TMI Blog2021 (7) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Reserve Bank of India which was not doubted by the AO. Admittedly, the sales instances were given by the valuer in his report with the remark that these are not comparable and therefore the same cannot be used for valuing the property in question as on 1 April 1981- the authorities below without rejecting the basis adopted by the valuer has referred the sales instances for determining the value of the land in question as on 1 April 1981. As such, these sales instances were rejected by the valuer himself and therefore in our considered view the authorities below erred in using these sales instances in valuing the property in question as on 1 April 1981. Reference to Valuation Officer - Whether the AO can substitute the value determined by the registered valuer as on 1st April 1981? - AO may refer the valuation of capital assets to a valuation officer where he s of the opinion that the value so claimed by the assessee is less than its fair market value. It is an undisputed fact that the assessee did not claim the value of the impugned land as on 1st April 1981 which is less than the fair market value. As such the assessee has claimed higher value than the fair market va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l three cases. The assessee submitted that there was no ill motive behind for not filing appeal in time. In this regard, he has also filed an affidavit dated 02/07/2020 stating the above reasons and requested to condone the delay which occurred due to administrative lapse on the part of his representative. At the time of hearing, the ld. DR left the issue for condoning the delay at the discretion of the Bench. 3. In view of the above, we notice that assesse had sufficient reason for not filing the said appeals before the ITAT, Ahmedabad Benches within the time prescribed. Therefore, we condone the delay of 253 days and proceed to adjudicate the appeals on merits. First we take up ITA No. 143/AHD/2019, an appeal by the assessee 4. The assessee has raised the following grounds of appeal: Ld.CIT(A) erred in law and well as on facts in confiring addition made by AO of ₹ 1,52,96,645/- by replacing cost of acquisition based on valuation report of registered valuer as 01/04/1981 by arbitrary figure. 4.1 Assessee has also raised following additional grounds of appeal: 1. Ld.AO erred in lawas well as on fact in computing 100% LTCG in appellants h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 95,33,505/- (ii) Transfer expenses ₹ 2,50,000/- (iii) Indexed cost ₹ 7,850/- ₹ 97,91,355/- Long Term Capital Gain ₹ 1,52,96,645/- 7.2 The aggrieved assessee preferred an appeal to the learned CIT (A). The assessee before the learned CIT (A) submitted that the valuer in his report for valuing the land in dispute as on 1 April 1981 has adopted the basis of increase in the gold price index as decided by the Reserve Bank of India. The valuer in his report has already mentioned that there were not available the specific instances of the sales of land directly comparable to the land in question. The references given by the valuer for the sale of land in his report were not used by him for deciding the value of the land in question as on 1 April 1981. Therefore, the AO erred in referring those instances of the sale of land for deciding the value of the land in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied with the value of the land, can make the reference to the DVO under the provisions of section 55A of the Act but he cannot decided the value at his own. 9.3 The learned AR further submitted that the land in question was jointly held by the assessee along with co-owners being mother and brother namely Smt. Meenaben N. Patel and Shri Mitesh N. Patel. The property being the land admeasuring 10623 square meters was inherited. The ownership of the assessee in the property was limited to the extent of 25% whereas the shares of both the coowners being the mother and the brother stands at 50% and 25% respectively. The share of the assessee in the sale consideration stood at ₹ 62,72,000.00 only. In this connection the learned AR drew attention on pages 12 to 37 where the sales deed was placed on record. The learned AR also drew our attention on the assessment orders of the co-owners to justify that the capital gain was also assessed in the respective hands with respect to the land in question. The copies of the assessment orders of the co-owners are available on record. Accordingly, the learned AR contended that the entire amount of capital gain cannot be taxed in the hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Govt. Deptts. / Khatedars of the Village, etc. 3. As the instances of the sales are very few and under valued, the increased trend of the gold prices can provide the basis for fixing the land values in 1981. The basis for fixing the land rates 1981 the gold price fixed by.; Reserve Bank of India was 167.00 per one gramme. The percentage increase is / was 100. While in 2002, it is/ was ₹ 506.00 per one gramme percentage increase is/ was 302.99. At present i. e. on the date of sale deed executed registered on April 2009, the price of gold was approx ₹ 1400/- per one gramme. It is approximately 838 times more as compared with/to the price of 1981. Besides the sale/purchase of gold does not involved any types of speculation. This basis considered to be fair and reasonable transaction. Hence it may be taken into consideration suitably for fixing assessing/estimating land rate suitably 11.4 However, the authorities below without rejecting the basis adopted by the valuer has referred the sales instances for determining the value of the land in question as on 1 April 1981. As such, these sales instances were reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. Coming to the question of reference to DVO for ascertaining the fair market value as on 1.4.1981 also, we find that such reference was not competent. We have noticed that prior to the amendment in section 55A with effect from 1.7.2012 in a case, the value of the asset claimed by the assessee is in accordance with the estimate made by the Registered Valuer, if the Assessing Officer was of the opinion that the value so claimed was less than its fair market value as on 1.4.1981. It would not be the case of the Assessing Officer that the value of the asset shown as on 1.4.1981 was less than the fair market value. Such clause, therefore, as it stood at the relevant time, had no application to the valuation as on 1.4.1981. We are conscious that with effect from 1.7.2012, the expression now used in clause (a) of section 55A is is at variance with its fair market value . The situation may, therefore, be different after 1.7.2012. We are, however, concerned with the period prior thereto. Clause (b) of section 55A is in two parts and permits a reference to DVO if the Assessing Officer is of the opinion that (i) the fair market value of the asset exceeds the value of the asset so clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer the matter to the DVO or to substitute the value of the impugned land as on 1st April 1981. Therefore we hold that the AO in the given facts and circumstances cannot substitute the value of the impugned land as on 1st April 1981. 11.8 Before parting, we want to make it flawless that there was an amendment under the provisions of section 55A of the Act by the Finance Act 2012 which reads as under: [Reference to Valuation Officer. 78 55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter 79 , the 80 [Assessing] Officer may refer the valuation of capital asset to a Valuation Officer- (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the 80[Assessing] Officer is of opinion that the value so claimed 80a [is at variance with its fair market value]; (b) in any other case, if the 80 [Assessing] Officer is of opinion- (i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such per centage 81 of the value of the asset as so claimed or by mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee in the case of Shri Apurva N. Patel bearing ITA No.143/Ahd/2019 corresponding to A.Y. 2010-11 which has been decided in favour of assessee vide paragraph No. 11 of this order. For the detailed discussion please refer the above mentioned paragraph number of this order. Accordingly, we hold that finding given in above paragraphs with regard to ITA No.143/Ahd/2019 will mutatis mutandis apply here in this case also. 15. The 2nd issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowance of the exemption claimed by the assessee for ₹ 9,40,000.00 under section 54F of the Act. 16. At the time of hearing, the Ld. Counsel for the assessee has requested not to press ground No. 2 of the appeal. Therefore, the same is dismissed as not pressed. 17. Coming to ITA No. 142/Ahd/2019 for A.Y. 2010-11, the assessee has raised the following grounds of appeal: 1. Ld.CIT(A) erred in law as well as on fact in confirming addition made by AO of ₹ 27,29,083/- by replacing cost of acquisition based on valuation report of registered valuer as on 01.04.1981 by arbitrary figure. 2. Ld.CIT(A) erred in law as well as on fact i ..... 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