2008 (1) TMI 10 - HC - Income Tax

Valuation of properties - registered valuer has valued the same properties twice, that is, first on 31st May, 1971 and subsequently on 30th March, 1979 - Earlier report can not be ignored without any specific reason - valuation on the basis of subsequent report is not valid

Summary

Issues Involved:
1. Interpretation of the Income Tax Act, 1961 regarding the valuation of properties as on 1st January, 1964.

Analysis:
The case involved a dispute regarding the valuation of properties for the assessment year 1978-79. The Assessee acquired two plots in partial partition and claimed the costs of acquisition based on a valuation report from a registered valuer. However, the Income Tax Officer noticed a discrepancy in the valuation report as the same properties were valued differently in a report from 1971. The Officer then computed the value of the properties on 1st January, 1964, using the 1971 valuation report, considering the appreciation in value. The Assessee contested this decision before the Assistant Commissioner of Income Tax, who upheld the Income Tax Officer's decision.

Subsequently, the matter was taken to the Tribunal by the Assessee, which dismissed the appeal. The key contention was the utilization of the earlier valuation report by the Assessee, which was accepted by the Revenue previously. The Assessee failed to provide a valid reason for disregarding the earlier report. The Tribunal found that the Income Tax Officer based the cost of acquisition on the Assessee's own evidence and noted the absence of evidence regarding the occupancy of the house property by a tenant.

The Tribunal concluded that the value of the properties as on 1st January, 1964 should be determined by the capitalization method. The High Court affirmed the Tribunal's decision, stating that the Tribunal did not err in its judgment. Consequently, the Court ruled in favor of the Revenue and against the Assessee, disposing of the reference accordingly.