Appeal partly allowed for statistical purposes. Adoption of sale consideration and fair market value remitted for fresh consideration. Disallowance of expenses upheld.

The appeal was partly allowed for statistical purposes. The Tribunal remitted the issues regarding the adoption of sale consideration and the estimation of fair market value as of 1.4.1981 back to the AO for fresh consideration. The disallowance of expenses claimed against professional receipts was upheld.

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Issues Involved:
1. Application of Section 50C of the IT Act, 1961, and adoption of sale consideration.
2. Consideration of property disputes for valuation.
3. Estimation of fair market value of the property as on 1.4.1981.
4. Disallowance of expenses claimed against professional receipts.

Issue-wise Detailed Analysis:

1. Application of Section 50C of the IT Act, 1961, and Adoption of Sale Consideration:
The assessee contested the adoption of the sale consideration at Rs. 67,36,715 (1/8 of Rs. 5,38,93,718) by the CIT(A) against the declared sale consideration of Rs. 25,00,000 (1/8 of Rs. 2,00,00,000). The assessee argued that the property was sold at a lower price due to illegal occupants, which reduced its market value. The AO substituted the transaction value with the valuation done by the Stamp Valuation Authority, which was lower than the valuation made by DVO. The CIT(A) partially accepted the assessee's contention by reducing the value of property No. 9 to 14 by Rs. 43,80,712 as per the DVO's valuation but upheld the valuation of property No. 15 & 16 as assessed by the Stamp Valuation Authority.

2. Consideration of Property Disputes for Valuation:
The assessee argued that the DVO and AO did not consider the illegal occupancy, which significantly reduced the property's market value. The CIT(A) relied on judgments from the Gujarat High Court, which were not directly relevant to the issue. The assessee cited judicial pronouncements from Chandra Bhan Vs. ACIT and Ravi Kant Vs. ITO, which were not distinguished or followed by the CIT(A). The CIT(A) rejected the assessee's claim, stating that the appellant did not respond to the DVO's letter and was not present during the property inspection. However, the Tribunal found that the assessee had responded to the DVO's notice and that the DVO and AO did not properly address the valuation considering the illegal occupancy. The Tribunal remitted the matter to the AO to call for a fresh report from the DVO and decide the issue afresh as per law.

3. Estimation of Fair Market Value of the Property as on 1.4.1981:
The assessee estimated the fair market value of the property as on 1.4.1981 at Rs. 1,54,285 (1/8 of Rs. 12,34,280), whereas the DVO estimated it at Rs. 84,078. The AO adopted the DVO's valuation. The CIT(A) rejected the assessee's claim, stating that the appellant did not respond to the DVO's letter. The Tribunal noted that the DVO's report did not properly address the valuation considering the illegal occupancy and remitted the matter to the AO to call for a fresh report from the DVO, including the valuation of both land and building, and decide the issue afresh as per law.

4. Disallowance of Expenses Claimed Against Professional Receipts:
The assessee claimed a sum of Rs. 11,500 as expenses against professional receipts, which was disallowed by the AO and confirmed by the CIT(A). The Tribunal found no infirmity in the lower authorities' order and dismissed this ground of appeal.

Conclusion:
The appeal was partly allowed for statistical purposes, with the Tribunal remitting the issues related to the adoption of sale consideration and the estimation of fair market value as on 1.4.1981 to the AO for fresh consideration. The disallowance of expenses claimed against professional receipts was upheld.

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