ITAT remits FMV determination, stresses expert opinion & transactions for accurate assessment.

The ITAT partially allowed the Revenue's appeal, remitting the determination of the property's fair market value (FMV) as of 01.04.1981 back to the AO for reevaluation based on a valuation report from the DVO. The decision emphasized the importance of expert opinion and consideration of actual transactions in the vicinity for an accurate assessment of FMV.

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Issues:
1. Determination of fair market value of property as on 01.04.1981 for computation of capital gains.

Analysis:
The appeal was filed against the order of the CIT(A)-I, Kochi pertaining to the assessment year 2011-12. The Revenue raised grounds challenging the CIT(A)'s direction to adopt Rs. 50,000/- per cent as the fair market value (FMV) as on 01.04.1981. The CIT(A) observed that the assessing officer relied on a registered document dated 19.01.1980 to estimate the FMV as on 01.04.1981, restricting it to Rs. 3000 per cent. The CIT(A) compared this case with a previous Tribunal decision involving a similar issue and directed the AO to adopt Rs. 50,000/- per cent as the FMV based on the earlier Tribunal ruling. The Revenue appealed this decision, arguing that the Tribunal's value determination in the previous case was not identical to the present case. The ITAT held that the FMV should be determined by the DVO instead of the AO/CIT(A) without expert opinion, remitting the issue back to the AO for fresh assessment based on technical expert evaluation, considering actual transactions in the vicinity of the property.

The facts revealed that the property was originally acquired by a partnership firm and later transferred to a private limited company, which was then amalgamated with the assessee company. The land's value significantly increased due to improvements and commercial development after NH 47 was opened in 1980. The assessee argued that the FMV determined by the AO at Rs. 2992/- per cent as on 01.04.1981 was undervalued. Discrepancies between the comparable land used by the AO and the assessee's property were highlighted. The ITAT considered both parties' contentions and decided to vacate the CIT(A)'s findings, directing a valuation report from the DVO for a more accurate determination of the property's FMV as on 01.04.1981. The ITAT emphasized the importance of considering actual transactions in the vicinity for a fair assessment.

In conclusion, the ITAT partially allowed the Revenue's appeal for statistical purposes, remitting the issue of determining the property's FMV as on 01.04.1981 back to the AO for reevaluation based on a valuation report from the DVO. The decision stressed the necessity of expert opinion and consideration of actual transactions in the vicinity for an accurate assessment of the fair market value.

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