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TMI Blog2006 (3) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... bungalow with a construction of 15,180 sq.ft. on 3 acres of land. The property is situated at Belligeri Village, Somvarpet Taluk, Kodagu District, Karnataka. The property was sold for a total consideration of Rs. 250 lakhs. The sale deed was for composite sale of land and building. Since the land is agricultural land not falling within the definition of capital asset defined in section 2(14), the appellant excluded the value of land. The appellant obtained a valuation report on 3-3-1999 before executing the sale deed. The approved valuer valued the land at Rs. 10 lakhs per acre i.e. Rs. 30 lakhs in total. This was reduced from the net sale consideration and capital gain was computed on the construction portion alone. The Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of ascertaining the value of the building and the value of the land but the same was not done by the Assessing Officer and in the absence of any contrary valuation to the valuation as given by the appellant, the action of the CIT(A) in confirming the action of the assessing authority is arbitrary and ought to be annulled. Between January, 1997 and February, 1999, value of the agricultural land varied from Rs. 50,000 to Rs. 2,66,666 per acre and obviously residential properties would fetch a much higher value and thus he ought to have accepted the value as declared by the appellant. The Assessing Officer has wrongly assumed that what cannot be the value of land is presumed to be value of building. He submitted that the construction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he building is to be considered, as part of building and cost of such land has to be reduced from the net sale consideration for the purpose of computing capital gain. 5. We have carefully considered the relevant facts and the arguments advanced. We have also perused the valuation report and other documents, to which our attention was drawn. The preamble to the sale deed mentions that the schedule property is situated in the most prime location of the said properties and is attractive due to its scenic beauty, aesthetic consideration, and comfortable stay and use. As per the valuation report, the residential building has an excellent 4 km. length of approach road. The land comprised under such road is 3.75 acres apart from other land ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Learned CIT(A) was not justified in going by the presumption that what is not the value of land is to be considered as value of building. When the assessee has declared the value of building as on 30th March, 1999 at Rs. 210 lakhs as against the cost of the same, which is very likely to depreciate because of wear and tear for the construction carried out before 31-3-1996, in our opinion, the valuation is very fair. The valuation of land should have also considered the approach road. Though certain sale instances are mentioned, the property, which is subject matter of valuation due to its special characteristics, cannot be compared with other sale instances. We accordingly hold that the value assigned to the building is fair, reasonable a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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