TaxTMI 
TaxTMI 
2026 (1) TMI 1372
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....icer from time to time. 3. During the course of assessment proceedings the Assessing Officer noted from the various details furnished by the assessee that the assessee along with the other co-owners has sold the immovable property for Rs. 9,10,73,028/- out of which the share of the assessee was Rs. 3,10,00,000/-. The assessee, while computing the long term capital gain, has taken the cost of acquisition at Rs. 14,83,000/- for his 30% share as on 01.04.1981 i.e. the base year. This, according to the Assessing Officer translates to Rs. 415/- per square meter. Thus, while claiming indexation, the indexed cost of acquisition was taken at Rs. 1,51,85,920/-. However, the Assessing Officer did not accept the cost of acquisition as on 01.04.1981 adopted by the assessee on the ground that the same appears to be unreasonably high. On perusal of the valuation report submitted by the assessee he noted certain anomalies. He noted that the valuation report does not explicitly mention the purpose of valuation. The valuer has completely disregard the IGR guidelines. The value of land in 2003 was Rs. 790/- per square meter and in 1981 was Rs. 415/- per square meter. Thus, according to the Assess....
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....n for purpose of calculating long term capital gains, hence penalty proceeding u/s. 271(1)(c) of Income Tax Act, 1961 are initiated for furnishing inaccurate particulars and concealment of income. 4. Since the assessee has already disclosed the long term capital gain of Rs. 40,40,671/-, the Assessing Officer made addition of Rs. 36,12,651/- to the total income of the assessee as long term capital gain. 5. Before the Ld. CIT(A) / NFAC the assessee challenged the addition made by the Assessing Officer on the ground that the Assessing Officer did not follow the principles of natural justice. Further, the Assessing Officer did not refer the matter to the DVO. It was argued that without considering the various submissions and evidences filed by the assessee from time to time, he replaced the fair market value as on 01.04.1981 at Rs. 80/- per square meter as against the fair market value @ Rs. 415/- per square meter adopted by the assessee as per the report of a registered valuer. 6. However, the Ld. CIT(A) / NFAC was not satisfied with the arguments advanced by the assessee and dismissed the appeal filed by the assessee. He further held that the Assessing Officer was justified ....
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.... factual assertions without evidence are arbitrary and unsustainable. The CIT(A) has failed to scrutinize the factual foundation or allow rebuttal which is violation of Principle of Natural Justice. 6. CIT(A) misinterpreted the scope of Section 55A and AO's duties, affecting substantial rights of the appellant. 7. The additions made by CIT(A) were made solely based on the AO's observations without appreciating the facts of the case, the true nature of the transactions, and the surrounding circumstances. 8. The appellant craves leave to add, amend, modify, delete, or alter any of the grounds of appeal at the time of hearing, as may be deemed fit in the interest of justice. 8. The Ld. Counsel for the assessee at the outset referring to various decisions submitted that when the assessee had submitted a report of the registered valuer and the Assessing Officer did not accept the same, he should have referred the matter to the DVO even if the assessee has not made any specific request to refer the matter to the DVO. 9. Referring to the following decisions he submitted that once the assessee produces a valuer's report, the Assessing Officer cannot....
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....titute fair market value determined by an approved valuer. He accordingly submitted that he has no objection if the matter is restored to the file of the Assessing Officer with a direction to refer the matter to the DVO and determine the long term capital gain. 14. The Ld. DR on the other hand strongly supported the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. He submitted that since the Assessing Officer after obtaining information from the District Sub-Registrar and other co-owners has adopted the fair market value as on 01.04.1981 at Rs. 80/-, the same should be upheld and the grounds raised by the assessee be dismissed. 15. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has received an amount of Rs. 3,10,00,000/- out of total sale consideration of Rs. 9,10,73,028/- towards his share. After considering the cost of acquisition as on 01.04.1981 at Rs. 14,83,000/- which gives an effective rate of Rs. 415/- per square meter, the a....