1989 (7) TMI 134 - AT - Income Tax

Summary

Issues: Valuation of lands for computation of capital gains, Revisional powers of Commissioner under sec. 263, Competency of Commissioner to pass order after CIT(A) decision, Discrepancy in valuation of land in different cases.

Valuation of lands for computation of capital gains:
The appeal involved the valuation of certain lands for computing capital gains. The assessee claimed the land's value at Rs. 45 per sq.yd., while the ITO initially assessed it at Rs. 28 per sq.yd. The Commissioner, using revisional powers, directed the ITO to reframe the assessment, resulting in the land's value being assessed at Rs. 2.07 per sq.yd. The valuation was based on evidence from the HUF's wealth-tax returns showing the land's value at Rs. 2.07 per sq.yd. The CIT(A) upheld this valuation, rejecting the assessee's arguments regarding Stamp Duty and other family members' valuations. The Tribunal held that the land's value for capital gains must be Rs. 2.07 per sq.yd., regardless of valuations in other cases.

Revisional powers of Commissioner under sec. 263:
The assessee challenged the competency of the Commissioner to pass an order under sec. 263 after the CIT(A) had already decided on the original assessment. The CIT(A) rejected this argument, emphasizing the revisional order's impact on the assessment. The Tribunal affirmed the Commissioner's authority to revise the assessment, leading to a substantial increase in capital gains.

Competency of Commissioner to pass order after CIT(A) decision:
The assessee contested the Commissioner's authority to issue a revisional order under sec. 263 post the CIT(A) decision. The CIT(A) rejected this argument, highlighting the revisional order's impact on the assessment. The Tribunal upheld the Commissioner's competence to revise the assessment, resulting in a significant change in the capital gains assessment.

Discrepancy in valuation of land in different cases:
During the hearing, the assessee presented evidence of differing land valuations in other cases, including one where the land was valued at Rs. 35 per sq.yd. The departmental representative pointed out that the valuation in those cases differed from the HUF's wealth-tax records, which showed the land's value at Rs. 2.07 per sq.yd. The Tribunal emphasized the importance of consistency in valuation, holding that the assessee's valuation for capital gains must prevail, despite variations in other cases. Ultimately, the appeal was dismissed, affirming the valuation at Rs. 2.07 per sq.yd.