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TaxTMI 
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TaxTMI 
2016 (10) TMI 994
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.... Distillery, Daman. He has filed his return of income on 31.3.2013 declaring total income at Rs. 11,18,670/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee has shown long term capital loss of Rs. 52,50,759/-. The assessee had sold two piece of land comprised at Survey Nos.165/1 and 165/2 within the Revenue state of Village Dabhel, Nani Daman. Sale deed was executed on 21.10.2011. Total area sold by the assessee is of 8800 sq.meters. He sold this land at the rate of 1887.50 per sq.meter to M/s.Alkem Laboratories. The assessee has shown sale consideration at Rs. 1,66,10,000/-. While computing long term capital gain, the assessee has adopted cost of acquisition of the property at Rs. 316/- per sq.meter as on 1.4.1981. The ld.AO was not satisfied with the calculation of long term capital loss at Rs. 52,50,759/-. Therefore, in order to collect correct fair market value as on 1.4.1981, he issued notice under section 133(6) of the Income Tax Act, 1961 to Civil Registrar-cum-Sub-Registrar, Moti Daman on 30.9.2014 and requested him to ....
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....ion as on 1.4.1981 at the rate of Rs. 192/- per sq.meter as against Rs. 2/- adopted by the Revenue department. The ld.CIT(A) in this way, upheld the computation of long term capital gain at Rs. 35,46,640/-. 5. Dissatisfied with the order of the ld.CIT(A), the assessee is in appeal before the Tribunal. The ld.counsel for the assessee while impugning the orders of the Revenue authorities has contended that the assessee has filed his return of income on 31.3.2013. He was required to compute the capital gain on this date. While computing the capital gain, the order of the Deputy Secretary, Revenue Department was very much available, and the assessee has adopted the cost of acquisition by taking reverse indexation from the order of the Revenue Secretary, who has determined the fair market value of the property for the purpose of stamp duty. No one has disputed those rates. Therefore, the ld.CIT(A) ought to have not rejected this contention of the assessee. With regard to DVO's report, he contended that this aspect has been considered by the Hon'ble Jurisdictional High Court in large number decisions, and it has been propounded that the AO has no power to make reference to the DVO for th....
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....ts fair market value as on 1.4.1981. It would not be the case of the Assessing Officer that the value of the asset shown as on 1.4.1981 was less than the fair market value. Such clause, therefore, as it stood at the relevant time, had no application to the valuation as on 1.4.1981. We are conscious that with effect from 1.7.2012, the expression now used in clause (a) of section 55A is "is at variance with its fair market value". The situation may, therefore, be different after 1.7.2012. We are, however, concerned with the period prior thereto. Clause (b) of section 55A is in two parts and permits a reference to DVO if the Assessing Officer is of the opinion that (i) the fair market value of the asset exceeds the value of the asset so claimed by the assessee by more than such percentage of the value of the asset so claimed or by more than such amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. Sub-clause(i) of clause (b) also for the same reasons recorded above, would have no bearing on the fair market value as on 1.4.1981. The Assessing Officer had not resorted to sub-clause(i....
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....ew to ascertaining the fair markiet value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the Valuation of capital asset to a Valuation Officer: (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion that the value so claimed is less than its fair market value; The provision specifically provides that if the Assessing Officer is of the opinion that the value disclosed by the assessee is less than the fair market value only, then he can make a reference to the DVO. Now the moot question is as to how the opinion is to be formed by the Assessing Officer. Whether this opinion is subjective or guided by some judicious actions. The formation of opinion should have rational connection with the material brought on record. It should not be based on extraneous or irrelevant reasons. In the present case, the Assessing Officer before making a reference to the Valuation Officer has not brought anything on the record indicating that the assessee has disclosed lesser sale price. There is nothing on the record which can suggest to ignore the....
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....er invenorised as page no.21 of Annexure A/3 was found and impounded. A perusal of this page would indicate that it contains survey numbers of land sold by the assessee, area, cash payment and payment by cheque. On the basis of these noting found in this page, the ld.AO formed an opinion that the assessee has received a sum of Rs. 1,92,06,000/- as on-money, over and above, the amounts stated in the sale deed. The ld.AO has called upon the assessee and confronted him. He recorded statement of the assessee under section 131 of the Act. The ld.AO further observed that one component of the cash payment was of Rs. 50.00 lakhs .This payment was alleged to have been received by the assessee in the month of August, 2011 and the assessee has made deposits of Rs. 50 lakhs in cash in Goa State Co-op. Bank. Armed with these two information, the ld.AO has confronted the assessee as to why he failed to disclose this on-money in the total sale consideration of the land. The assessee has contended that he was having a bungalow situated at plot no.17, admeasuring 625 sq.meters which bears house no.711/41 situated at Porvorim within area of Socorro village, North Goa. The assessee had sold this bung....
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.... for the assessee further contended that no doubt on page no.21 entries are available, but who wrote these on this pages and what was the intention, it has not been proved by the AO. He could not seek explanation of the assessee on a page which was not written by the assessee or not possessed by the assessee. It can only be a corroborative piece of evidence against the assessee in the hands of the AO, but onus was not upon the assessee to disprove this page. It is the AO who has to prove this page first against the assessee, and only thereafter, explanation of the assessee could be sought. In this way, the ld.counsel for the assessee prayed that addition made by the AO on account of receipt of on-money be deleted. 12. On the other hand, the ld.DR contended that perusal of this page would make it clear that the assessee has received on-money. The page has been written in methodological manner, which discloses survey numbers, rates on which the land was sold and component of money - in cash as well as by cheque. Some of the entries duly tallied with actual happening of incidences. In such situation, page ought to be read in evidence for charging the assessee with liability. 13. We ....
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.... want the following information from the department: i) Whether any representative of the vendee, while explaining this paper during the course of survey, made any disclosure about payment of any money to the assessee. ii) Whether any inquiry is made in the case of vendee or any addition on account of unexplained investment etc. was made in vendee's case. The Id.DR is directed to collect this information and furnish to the Bench Clerk within 15 days. Copy of this order be supplied to the Id.DR for compliance." 14. But no information has been placed by the department before the Tribunal. It is not ascertainable whether vendee has alleged that on-money was paid to the assessee. The department is expecting the assessee to prove negative i.e. he has not received on-money. To our mind, first proposition is that the ld.AO should prove that the assessee has received on-money. One loose paper found at the premises of a third party, authored by a third party, could not be considered as a sufficient evidence to accept that assessee has received on-money. This piece of evidence can be a corroborative piece of evidence for confronting the assessee, but it is not a conclusive proof.....
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....ative circumstances referred by the AO in the assessment order i.e. deposits of Rs. 50 lakhs in Goa State Cooperative Bank is concerned, stand of the assessee was that he has agreed to sell a bungalow owned by him in Goa. There were nine persons who have entered into an agreement with him. The assessee has produced five vendees out of nine. The assessee has produced Notary who has notarized the agreement. The AO did not rely upon the statement of the vendee on the ground that they were not possessing copy of bank statement or evidences exhibiting the source of income. In our opinion, their role as witness was to depose whether they have entered into an agreement with the assessee for purchase of bungalow or not. They confirmed this transaction. The AO could not found fault in their statement with regard to this deposition. If they do not have the source of payments made to the assessee, at the time when appeared before the AO, then that cannot be ground to just ignore their evidence. In that case, notice can be issued in their cases and it could be examined in their cases. These two aspects are totally different to each other. Therefore, in our opinion, the ld.AO was not justified ....