2019 (2) TMI 290 - AT - Income Tax

Capital gain - whether the assessee is liable for capital gain on sale of land at Olavakkode? - whether the fair market value fixed as on 01.04.1991 at 269 per cent is correct? - Held that - The Hon ble High Court of Kerala in assessee s own case for assessment year 1991-1992 had held that the assessee was liable for capital gains in respect of sale of land at Olavakkode. The relevant finding of the Hon ble High Court has been extracted at para 8 of the CIT(A) s order, hence the same is not reiterated here. In view of the decision of the Hon ble jurisdictional High Court rejecting the assessee s claim that it cannot be liable for capital gains as it had acquired this property free of cost, is rejected. Fair market value as on 01.04.1981 adopted at ₹ 269 per cent of land - assessee had claimed the fair market value as on 01.04.1981 at substantially higher, which was rejected by the A.O. and by the CIT(A) - Held that - We have heard the rival submissions and perused the material on record. The assessee has not produced any evidence / material to prove that the fair market value as on 01.04.1981 is more than ₹ 269 per cent adopted by the A.O. Hence, we confirm the fair market value as on 01.04.1981 at ₹ 269 per cent. Hence, this issue is decided against the assessee.

Summary

Issues:
1. Whether the assessee is liable for capital gain on the sale of land at Olavakkode?
2. Whether the fair market value fixed as on 01.04.1991 at 269 per cent is correct?

Capital Gain Issue:
The Assessing Officer concluded that the assessee was liable for Income-tax on capital gains from the sale of land at Olavakkode for the assessment years 2007-2008 to 2009-2010. The assessee argued that as the land was acquired free of cost from a British Company under an amalgamation scheme, capital gains should not be computed. However, the CIT(A) ruled in favor of capital gains based on a judgment of the Kerala High Court in the assessee's case for the assessment year 1991-1992. The Tribunal upheld this decision, citing the High Court's rejection of the claim that the assessee should not be liable for capital gains due to acquiring the property free of cost.

Fair Market Value Issue:
The second issue revolved around the fair market value fixed as on 01.04.1981 at 269 per cent. The Assessing Officer and the CIT(A) rejected the assessee's claim of a higher fair market value, based on transactions from adjacent survey numbers. The CIT(A) upheld the Assessing Officer's valuation, stating that the higher value was justified. The Tribunal, after hearing submissions from both sides, found that the assessee failed to provide evidence to support a fair market value higher than the 269 per cent adopted by the Assessing Officer. Consequently, the Tribunal confirmed the fair market value at 269 per cent, ruling against the assessee.

The Tribunal dismissed the appeals and the Stay Applications filed by the assessee as infructuous since the appeals were disposed of. The order was pronounced on February 4, 2019, by the Tribunal at Cochin.