2010 (4) TMI 1210 - HC - Income Tax

Summary

Issues involved:
Challenging order on substantial questions of law regarding property valuation and capital gains assessment.

Issue 1: Comparative sale instance for property valuation
The Tribunal's decision on the reliance of comparative sale instance for property valuation was challenged by the Revenue. The Assessee contended that the property was under litigation without supporting evidence, which the Revenue did not controvert. The Tribunal's consideration of this circumstance and rejection of the valuation adopted by the Assessing Officer were deemed as shifting the burden of proof to the Revenue.

Issue 2: Consideration of property location for valuation
The Tribunal's decision to consider a property with a residential building situated away from the main road for valuation, as opposed to a vacant site on the main road, was questioned. The Revenue argued that the property in question was under litigation and might not have fetched a good value, but no evidence was presented to support this claim. The Tribunal justified its decision by stating that properties on main roads generally have higher value, and the valuation by the Sub Registrar's office is only a guidance value, not reflecting the true market value.

Judgment Summary:
The appeal was filed by the Revenue challenging the order on substantial questions of law related to property valuation and capital gains assessment. The Assessee sold a nursing home in 1995 and offered tax on capital gains, splitting it into long term and short term gains. Disagreement arose regarding the valuation of the property as on 1.4.1981, with the Assessing Officer and the Assessee citing different values per sq.ft. The Tribunal allowed the Assessee's appeal on long term capital gains, leading to the Revenue's challenge.

The Court noted that the property in question was on the main road, which typically commands a higher value. The Tribunal's decision to accept the Assessee's valuation over the Assessing Officer's was deemed justified, as the Sub Registrar's valuation is considered a minimum and not reflective of the true market value. Therefore, the substantial questions of law were answered against the Revenue, and the appeal was dismissed.