TaxTMI 
TaxTMI 
2017 (2) TMI 953
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....eclaring a total income of Rs. 1,40,01,539/- including his share of net long term capital gains of Rs. 1,39,55,157/- on property sold at Jubilee Hills, Hyderabad. and income from House property The case was selected for scrutiny and originally the order u/s 143(3) r.w.s 147 was passed and the long term capital gains of the assessee's share was determined at 2,58,59,974/- as against Rs. 1,39,55,157/- returned by the assessee. During the course of assessment proceedings, the AO observed that the assessee has arrived at the Long term capital gains by working the cost of property at Rs. 3,875/- per sq. yard as per valuation report and the AO rejected the same as the assessee could not file any evidence for the market value and instead adopted the SRO rate of Rs. 8 per sq. yard and arrived at the capital gains. 3.1 Aggrieved with this order of the AO, the assessee filed an appeal before the CIT(A) and the CIT(A) vide his order dated 01-12- 2011 upheld the reopening proceedings and also directed the AO to adopt the SRO rate at Rs. 12 sq. yard instead of Rs. 8 per sq.yard. Further, the assessee aggrieved with the order of the CIT(A), filed an appeal before the Hon'ble ITAT whic....
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....on'ble High Court of Andhra Pradesh and the Hon'ble High Court of Andhra Pradesh vide its order dated 19/06/2013 in ITTA NO.533 of 2012 held as under: "After hearing the learned counsel for the parties and after perusing the impugned judgment and order of the learned Tribunal, we are of the view that this matter is not required to be admitted for hearing as the impugned order has been passed remanding the matter for fresh hearing. But, fresh hearing has been directed to be made based on certain observations as recorded by the Tribunal. We modify slightly the order of the learned Tribunal to the extent that hearing on remand back shall take place afresh and not basing on the observations of the learned Tribunal. The appeal is accordingly disposed of. There will be no order as to costs." 5. Consequent to the above order of the Hon'ble High Court of Andhra Pradesh, the Assessing Officer completed the assessment u/s 143(3) rws 254 of the I.T. Act on 31-12-2014 by adopting the comparable values and by adopting the rate at Rs. 13.36 per sq. yard as adopted in the comparable case as the Fair Market Value of the land in 1981 and completed the asses....
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....ion report, to be allowed as reasonable. Further, the assessee relied on Hon'ble ITAT in the case of Ashven Datla Wherein the value adopted at Rs. 750 per sq. yard as on 1-04-1981 when there is guideline value of Rs. 3700 per sq. yard in the year 2006. Whereas, the property situated at Jubilee Hills, the value as per the registered valuer as on 1-04-1981 was Rs. 3875 per sq. yard and as on the date of sale, the value was Rs. 33000 per sq. yard as per SRO. As per the orders of the ITAT, the cost of the property adopting at Rs. 750 per sq. yard and the SRO value at Rs. 3700 for comparison with the property located at Hyderanagar, Kukatpally, the cost of property at Jubilee Hills on the date of sale works out to Rs. 6689 per sq. yard as FMV as on 1-04-1981 and if the sale value of the property as per sale deed is taken at Rs. 45,000/- per sq. yard then the FMV works out to Rs. 9121 per sq. yard. But the assessee adopted only FMV as on 1-04-1981 i.e., Rs. 3875 which is lower side when compared. Therefore, the Assessing Officer in original assessment order also adopted the SRO rate at Rs. 8 per sq. yard and again in this order adopted Rs. 13.36 per sq. yard. The Assessing Officer has fa....
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....shwin Datta (supra) is factually different, as the Hon'ble High Court has ordered for fresh hearing in the case of Ashwin Datta without basing on the observations of the Tribunal. She further relied on the order of the AO. 11. Ld. AR submitted that the said property was acquired in the year 1970. He brought to our notice that as per section 55(2)(b)(ii), where the capital asset became the property of the assessee by any of the mode specified in section 49 and the capital asset became property of the previous owner before 01/04/1981, means the cost of the capital asset to the previous owner or the fair market value of the asset as on 01/04/1981, at the option of the assessee, by which the assessee has the option to adopt any method which is beneficial to him. In the given case, the assessee has adopted the cost of the property based on the valuation report, which is within the rights extended by the statute under section 55(2)(b)(ii) of the Act. He submitted that even though the market price at the time of transfer is at Rs. 33,000/- per sq.yd. but the assessee chose to adopt at Rs. 45,000/- as per the valuation report. The assessee has adopted valuation report consistently in se....
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....and thereafter compute the capital gain tax. 11. In the result, the appeal of the assessee stands allowed." 12. Considered the rival submissions and material facts on record. The assessee has utilized the services of registered valuation officer to value the fair market value on the date of transfer and for the fair market value as at 01/04/1981. The valuation officer arrived the valuation of the asset as at current market value and applied reverse indexation method to arrive the value of the property as at 01/04/1981. The assessee chose to apply the valuation for the sale as well as for the value as at 01/04/1981. The relevant point to be noted is that the SRO value as on the transfer date was Rs. 33,000/- but as per valuation of FMV is Rs. 45,000/-. The assessee preferred the higher value of Rs. 45,000/- and at the same time adopted the cost of the property as at 01/04/1981 also the FMV as arrived by the valuation officer. As per the provisions of section 55(2)(b)(ii), the assessee has the option to adopt the FMV of the asset as at 01/04/1981 or the actual value as at that date. In the given case, assessee preferred to adopt the FMV as the value of asset as at 01/04/1....