AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 731
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....stead of adopted by the assessee @ Rs. 1,500/- per square meter on the basis of the Valuation Report. Then after order u/s 154 of the Act was passed on the basis of Report of the DVO and thereby assessed income was determined at Rs.18,28,824/-. 2. On the facts and circumstances of the case, as well as law on the subject, the learned ITO Ward-1(2)(2), Surat ought to have accepted the valuation report of the Government approved valuer submitted before him based on sale instances provided by him. 3. On the facts and circumstances of the case, as well as law on the subject, the Learned CIT(A) NFAC Delhi erred in confirming the addition made by the learned A.O on the basis of the Valuation Report of DVO by ignoring the valuation report of the Govt. Approved Valuer." 2. Brief facts of the case are that assessee is Karta of Hindu Undivided Family (HUF), filed his return of income for assessment year 2015-16 on 22.09.2015 declaring nil income. The case was selected for scrutiny. The case was selected under "limited scrutiny" to verify (i) mismatch in income / capital gain on sale of land or building and (ii) deduction claimed under the head "capital gains". During asse....
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....31.12.2017, thus, he was completed the assessment subject to rectification, as and when report of DVO is receipt. The Assessing Officer also issued noticed under section 133(6) to Sub-Registrar Office, Nanpura, Surat on 09.08.2017 for seeking comparable evidence of instances of surrounding area, where the property is situated. No sale instances were provided by Sub-Registrar, Nanpura, Surat concerned. The Assessing Officer recorded that assessee provided certain sale instances along with report of Government Approved Valuer who adopted the land rate @ Rs.1500/- per square meter as on 01.04.1981 and such sale instances is recorded by Assessing Officer in para-4.1 of assessment order, which are reproduced below: - "4.1 This office had issued enquiry letter u/s 133(6) of the Act to the Sub Registrar office, Nanpura, Surat on 09.08.2017 providing comparable evidences/sale instances of surrounding area of the property in question. The Sub-Registrar, Surat-10, Nanpura, Surat vide his letter dated 10.,08.2017 failed to provide any comparable evidences. However, during the cou8rse of hearing, the ae vide letter dated 30.01.2017 has furnished some sale instances along with the valu....
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....re the Assessing Officer, submitted that Assessing Officer has not brought any evidence on record to justify that land rate adopted by assessee was on higher side. The Assessing Officer has mentioned that value of land was adopted at Rs. 1,500/- per square meter seems to be on "higher side". The Assessing Officer himself was not cited any comparable rates and referred the matter to DVO without any reasoning by simply stating that land rate seems to be on higher side without application of mind. Hence, the reference under section 55A bad in law and without jurisdiction. The rate adopted by assessee on the basis of valuation report of Government Approved Valuer, supported with sale instances should have been accepted. The valuation report of Government Approved Valuer is backed by various sales instances which was ignored by Assessing Officer without bringing anything on record that rate adopted by Government Approved Valuer was on higher side. The report of the DVO was received by assessee on 02.11.2018, after almost one year of completion of assessment order. The assessee filed his objection. The DVO adopted the rate of land at Rs.880/- per square meter on the basis of three sale i....
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..../- per square meter as against the value of RCC adopted by assessee on the basis of Government Approved Valuer at Rs.650/- per square meter. The Ld. CIT(A) further noted that assessee has not objected the DVO's report regarding valuation of land as on 01.04.1981 at Rs.850/- per square meter though the Government Approved Valuer valued the same at Rs.1,500/- per square meter. The assessee objected the report of DVO on the ground that in the reference under section 55A of the Act the reference was for land as on 01.04.1981 and not for building / RCC structure and such objection of assessee has no force as draft valuation report was already sent to assessee for his comment before submitting final report to Assessing Officer. No objection was raised by assessee at the time of inspection or against the draft valuation report. Secondly, the assessee contended that Assessing Officer has only referred the valuation of land and therefore valuation report of DVO in respect of land and not in respect of RCC structure. The Ld.CIT(A) held that computation of Long Term Capital Gains made by Assessing Officer for the entire sale of building with land and not only for the land as a separate compon....
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.....12.2015. The said residential property was acquired prior to 01.04.1981. The assessee adopted it value at Rs.3,72,050/- as on .1.04.1981 on the basis of report of Shri Nikunj Choksi, Government Approved Valuer. The valuer estimated the rate of land at Rs.1,500/- per square meter and RCC structure was at Rs.950/- per square meter and for wooden structure at Rs.850/- per square meter. The report of Government Approved Valuer is filed on record. On the basis of report of Government Approved Valuer, the index cost of land in structure was arrived at Rs.38 lakhs. The sale consideration of Rs.90 lakhs thus, on the basis of index, the assessee computed Long Term Capital Gains of Rs.52 lakhs. The assessee made investment of Rs.36 lakhs by purchased one residential property on 30.03.2015 of claimed deduction under section 54. The remaining amount of Rs.16 lakhs was invested in infrastructure bonds, thus, the assessee also claimed exemption under section 54EC. Thus the Long Term Capital Gains was worked out as nil. The case of assessee was selected for scrutiny. During the assessment, the Assessing Officer asked to substantiate the working of capital gains. The assessee furnished copy of va....
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....t the proposed valuation of DVO, which was not considered properly. The DVO narrated only three instances in his report. Out of which two instances pertains to year 1979. No sale instances of built-up property are narrated by DVO. The DVO adopted rate of land @ Rs. 880/- and for construction @ Rs.437/- per square meter. No bifurcation of wooden structure or RCC was specified. The ld AR for the assessee submits that the lower authorities may be directed to accept the valuation report furnished by the assessee. 10. In the alternative and without prejudice submissions, the ld AR for the assessee submits that having regard to the facts of the case, the bench may estimate the value of land on the basis of report of DVO and Government approved valuer. As the assessing officer has not made any reference about valuation of RCC structure and wooden structure those value may be accepted as it is. To support his submissions, the ld AR for the assessee relied on the decision of division bench of this Tribunal in Dharmendra B Patel Vs DCIT in ITA No. 55/Srt/2018 dated 30.06.2021, wherein the average of DVO and Government approved valuer report was considered by taking holistic view. 11. O....