Tribunal directs reassessment of property valuation, dismisses Cross Objections

The Tribunal allowed the revenue's appeal for statistical purposes and dismissed the Cross Objections (CO) filed by the assessee. The Assessing Officer (AO) was directed to re-examine the issue de novo, considering all relevant factors, including the valuation report by the registered valuer, making a reference to the DVO, and examining comparable properties in the same locality. The CO filed by the assessee was deemed infructuous, and the case was remitted to the AO for fresh adjudication in line with the principles outlined in the case of Ashwin Joshi.

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Issues Involved:
1. Condonation of delay in filing Cross Objections (CO).
2. Determination of Fair Market Value (FMV) of properties as on 01/04/1981 for computing long-term capital gains.
3. Validity of the valuation report by the Government Registered Valuer.
4. Adoption of FMV by the Assessing Officer (AO) and CIT(A).

Summary:

Condonation of Delay:
The assessee filed the CO with a delay of 71 days. The Tribunal, after considering the reasons and submissions, condoned the delay and admitted the CO for adjudication.

Determination of FMV:
The AO noticed that the fair market values of the properties sold by the assessee were higher than the consideration recorded in the registered sale deeds. The AO adopted the FMV as per the registration authorities for determining long-term capital gains, leading to the reopening of the assessment u/s 147 and passing an order u/s 143(3) r.w.s. 147.

Valuation Report by Government Registered Valuer:
The assessee claimed the FMV as on 01/04/1981 at Rs. 1800/- per sq. yard, supported by a valuation report from a Government Registered Valuer. However, the AO found the report to be based on local enquiries and not supported by comparable sales instances, thus treating it as a self-serving document. The AO adopted the FMV of Rs. 150/- per sq. yard as per the SRO.

Adoption of FMV by AO and CIT(A):
The CIT(A) directed the AO to recompute the long-term capital gains by adopting the FMV of land as on 01/04/1981 at Rs. 1200/- per sq. yard, considering the location, size, and potential of the property. The CIT(A) observed that the AO did not cite any comparable instances and relied solely on the basic value register, which cannot be the basis for determining FMV.

Appeal and Cross Objections:
The revenue appealed against the CIT(A)'s order, arguing that the CIT(A) arbitrarily adopted the FMV at Rs. 1200/- per sq. yard without any supporting evidence. The assessee, in her CO, contended that the FMV should be Rs. 2000/- per sq. yard as determined by the registered valuer.

Tribunal's Decision:
The Tribunal noted that the valuation report by the registered valuer was not based on comparable cases and relied on local enquiries. Following the decision in the case of Ashwin Joshi, the Tribunal set aside the CIT(A)'s order and remitted the issue to the AO for fresh adjudication. The AO was directed to consider the registered valuer's report, make a reference to the DVO, examine the inherent quality of the property, and consider any comparable properties in the same locality. The CO filed by the assessee was dismissed as infructuous.

Conclusion:
The appeal of the revenue was allowed for statistical purposes, and the CO filed by the assessee was dismissed. The AO was directed to re-examine the issue de novo, considering all relevant factors and providing a reasonable opportunity of being heard to the assessee.

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