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TMI Blog2024 (1) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... comparative sale instances. The Ld. CIT (A) has conveniently misstated the facts of the case of Nellore Straw Brothers relied upon by the appellant stating that the same are different from the case of the appellant. The Ld. CIT (A) further erred by not accepting the plea of reverse indexation method upheld by judicial precedent. Hence the fair market value as ascertained by the registered valuer is prayed for restoration. 3. The Ld. CIT (A) has erred in not allowing the cost of improvement as claimed by the appellant. The Ld. CIT (A) has wrongly differentiated the case of ITO v, Anilkumar 56 Taxmann.com 320 with the case of appellant even though it is held that the cost of improvement cannot be declined only for the want of evidence. He disregards the fact that for a property worth Rs.3 cr. Improvement cost of Rs. 9L is a meager amount and should not be denied. Thus the disallowance sustained by the Ld. CIT (A) suffers from legal infirmity. The same may kindly be deleted. 4. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of appeal." 3. The assessee has taken the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of improvement of Rs. 9,00,000/- while computing the long term capital gain. 5. In appeal before ld. CIT(A), he observed that the said land was agricultural land in 01-04-1981 and the said land was converted into non-agricultural land in the current year only. Further, the ld. CIT(A) observed that during the course of appellate proceedings, the assessee produced "registration certificate of valuer" however, the said certificate only gave permission to the valuer for valuation of immovable properties "other than agricultural land", whereas in the assessee's case, valuation of land as on 01- 04-1981 was required to be made for "agricultural land" and not for non-agricultural land. The ld. CIT(A) further observed that the valuer on which reliance was placed by the assessee had estimated the value of the land as on 01-04-1981 @ Rs. 163.20 per square meter without any basis . The valuer had not given any comparative sale instances as given by the DVO. The valuer appointed by the assessee had arrived at value of cost of acquisition of land by adopting reverse formula i.e. by taking base of sale rate in current year and applying inflation index. However, the aforesaid method for valuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this issue has been dealt by the ld. CIT(A) in the appellate order wherein similar arguments were made but were rejected by ld. CIT(A) with the following observation:- "Appellant has objected the above computation by AO and also stated that sale transaction is prior 01/07/2012 and as per provisions of said section AO can refer to DVO only when the value of the asset as claimed by the appellant is in accordance with the estimate made by a registered valuer, if the AO is of opinion that the value so claimed is less than its fair market value. On careful consideration of entire facts, it is observed that though appellant had sold the land was non agriculture land, said land was agriculture land only on 01/4/1981 and said land became non agriculture land in current year. Though appellant has submitted the valuation report, AO has observed that valuer is not approved registered valuer by the Income Tax department and valuer is not authorised to value agriculture land by Government of Gujarat. During the course of appellate proceedings, appellant has submitted registration certificate of valuer by office of CCIT, Ahmedabad II vide letter dated 03/02/2004. However, this certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, we are of the considered view that there is apparently no justification for considering the cost of acquisition of the aforesaid property as non-agricultural land as on 01-04-1981, when such property was agricultural property as on the date of acquisition and such property had been converted into non-agricultural property only during the impugned year under consideration, prior to sale. Further, the valuation adopted by the assessee has not given any comparative sale instances and has simply arrived at value of cost of acquisition of land by adopting reverse formula i.e. by taking sale rate of non-agricultural property in the current year and applying inflation index. However, we are of the considered view that ld. CIT(A) has correctly observed that the land sold in current year is non-agricultural land but the land was agricultural land as on 01-04-1981 and therefore cost of land as on 01-04-1981 cannot be determined based on sale rate of non-agricultural land for the current year and thereafter applying reverse formula thereon. In our view, the ld. CIT(A) has correctly concluded that fair value of land adopted by the valuer appointed by the assessee is incorrect and that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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