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TMI Blog2019 (11) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... to determining the cost of acquisition on sale of property for computing the capital gains. The assessee is an individual engaged in the business of money lending and filed his return of income for the A.Y.2014-15 on 28.07.2014 declaring total income of Rs. 17,33,900/-. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer (AO) found that the assessee has sold the immovable property consisting of land admeasuring 450.55 sq.yards and building with Madras Terrace roof at Akulavari Street, Governorpet, Vijayawada for a consideration of Rs. 1,63,00,000/-. In the return of income, the assessee has worked out the capital gains loss of Rs. 13,39,212/- taking the Fair market Value(FMV) at Rs. 18, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50/- per sq.yd for land and Rs. 21/- per sq.ft for Madras Terrace building and worked out the indexed cost of acquisition at Rs. 18,02,437/- and computed the capital gains at Rs. 1,44,97,563/- as under : Indexed Cost : Land 450.55 sq.yds @250 per sq.yd 1,12,637 x 939/100 Rs. 10,57,666/- Building 2503 sq.ft @21/- per sq.ft 52,563 x 939/100 Rs. 4,93,567/- Stamp duty & others 2007-08 1,47,405 x 939/551 Rs. 2,51,204/- TOTAL Rs. 18,02,437/- Calculation of capital gains : Sale consideration Rs. 1,63,00,000/- Less : Indexed cost of acquisition Rs. 18,02,437/- Long Term Capital Gains Rs. 1,44,97,563/- 3. Against the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be adopted for the purpose of capital gains and subsequent to introduction of 50C, even if the actual consideration is lesser than the full value of sale consideration, the same required to be adopted for the purpose of computing the capital gains. However, for the properties purchased prior to 01.04.1981, the law has permitted the assessee for substituting FMV as on 01.04.1981 as cost of acquisition. Therefore, submitted that the Chartered Engineer had inspected the land and building and valued the land and building as per the information collected by the Chartered Engineer. Registered valuer is a qualified Engineer and expert in valuing the properties, hence, requested to adopt the fair market value as determined by the Chartered Eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we extract relevant part of the order of this Tribunal in para No.10 to 13 which reads as under : "10. It is the contention of the assessee that he has adopted fair market value of the property based on the certificate of the registered valuer. The assessee further contended that the A.O. was not correct in applying SRO value as fair market value of the property, as the SRO value fixed by the State Government is not correct market value of the property. The A.O. was erred in equating with full value of consideration as a result of transfer to the fair market value of the property for the purpose of computation of cost of acquisition. We find force in the argument of the assessee for the reason that the A.O. was erred in adopting SRO valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dopted by the assessee is higher than the fair market value of the property. The A.O., without exercising the option of referring the matter to the valuation officer, simply adopted SRO value which is fixed in a different context to determine the cost of acquisition of the property. Therefore, we are of the opinion that the A.O. was erred in adopting SRO value to substitute the fair market value adopted by the assessee, which is based on a registered valuer certificate. 12. Now it is pertinent to discuss here the case law relied upon by the assessee. The assessee has relied upon the decision of Hon'ble Karnataka High Court in the case of N. Govindaraju Vs. ITO & Anr. 377 ITR 243, wherein the Hon'ble High Court under similar circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Capital gains' under the Act. (para 48) Tribunal was not justified in arriving at the fair market value of the property in question as on 1.4.1981 without taking into consideration the material on record, including the valuation report filed by the assessee. The matter thus requires to be remanded to the Assessing Officer for determination of the fair market value of the property in question in accordance with law and in the light of the observations made hereinabove. (para 51)" 13. The CIT(A) after considering the relevant details has rightly directed the A.O. to substitute value adopted by the assessee as fair market value of the property as on 01.04.1981 to compute cost of acquisition. We do not find any reasons to interfere with t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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