TaxTMI 
TaxTMI 
2019 (11) TMI 366
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..... The concerned partner's capital account was credited on 01-04-1981 with an amount of Rs. 2,70,975/- towards the value of land brought in by him into the partnership firm as his capital contribution. During the year under consideration, the above said land was sold by the assessee and while computing the long term capital gain on sale of above said land, the assessee adopted 'fair market value as on 1.4.1981' as Rs. 30.00 lakhs. The AO rejected the same and he adopted the value of Rs. 2,70,975/- as shown in the books of accounts, as the partnership firm has valued the land at Rs. 2,70,975/- as on 1.4.1981, when the partner introduced the land into partnership firm as his capital contribution. When the dispute reached the ITAT, the Tribunal took the view that the value of Rs. 2,70,975/- adopted for book purposes is only a notional value and hence, the same cannot be taken as Fair Market Value as on 1.4.1981 for the purpose of computation of capital gain. Accordingly, the Tribunal restored the issue to the file of the AO. In the second round, the AO adopted the very same value of Rs. 2,70,975/- as on 1.4.1981 and accordingly computed long term capital gains. In the second roun....
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....as also learnt upon discreet enquiry with a lot of old real estate agents, that Rs. 33 per sqft was not accurate. Since there is a difference of opinion, there is reasonable doubt that the estimate cannot be undisputed. The assesee in his submission had stated that no specific enquiries has been made to the Valuer and that no site visit has been carried out by this Office. However, the assesseee was extended every opportunity possible to substantiate, providing copies obtained from the Sub Registrar's and to justify their claim. Besides, the onus lies on the assessee to proof that the Valuer from whom the Valuation was done is authentic and that his valuation is beyond doubt. These contention is just to hoodwink the Department into justifying that proper opportunity was not provided. If the assessee so wished to prove that the Valuer is genuine, it is his right to produce the Valuer and explain to the Assessing Officer, the authenticity of his Valuation. The Office has never debarred the assessee from exercising his rights to produce the Valuer. No request has been receive in this regard from the assessee. Fourthly, when the Sub Registrars themselves stated th....
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....as taken the view that the rates available for residential plots (smaller size) located in a developed area cannot form the basis for valuing an industrial land (bigger size). Hence the AO has rightly rejected the valuation report furnished by the assessee. The Ld D.R further submitted that the Sub-registrar rates reasonably indicate the fair market value and hence the same was adopted by the AO. Accordingly he contended that the order passed by Ld CIT(A) does not call for any interference. 6. We heard rival contentions and perused the record. The assessee has wholly placed its reliance on the valuation report given by the Approved Valuer and the same is placed at pages 140 to 143 of the paper book. A perusal of the same would show that the Valuer has referred to eight sale instances and all of them pertain to sale of "housing plots" admeasuring 1750 sq.ft. to 2400 sq.ft.. The Valuer has further stated that the above mentioned 8 residential plots are located within a distance of 2.5 kms from the industrial land sold by the assessee. Based on the sale value mentioned in the conveyance deed of the eight plots, the Valuer has arrived at the fair market value as on 1.4.1981 at....
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.... the first and second round of proceedings. As noticed earlier, the above said amount was the value credited to the capital account of the partner who introduced the impugned land into the firm. The above said value was held to be a Notional value by the Tribunal and it was also held by the Tribunal that the same cannot be considered as Fair market value as on 1.4.1981. However, in the third round, the AO has determined the fair market value of impugned industrial land at Rs. 25,625/-, which was much lower than the value of Rs. 2,70,975/-. We have held that the valuation report furnished by the assessee was rightly rejected by the AO and at the same time, we have also held that the fair market value as on 1.4.1981 determined by the AO on the basis of sub-registrar rates was also not correct. 10. There should not be any dispute that the industrial land located outside municipal limits, far away from the developed areas would certainly command lower rate. Further the market rate of a plot/land is dependent upon various factors. For example, we have noticed earlier that, even between the plots/land having same characteristics, the bigger plot/land would command low rates than the s....