AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 128
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....e grounds of appeal raised in ITA No. 6081/Del/2013 are as follows: 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in directing the AO to adopt, for computation of capital gains, the cost of acquisition as on 01.04.1981 as declared by the assessee on the basis of the Fair Market Value (FMV) estimated by a Registered Valuer, in precedence over the FMV as on 01.04.1981 as estimated by Departmental Valuation Officer (OVO). 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred holding that there appears to be no reasons for not relying on the report of the registered valuer, ignoring the fact that the land rate and construction rates as on 01.04.1981 ad a....
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....ent. In the said case, the AO chose to himself apply the rates mentioned in the Nabhi's Guide to House Tax and estimate the FMV of the property, whereas in the case under consideration the valuation was arrived at by the OVO in an objective and scientific manner. 6. The appellant prays for leave to add, amend, modify or alter any grounds of appeal at the time or before the hearing of the appeal. 2. For the sake of clarity and convenience, the facts in ITA No. 6081/Del/2013 are as under: 2.1 The respondent assessee is an individual. The return of income for the assessment year 2010-11 was filed on 14th July, 2010, declaring income Rs. 4,70,82,272/-, which includes long term capital gain of Rs. 4,20,84,000/- on the sales of....
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....dexing the same, the cost of acquisition worked out at Rs. 6,38,32,000/- and surplus was offered to tax after claiming exemption of Rs. 50 lakhs under the provisions of Section 54EC of the Act. However, the Assessing Officer, based on the report of DVO obtained in the case of Sh. Anil T. Kriplani, adopted the fair market value of the property as on 01.04.1981 at Rs. 6,70,000/-. Accordingly, he computed the capital gains at Rs. 7,18,82,000/- and made addition of Rs. 2,97,98,272/-. Being aggrieved by this addition, assessee preferred an appeal before the CIT(A)-XXIX, New Delhi, who vide order dated 24th September, 2013 allowed the appeal relying upon the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Raman Kumar Suri (ITA No....
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....llant deserves to succeed. The AO is directed to adopt cost of acquisition as on 01.04.1981 at Rs. 1,01,00,000 as declared by the appellant in accordance with registered valuer's report. The grounds of appeal are allowed." Being aggrieved, the Revenue is before us with the present appeals. 3. The learned Sr. DR vehemently argued that the CIT(A) was not justified in not taking into cognizance of DVO's report and such report is based on the comparable instances, therefore, there was no basis to ignore the report of the DVO. Hence, he submitted that the report of the DVO should be adopted for the purposes of ascertaining the fair market value of the property sold as on 01.04.1981 and not the value as per report as it was made arbitra....
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....d any appeal, nor cross objection before this Tribunal. Hence, finding of the CIT(A) on this issue attained finality. Therefore, we are now required to adjudicate as to which report to be adopted either of DVO or of Registered Valuer. To adjudicate this issue, we had gone through the reports, we find that both the registered valuer as well as the DVO had not referred to any comparable instances and simply adopted the value without any reference of the supporting material. The term 'fair market value' has been defined under the provisions of Section 2(22B) of the Act to mean that the fair market value to the value which asset would ordinarily fetch on the sale in the open market on the relevant date. In our opinion, the concept of fair marke....