2013 (7) TMI 1107 - AT - Income Tax

Summary

Issues Involved:
1. Determination of Fair Market Value (FMV) as on 01/04/1981.
2. Adoption of FMV for Long Term Capital Gains (LTCG) computation.
3. Validity of the Registered Valuer's report.
4. Reference to the District Valuation Officer (DVO).
5. Comparable property considerations.
6. Levy of interest u/s 234-B and 234-C.

Summary:

1. Determination of Fair Market Value (FMV) as on 01/04/1981:
The appellant declared a total income of Rs. 61,741,934/- under LTCG from the transfer of property. The Assessing Officer (AO) determined LTCG at Rs. 84,056,784/- due to differences in FMV estimation as on 01/04/1981. The appellant's FMV was based on a valuation report by an approved valuer, while the AO used sub-registrar rates.

2. Adoption of FMV for Long Term Capital Gains (LTCG) computation:
The CIT(A) directed the AO to recompute LTCG by adopting FMV of land at Rs. 900/- per sq. yard and built-up area at Rs. 100/- per sq. yard. The appellant contested this, arguing for the valuer's FMV of Rs. 1600/- per sq. yard for land and Rs. 1520/- per sq. meter for the built-up area.

3. Validity of the Registered Valuer's report:
The appellant argued that the AO ignored the registered valuer's report and other higher FMV instances. The Tribunal noted that the Bombay High Court in Commissioner of Income Tax vs. Raman Kumar Singhvi held that the registered valuer's FMV estimation is acceptable and takes precedence over basic value registers.

4. Reference to the District Valuation Officer (DVO):
The Tribunal highlighted that the AO should consider the registered valuer's report and make a reference to the DVO for determining the cost of acquisition as on 01/04/1981. The Tribunal cited DCIT vs. Chaturbhuj Vallabhdas HUF, emphasizing the relevance of the DVO's valuation.

5. Comparable property considerations:
The Tribunal instructed the AO to consider comparable properties in the same locality, inherent property qualities (size, location, road frontage, corner plot), and values given by different persons (DVO and Registered Valuer) for a thorough examination.

6. Levy of interest u/s 234-B and 234-C:
The appellant denied liability for interest u/s 234-B and 234-C. The Tribunal did not specifically address this issue in the judgment.

Conclusion:
The Tribunal allowed both the assessee's and the department's appeals for statistical purposes, directing the AO to re-examine the FMV determination by considering the registered valuer's report, making a reference to the DVO, and evaluating comparable properties. The AO must provide a reasonable opportunity for the assessee to be heard.