9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (4) TMI 852 - AT - Income TaxLTCG for investment in REC Bond s - Computation of capital gain - fair market value (FMV) of the land and building as on 01/04/1981 was calculated on the basis of valuation report of two chartered engineers - HELD THAT - In the hands of one of the co-owners, the assessment was completed u/s. 143(3) by accepting the computation of long term capital gains made by the co-owner (Shri Thinkal Govind Kumar). In the case of Shri Thinkal Govind Kumar, the assessment was taken up for scrutiny based on AIR information that he had sold an immoveable property at Chennai on 05/10/2005. The liabillity of long term capital gains cannot differ between the co-owners of a property. Even though there is no res judicata in tax proceedings, the principle of consistency has to be applied. The Hon ble Supreme Court in the case of Union of India Others vs. Kaumudini Narayan Dalal and Another 2000 (12) TMI 101 - SC ORDER was considering an issue whether it is open to revenue to accept a judgment in the case of one assessee and appeal against identical judgment in the case of another assessee. In this context it was held by Hon ble Apex Court that such a differential treatment on the same set of facts was not permissible in law. The same view was taken by the Hon ble Supreme Court in the case of Berger India Ltd. 2004 (2) TMI 4 - SUPREME COURT In the instant case, the assessee has adopted the FMV as on 01/04/1981 based on the valuation reports of two chartered engineers and is not without any basis - in the hands of one of the co-owners (Shri Thinkal Govind Kumar) the computation of long term capital gains calculated by him which was identical to the LTCG computed by the assessee was accepted in scrutiny assessment. Long term capital gains computed by the assessee needs to be accepted. - Appeal of the assessee is allowed.
Issues Involved:
1. Computation of Capital Gain on Sale of Residential Building. 2. Rejection of Valuation Report and Fair Market Value (FMV) as on 01/04/1981. 3. Credence to Affidavit and Valuation Reports. 4. Denial of Natural Justice. Detailed Analysis: 1. Computation of Capital Gain on Sale of Residential Building: The primary issue revolves around the computation of long-term capital gains (LTCG) on the sale of a residential building in Chennai. The assessee declared a total income of ?51,238 for the assessment year 2006-07, including LTCG on the sale of the property. The Assessing Officer (AO) recalculated the LTCG at ?18,88,840, significantly higher than the assessee's computation of ?3,68,299. The AO's computation was based on guideline values and CPWD rates, while the assessee's computation relied on valuation reports from two chartered engineers. 2. Rejection of Valuation Report and Fair Market Value (FMV) as on 01/04/1981: The AO rejected the FMV of the land and building as on 01/04/1981, calculated by the assessee based on the valuation reports of two chartered engineers. Instead, the AO adopted the guideline value from the Sub Registrar, Chennai, and CPWD rates for construction. The CIT(A) upheld the AO's method, noting that the valuation by the assessee was on an estimate basis and lacked substantial evidence. 3. Credence to Affidavit and Valuation Reports: The assessee argued that the valuation by a Registered Valuer is a valid method to determine FMV as on 01/04/1981 and that the affidavit filed regarding the cost of the building and improvements should be given credence. The CIT(A) and AO, however, did not consider these submissions and relied on their own methods and evidence. 4. Denial of Natural Justice: The assessee claimed that the CIT(A) did not consider any of the arguments advanced and thus denied natural justice. The CIT(A) summarily rejected the valuation reports and the affidavit without providing substantial reasoning or evidence to contradict the findings of the AO. Tribunal's Findings: The Tribunal noted that the assessee's computation of LTCG was based on valuation reports from two chartered engineers, which provided a legitimate basis for the FMV as on 01/04/1981. Importantly, in the case of one of the co-owners, the AO had accepted a similar computation of LTCG in a scrutiny assessment. The Tribunal emphasized the principle of consistency, stating that the liability of LTCG should not differ between co-owners of the same property. Citing the Hon'ble Supreme Court's rulings in Union of India & Others vs. Kaumudini Narayan Dalal and Another and Berger India Ltd., the Tribunal concluded that differential treatment on identical facts is impermissible. Conclusion: The Tribunal ruled in favor of the assessee, accepting the computation of LTCG based on the valuation reports of the two chartered engineers. The appeal of the assessee was allowed, and the Tribunal ordered that the long-term capital gains computed by the assessee be accepted. Result: The appeal of the assessee was allowed, and the Tribunal pronounced the judgment in the open court on 25th February 2020.
|
