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TMI Blog2011 (4) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuation report of approved valuer filed before the Assessing Officer, the value as worked out in the valuation report is liable to be adopted for computing the capital gain, the value adopted by the Assessing Officer (on the basis of report of Income-tax Inspector) is without any basis, no addition on this score is called for, addition made on this score is liable to be deleted. 2. That while working out the long term capital gain, the Assessing Officer has not accepted the valuation report of the approved valuer furnished before him nor has referred the matter to the valuation officer under section 55(A) of the Income-tax Act for obtaining the valuation. In the absence of valuation report of any technical person contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t agree with the assessee, but on the basis of the Inspector's report, he took the circle rate list dated 8-6-1981 of the agricultural land of Koil Tehsil and valued the land at the rate of 12300 per bigha as on 1-4-1981 and recomputed the long-term capital gain at Rs. 16,02,400 in the following manner: Total land sold by the assessee = 5 bigha Share of assessee ½ = 2.5 bigha Hence, fair market value of the land as on 1-4-81 On the basis of circle rate as discussed above. = 2.5 x 12,300 = 30,750 Indexed cost of acquisition = 30,750 x 480/100 = 1,47,600 Sale consideration of land as per provision of section 50C = 17,50,000 Hence, long-term capital gain = 17,50,000 - 1,47,600 = 16,02,400. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be determined in accordance with rules made under the Income-tax Act. It was pointed out that no rule in this regard has been made so far. Attention was also drawn to section 55(2)(b)(i) which allow the option to the assessee where the capital asset became the property of assessee before 1st day of April, 1981 to take the fair market value of the asset as on 1st day of April, 1981 for the purpose of computation of capital gain as cost of acquisition. Referring to section 55A, it was pointed out that the Assessing Officer, in case was not satisfied with the estimate made by the Registered Valuer, he should have referred to the matter to the Valuation Officer. It was pointed out that the circle rates are to be adopted only for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such price as may be determined in accordance with the rules made under this Act.'' This is a fact that in this case, no rules have been determined for the purpose of determining fair market value. The assessee has relied on the valuation report which he obtained from the registered valuer who is technical person and duly approved by the department. He has submitted the copy of the valuation report. The Assessing Officer, on the other hand deputed the Inspector who brought the circle rate of the village where the land was situated and has adopted the circle rate to be fair market value. We could not get any provision under this chapter relating to the computation of the capital gain, which states that circle rate will be treated to be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at having regard to the nature of the asset and other relevant circumstances, it is necessary so to do; and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the 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.'' In view of the aforesaid provision, we are of the view that once the assessee has submitted the necessary evidence by way of valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,00,000 totalling to Rs. 2,17,000 respectively on 15-7-2007, 27-11-2004 and 24-12-2004 in his bank account No. 23/7626. The cash deposited in the bank account was found disproportionate to the income shown by the assessee in return of income. The assessee was, therefore, required to explain the source of these deposits and to furnish the cash flow statement. The Assessing Officer further observed that though the assessee furnished the fund flow statement, but for want of any evidence in support thereof and also the fact that the assessee did not prepare and personal statements of affairs nor maintained any books of account, the fund flow statement furnished by assessee was doubted and the amount of Rs. 2,17,000 was added to the income of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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