TMI Blog1996 (6) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... hereof. The said fair market value as on 1-4-1981 has been considered by the assessee at Rs. 8,48,000 on the basis of the report dated 15-9-1993 of one approved valuer Shri H. S. Nagaraja. After indexing the above-mentioned fair market value, the assessee has returned the indexed cost at Rs. 20,69,120 and the resultant amount of capital gains at Rs. 8,30,880 only. 2. The Assessing Officer, on the other hand, found out that in his wealth-tax returns, the assessee had returned the value of this property at Rs. 55,000 only as on 31-3-1976, 31-3-1977 and 31-3-1978 and thereafter at Rs. 90,000 only as on 31-3-1979, 31-3-1980, 31-3-1981 and 31-3-1982. Thereafter however, from assessment year 1983-84 onward, the assessee had returned the value of the property at Rs. 12,562 only by applying the provisions of rule 1BB inasmuch as the property was let out by the assessee in those later years. The Assessing Officer, therefore, proposed to recompute the amount of the capital gains by considering the amount of Rs. 90,000 only to represent the fair market value of the property as on 1-4-1981. After indexing the said amount, the net amount of capital gains was arrived at by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence incorrect. He has thereafter emphasised on the fact that the expert opinion about valuation of the property as given in the valuation report of the authorised valuer is hence required to be taken into consideration. Shri Devaraj has also relied on the following decisions in which cases it has been held that the valuation of an asset for the purpose of awarding compensation with regard to insurance business will not hold good for valuing the same assets for income-tax purposes : (i) CIT v. United India Life Assurance Co. Ltd [1966] 62 ITR 610 (Mad.) (ii) CIT v. Oriental Govt. Security Life Assurance Co. Ltd. [1983] 141 ITR 215/[1982] 10 Taxman 308 (Bom.), and (iii) CIT v. New India Assurance Co. Ltd [1980] 122 ITR 633/[1979] 1 Taxman 544 (Bom.). 5. The learned DR has, on the other hand, argued that the property was obtained by the assessee on partition of the HUF to which he had originally belonged. He furthermore argued that while disclosing the value of the property for wealth-tax purposes, the assessee was assisted by a Chartered Accountant and hence, it must be considered that the valuation as shown in the wealth-tax returns was a well-considered one. As regards the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Tribunal had held in that case that there was no estoppel on the assessee to contend that the value of the property for income-tax purpose would be at the higher figure of Rs. 5 lakhs in spite of the assessee herself having returned the valuation in the wealth-tax return at a much lower figure. The AP High Court did not find any error in the reasoning of the Tribunal. However, in doing so, the AP High Court discussed that it was guided by two particular considerations. In the language of the AP High Court : " In the first place, we are unable to get the necessary clarification whether the sum of Rs. 2,50,000 was the valuation declared by the assessee and accepted by the Department or whether the Department enhanced the valuation of Rs. 2,50,000 made by the assessee for the assessment year 1957-58. Secondly, the Tribunal referred to the fact that there was a reduction in the rental income as a result of intervention of the rent control authorities from Rs. 2,600 to Rs. 1,450 per month and, therefore, the valuation as on January 1, 1954, must be made with reference to the above-mentioned rent determined by the Rent Controller. " It is thus clear that the question of the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the wealth-tax assessments of the said sister for the subsequent years 1960-61 and 1961-62, the claim of the assessee that jewels worth Rs. 1 lakh had not passed but only those of the value of Rs. 3,350 had been left by her brother was negatived on the ground that no tangible material to substantiate the contention was produced. On a reference to the High Court, their Lordships held that the assessee was not estopped from putting forward in the subsequent years the claim that she had in her possession only jewels worth Rs. 3,350 by producing acceptable material before the Tribunal. It was however, ultimately, held by the High Court that as no acceptable evidence had been adduced to substantiate that contention to displace the order of the Tribunal in respect of the WT assessment for assessment year 1959-60 and the view of the High Court in the estate duty proceedings of R, the Tribunal was right in its view that the assessee had inherited jewels worth Rs. 1 lakh on the death of R and these continued in her hands even in the assessment years 1960-61 and 1961-62. It may thus be seen that the issue of estoppel in this particular case was decided by the High Court in the context of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the wealth-tax purposes. The different Courts have held at various points of time that there should be some consistency in the matters of valuation of things like assets, closing stock, etc., in the nearby years and also in proceedings under the different direct tax enactments. A similar view with regard to transactions in general, has been expressed by the Madras High Court in the case of K. V. Iyer v. CIT [1995] 215 ITR 461. We are, thus, of the view that the valuation as disclosed by the assessee in the wealth-tax return has got to be taken into consideration for evaluating the same property and on the same date in connection with the determination of capital gains in the income-tax proceedings. 10. Even the basis for showing such a higher valuation, being the report of the approved valuer, is also not free from flaws and lacunae as has been discussed in detail by the CIT(A) in his impugned appellate order. He has discussed very well that the different instances of sale as cited by the approved valuer in his report mostly relate to properties situated at 4th Cross, which area was much more developed at the relevant point of time than the area being 36th Cross, on which the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rar's Office, Jayanagar) the ultimate sale of the property in favour of the assessee was completed. The CIT(A) states thereafter that in both these documents, the value of the property must have been mentioned but unfortunately the assessee did not disclose such valuations before the income-tax authorities at any stage. The CIT(A) has been of the opinion that the value of this very property as shown in these two registered documents would give a much better idea about the valuation of the property as on 1-4-1981. We agree with the CIT(A) in this regard. The assessee has not at all tried to come up clearly with all the relevant facts like the valuations of the property shown in these two documents, which would have thrown much more light on the valuation aspect. The learned CIT(A) has also mentioned certain restrictions with regard to the above property likes restriction on sub-dividing the plot into smaller plots, restriction on erecting more buildings than one and also restriction on raising multi-storeyed flats on the property, etc. The CIT(A) has aptly discussed that these restrictions finding place in the covenant of sale would go to reduce the price of the property considera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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