2020 (9) TMI 724

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....ng Officer's action of referring valuation of Pimple Gurav land to DVO u/s 55A of Income Tax Act as illegal, ignoring the amendment in section 55A(a) by Finance Act, 2012 with effect from 01/07/2012 wherein words 'is less than Fair Market Value' was substituted by the words 'is at variance with Fair Market Value', which is procedural in nature. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred allowing additional ground of exemption u/s 54F with reference to Long Term Capital Gain(L TCG) on sale of Shivaji Nagar land, without giving an opportunity to Assessing Officer to contest additional claim/evidence produced by the assessee and also in doing so ignored the decision of ,Hon'ble Bombay High Court in the case_ of Humayun Suleman Merchant vs CCIT, wherein it has been held that exemption u/s 54F is allowable only when consideration which is not appropriated/utilized to purchase/ construct new house before furnishing of return u/s 139(1) is deposited in Capital Gain Account Scheme." 2. At the very outset, the learned Authorised Representative submitted that there is a delay of 252 days in filing the C.O., of the assessee and had filed....

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....id not submit the report much before the date, of limitation, the A.O had to devise another method to determine the F.M.V. For this purpose, the A.O took the Help of Ready Reckoner Rate issued by the state Govt. authorities, which is available since 1989 and no specific rate is given for the year 1981. However, as per circular No.9 of the said reckoner, a rate of 40% of the rate for the year 1989 is to be adopted in order to workout the rate as on 1.4.1981. According, to the A.O, the rate for the area in which impugned Land is situated, the rate in 1989 was Rs. 3,50,000/- per Hectare and by following the above circular 40% of the above rate comes to Rs. 1,40,000/- being 40% of Rs. 3,50,000/-. The appellant had sold 1 hectare and 8.39 area. of land, hence, applying the above rate the F.M.V of the land as on 1.4.1981 was determined at Rs. 2,55,358/- and accordingly indexed cost of acquisit'on was determined at Rs. 6,32,000/- in the year in which the Land was sold i.e. the year under consideration. Here, it is pertinent to highlight that the A.O had to follow the ready reckoner rate because he did not find any sale instance in the said locality in the year 1981. I have carefully....

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....ure land but due to proximity of the urban centre, these lands may fetch handsome price, if the owner is willing to sell. Hence, the valuation report cannot be rejected merely on the ground that the land under discussion has been specified as agricultural land. (iv) The registered value' has given several instances viz, no agricultural activity was carried out after 1978, proximity to urban centre even in the year 1981, notified by urban planning department in the year 1976, and availability of transportation even in the year 1981, amply proves beyond doubt that, although, the said land was under the category of agricultural land and that is also because the appellant never got it converted into urban land, however, the potential of the land was much more than what the AO has assumed. During the appeal proceeding, the appellant has brought on record that even before the sale of the land in the year under consideration, the appellant had been filing wealth tax return, wherein, she had offered the above land as deemed urban land for wealth tax in terms of section 2(ea)(v) of the W.T. Act 1957 and paid requisite wealth tax. No doubt, the wealth tax returns have been filed much a....

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....sis to ascertain the true or correct market value undue emphasis in the guideline value without reference to the setting in which it is to be viewed will obscure the issue for consideration. It is clear, therefore, that guideline value is not sacrosanct as urged .... but only a factor to be taken note of it all available in respect of an area in which the property transferred lies. In any event, therefore, if for the. purpose of stamp Act. guideline value alone is not a factor to determine the value of property. Similar finding has been given by H'ble supreme court in the cases of Jawajee Nagnathan vs Revenue Divisional officer, Adilabad(1994)4, supreme court cases 595, Tribeni devi vs collector of Ranchi (1972)1 scc. and in the case of Periyar and Pareekanni Rubbers Ltd vs State of Kerala(1991)4 scc 195. Further, an identical finding has been given by H'ble jurisdictional Bombay High Court in the case of Shalini Vaman Godbole vs Special Land Acquisition Officer special unit Solapur in F. appeal no.182 of 1996 decided on 22.06.2009. (vi) In Nutshell, it can be easily inferred that solely on the basis lof Ready reckoner rates, the fair market value of the asset cannot ....