TaxTMI 
TaxTMI 
2021 (6) TMI 315
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....d did not file copy of revised return of income showing the transaction of sale of property in the hands of co owners as per provisions of section 50C of the Act. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in valuing the property on the basis of rental value method ignoring the report of DVO who is having specialized skill for valuation of property and prescribed authority under the Act for such purposes. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in accepting the grounds of objections in respect of valuation of property, when no such objection was submitted before DVO while ongoing process of valuation. 5. On the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in adopting method for valuation of property sold which suggest the value of property to be same as on 01.04.1981 and during F.Y 2014-15 6. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in valuing the property as on 01.04.1981 instead of sending the matter to the file of AO for verification through DVO violating the rule 46A. 7. The appellate prays that the order of the Ld. CIT(A) on the above....
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....g the fair market value(FMV) and the assessee was provided opportunity to state its objections in writing on or before 20.11.2017, but no objections were received. Therefore, the DVO has passed the order determining the market value of Rs. 5,19,27,500/-.The A.O. has observed that the opportunity was provided to the assessee to make the objections, the assessee has not placed any objections and now in the assessment proceedings the objections cannot be considered. Therefore, the A.O. applying the provisions of Sec. 50C of the Act considered the fair market value of the property as determined by the DVO of Rs. 5,19,27,500/- and deducted proportionate cost of properties and assessed the total income of Rs. 5,67,31,580/- and passed order u/s 143(3) of the Act on 12.12.2017. 3. Aggrieved by the order of the A.O, the assessee has filed an appeal before the CIT(A). The Ld. CIT(A) considered the grounds of appeal, findings of the A.O, and the submissions of the assessee referred at para 3.1 of the CIT(A) order on the issue of adopting the fair market value as per DVO of Rs. 5,16,56,333/-.The CIT(A) has observed that the assessee for the first time mentioned that the property ownership is ....
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....psed and thus he could not file the revised return online. Therefore, during the course of assessment proceedings, a revised computation of income was filed with the A.O. vide letter dated 12th July, 2017. The revised computation of total Income includes income from property amounting to Rs. 96,139/- and long term capital loss of Rs. 5,32,37,693/- and no income is offered as business income as there is no business activity. This gains on the part property co-owned by members and hence income is allocable amongst co-owners. The appellant has regularly been offering only rental income for taxation for earlier years. Further, I would like to draw your attention to the following write-up at page No. 2754 of Income Tax Law, Fifth Edition, Volume 2 by Chaturvedi & Pithisaria's. "Where property owned by more than one person is transferred, each co owner is to be separately assessed in respect of that portion of capital gain arising from transfer" which pertains to his share in the transferred property /C.G.Ghanshamdas v.CIT(1979) 116 ITR 212 (Mad.)]. The entire capital cannot be taxed in the hands of an association of persons or body of individuals constituted of the co-owners" 4.7.....
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....he hands of the co-owners. In respect of non application of fair market value(FMV) determined by the DVO who is specialized in valuation of property and further the assessee has not filed objections before the DVO while determining the fair market value. There is violation of the provisions of rule 46A of IT Rules as the CIT(A) himself has valued the property as on 1-4-1981 without referring to the DVO and the Ld.DR relied on the order of the Assessing officer and prayed for allowing the revenue appeal. 5. Contra, he Ld. AR relied on the order of the CIT(A). The contentions of the Ld.AR that the sale of the properties is held by the co-owners and has to be taxed in their hands and not in the status of the AOP. The fair market value determined by the DVO is not applicable considering the legal hurdles with the tenants and prayed for dismissal of the revenue appeal. 6. We heard the rival submissions and perused the material on record. Prima-facie the revenue has filed the appeal on the three disputed issues. (i) whether the income on sale of property is assessable in the hands of co-owners, whereas the agreement has been renewed by AOP.(ii) Adoption of Fair market Value(FMV) deter....