were not many Industrially Converted Lands in that area, how the Valuer got an estimate at ₹ 30 per sqft is doubtful. In that case, why did the assessee enter an amount of ₹ 2,70,975/- as the book value and not ₹ 30 Lakhs. It is to be noted that the Asset was introduced into the books of accounts of the assessee through its partner's capital account. Hence due to the above reasons, the value adopted by the assessee at ₹ 30 lakhs is found to be doubtful hence incorrect. The Ld CIT(A) confirmed the order passed by the AO and hence the assessee has filed this appeal before the Tribunal. 4. The Ld A.R submitted that the assessee has obtained a valuation report .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... of housing plots admeasuring 1750 sq.ft. to 2400 sq.ft.. The Valuer has further stated that the above mentioned 8 residential plots are located within a distance of 2.5 kms from the industrial land sold by the assessee. Based on the sale value mentioned in the conveyance deed of the eight plots, the Valuer has arrived at the fair market value as on 1.4.1981 at ₹ 33.19 per Sq.ft. Accordingly, he has valued the impugned land at ₹ 30.00 lakhs as on 1.4.1981. 7. There should not be any dispute that the value of a residential plot located in a well-developed area, that too located within municipal limits, would command higher rate than an industrial land located outside the municipal limits in an under developed area. As rightly pointed out by the AO, the residential plots are generally quoted at the rate per Sq.ft., while the agricultural land/industrial land would be quoted at the rate per acre. Further it is a general rule that the bigger the size of plots, lower the price it could fetch. This rule is applicable even to residential plots located in a well-developed area. When the questions relate to agricultural lands/industrial lands, the rates are quoted for per acre an .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ispute that the industrial land located outside municipal limits, far away from the developed areas would certainly command lower rate. Further the market rate of a plot/land is dependent upon various factors. For example, we have noticed earlier that, even between the plots/land having same characteristics, the bigger plot/land would command low rates than the smaller plot/land. Further the size of the plot/land, location, access to main road, availability of other amenities etc. would also determine the market rates. The Ld A.R contended before us that the sale instances cited by the Valuer are within 2.50 kms and hence the same can also be adopted. However, the assessee has not brought on record any other characteristics or positive factors related to the land which would enable it to command higher rates. Hence the so called shorter distance alone could not be a factor that should influence a probable buyer to pay the same rates as are available to a residential plot located in a developed area. 11. We have noticed that both the parties could bring on recoed any comparable sale instances of similarly placed land. Hence, we have no other option, but to estimate the probable fair .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||