TaxTMI 
TaxTMI 
2014 (3) TMI 60
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....capital gains, the assessee had worked out and deducted indexed cost of acquisition of Rs.4,03,26,616/-, which read as under :- Indexed cost of 12.97 Kattah land based on cost as on 1.4.1981- Rs.3,50,000 x 551/100 = Rs. 2,50,12,645/- Indexed cost of 14.72 Kattah land purchased on 12.08.97 from Nita Bose at Cost Rs.91,99,500/- x 551/331 = Rs. 1,53,13,971/- Rs.4,03,26,616/- Assessing Officer made a reference to the Departmental Valuation Officer for fixing the fair market value as on 1.4.1981. According to him, assessee had showed excessive cost for 12.97 Kottach land as on 1.4.1981, for indexation. Departmental Valuation Officer gave a report on 24.12.2010 by which he fixed the cost as on 1.4.1981 of 12.97 Kattah of land at Rs.11.90 lakhs. Accordingly the indexed cost of acquisition of this land came to Rs.65,56,900/-. The total indexed cost of acquisition thus came to Rs.2,18,70,871/- against Rs.4,03,26,616/- shown by the assessee. There was no dispute with regard to the indexed cost of 14.72 Kattah of land purchased by the assessee on 12.08.1997 which was a part of the total 27.69 Kattah of land sold. Since indexed cost of acquisition assessed by the....
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.... For arriving at this fair market value, assessee had relied on valuation report given by one Shri Mallar Mukherjee, Registered Valuer, copy of which has been placed at pages 34 to 46 of the paper book filed. In his report it has been mentioned by the Registered Valuer that on local enquiry, the price of land in the concerned area, during 1981-1982 was between Rs.3,50,000/- and Rs.4,00,000/- per Kattah. This conclusion appears at page 42 of the paper book. As against this, opinion of the Assessing Officer was that such fair value was very high since assessee was holding the property since 1979. Based on this reasoning he had referred the valuation to the DVO. Copy of the DVO's report is placed at pages 69 to 84 of the paper book. DVO in his report has clearly mentioned that reference to him was made by the Assessing Officer under section 55A of the Act. He determined the value of 12.97 Kattah of land as on 1.4.1981 at Rs.11,90,000/-. At this juncture, a look at section 55A becomes necessary. This is reproduced hereunder :- "55A : With a view of ascertaining the fair market value of a capital asset for the purposes of this chapter, the Assessing Offic....
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....ot prepared on the basis of any sale instance. Naturally the AO proceeded on the basis of the valuation of the Departmental Valuer which made a lot of difference in assessing tax liability. Basing Departmental valuation report the AO came to conclusion that the assessee had overstated the value of the opening stock at Rs.2,26,54,893/- and instead of accepting the loss, as shown in the return the AO has determined the net profit of Rs.6,09,025/-. Thus the conclusion arrived at by the AO based on valuation. Therefore, the point raised before the CIT(A) that the valuation was got to be done by the AO without compliance of s. 55A of the !T Act, 1961. According to the assessee reference to the valuation officer is without jurisdiction as per- condition for reference was not satisfied. According to the assessee before making any reference the AO has to form opinion that the value so claimed is less than the fair market value without doing so reference is without jurisdiction. On this limited point the CIT(A) allowed the appeal and held that the reference was not done by the AO in compliance of provisions of sec. 55A of the said Act. The Tribunal also upheld this finding. &....
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....acquisition with the value fixed by the DVO, therefore, stands quashed. 9. The only other effective ground taken by the assessee which is in its ground no. 4 is regarding an addition of Rs.20,00,000/- claimed by it as an expenditure while computing the long-term capital gains. 10. Claim of the assessee was that he had paid a sum of Rs.20,00,000/-to one Shri Nikhil Chanda who was a confirming party in the sale. However, Assessing Officer was not inclined to accept the claim. Assessee's appeal in this regard before the ld. CIT(Appeals) was also not successful. Ld. CIT(Appeals) held that the claim of Rs.20,00,000/- was not a genuine. 11. Now before us, ld. AR strongly assailing the order of authorities below submitted that the vendors of the property were assessee and Smt. Nita Bose. According to him, the agreement entered into by the assessee and Smt. Nita Bose with the purchaser M/s. Madgul Services Pvt. Ltd., copy of which was placed at pages 15 to 33 of the paper book, clearly mentioned that Shri Nikhil Chanda was a confirming party. According to him, payment of Rs.20,00,000/- was directly made to Shri Nikhil Chanda and this was evident from page 28 of the paper book.....