TMI Blog2021 (4) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... ction to refer the valuation of the property to the Valuation Officer and after obtaining his report, the AO shall recompute the taxable capital gain - ITA No.299/Hyd/2019 - - - Dated:- 22-3-2021 - Smt. P. Madhavi Devi, Judicial Member And Shri A. Mohan Alankamony, Accountant Member For the Assessee : Sri V.Srinivas For the Revenue : Sri Sunil Kumar Pandey,DR ORDER PER SMT. P. MADHAVI DEVI, J.M. This is assessee s appeal for the A.Y 2013-14 against the order of the CIT (A)-6,Hyderabad, dated 23.10.2018. 2. Brief facts of the case are that the assessee is an individual having income from house property, capital gains and other sources. The AO received information that the assessee along with his brother had entered into a development agreement cum GPA vide document No.1542/2012, dated 30.07.2012 entrusting the property bearing No.1-8-220 to 229/9/1, Plot No.6 forming part of old bungalow No.144, admeasuring 1180 sq.yards situated at Natarajan Colony, Secunderabad to M/s LB s Ganesh Constructions, Marredpally, Secunderabad after dismantling the existing building at the owner s cost for the development of a residential complex and that the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndum of Past Partition and family arrangement along with order u/s 171 of the IT Act for your ready reference. In the said Partition, the property under consideration has been allotted to all the three male members of the joint family i.e., my grandfather, father and uncle in 3 equal shares, Later, up on demise of my Grandfather Sri CP. Natarajan in the year 1982, his 1/3rd share devolved on my father and uncle equally under Hindu Succession Act 1956. Thus my father became 50% shareholder in the property, partly through partition of the Joint family and partly by way of succession from my Grandfather. Now, I have been legally advised that the property under consideration is assessable partly in the status of HUF and partly in the status of individual as under; . a) 1/3rd share - In the status-of HUF having been allotted to him in the partition in his capacity as Coparcener of the Jt. Family b) 1/6th share In his individual status as legal heir of my Grandfather Sri C.P. Natarajan However, as explained above, the capital gains is not chargeable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the rate adopted by the SRO, Secunderabad at ₹ 40 per sq. yd and ₹ 100 per sq. ft for the year 1981-82 respectively. Therefore, he computed the assessee s share of capital gain and thereafter allowed deduction u/s 54 and arrived at taxable income of ₹ 34,35,628/-. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the order of the AO with regard to the computation of taxable capital gain. Aggrieved, the assessee is in second appeal before the Tribunal by raising the following grounds of appeal: 1) On the facts and in the circumstances of the case, the order of CIT(A) is erroneous and bad in law to the extent it is prejudicial to the assessee. 2) On the facts and in the circumstances of the case, the learned C1T(A) erred in assessing the capital gains in respect of the property given on development in the year under consideration instead of assessing the same in the year of construction permission. 3) On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the value of land and building at ₹ 9,16,083/- as on 01-04-1981 as against ₹ 13,41,000/- valued by the registered v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of any material on record, Assessing Officer should not have made his own calculation for the purpose of computing the capital gains. The orders of the authorities below, thus, cannot be sustained in law. We, accordingly, set aside the orders of authorities below and direct Assessing Officer to accept valuation reported by the assessee as per report of the Registered Valuer as on 01.04.1981 and accept the computation filed by the assessee . 8. In the case of Ajanta Tubes Ltd in ITA No.4432/Del/2014, vide order dated 5.9.2019, the Coordinate Bench at New Delhi has held as under: 15. We have carefully considered the rival contention and perused the orders of the lower authorities. Brief facts of the case are that the business of the appellant Company was to manufacture of steel and P.V.C. pipes at its works at Ghaziabad (UP). The appellant company filed its return of income for the assessment year 2008-2009 declaring the total income at ₹ 12,09,46,$10. The appellant company sold part of the immovable property consisting of land and building on 12th March, 2Q08 for ₹ 18,37,00,000 and ₹ 9,09,45,000, respectively. The appellant in its return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his, the rejection of the valuation report by the learned assessing officer cannot be accepted. Even otherwise in the grounds of appeal the learned ,AO has raised an issue that taking the valuation of land as per approved valuer's report means that the land purchased in 1993 has not been distinguished for the taxation purposes separately. However, no evidence has been produced before us that the impugned land sold by the assessee is acquired post 1/4/1981. In view of . this ground number 1 of the appeal is dismissed . 9. In the case of ITO vs. Padarti Venkata Rama Chandra Rao, reported in (2016) 74 Taxmann.com 195, vide its decision dated 16.09.2016, the Coordinate Bench at Visakpatnam has held as under: 9. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The first issue that came up for our consideration is cost of acquisition of the property. The assessee has adopted cost of acquisition of the property as on 1.4.1981 based on the certificate of registered valuer. The A.O. has determined cost of acquisition of the property based on the SRO value of the property fixed by the State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and adopted SRO value of the property for the purpose of determination of computation of cost of acquisition, when Act specifically provides powers to the A.O. under the provisions of section 55(2) of the Act, to refer the valuation of the property to the valuation officer, when he is of the opinion that the fair market value of the property adopted 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 (supra), wherein the Hon'ble High Court under similar circumstances held as under: Section 48 of the Act deals with the 'Mode of Computation' of income chargeable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has sold a property which he had acquired by way of partition deed in the year 2007-08. The assessee claims that he got right over the property by way of partition deed, which was acquired by his father prior to 1.4.1981. The assessee further submitted that as per the provisions of section 49(1) of the Act, when he got right over the asset by way of any modes specified u/s. 49( I) of e Act, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it as increased by the cost of any improvement of the asset incurred or born by the previous owner or the assessee as the case may be. Since, he got right over property by way of inheritance or succession, as per the provisions of the Act, he has adopted fair market value of the property as on 1.4.1981 and applied indexation benefit from the date the asset was first held by the previous owner and computed long term capital gain. The A.C. was of the opinion that when assessee is owner of the property by way of anyone of the mode specified u/s. 49(1) of the Act, then the indexation benefit should be allowed from the date the asset first held by the assessee. The A.O. further wa ..... 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