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2016 (7) TMI 838
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....aw, Id. CIT(A) has erred in allowing relief to the assessee by adopting mean value of the properties based on valuation reports submitted by the DVO and assessee valuer for the purpose of cost of acquisition of land as on 01.04.1981 without giving credence to value adopted by District Valuation Officer u/s 55A. 2. On the facts and circumstances of the case and in law, Id. CIT(A) has erred in not appreciating the fact that the Income-tax does not permit mean value of Government Valuer and Register Value for the purpose of cost of acquisition as on 01.04.1981. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. The Appellant pray that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored." 3. The brief facts of the case are that the assessee is an individual deriving income from house property, capital gains and also income from other sources. During assessment proceedings u/s 143(3) read with Section 143(2) of the Act, the assessee submitted all the supporting documents for computation of capital gains , like agreements, rates as per the ready reckoner, ....
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.... No.7/1 admeasuring 952.20 sq mtrs situate, lying and being at Village hariyal Taluka Kurla has been declared as slum vide Gazette Notification No. SLM-OCK-II-WS-I-3025 dated 6th April, 1984. It is further mentioned that: "We hereby also agree and undertake to develop the said slum notified property as mentioned hereinabove under the Slum and the same herein under the prescribed guidelines of Development Control regulation for Greater Bombay, 1991, 33(10), 33(14-D) of Mumbai Municipal Corporation and conformity with SRA(Slum Rehabilitation Authority) or any other scheme permissible by law by demolishing the existing structures and construction new building in its place as per Slum Rehabilitation Scheme under the Maharashtra Slum Area(Improvement, clearance and Re-development) Act, 1971". It is clear from the above facts, the land has been purchased for develop the same which is also clear from the Indemnity Bond filed by M/S. Kanchi Koncept it and as per the stamp duty authority also the land has Zero value for the purpose of stamp duty. The said land had already declared as slum as on 6th April, 1984 indicated that land is not developed as on 0l.04.1981. Hence, Fair Market Value o....
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....9(part) of Village Hariyali, Area: 599.99SQFT. Cost of acquisition taken by the assessee is Rs. 112/- per SQ.FT. (as developed land). As per the deed of conveyance it is clear that this property is already encroached and was not having any approved buildings or meets the other criteria as per definition of developed land. Hence, cost of acquisition is taken as Rs. 32/ - per SQFT as for undeveloped land which comes to Rs. 19,200/ -. (vi) CTS No.181(PT) of Village Hariyali, Area: 44,132.40SQFT, cost of acquisition taken by the assessee as Rs. 52/ - per SQFT(as developed land) The aforesaid property has been notified as slum area vide the Notification No. SLM-OC-K-l1, 77, Published in the Maharashtra Government Gazette, dated 8th February, 1979. It is also found from the deed of conveyance, the property has various reservations in force on various portion of the said property. Further, the property was sold to develop the slum area. In view of the above and also since it does not fulfill the conditions of developed land, the cost of acquisition is taken as Rs. 20/- per SQFT as for undeveloped land which comes to Rs. 8,82,648/-. (vii) CTS No. 215,221....
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....the valuation report from the DVO , whereby the DVO informed the AO that since the valuation of the property will take some time, the A.O. may pass a protective order as the case was getting time barred. Thus, the A.O. has estimated the value on his own and held that appropriate action will be taken once the report from the DVO is received and in view of time barring date, the assessment order u/s 143(3) of the Act was passed based on the information available on record. In the absence of the DVO report, the A.O. finalised the assessment by estimating value and agreed to adopt the ready reckoner rate of 1-4-1981 but he had taken the rate of undeveloped land while the assessee has adopted the ready reckoner rate of developed land. The assessee explained that developed land means land that has approved building and has facilities of road, electricity, drainage and water or has got non- agricultural permission. The A.O. rejected the contentions of the assessee on the ground that these lands are declared as slum by the Maharashtra Government and the purchaser of the land has to develop the property. The assessee averred before the learned CIT(A) that the A.O. erred in not considering t....
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....r rejecting ready reckoner rates as on 01-04-1981, has valued the land as on 1-4-1981 as per the share of the assessee which comes to Rs. 29,36,679/- , whereas the valuer of the assessee M/s Shah & Shah in the report given to the DVO valued the said land at Rs. 49,57,208/- whereby the assessee valuer cited the sale instances of that year in the vicinity. It was objected that the A.O. cannot extend the time barring limit of the assessment if the DVO report is not received. In support the assessee relied on the decision of Hon'ble Calcutta High Court in the case of Reliance Jute & Industries Ltd. v. ITO, 150 ITR 643 (Cal.) and in the case of Shahdara (Delhi) Sarangpur Light Railway Co. Ltd. v. CIT, 208 ITR 882 (Cal.). It was further submitted that all the lands are developed lands having structure, road, electricity, drainage and water facilities and are non agricultural lands as per non-agricultural permission and merely because they are occupied by hutments, it cannot be said that they are not developed lands. The ld. CIT(A) observed that the A.O. has made the addition by valuing the land as undeveloped land based on the ready reckoner rate as on 01-04-1981 as the DVO report was....
