2023 (9) TMI 1037 - AT - Income Tax

Long term capital gains - FMV determination - CIT(A) confirming the addition as LTCG by adopting miniscule market value as on 01.04.1981 of land sold by the appellant - It was the case of the assessee that the land sold by her could not be compared with the value adopted by the Hon'ble Supreme Court in the case Premawati Vs. Union of India and Ors. 2013 (7) TMI 1217 - SUPREME COURT and also Rajender Singh (D) by LRs Vs. Delhi College of Engineering 2013 (7) TMI 1217 - SUPREME COURT and contended that her land was better located and was not an agriculture land. HELD THAT - The assessee except making the above assertions that the land sold by the assessee was in a better position, not produced any evidence before the Lower Authorities to prove that the Assessee s land that of the Hon'ble Supreme Court of India had decided the fair market and no specific difference has been pointed out by the assessee. Therefore, in our opinion, in the absence of any material to prove that the land of the assessee and the land for which the Hon'ble Supreme Court has decided the fair market value at Rs. 50,000/- per Bigha are different and in the absence of any supporting evidence in support of the contention of the assessee, we find no error or infirmity in the orders of the Lower Authorities in adopting fair market value on the basis of the decisions of Hon'ble Supreme Court of India. Appeal filed by the assessee is dismissed.

Summary

Issues Involved:
The issues involved in the judgment include the proper application of mind by the Assessing Officer (AO) in making additions to the income of the assessee as long-term capital gains, the validity and reasonableness of the assessment order, determination of fair market value of land as on 01.04.1981, comparison of market values based on Supreme Court decisions, appreciation of evidence furnished by the appellant, adherence to principles of natural justice, and consideration of entitlement to deduction under section 54B of the Income Tax Act.

Issue 1: Proper Application of Mind by AO and CIT(A)
The AO was criticized for making an addition of Rs. 28,892,596 as long-term capital gains without proper application of mind. The CIT(A) was also faulted for confirming this addition without considering the circumstances of the case. The appellant contended that the AO and CIT(A) erred in not determining the Fair Market Value of the land as on 01.04.1981 according to established valuation principles.

Issue 2: Comparison of Market Values
The AO and CIT(A) were accused of adopting the market value of land based on a Supreme Court decision pertaining to a different location, which was about 38 kilometers away from the land sold by the appellant. The appellant argued that the two lands were not comparable in value due to differences in location and quality. It was suggested that the Fair Market Value of similarly located land should have been considered.

Issue 3: Appreciation of Evidence
The CIT(A) was criticized for not properly appreciating the explanation and evidence provided by the appellant, particularly regarding the superior location of the land sold compared to the land considered by the AO. The appellant's contentions were deemed unsupported by evidence and considered as mere self-serving statements.

Issue 4: Principles of Natural Justice
The AO and CIT(A) were accused of not following the principles of natural justice as per established law. The appellant's case for entitlement to deduction under section 54B of the Income Tax Act was not considered, raising concerns about procedural fairness and due process.

Final Decision:
Despite the appellant's arguments, the Tribunal upheld the AO's decision to adopt the fair market value of the land based on Supreme Court judgments. The Tribunal found no merit in the appellant's grounds of appeal and dismissed the case, affirming the addition of Rs. 28,892,596 as long-term capital gains in the hands of the assessee.