TaxTMI 
TaxTMI 
2017 (6) TMI 127
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....ities grossly erred in ignoring several reasonable, plausible objections which had material bearing on the impugned case, ignoring the same is unjustified, bad in law, is in utter violation of principles of natural justice and ought to have been considered. Non-consideration and rejection in a summary manner is unjustified, bad in law and the entire addition deserves to be deleted. 2.2 That the District Valuation Officer having stated the objections are not considered, the same having been raised by the Assessing Officer, the Assessing Officer grossly erred in mentioning that the District Valuation Officer has considered the same/ considered by the erstwhile Assessing Officer when he himself (District Valuation Officer) had not considered the same, the non-consideration of objection is unjustified and deserves to have been considered. 3. That the ld. lower authorities grossly erred in computing the indexed cost of acquisition at Rs. 6,89,747/- instead of Rs. 34,48,340/- 3.1 Registered Valuer being an expert having computed / worked out fair market value as on01-04-1981 at the rate of Rs. 200/- per sq. yard the ld. lower authorities grossly erred in holdin....
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....n the valuation adopted by the erstwhile Assessing Officer without any cogent reasons, the non-consideration is unjustified and deserves to be considered.'' 2.1 First of all, the appeal of the assessee Smt. Deepali Bhargava in ITA No. 158/JP/2016 for the assessment year 2008-09 is taken up for adjudication. 3.1 Apropos Ground No. 1 of the assessee, brief facts of the case are that the return of income declaring total income of Rs. 2,19,400/- was furnished on 30-07-2008 by the assessee which was processed u/s 143(1) of the Act at declared income in her return. The AO observed that during the year the assessee had entered into a sale transaction of land and had earned capital gain on sale of property from Gram Naya Nagar, Tatgarh Road, Beawar. Perusal of order made by the then AO, it was observed by the AO that same had not been disclosed by the assessee. Accordingly, notice u/s 148 was issued after recording the reason with the prior approval of the ld. CIT -1, Jaipur which was conveyed by the Addl. CIT, Range-2, Jaipur vide his letter No. 1981 dated 6-01-2014. In compliance of it Shri N.K. Baid Advocate and A.R. of the assessee filed reply stating that original return filed o....
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....ts and circumstances of the case, it is held that AO was justified in reopening the case of the appellant u/s 147 of the Act as a substantial income had escaped assessment within the provision of Section 147 of the Act. Hence, this ground of appeal is hereby rejected.'' 3.3 I have heard the rival contentions and perused the materials available on record. The ld. AR of the assessee filed the written submission on the issue in question but it is noted that the ld. AR of the assessee at the time of hearing of the case could not controvert the observations of the ld. CIT(A) on the issue in question. The ld. CIT(A) has rightly held that the AO was justified in reopening the case of the assessee u/s 147 of the Act as substantial income had escaped assessment within the provision of Section 147. In this view of the matter, the Ground No. 1 of the assessee is dismissed. 4.1 Apropos Ground No. 2, 2.1 and 2.2 of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- 3.2.2. Determination: (i) I have carefully perused the submission of the appellant, assessment order and the material placed on record. The appellant along with his five ot....
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.... Whereas n case of up Kshetra B & C the value adopted is half of the main road rate in case the land is away from the main road. Benefit of such depth from the main highway while calculating the valuation report ought to have been given but has not been given. * At the time of physical inspection of the impugned land the DVO had noticed that the land is irregular and it is neither straight nor square nor rectangular, it has several turns after every 50 feet and is also situated in law lying area and at least 5 feet below from the main road and in comparison to other nearby lands. Thus at the time of selling the buyer would have discounted the irregular shape of land and would have adjusted the rate of filling up such huge and area. The id. Valuation officer has just given a benefit of 5% on this count which should have been at least 10% * No comparative sale instance has been given by the DVO in its favour of adjoining land areas. * The land was owned by six co-owners and unless all agreed to sell it could not have been sold. The ID. Distriict valuation officers has allowed only 10% adjustment when it should have been at least 20% * The land was ....
