TMI Blog2022 (9) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... he reason for reassessment and, rather, without any deliberation thereon. The basis of valuation of the subject land (as on 01/04/1981) thus remains unstated and un-opined, much less examined, and which prompted us to state earlier of our being at a loss to understand the same. We, accordingly, find no reason to interfere with the impugned order, and uphold the same. The matter of valuation, as evident, being principally and essentially factual, reliance by Shri Bardia during hearing on the decision in Pr. CIT vs. Om Rudrapriya Holiday Resort Pvt. Ltd. [ 2019 (7) TMI 989 - RAJASTHAN HIGH COURT] would be, for that reason, of no assistance. Even as observed by the Bench during hearing, in the facts of that case, the Hon'ble Court dismissed the Revenue s appeal in view of the finding by the Tribunal that the AO had taken a plausible view in respect of valuation, a matter of fact. In the instant case, on the contrary, we find a complete non-application of mind by the AO in the matter. Assessee appeal dismissed. - I.T.A. No. 25/JAB/2022 - - - Dated:- 2-9-2022 - Shri Sanjay Arora, Hon‟Ble Accountant Member And Shri Manomohan Das, Hon'ble Judicial Member For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary for the assessing authority to explicitly state his view, which is apparent from his acceptance of the assessee s claim upon enquiry, i.e., that the assessee had correctly and fairly returned the capital gain at Rs. 7.30 lacs. The valuation report by the registered valuer is an expert opinion, and the AO had only accorded due regard thereto inasmuch as he had no reason to doubt the same. Merely because the AO has not referred the valuation to the Valuation Officer (VO) u/s. 55A, can by itself be no ground for invoking s. 263 inasmuch as occasion to do so would arise only where there is in his opinion a variance in the disclosed value and the fmv of the relevant capital asset. 3.2 The Revenue s case, on the other hand, is that the matter being technical, the AO ought to have exercised due care and circumspection and referred the matter to the VO u/s. 55A, which only would have brought forth the correct picture in view of the absence of any objective basis for valuation per the valuation report. The respective cases 4. The assessee s case, in sum, is that the matter of valuation as on 01/4/1981 (VD) the subject land having been acquired prior to that date, of the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscretion stands, in the given facts and circumstances of the case, including in the main the stated absence of any objective basis of valuation in the VR submitted, judicially exercised upon considering the material relied upon together with the explanations, if any, furnished by the assessee before him. The said non-reference, it may be noted, itself forms a part of the facts and circumstances of the case, in the conspectus of which the adjudication by the AO is to be reviewed by the revisionary authority from the standpoint of due, i.e., as warranted in the given facts circumstances, application of mind, or the lack of it. 5.3 The reason for reopening, which is not disputed, was the absence of any basis for the stated (returned) value in the valuation report by the valuer. The AO s enquiry in the assessment proceedings ought to have been therefore directed toward ascertaining this basis, if any, and issue a finding qua the same. It is only where he does so that he could be said to have made proper enquiry, i.e., as warranted under the circumstances and, consequently, of having applied his mind in the matter. Not only there is no whisper of the same in the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition potential for marketablility, population growth and other demographic trends that has been impart on the subject property. The valuation of the property is as follows:- Value of Property as on 01/04/1981 In my opinion the rate of well-developed agricultural land as on 01/04/1981 could be considered as Rs. 3,80,000/- per Hectare (about Rs. 1,54,000/- per acre). Hence the Fair Market Value of this property measuring 5.781 Hectare area of developed land as on 01/04/1981 was 5.781 @ Rs. 3,80,000 = Rs. 21,96,780 Say Rs. 21,97,000 (INR Twenty One Lac Ninety Seven Thousand Only). The stated basis, it may be noted, is a generalized statement, to be found in all valuation reports, without specifying any detail, and neither does the opinion expressed furnishes any basis of valuation. Shri Bardia, on this being observed by the Bench during hearing, would draw our attention to section SALES of the valuation report which, apart from reference to Part-II (of the report), relevant part of which stands reproduced hereinabove, also mentions as enquiry from the local people . He, however, could not answer as to how could one possibly remember the sale rate/s after over three dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chanical manner at a predetermined value, de hors any actual data or valid basis. How and, if so, to what extent, one wonders, could factors like situation, location, area, shape, size ratio of frontage to depth, return frontage, tenure condition, etc., all unstated, have a bearing on the value of a land, agricultural in nature and held for that purpose ? Why, he could not have possibly verified, so as to certify the description of the property as stated in his report, except of course it s status as an agricultural land as on 01/04/1981, even the basis of which is not stated in his report. Continuing further, land, it is to be appreciated, is a natural asset. It s cost would thus be its market value, i.e., at which it is purchased and sold. Of course, the cost of any development, where so, would increase it s cost to that extent for the owner, and may also impact it s sale value. The ownership of the subject land was, as stated, through a family partition dated 01/04/1971. There is no material on record toward it s value on that date, even as it admittedly formed a part of the assessee s balance-sheet. Admittedly, there are no sale instances at the relevant time (i.e., April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detailed guideline on valuation of immovable properties in 2009, which has to be followed by the approved valuers. A non-reference u/s. 55A may be justified where the AO, for reasons stated in his order which are non-existent, opines on valuation independent of VR, and which coincides or agrees with that by the RV, while, on facts, the latters report itself is found as without basis. Rather, if only the AO had applied his mind, he would have been able to discern that the valuation report being relied upon by the assessee is, we are afraid to say, a hash report and, in any case, without any basis of valuation, much less a valid basis, even as observed by the Bench during hearing. To us, it is a clear case of valuation being made by applying reverse indexation, i.e., by arriving at the value of land as on 01/04/1981, upon first determining the amount of capital gain that is to be disclosed. This is apparent from his order being sans any finding qua such basis, which also forms the reason for reassessment and, rather, without any deliberation thereon. The basis of valuation of the subject land (as on 01/04/1981) thus remains unstated and un-opined, much less examined, and whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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