ITAT decision addresses FMV, evidence, depreciation, and set-off issues in tax appeal.

The ITAT partly allowed the Assessee's appeal, addressing discrepancies in FMV adoption, admission of additional evidence, and set off of unabsorbed depreciation. The ITAT directed the AO to adopt the cost of acquisition at Rs. 25 per sq ft based on the Valuation Report, and allowed the set off of unabsorbed depreciation against the assessed income. The Assessee's claim for set off of carry forward business loss was rejected. The issue of interest levy under various sections was deemed consequential, and the objection to the initiation of penalty proceedings was dismissed as premature.

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Issues involved:
1. Fair Market Value (FMV) adoption discrepancy
2. Admission of additional evidence at appellate stage
3. Set off of carry forward business loss
4. Set off of unabsorbed depreciation
5. Levy of interest under various sections
6. Initiation of penalty proceedings

1. Fair Market Value (FMV) adoption discrepancy:
The Assessee challenged the adoption of FMV at Rs. 20 per sq ft instead of the claimed Rs. 30 per sq ft as on 01/04/1981. The Assessee argued that the AO should have referred the valuation to the DVO and not estimated the FMV unilaterally. The ITAT directed the AO to adopt the cost of acquisition at Rs. 25 per sq ft, considering the Valuation Report submitted by the Assessee. The ground raised by the Assessee was partly allowed.

2. Admission of additional evidence at appellate stage:
The Assessee contested the rejection of sale instances and valuation report submitted at the appellate stage, citing unfair treatment and a breach of Principles of Natural Justice. The ITAT considered the submissions and directed the AO to adopt the cost of acquisition at Rs. 25 per sq ft based on the Valuation Report, partially allowing the Assessee's claim.

3. Set off of carry forward business loss:
The Assessee's claim for set off of carry forward business loss against the assessed income was rejected as it was conceded to be covered against the Assessee.

4. Set off of unabsorbed depreciation:
The Assessee challenged the partial confirmation of the AO's action regarding unabsorbed depreciation, arguing that the authorities failed to consider submissions and commercial viewpoints. The ITAT, following the decision in General Motors India (P) Ltd. vs. DCIT, directed the AO to allow the set off of unabsorbed depreciation against the assessed income, thereby allowing the Assessee's claim.

5. Levy of interest under various sections:
The issue of interest levy under sections 234A/234B/234C & 234D was deemed consequential in nature.

6. Initiation of penalty proceedings:
The Assessee's objection to the initiation of penalty proceedings under section 271(1)(c) was dismissed as premature.

In conclusion, the ITAT partly allowed the Assessee's appeal, addressing discrepancies in FMV adoption, admission of additional evidence, set off of unabsorbed depreciation, and directed the AO to make necessary adjustments. The decision was based on legal interpretations and precedents, ensuring fairness and justice in the assessment process.

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