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....e DVO for determining the FMV as on 31.03.2008. Further, the appellant has not provided a copy of the Agreement to sell dated 29.03.2007 and did not demonstrate how the date of sale could be taken as 29.03.2007 when the document for transferring the little of the property under consideration was registered on 31.03.2008 itself. Therefore, this contention is rejected. (vi) In view of the above discussion, it is held that the DVO has not followed the circle rates blindly but he has applied his mind, made the spot inspection of the property, considered the factors which may adversely affect the FMV and determined the FMV of the property under consideration of Rs. 10,05,15,372/- Therefore, I do not find any infirmity in the valuation report of the DVO. Hence this ground of appeal is rejected. (vii) It is pertinent to mention here that regarding the FMV of the property under consideration as on 01.04.1981, as dealt in ground of appeal no. 3 the appellant has taken the value at Rs. 200/- per Sq. Yard on the basis of the valuation report of the Registered valuer by treating the property under consideration as a commercial property. It is observed from the valuation repor....
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....any benefit while working out the valuation at Rs. 16,752,562/- which are as under: Objection No. Remarks Relief by DVO 01 The valuation done by the Sub-Registrar is @ Rs. 700/- per square feet whereas it is to be noted that no specific valuation has been prescribed by the Sub-Registrar towards the land belonging to the Assessee appellant PB 67. On perusal of the chart of DLC rate; as obtained from the office of Sub-Registrar your honour shall notice that the rate is Rs. 700/- per feet on Tatgarh Marg only upto Parsvanath Hospital. The land belonging to the Assessee appellant is situated at least 500 meters further away from Parsvanath Hospital PB 27. Furthermore no benefit on this account has been given by the ld. Valuation Officer. PB 69. NIL 02 On perusal of the DLC rate chart PB 67 your honour will further notice that no rate has been prescribed of land value in case the land is situated away from the main road in case of (Up Kshetra A). Whereas in case of Up Kshetra B & C the value adopted is half of the main road rate in case the land is away from the main road. Benefit of such depth from the main highway while calculating the valuation report ought....
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....d - In course of assessment, provision of section 50C were applied to assessee's case and valuation of property as per guideline value of stamp valuation authority was accepted because same was found to be higher than sale consideration disclosed by assessee - Assessee invoked provisions of section 50C(2) and claimed that value as fixed by stamp valuation authority was on higher side - Assessing Officer thus referred valuation of property to DVO - DVO valued property at a figure much lower than value as fixed by stamp valuation authority - Whether on facts, claim of assessee was true and correct and, therefore, Assessing Officer was to be directed to accept sale consideration as admitted by assessee in her return of income - Held, yes. (c) In Ravi Kant v. ITO [2007] 110 TTJ 297 (Delhi ITAT) PB 92-95 it was held: On a perusal of valuation report, however, we find that even the valuation by the DVO has placed too much of emphasis on the assessment or valuation by the stamp valuation authority. This is neither desirable nor permissible. The reason is this. The valuation by the stamp valuation authority is based on the circle rates. These circle rates adopt unifor....
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....mann.com 120 (Chennai ITAT) PB 101-106 the report of the DVO was ignored. (f) In Chandra Bhan Agarwal vs. Addl. CIT [(2012) 21 taxmann.com 133 (Calcutta ITAT) PB 107-116 wherein the report of the DVO was ignored since objections of the assessee were not properly disposed and accordingly consideration given by the Assessee was accepted. (g) In Jai Kumar Chawla v. ITO [(2013) 39 taxmann.com 188 (Indore ITAT) PB 117-123 it was held: Valuation in case of land should be arrived at by taking into account adverse factors attached to land. Keeping into account all these factors, which are going to adversely affect fair market value of land, we direct the Assessing Officer to reduce the valuation arrived at by the DVO by 20 %. Accordingly, the Assessing Officer is to recompute the gain after reducing the valuation arrived at by the DVO by 20 % or the actual sale consideration received by assessee, whichever is higher. (h) In Reshma R. Daryanani v. ITO [(2015) 57 taxmann.com 414 (Mumbai ITAT) PB 124-126 it was held: Where AO had not examined whether assessee could have sold her plot at a price which was stipulated by stamp duty authorities and ass....
