Appeal partly allowed on property valuation for capital gains calculation. Fair market value directed at Rs. 6,25,590.

The appeal was partly allowed based on the valuation of the property for calculating capital gains. The appellant's plea was accepted, directing the Assessing Officer to adopt the fair market value at Rs. 6,25,590 as of 01.04.1981 and recalculate the capital gain with necessary indexation. The order of the Commissioner of Income Tax (Appeals) was set aside for consistency with a decision in a coowner's case.

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Issues Involved:
1. Valuation of property for calculating capital gains.

Analysis:
Issue 1 - Valuation of property for calculating capital gains:
The appellant contested the addition of Rs. 29,54,102 under section 50C for an Agreement of Development, where the market value was adopted as Rs. 1,68,85,645 by the Income Tax Department, higher than the declared value of Rs. 90,34,200. The first ground was not pressed and rejected. The second ground focused on the valuation of the property. The Assessing Officer (AO) referred the matter to the District Valuation Officer (DVO) to ascertain the fair market value as on 01.04.1981 at Rs. 5,21,913, differing from the value declared by the registered valuer at Rs. 16,91,025. The issue was discussed in a similar case, where it was held that the reference to DVO was invalid if the value declared by the assessee was higher than the fair market value. Citing various decisions, it was concluded that the AO's reference to DVO for valuation was not valid, and the FMV declared by the assessee should be accepted. The appellant's plea was allowed, directing the AO to adopt the FMV at Rs. 6,25,590 as on 01.04.1981 and recalculate the capital gain accordingly, with necessary indexation. The order of the CIT(A) was set aside, following the decision in the coowner's case for consistency.

In conclusion, the appeal was partly allowed based on the valuation of the property for calculating capital gains.

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