TaxTMI 
TaxTMI 
2010 (12) TMI 232
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....ture on the AO, report of the registered valuer has to be considered on merits which the CIT(A) failed to consider". Grounds No.5, 6 & 7 are in support of the grounds of appeal No.4". 3. Grounds of appeal No.1, regarding adoption of valuation of land as on 1.4.1981 for computation of capital gain. During the year under consideration, the assessee sold the land situated at Kirol Village, Ghatkopar (E), Mumbai vide development agreement dated 12.12.2003. The sale consideration of this land amount to Rs. 12,71,00,000 which is the value adopted by the Stamp duty Authority for stamp duty purpose. In computation of the long term capital gain, the assessee has taken the cost of acquisition of the land as on 1.4.1981 at Rs. 73,33,630 based on the report of the Registered Valuer. The AO noted that the registered valuer has adopted the land rate at Rs. 1180 per sq. mt. for 5364 sq.mt corresponding to the unused FSI value of land. However the registered valuer has also estimated the cost of construction/structure occupied by the assessee only at Rs. 9,41,760. Another element which is shown in cost of acquisition of land is pertaining to capitalized value of rents, from tenants occupying....
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....value of the asset returned in accordance with the estimation made by the registered valuer is more than the fair market value. He has filed a copy of the reference letter along with the proforma in Form No. SB-I and submitted that in the relevant column of Form the A.O. has expressed his opinion. The ld. DR has also relied upon the order of this Tribunal in the case of Vijay Kumar M. Shah v. Dy. CIT (2010) 2 ITR 116 (Mum.)(Trib.) 6. The ld. DR has further contended that when DVO has adopted the rate after considering the sale instances of the property at the relevant point of time in the same area and the assessee was given an opportunity to cross-examine the DVO then there cannot be any mistake or illegality in the report of the DVO. The learned DR has futher submitted that as per the provisions of section 55A(b)(ii), if the AO is of the opinion that having regard to the nature of the assets and in other circumstances, it is necessary to refer the value of the capital asset to the valuation officer to ascertain the fair market value of the capital asset then the AO has the jurisdiction and power to make the reference to the valuation officer for valuation of the capital asset.....
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....d (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the [Assessing] Officer under sub-section (1) of section 16A of that Act. Explanation.-In this section, "Valuation Officer" has the same meaning, as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).]" 9. The provisions of section 55A manifest that for the purpose of computation of income from capital gain the AO has jurisdiction to take the expert opinion for ascertaining the FMV of the capital asset. The circumstances as set out in the provisions inter-alia in case, if the AO is of the opinion that having regard to the nature of the assets and other relevant circumstances, it is necessary to refer the valuation of the capital asset to the valuation officer with a view to ascertain the FMV for the purposes of computation of capital gain. Thus, it is clear from the sub-clause (ii) of clause (b) of section 55A that all other cases/instances of the FMV of the asset which are not specifically provided under....
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....e as well as the valuation report of the DVO are only a part of the assessment proceedings and cannot be taken as a decision of the A.O. or of DVO. Thus, there is no requirement of any long drawn reasoning for expressing the opinion by the AO to initiate the reference of the valuation of the capital asset to the valuation officer. There are decisions of this Tribunal on both sides. This Tribunal in the case of Vijay Kumar M. Shah v. Dy. CIT (supra) has taken a view against the assessee after considering the decisions of this Tribunal in the case of Ms. Rubab M Kazerani v. JCIT (supra) (Third Member). We further note that in the subsequent decision dated 06.04.2010 in ITA No. I.T.A. No. 746/Mum/2005 and I.T.A. No. 883/Mum/2005 in the case of M/s. Killick Nixon Ltd., this Tribunal taken a view against the assessee on this issue after considering the decisions relied upon by the assessee before us. 11. Even otherwise, for the sake of argument, if it is presumed that the reference made by the AO is not as per the provisions of section 55A, the valuation report of the DVO will not loose/reduce its relevancy being a good piece of evidence on the issue of FMV of the capital assets as o....
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....learned Chief Justice Sir Lawrence Jenkins says at page, 500 : Mr. Das .......... In Emperor v. Allahabad Khan .......... In Kuruma v. The Queen (2) where the Privy Council had to consider the English Law of Evidence in its application to Eastern Africa, their Lordships propounded the rule thus : "The test to be applied, both in civil and in criminal cases, in considering whether evidence is admissible is whether it is relevant to the matters in issue. If it is, it is admissible and the court is not concerned with how it was obtained." Some.... Certain... In Kuruma's case, Kuruma was searched by two Police Officers who were not authorised under the law to carry out a search and, in the search, some ammunition was found in the unlawful possession of Kuruma. The question was whether the evidence with regard to the finding of the ammunition on the person of Kuruma could be shut out on the ground that the evidence had been obtained by an unlawful search. It was held it could not be so shut out because the finding of ammunition was a relevant piece of evidence on a charge for unlawful possession. In a later case before the Privy Council in Herman King v. The Queen (....