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.... 4.4 I have heard the rival contentions and perused the materials available on record. It is noted from the records that the assessee alongwith five other members jointly sold a commercial land at Naya Nagar, Titgarh Road, Beawar, Ajmer admeasuring 18777.21 Sq. Yards on 31-03-2008 for a consideration of Rs. 9,38,34,660/- and paid a stamp duty on Rs. 11,82,96,432/-. It is observed that as per assessee her 1/6th share of sale consideration was to the tune of Rs. 1,56,39,110/- only and for the purpose of stamp duty, the share of the assessee is worked out to Rs. 1,97,1,072/-. It is also noted that the AO during the course of assessment proceedings in the case of the assessee had taken into consideration the case of Shri Ms. Roopali Dhingra, another co-owner of the property and noted that as the share of Ms. Roopali Dhingra for the purpose of stamp duty valuation was higher than the sale consideration as stated in the sale deed, in view of the provisions of Section 50C of the Act. It is also noted that the matter was referred to the DVO by her AO for determining the FMV as on 31-03-2008. The DVO vide his valuation report dated 28-12- 2010 determined the FMV of the property under consi....
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....a. It is also noted that at the time of physical inspection of impugned land the DVO observed that the land was neither straight nor square nor rectangular which had several turns after every 50 sq.ft. It is also noted that no comparative sale instance had been given by the DVO as to adjoining land of the assessee. It is noteworthy to mention that there are six co-owners of the land and the land in question cannot be sold without their consents. It is also noted that the AO had taken the case of Ms. Roopali Dhingra, another co-owner of the property with the case of the assessee which case was decided by the ld. CIT(A), Bikaner (camp at Jaipur) vide appeal no. 684/Bikaner/2010-2011 dated 31-03-2015 in favour of Ms. Roopali Dhingra deleting the additions made by the lower authorities (APB page 39 to 60). It is thus observed that although the lower authorities have taken the recourse of Ms. Roopali Dhingra case with the assessee during the assessment order and made the additions yet the case of Ms. Roopali Dhingra has been decided by the ld. CIT(A), Bikaner (camp at Jaipur), supra deleting the additions. Therefore, the question does not arise to make addition in the case of assessee. ....
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....rty accurately since some of the items are to be value on guesswork or notionally. Therefore, as observed by the Pune Bench of this Tribunal, the difference of less than 10% has to be ignored. In view of the decision of the Pune Bench of this Tribunal in the case of Rahul Construction (supra), in our opinion, the CIT(A) has rightly deleted the addition made by the Assessing Officer. Therefore, we do not find any infirmity in the order of the lower authority. Accordingly the same is confirmed. '' In this view of the matter and also taking into consideration the decision of ITAT , Hyderabad Bench in the case of ACIT vs. Smt. S. Suvarna Rekha (supra), we find that the ld. CIT(A) is not justified in adopting the value of the impugned land at Rs. 1,67,52,562/- instead of Rs. 1,56,39,110/- u/s 50C of the Act. Thus Ground No. 2 to 2.2 of the assessee are allowed. 5.1 Apropos Ground No. 3, 3.1 and 3.2 of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- 3.3.2 Determination: (i) I have carefully perused the submissions of the appellant and the material placed on record. It is noted that the appellant has taken the cost of acquisition (....
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....rd and his valuation report con not be relied upon. Now the question comes what should be the FMV as on 01.04.1981 or cost of acquisition. As already stated above, the Registered Valuer has taken the rates for Naya Nagar area at Rs. 65/-per sq. yard for residential property whereas the AO has taken the value at Rs. 40/-per sq. Yard. thus, the FMV as on 01.04.1981, can at the most be Rs. 65-per sq. Yard for a residential land as is evident from the report the report of Registered Valuer as stated earlier. It is noted from the assessment order that the Registered Valuer stated before the AO of Ms Roopali Bhargava that the earliest sale instance was on undated sale agreement, however, the said stamp paper was issued on 19.01.1990 therefore, the earliest sale instance was taken as available for 19.01.1990. The AO in the instant case under consideration adopted 19.01.1990 as the earliest sale instance available @ Rs. 65/- per sq. yard and made backward calculation on the basis of cost inflation index and determined the value in 1981 at Rs. 36/-per sq. yard. (v) The Ld. CIT(A), Bikaner in the case of Ms Roopali Dhingra observed that since the statement of Registered Valuer was r....
