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TMI Blog2011 (2) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... DRs. The assessment was completed at a total income of Rs. 92,16,716/- inter alia determining long-term capital gain on Udaipur property at Rs. 30,01,535/- and long-term capital gain on Mumbai property at Rs. 51,15,670/-. The matter was carried before the learned CIT(A), who while partly allowing the assessee s appeal, confirmed the long-term capital gain in respect of Swaroop Sagar property at Udaipur. However, as regards the Mumbai property, the learned CIT(A) accepted the assessee s contention in adopting the fair market value of the property as on 01.04.1981 as per the report of registered valuer at Rs. 9,76,000/-. Being aggrieved with the order of learned CIT(A), both the assessee and the department have preferred appeals before us. First we take up the assessee s appeal. 3. The grounds raised in appeal by assessee read as under : 1. The Ld. Commissioner of Income tax (Appeals), Udaipur, grossly erred in law as well as on facts of the case by confirming the sale value of the Swaroop Sagar Property at Rs. 97,89,450/- u/s. 50-C of the IT Act, on the basis of value taken by the Stamp Valuation authority for stamp duty purpose, as against actual sales consideration of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that as per Rules made by UIT, there was not a total ban on the construction in that area but only certain restrictions were made, as the area was nearby the lake. Further, the authorities would have considered all the facts while deciding rates for stamp duty purposes. He also gave a sale instance of the same area and pointed out that a property was sold for Rs. 70,00,000/- by M/s. Chetanya Kumar Mehta HUF to M/s. Bula Construction on 16.11.2005 and the Sub-registrar has also valued the property on the same value, i.e., Rs. 70,00,000/-. Therefore, the stamp duty valuation was reasonable. He, therefore, contended that the provisions of section 50C are clearly applicable to the assessee. Therefore, he adopted the sale consideration at Rs. 97,89,450/-. 5. Before the learned CIT(A), the assessee reiterated the contentions as were made before the Assessing Officer, inter alia pointing out that the Stamp Valuation Authority completely ignored the fact that the said property was under severe restrictions. It was further submitted that the sale consideration adopted by the assessee was justifiable from the approved valuer s report who had valued the property at Rs. 60.70 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-section (35) and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation. - For the purposes of this section, Valuation Officer shall have the same meaning as in clause of section 2 of the Wealth-tax Act, 1957 (27 of 1957). (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the registered valuer s report submitted by the assessee. We are unable to accept this contention of the ld. counsel for the simple reason that nowhere in section 50C, such a condition has been contemplated. In view of our above discussion, we restore the matter to the Assessing Officer with the direction to refer the valuation of the property to valuation officer for determining the fair market value and thereafter deciding the issue de novo in accordance with law. 11. In the result, assessee s appeal is allowed for statistical purposes. 12. Now, we come to the department s appeal. The only ground raised by the department reads as under : On the facts and in the present circumstances of the case, the ld. CIT(A) has erred in directing the AO to adopt the fair market value of the property situated at Mumbai as on 01.04.1981 at Rs. 9,76,000/- as against Rs. 1,91,000/- taken by the AO. 13. The brief facts apropos the issue are that during the year under consideration, the assessee sold a flat No. 165 situated at Jolly Maker Apartment Cuffe Parade, Mumbai for a consideration of Rs. 80,00,000/-. This property was acquired by the assessee as per gift deed dated 31.05.2001 from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred them to the Assessing Officer. The remand report has been reproduced by the learned CIT(A) in his order. During the remand proceedings, the Assessing Officer required the assessee to produce the copy of instrument showing fair market value @ 874/- per sq. ft. for the property under sale between M/s. Hari Bhai Estate Pvt. Ltd. and M/s. Maker Maker on 02.05.1980 on which the registered valuer, while valuing the property under question, basically relied. However, the assessee failed to produce any such evidence. The assessee, however, submitted that the Government Registered Estate Valuer, M/s. Kanti Karmesey Co., Mumbai valued the aforesaid property based on similar property in cuffe Parade Area. The registered valuer valued the property under sale @ Rs. 1150/- per sq. ft. relying on the factor of appreciation in cost of property from Rs. 874/- per sq. ft. as on 02.05.1980 to the date of valuation, i.e., 01.04.1981 and other valuation documents. The Assessing Officer also pointed out that in the report, the valuer himself has calculated the appreciated value of the property based on interpolation at Rs. 1000/- per sq. fit. as on 01.04.1981. He further pointed that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered by the valuer. The ld. counsel referred to the decision of ITAT in the case of Shri Manohar Singh, Jodhpur v. DCIT, Circle-2, Jodhpur in ITA No. 122/JU/2010 and referred to para 18 of the said decision, wherein it has been observed that the Assessing Officer is not a technical expert and, therefore, the valuation adopted by the register valuer cannot be rejected. 17. We have considered the rival submissions and have perused the record of the case. The short dispute is whether the valuation as on 01.04.1981 determined by the Assessing Officer at Rs. 1,91,000/- is to be accepted or the valuation as per registered valuer s second report has to be accepted. There cannot be any quarrel with the position that since the valuer is an expert of his field, therefore, his opinion cannot be substituted by the opinion of a non-technical person. Admittedly, the Assessing Officer is not a technical person to determine the valuation of property and therefore, under the normal circumstances, the valuation as per registered valuer s report has to be given weightage than that determined by the Assessing Officer. This is also evident from the observations of the Tribunal which are reprodu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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