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....TS 1801 (PT) Village Hariyali 44,132. 40 52.00 2,294,88 4.80 20. 00 882,64 8.00 65.00 2868,6 06.00 35.6 0 1,571,11 3.44 7 CTS 215,221,231 Village Harriyal i 67,045. 73 52.00 3,486,33 7.96 20. 00 1,340, 914.60 65.00 4,357,9 72.45 40.1 4 2,691,21 5.60 Total of(1+2+4=5+6+ 7 7,662,88 0.72 2,766, 547.78 9,125,6 64.07 5,212,56 5.41 21.5% of item No. 3 5,496,13 6.07 1,498, 946.20 5,745,9 60.44 3,597,47 0.88 Gross total 13,159,0 16.79 4,265, 493.98 14,871, 624.51 8,810,03 6.30 1/3 share of assessee 4,386,33 8.93 1,421, 831.33 4,957,2 08.17 2,936,67 8.77 ....
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....value of these structures which are existing on these properties. Further, in respect of the one property valued by the DVO, he has included the value of the structure existing on the property while calculating the value of the property, while in respect of the six properties valued by the VO, he has not taken into consideration the structures the properties existing thereon." It was observed by the ld. CIT(A) that the DVO/VO had taken the sale instances of Mulund (West), Ghatkopar (East) and Bhandup (West) whereas the sale instances in question valued by the assessee's valuer were of Hariyali village situated in Vikhroli . The sale instances cited by the assessee's valuer were much closer to assessee's properties. It was also observed that the DVO/VO had taken the sale instances of the year 1983 and 1985 whereas the assessee's valuer had taken the sale instances of the year 1982 which is much closer to 1-4-1981. However, neither the DVO/VO nor the assessee's valuer had given the exact sale instances of the areas in question or the date under consideration i.e.1.4.1981, thus, none of the two can be said to be the perfect method for valuing the property. The ld. CIT(A) o....
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....; 3,597,470.8 8 -- 4684206.8 8 Gross total 14,871,624 .51 8,810,036.3 0 -- 11872828. 36 1/3 share of assessee 4,957,208. 17 2,936,678.7 7 -- 3957609.4 5 6. Aggrieved by the appellate orders dated 15-07-2013 of the ld. CIT(A), the Revenue is in appeal before the Tribunal whereby Revenue has challenged adopting of mean value of the properties based on valuation reports submitted by the DVO/VO and the assessee's valuer for the purpose of cost of acquisition of land as on 1-4-1981 without credence to the value adopted by the DVO/VO u/s 55A of the Act. 7. The ld. D.R. submitted that the only issue involved in this appeal is with respect to the computation of long term capital gain on sale of seven properties in which the assessee has 1/3 share. He submitted that the land is situated in Central Suburbs in Vikhroli and the cost of acquisition is to be determined w.e.f. 1-4-1981. The assessee has adopted the ready reckoner rate for developed land as on 01-04-1981, while the AO ado....
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....VO. 1/3 share is owned by the assessee and 2/3 share is owned by the co- owners. It is an ancestral property. It is also submitted that in case of co- owners no additions have been made by the Revenue. The ld. Counsel submitted that there were some structure constructed on the land by slum dwellers who encroached the land, hence, it is developed land as it also has water, electricity, road and drainage as well non agricultural permission. It was submitted that assessee's valuer report was duly given to the DVO/VO at the time of filing objections. 9. We have considered the rival contentions and also perused the material on record. We have observed that the Revenue is aggrieved by the decision of the ld. CIT(A) with respect to the adoption of mean of the value taken by the DVO/VO on behalf of the Revenue and the government approved registered valuer M/s Shah & Shah on behalf of the assessee. We have observed that the assessee is the co-owner of the land situated at Vikhroli at Hariyali Village. The said land was encroached and occupied by the slum dwellers and the said land is notified slum by State of Maharashtra. As per the definition of the developed land, the land must hav....
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....not prejudiced . The learned CIT(A) went ahead to determine the value of the property as on 01-04-1981 being fair market value based on mean of the valuation adopted by the DVO/VO and the assessee's valuer which in our considered view was appropriate keeping in view the factual matrix and prevailing circumstances of the case as no exact sales instances in the area were available . Thus, the learned CIT(A) was required to find out the fair market value of the property as on 01-04-1981 as per provisions of Section 55 and 55A of the Act and in-fact while computing the fair market value , an element of estimation is always involved as the value cannot be determined with the exact precision. The sale instances relied upon by DVO/VO as well as of the assessee's valuer has some inherent weaknesses and under the factual circumstances of the case , keeping in view of the availability of the data with the DVO/VO and also with the assesee's government approved registered valuer , the best recourse was to find out mean so that a fair market value of the property is arrived at which in-fact the learned CIT(A) did to determine fair market value of the property as on 01-04- 1981 under the provisi....