2012 (5) TMI 667

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....is a retired Labour Officer, aged 83 years. He had inherited a piece of agricultural land situated at Khajuri Khurd from his father on his death in the year 1975. He sold the land to his brother's son for Rs. 10 lakhs, which was valued by the Sub Registrar for registration purposes at Rs. 38,11,000/-. The Assessing Officer asked the assessee for taking sale value at Rs. 38.11 lakhs for the purpose of computing capital gains. However, at the instance of the assessee, the matter was referred by Assessing Officer to the DVO, who valued the land at Rs. 24,76,890/-. By adopting DVO's valuation, the Assessing Officer computed capital gains and also did not allow the assessee's claim of expenditure of Rs. 3,82,356/- alleged to be incurred on impro....

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....s. The matter of valuation was however referred to the Departmental Valuation Cell at the instance of the assessee within the provisions of Section 50-C read with Section 55A of the Income-tax Act. The valuation Officer did admit that this land has been in possession of the Thakur Samaj long and hence valued the said land at a fair market value of Rs. 24,76,890/- as on the date of sale i.e. 05.05.2006 as against the Collector's value of Rs. 38,11,000/-. There was no basis for department valuer to support his valuation. Ld. Authorized Representative further submitted that the Assessing Officer adopted such value as determined by the Valuation Officer i.e. Rs. 24,76,890/- and finalized the assessment accordingly. In the process, however, he a....

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.... as per DVO's report. However, contention of the assessee was that his father has simply given the land to Thakur Samaj for the purpose of cultivation only. On a reference made by Assessing Officer to the DVO, the Valuation Officer also admitted that this land was in possession of Thakur Samaj since long back, but he arrived at valuation of Rs. 24,76,890/- without giving any reason Assessing Officer computed the capital gains by taking the value arrived at by DVO. We found that when the land was physically possessed by strong community, the market value of land goes down substantially as nobody would dare to buy such land where Thakur Samaj have the possession on the land since long back. Therefore, keeping into account the totality of fact....