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....dy it was seized and, therefore, no Writ of Prohibition in restraint of such use could be granted. It must be therefore, held that the High Court was right 'in dismissing the two Writ Petitions. The appeals must also fail and are dismissed with costs. 12. Thus, in view of the decision of the Hon'ble Supreme Court in the case of Pooran Mal v. Director of Inspection (Investigation) (supra), the valuation report of the DVO is a relevant and admissible evidence on the matter in issue irrespective of illegality of reference made by the AO. Thus, the issue of validity or illegality of reference made by the AO u/s 55A has become purely academic in nature. On merits 14. In the case in hand, the AO has adopted the valuation report of the DVO, whereas the CIT(A) has not decided the issue on merits but held that the AO has no jurisdiction to refer the valuation of the asset to the DVO. Therefore, we are of the view that this issue required to be re-examined in the light of the above observations. Accordingly, we set aside the issue of FMV as on 1.4.1981 to the record of the AO to decide the same by taking into account the registered valuar's report as well as the DVO's report and the....
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....09. The major reason was disputed with the tenant which was settled vide consent terms in the Small Cause Court. He has further contended that the assessee acquired substantial domain and control over the property by making the entire purchase price at the time of entering into the development agreement. Thereby purchased new residential unit. He has relied upon the decision of the Hon'ble Jurisdictional High Court in the case of ITO v. M/s Hilla J.B. Wadia [1995] 216 ITR 376 (Bom)). The ld. AR has also relied upon the circular No.472 dated 15.10.1986 reported in 162 ITR (St.41) and submitted that the allotment of the flat is treated as construction. Thus, the assessee has purchased a new residential house while entering into the development agreement. The learned AR has further submitted that the assessee being a HUF has purchased more than one residential units out of sale of residential house and therefore, the assessee is entitled for deduction u/s 54 in respect of three flats which are to be considered as one residential house as per the requirement of the assessee. He has relied upon the decision of the Hon'ble Karnataka High Court in the case of D. Ananda Basappa (2009) 309 ....
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....spect of any one house as held by the Hon'ble Bombay high Court in the case of K C Kaushik (supra). The view taken by us in this para is also justified by the decision of the Hon'ble Calcutta High Court in the case of B B Sarkar v. CIT (1981) 132 ITR 150, wherein purchase of ground floor of a house and thereafter construction of first floor ground floor of a house and thereafter construction of first floor was held to be an investment in one house only. Their Losrdships at page 156 observed as under : "If a floor is constructed to the new house or if it is renovated it remains a house and this will not be two houses" 11. In view of the above discussion, it is held that exemption under sections 54 and 54F of the Act would be allowable in respect of one residential house only. If the assessee has purchased more than one residential house, then the choice would be with assessee to avail the exemption in respect of either of the houses provided the other conditions are fulfilled. However, where more than one unit are purchased which are adjacent to each other and are converted into one house for the purpose of residence by having common passage, common kitchen, etc, then, it woul....
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....round to hold that the apartment is not a one residential unit. The fact that the assessee could have purchased both the flats in one single sale deed or could have narrated the purchase of two premises as one unit in the sale deed is not the ground to hold that the assessee had no intention to purchase the two flats as one unit". 21. Thus, it is clear from the facts recorded by the hon'ble High Court in the said decision that the two residential flats were converted into one residential house by modification and necessary alteration which is not in the case in hand. 22. The appeal of the revenue is partly allowed. CO No. 211Mum/2007 23. The assessee in the cross-objection has raised the following grounds : "1. Under the facts and circumstances of the case and in law, the ld. CIT(A) erred in confirming addition of Rs. 28,11,820 in the hand of HUF instead of three individuals being compensation received by the three co-parceners as individuals being occupants like other tenants of the property for the transit period for the temporary flats provide by the developers to them under the provisions of MHADA Act; 2. In any event, under the facts and circumstances of the ....
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....uthority have been done when the agreement regarding these flats was executed between the developer and the assessee and its co-parceners. Thus, it is clear that the additional evidence in the shape of the registered agreement between the developer and the assessee were not available at the time of the assessment order as well as the impugned order of the CIT(A). Under these circumstances, and in view of the decision of the Hon'ble Supreme court in the case of The National Thermal Power Company Ltd. (229 ITR 383), we admit the additional ground raised by the assessee. As we have discussed above, the additional evidence was not available before the lower authorities due the subsequent execution and registration of the agreement. Accordingly, in the interest of justice and fair play, we set aside the additional issue raised by the assessee in the additional ground to the record of the AO for verification of the evidence filed by the assessee and decide the same as per law. Original ground raised in the Cross-objection 27. Grounds Nos. 1, 2, 4 and 5, regarding the addition of Rs. 28,11,820 being the sale consideration in the shape of compensation in the form of accommodation pro....
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....nature of possession whether the premises were provided to the individual coparceners or to the HUF. He has relied upon the orders of the lower authorities. 31. We have considered the rival contentions and relevant record. It is undisputed that the property in question was transferred by the HUF to the developer and the HUF apart from the cash consideration received three flats as well as three accommodations during the transit period. We are not convinced with the contentions of the assessee that these are individual accommodations given to the co-parceners in their individual capacity and not to the HUF. The developer has provided the accommodation for the transit period only because the assessee- HUF has transferred the property in question and the accommodation was required for the HUF members. HUF itself is not a living person who requires an accommodation for residence but it is the members of the HUF have to occupy the accommodation. Therefore, the members and co-parceners of the HUF were provided the accommodation by the developer only because of being the members of the co-parceners of the HUF and not in any independent and individual capacity. The said transaction is b....