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TMI Blog2012 (5) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... e valuation arrived at by the assessing officer was not proper and justified, Learned Tribunal has not considered this aspect of the matter - this matter needs to be reconsidered - remanded for fresh hearing by the Learned Tribunal – in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... see to explain as to why long-term capital gain (LTCG) should not be computed by adopting deemed full value of consideration at Rs. 1,24,14,400/- u/s 50C of the Act. The assessee objected to the valuation made by Registrar of Assurance. Hence AO referred the matter to Valuation Officer of Income-tax Department u/s 50C(2)(b) of the Act. The Valuation Officer valued the property at Rs. 1,24,13,670/- and valuation report received vide letter dated 29/12/2008. The AO assessed the deemed full value of consideration at Rs. 1,24,13,670/- and computed LTCG accordingly. Aggrieved, assessee preferred appeal before CIT(A), who confirmed the action of the A.O. by giving following finding in paras 6 to 8 of his appellate order:- "(6) I have considered the submission of the appellant and also gone through the assessment made by the A.O. The section 50C of the I.T, Act, which was introduced, by the Finance Act, 2002 w.e.f. 01.04.2003, contains for a special provision for valuation of consideration in certain cases. Section 50C(1) provides that where consideration received or accruing as a result of transfer by an assessee of a capital asset, consisting of land or building or both, is less than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Section 50C(2), the A.O. has adopted the value of the property at Rs. 1,24,13,670/- for the purposes of computation of capital gain u/s. 48 of the I.T. Act as against the value of Rs. 1,24,14,400/- adopted by the Stamp Valuation Authority. (8) Under the circumstances, I am of the opinion that the A.O. has acted as per the provisions of Section 50C of the I.T. Act and accordingly he was justified in adopting the sale consideration of the property at Rs. 1,24,13,670/- as against the sale consideration shown by the appellant at Rs. 65,00,101/-. The action of the A.O. is upheld in this regard. The ground no. 1 is dismissed." Aggrieved, assessee preferred appeal before Tribunal and Tribunal vide order dated 07/5/2010 dismissed the appeal of the assessee and upheld the orders of lower authorities, against which assessee preferred appeal before the Hon'ble Calcutta High Court u/s. 260A of the Act and Hon'ble High Court has set aside the matter to the file of Tribunal to reconsider in the light of the direction reproduced as above. 4. This appeal was fixed for hearing before us, in view of the direction of Hon'ble Calcutta High Court, first time on 11/01/2012 and on that date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as determined at Rs. 1,24,13,670/- in respect to this property sold by assessee. The relevant abstract of the report reads as under:- "Abstract of Cost Determination of fair market value of property at 1472 Basudevpur, HPL Link Road, Haldia. The building is G+3 RCC framed structure. The property is located on main HPL Link Road and has huge commercial potential value. The property under consideration is commercial good and considering the factors such as commercial area, frontage of building, location transportation facilities and other amenities being very good. The rate of building under consideration as Rs. 10751 per sqm (plinth area) Plinth area 1154.76 sqm. @ Rs. 10750/- sqm. = Rs. 1,24,13,670/-. Plinth area - GF = 310.59 sqm. 1st to 3rd floor 3 x 323.83' = 971.49 sqm. 1282.08 sqm Less already sold (-) 127.32 sqm 1154.76 sqm. Valuation for property at 1472, Basudevpur HPL Link Road, Haldia The property is located on mail HPL Link Road PS Durgachak. Considering the factors such as good commercial area, frontage of building, location, transport facilities and other amenities being very good the rate adopted is Rs. 10750 per sqm. Sd/- Valuation Officer-VI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 16A(1) of that Act 27 of 1957. 6. In the present case before us, the property with land and building was sold for total consideration of Rs. 65,00,101/- and stamp duty at Rs. 5,20,100/- and Rs. 71,591/- were paid. This property was sold as on 29/07/2005 and sale deed was executed on this very date 29/07/2005. The AO proposed to take full value of consideration at Rs. 1,24,14,400/- in view of property assessed by A.D.S.R., Sutahata being deemed sale consideration of the property and accordingly computed LTCG on the same. The assessee objected and on that basis, and on objection of assessee AO referred the matter to DVO, who vide report dated 29/12/2008 assessed the property by applying plinth area rates @ Rs. 10,750/- per sq.mt. and ascertained the fair market value of this property as on the date of sale dated 29/7/2005 at Rs. 1,24,13,620/-. The AO assessed the deemed sale consideration, as assessed by DVO at Rs. 1,24,13,670/- and computed LTCG accordingly. The assessee before appellate authorities made argument that there is no fixed rate or there is no circle rate fixed by West Bengal Government for assessing the fair market value for the purpose of stamp duty during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value is to be ascertained and for that, as discussed above, sec. 50C of the Act has postulated certain conditions. In the present case, the fair market value estimated by DVO has been challenged as DVO's report has no basis, because it has not discussed any of the factors, such as locality, situation, general appearance in the area, availability of shopping and marketing facilities, conditions of public ways and transportation, availability of utilities etc. and etc. We have gone through the DVO.'s report, which is a cryptic one, and the assessment is based on value as assessed by A.D.S.R., Sutahata and that also on the basis of additional stamp duty asked for. If such is the situation, there is no purpose for referring the matter to DVO reason being if the DVO is to adopt the value taken by stamp duty authority, then he has not applied his independent mind and that itself is based on irrelevant considerations and germane considerations have not been considered while assessing the value. Hon'ble Supreme Court has ruled for determining the fair market value, no doubt in the context of Land Acquisition Act, 1894, but the same holds the field even in the case of valuation to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise indicated in clauses (7) to (9) has to be undertaken in a common sense manner as a prudent man of the world of business would so. We may illustrate some such illustrative (not exhaustive) factors:- Plus factors Minus factors 1. Smallness of size. 1. Largeness of area 2. Proximity to a road. 2. Situation in the interior at a distance from the road. 3. Frontage on a road. 3. Narrow strip of land with very small frontage compared to depth. 4. Nearness to developed area. 4. Lower level requiring the depressed portion to be filled up. 5. Regular shape. 5. Remoteness from developed locality. 6. Level vis-à-vis land under acquisition 6. Some special disadvantageous factor which would deter a purchaser. 7. Special value for an owner of an Adjoining property to which it may Have some very special advantage. (11) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance, take the factor regarding the size. A building plot of land say 500 to 1000 sq. yds. cannot be compared with a large tract or block of land of say ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred cases. These, above referred cases of Hon'ble Supreme Court, were confronted to DVO. Even Ld. Sr. DR, Shri S.K. Roy could not support the valuation report and fairly conceded that at the time of registration of sale deed of the assessee's property, there was no circle rates for assessing the fair market value for the purposes of collection or levy of stamp duty is fixed. In such circumstances, now we have to determine what should be the fair market value. As argued by ld. Counsel for the assessee, Shri S.M. Surana and the valuation report as assessed by the stamp valuation authority, the same property vide report dated 08.09.2008 assessing the market value at Rs. 76,18,872/- as filed before us can be considered. Hence, as directed by Hon'ble Calcutta High Court, considering the fair market value determined by A.D.S.R., Sutahata, Govt. of West Bengal, i.e. the valuation authority report dated 08/9/2008 assessing the fair market value of this property as on 08/9/2008 at Rs. 76,18,872/- seems to be fair and reasonable for the purpose of computation of long-term capital gains because when assessee sold his property, in question, there was no circle rates fixed by stamp valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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