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....erty under consideration @ Rs. 40/- per sq. yard as on 01.04.1981. Hence, this ground of appeal is rejected. (viii) It may be mentioned that during the appellate proceeding, the appellant invited my attention to the decision of the Ld. CIT(A), Bikaner (Camp at Jaipur) dated 31.03.2015 in the case of Ms. Roopali Dhingra for the AY 2008-09 wherein all the addition were deleted and the Ld. CIT(A) restored the valuation as on 01.04.1981 which was adopted on the basis of report of Registered Valuer. It is respectfully stated that I do not concur with the findings of the Ltd. CIT(A), Bikaner in the case of Ms. Roopali Dhingra for the reasons as discussed earlier in this order while confirming the action of the AO.'' 5.2 During the course of hearing, the ld. AR of the assessee challenged the order of the ld. CIT(A) on the issue in question and filed the written submission as under:- 1. Prior to filing of Income Tax Return the assessee appellant and the other 5 co-owners obtained a valuation report from Registered Valuer Shri P.N. Bhargava who gave his valuation report dated 07.07.2008 and adopted the value as at 01.04.1981 at Rs. 200/- per square yard on the basis of ....
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....annot be substituted by the A.O. merely on the basis of general inquiries without obtaining a report from DVO. (c) Hon'ble Bombay High Court in CIT v. Puja Prints [(2014) 265 CTR 124 (Bom)] [PB 150-155] has held: "6. We have considered the rival submissions. We find that the impugned order dated 18 February, 2011 allowing the respondent-assessee's appeal holding that no reference to the Departmental Valuation Officer can be made under Section 55A of the Act, only follows the decision of this Court in the matter of Daulal Mohta HUF (supra). The revenue has not been able to point out how the aforesaid decision is inapplicable to the present facts nor has the revenue pointed out that the decision in Daulal Mohta HUF (supra) has not been accepted by the revenue. On the aforesaid ground alone, this appeal need not be entertained. However, as submissions were made on merits, we have independently examined the same. 7. We find that Section 55A(a) of the Act very clearly at the relevant time provided that a reference could be made to the Departmental Valuation Officer only when the value adopted by the assessee was less than the fair market value. In the pres....
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....56-163] it has been held that: 9. We have considered rival submissions and do not subscribe to the views of the authorities below. The assessee filed report of Registered Valuer in support of the market value as on 01.04.1981. The Assessing Officer was not having any evidence or material before him to contradict the report of the Registered Valuer. The Assessing Officer, if was not satisfied with the report of the Registered Valuer, could have made a reference to the Departmental Valuation Officer under section 55A of the Act for the purpose of computing income from capital gains. The Assessing Officer has thus, not acted in accordance with law and without any basis or evidence in his possession, did not accept report of the Registered Valuer. In the absence of any material on record, Assessing Officer should not have made his own calculation for the purpose of computing the capital gains. The orders of the authorities below, thus, cannot be sustained in law. We, accordingly, set aside the orders of authorities below and direct Assessing Officer to accept valuation reported by the assessee as per report of the Registered Valuer as on 01.04.1981 and accept the comp....
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....uation report of a Government approved valuer. The Assessing Officer referred issue of valuation to DVO, who valued property at Rs. 3.10 crores and the Assessing Officer computed capital gains accordingly. Held that since value adopted by the assessee was much more than fair market value as on 1-4-1981, then reference to Valuation Officer could not have been made as per provisions of section 55A(a) as it existed at relevant time.'' 5.3 During the course of hearing, the ld. DR relied on the orders of the lower authorities. 5.4 I have heard the rival contentions and perused the materials available on record. It is noted from the records that the assessee and other 5 co-owners obtained a report from registered valuer relating to cost of land as on 01-04-1981. Shri P.N. Bhargava, registered valuer gave his report dated 7-07-2008 and adopted the value as at 01-04-1981 at Rs. 200/- per. Sq. Yd. Accordingly, the valuation of the land comes to Rs. 37.55 lacs (Assessee's paper book pages 127 to 139). It is also noted that the AO in the case of Ms. Roopali Dhingra applied the rate at Rs. 40/- per. Sq. Yd and made the valuation at Rs. 6,89,747/-. It is also noted that on th....