2013 (8) TMI 1081 - AT - Income Tax

Summary

Issues involved:
The issues involved in this case are the determination of fair market value of a property for the assessment year 2006-07, specifically focusing on the valuation of the property as on 01/04/1981 for the purpose of computing capital gains.

Summary of Judgment:

Issue 1: Valuation of Property as on 01/04/1981
- The appellant filed a return of income declaring income from rents, capital gains, and interest income for the assessment year 2006-07.
- The Assessing Officer (AO) selected the case for scrutiny and determined the cost of acquisition based on the sub-registrar's valuation, leading to a tax demand.
- The appellant contended that the market value of the property should be higher than the value considered by the AO.
- The CIT(A) held that the sub-registrar's valuation cannot be considered as the market value and directed the AO to adopt a value of Rs. 350 per sq.yd for determining the cost of acquisition.
- The revenue appealed against the CIT(A)'s order, arguing that the Fair Market Value adopted by the AO should be confirmed.

Issue 2: Consideration of Registered Valuer's Report
- The parties presented arguments regarding the valuation done by a registered valuer and the influence of vested interests.
- The Tribunal emphasized the importance of considering comparable sale instances for determining fair market value.
- References were made to previous cases where the report of a registered valuer was questioned, highlighting the need for a comprehensive evaluation of property aspects and surrounding circumstances.
- The Tribunal directed the AO to consider the registered valuer's report, refer to the District Valuation Officer, and thoroughly examine the property's nature and values provided by different sources before deciding the issue afresh.

Conclusion:
- The Tribunal allowed the revenue's appeal for statistical purposes, emphasizing the need for a detailed assessment of property valuation based on various factors and expert opinions.
- The case was remanded to the AO for a fresh decision after considering all relevant aspects and providing the assessee with a reasonable opportunity to be heard.

This judgment highlights the significance of accurate property valuation for tax assessment purposes and the need for a thorough evaluation process involving expert opinions and comparable instances to determine fair market value effectively.