2018 (12) TMI 1079 - HC - Income Tax

Valuation of the property as sold by the assessee - whether the valuation of the property, which was sold by the assessee, as adopted by the CIT (Appeals)-V in his order dated 20.09.2007, was proper? - whether the Tribunal was right in not interfering with the said valuation and dismissing the appeal filed by the Revenue? - Held that - The estimation was found to be just and proper. The Court can take judicial note of the fact that during the relevant time, that is, during 1980-81, the guideline value fixed by the Sub-Registrar was based upon the last sale transaction, which took place in the area . Thus, for several years, if the sale transactions were done at a particular limit, then the guideline value remained static. It is only thereafter, the Government took a decision to revise the guideline value on a yearly basis with effect from 1st April of every month. Thus, considering the factual position, we are of the view that no substantial question of law arises for consideration in the instant case, as it pertains to computation of the value of the property, which was done by the Commissioner in a particular manner, which was considered to be fair and reasonable.

Summary

Issues:
Valuation of property for income tax assessment based on registered valuer's report and guideline value.

Analysis:
The appeal before the Madras High Court involved the valuation of a property for income tax assessment for the assessment year 2004-05. The Revenue challenged the order of the Income-tax Appellate Tribunal, which upheld the valuation adopted by the Commissioner of Income Tax (Appeals)-V. The substantial questions of law raised in the appeal questioned the Tribunal's reliance on the registered valuer's report and the decision of the Madras High Court in a previous case. The key issue was whether the valuation of the property was proper and whether the Tribunal was correct in not interfering with the valuation adopted by the Commissioner.

The Commissioner of Income Tax (Appeals)-V had considered the prevailing guideline value, the valuation by the registered valuer, and the locational advantages of the property. After reviewing the principles for adopting comparable sale instances method, the Commissioner fixed the value at ?89,250 per ground. The Tribunal, in rejecting the Revenue's appeal, found the Commissioner's estimation reasonable, as it was based on the average of two valuations. The Court noted that the guideline value was historically based on past sale transactions until the government decided to revise it annually from April 1st.

Ultimately, the High Court found no substantial question of law requiring consideration as the Commissioner's valuation was deemed fair and reasonable. The Court declined to interfere with the Commissioner's order, leading to the dismissal of the appeal. The judgment highlighted the importance of the valuation methodology, historical guideline values, and the reasonableness of the Commissioner's decision in determining the property's value for income tax assessment purposes.