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TMI Blog2024 (7) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... y upheld the computation of income as made by the Ld. A.O. in the assessment order u/s 143(3) of the Act without accepting and considering the revised computation. 2. That, the Ld. CIT(A) further erred on facts and in law in upholding the action of the Ld. A.O. in not having accepted and denied to have taken any cognizance of the valuer's report submitted by the assessee from a Govt. Regd. Approved Valuer for the purpose of indexed cost of acquisition and FMV of the property sold simply on the suspicion of guess work and to provide undue tax advantage to the assessee. 3. That, the Ld. A.O. while not accepting the valuation report from a Govt. regd. valuer allegedly made on an estimate basis erred in law in not having referred the valuation of the said property to the DVO as required u/s 55A r.w.s. 142A of the Act before finally computing the capital gains/loss in the hands of the assessee and the Ld. CIT(A) has illogically upheld such unlawful action of the AO on the sole allegation that the valuer visited the property after the assessee sold the same. 4. That, without any prejudice to the above, the Ld. CIT(A) erred in having upheld the LTCG worked out by the Ld. AO on e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jhalda (Purulia) and Aurangabad bearing Dag Nos. 206, 207 & 211 from his father, who acquired the same before 01.04.1981. For the property at Jhalda, in the original computation of income, the assessee computed the capital loss on the basis of actual consideration of Rs. 35,00,000/- received by him which was less than the value adopted by the stamp duty authority. He had shown the stamp duty value of the property at Rs. 35,00,000/- and the Fair Market Value (FMV) as on 01.04.1981 at Rs. 2,47,500/- on estimated basis without obtaining any report from the registered valuer. He, accordingly, showed long term capital loss of Rs. 4,20,418/- in the original computation on the sale of the impugned property on 09.12.2013. Thereafter, the assessee obtained valuation report dated 03.10.2016 of the property from a registered chartered valuer and during the scrutiny assessment proceedings, he accordingly rectified the FMV as on 01.04.1981, which was taken earlier at Rs. 2,47,500/- on estimated basis, to Rs. 6,33,800/- as per the registered valuer's report. In the revised computation, the assessee had shown capital loss of Rs. 9,238/- on account of sale of the said property by showing value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the year under appeal suffers from illegality. For the property at Aurangabad (Dag No. 211), in the original computation of income, the assessee computed the capital gains on account of sale of the property on 06.12.2013 on the basis of actual consideration received by him as stamp duty value of Rs. 27,00,000/- and FMV as on 01.04.1981 at Rs. 6,42,700/- on estimated basis without obtaining any report from the registered valuer, which was less than the value adopted by the stamp duty authority at Rs. 56,52,375/-. Thereafter, the assessee obtained valuation report dated 03.10.2016 of the property from a registered chartered valuer and during the scrutiny assessment proceedings, he accordingly rectified the FMV as on 01.04.1981 taken earlier at Rs. 6,42,700/- on estimated basis to Rs. 5,92,000/- as per the registered valuer's report. In the revised computation, the assessee had shown capital gains on account of sale of the said property by showing value of the property at Rs. 56,52,375/- as considered by the stamp duty authority and indexed cost of acquisition of the property at Rs. 55,58,880/- on the basis of the FMV determined by the registered valuer and thus offered capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the verbal information provided by the owner without any documentary evidence. It is claimed that while filing the return of income, the assessee valued the properties as per the SRO rates and these are the authenticated values and the assessee has claimed indexed cost of the acquisition based on the SRO values. In view of the above, the Ld. CIT(A) was of the view that he has no reason to interfere with the observations of the AO and the working of the LTCG made by the AO was upheld. On account of disallowance of capital loss of Rs. 2,07,054/- of earlier year, the Ld. CIT(A) dismissed the ground of appeal of the assessee by observing that the assessee has not made the long term capital loss in the return of income filed for the A.Y 2012-13 however, he incurred the loss on the transaction. As per the provisions of Sec. 80, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139, shall be carried forward and set off under Sec. 72 or subsection (2) of section 73 or sub-section (2) of section 73A or sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A. In view of the above, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do, and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub-section (1) and subsections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the [Assessing Officer] under sub-section (1) of section 16A of that Act. Explanation.-In this section, "Valuation Officer" has the same meaning, as in clause (r) of section 2 of the Wealth Tax Act, 1957 (27 of 1957)." 6. The Ld. AR stated that if the Ld. AO does not refer to the DVO as he is duty bound to refer, he should have accepted the registered valuer's report or fair market value as on 01.04.1981 which was earlier filed on estimated basis and on being apprised with the legal rights, the assessee got the valuation done for the properties and filed the same but the reports were rejected by the AO which is not permissible as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (iii) of the Explanation thereof "indexed cost of acquisition" means an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the 1st day of April, 1981, whichever is later. Thus, since the assessee had filed a valuation report and if the Ld. AO was of the opinion that the value so claimed is at variance with its Fair Market Value, as per clause (a) of Section 55A, the Ld. AO should have referred the valuation of capital asset to the Valuation Officer instead of outrightly rejecting the valuation reports and without pointing out any error in the rate or the area adopted for the valuation. Thus, the order of the Ld. CIT(A) is set aside and the AO is directed to adopt the FMV of the properties as per the rates adopted by the registered valuer and which reports were filed during the course of the assessment proceeding as he did not form any opinion that the value so claimed was at variance with the FMV but outrightly rejected the report of the registered valuer which he was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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