2014 (9) TMI 758 - HC - Income Tax

Computation of capital gains - Adoption of fair market value as on 1.4.1981 Documentary evidences considered or not Held that - The assessee apparently is stretching his claim further and has chosen to file these appeals, which cannot be held as justified - There is absolutely no basis for the claim made by the assessee for determining the fair market value - The documents produced before the AO clearly shows that the guideline value as on 01.04.1981 is ₹ 300/- per cent; before the CIT(A), the document of the year 1984 was submitted and based on that the CIT(A) fixed the fair market value at ₹ 1,200 per cent - The Tribunal has fixed the same at ₹ 5,000/- per cent, however, without any discussion - the document dated 14.2.1984 in respect of S.F.No.165/1 at Kurichi Village correctly shows the fair market value at ₹ 8,393/- and the Tribunal after allowing certain deductions for the three year period, i.e. the difference between the date of acquisition by the assessee, namely, 02.02.1981 and till the date of the noted document, to come to a conclusion that ₹ 5,000/- should be fair market price the determination by the Tribunal does not warrant any further modification or interference thus, no substantial question of law arises for consideration Decided against assessee.

Summary

Issues:
1. Determination of fair market value by the Income Tax Appellate Tribunal without evidence.
2. Consideration of documentary evidence for fair market value near the assessee's property.

Analysis:
1. Issue 1 - Determination of fair market value:
The appellant inherited land and sold a portion to Hasan Kutty at a specific rate. The Assessing Officer adopted a fair market value of Rs. 300 per cent based on guideline value as of 01.04.1981. The Commissioner of Income Tax (Appeals) increased it to Rs. 1,200 per cent for the assessment year 2009-10, and the same value was applied for 2011-12. However, the Income Tax Appellate Tribunal set the fair market value at Rs. 5,000 per cent, stating that no evidence was provided by the assessee to support the claim of Rs. 30,000 to Rs. 40,000 per cent. The Tribunal considered the original claim, transactions, and previous decisions but did not provide detailed reasoning for the Rs. 5,000 per cent value.

2. Issue 2 - Consideration of documentary evidence:
The appellant presented a document showing a sale in 1984 in a different locality to support a fair market value of Rs. 47,410 per cent for the property sold. The Assessing Officer rejected this value, sticking to the guideline value of Rs. 300 per cent. The Commissioner of Income Tax (Appeals) considered the 1984 document and raised the fair market value to Rs. 1,200 per cent. The Tribunal, however, disregarded the specific evidence and set the value at Rs. 5,000 per cent, mentioning the lack of nearby sale transactions. The High Court found the Tribunal's determination reasonable, considering the evidence presented and the time period involved.

In conclusion, the High Court dismissed the appeals, stating that no substantial question of law arose. The Court found the Tribunal's decision on the fair market value justified based on the available evidence and circumstances, even though the reasoning provided by the Tribunal was brief.