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TMI Blog2012 (5) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... ort in which the valuer for the reasons stated therein has adopted the average value of the value of open land and value of land with buildings and adopted an average value so arrived at - A.O. has taken one of the possible views in adopting the cost of acquisition as supported by the valuation report - the action of the CIT in invoking of section 263 is without any jurisdiction for the reasons stated - Decided in favor of the assessee - ITA No. 3837/Mum/2011 - - - Dated:- 31-10-2011 - D. Manmohan, B. Ramakotaiah, JJ. B.V. Jhaveri for the Appellant Usha Nair for the Respondent ORDER B. Ramakotaiah: This appeal by the assessee is against the order of the CIT-23, Mumbai under section 263 of the IT Act dated 22.03.2011. 2. In this case assessment was originally completed under section 143(3) of the Act vide order dated 29.12.2008 assessing the total income at Rs.3,01,47,782/-. On examination of record the CIT(A) was of the opinion that the order passed by the A.O. was erroneous and prejudicial to the interest of Revenue, therefore, a show cause notice under section 263 was served on the assessee to re-assess the income under the head 'Capital Gains' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in our Balance Sheet and Books of Accounts in respective years. The property in question is held for a period of more than 36 months and Capital Gain on it would be treated as Long Term Capital Gain. Rate of Tax on L.T.C.G. is paid @ 20% as per provisions of section 112. This working is properly shown as per statement of Long Term Capital Gain on sales of plot with shed." The assessee had filed Valuation Report of M/s. V.S. Modi Associates, Chartered Engineers, Government Approved Valuers and Surveyors. The aforesaid Government Approved Valuers valued the property of the assessee firm as on 01.04.198 1 wherein the valuer observed as under: "In or around 1981, several industries in the vicinity of land were functioning. [example: Divecha Glass Factory, Ganesh Flour Mills, Power Line Products, Venus Tiles etc.] Therefore, in or about 1981, land in this area can be said to have very good potential for industrial development. Therefore, to value such type of land, one may start base figure as applicable to "land plus building"and then reduce "cost of construction"and "developers margin". We consider "Indian Valuers Directory and Reference book for market value of property in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er relied upon the Government Approved Valuer who is supposed to know the intricacies of the valuation of immovable property. Therefore, the view adopted by the Assessing Officer cannot be said to be erroneous view or the one which is unsustainable in law, (iii) There must be material before the CIT to hold that an order is "erroneous and prejudicial to the interests of the Revenue"and a mere change of opinion cannot render the order erroneous. The CIT has considered only the book "Indian Valuers"Directory and Reference"published by Architect Publishing Corporation of India which was considered by the Government Approved Valuer whose report was filed by the assessee and accepted by the A.O. while completing the assessment under section 143(3) of the Act, and (iv) The provisions of section 263 contemplate to cover within its ambit and scope the error which is committed by the AO and not those errors which are committed by any other authority. 5. The learned D.R., however, reiterated the contentions of the CIT that the value adopted by the A.O. was not correct and the A.O. has not enquired about the cost of acquisition as his order was really on adaptation of sale value and not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has relied on the Indian Valuer's report in arriving at a price at an average method which the CIT now disputes. The order cannot be termed as erroneous just because the A.O. did not write elaborately on the issue, as considered by the Hon'ble Bombay High Court in the case of CIT vs. Gabriel India Ltd. 203 ITR 108. This section does not visualize a case of substitution of the judgment of the CIT for that of the Income-tax Officer unless the decision is held to be erroneous. Nowhere the CIT established that the order is erroneous. The CIT's contention is only that the valuer has adopted a different value than prescribed for open land, therefore, the mistake, if any, is not in the order of the A.O. but in the order of the Government Valuer whose report is on record before AO. 8. Even otherwise as seen from the record the basis for issuing show cause notice dated 18.02.2011 was the information from the stamp valuation authority. The relevant part of CIT's show cause notice is as under:- "The cost of land as on 1.4.1981 based on the valuation report of the valuer, M/s. V.S. Modi Associates was taken at Rs.62,74,800/- (i.e. Rs.168 per sq.ft.). However, it was found that the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of land with buildings and adopted an average value so arrived at. Therefore, it cannot be stated that the information with regard to valuation was available at the time of passing the assessment order and the A.O. has erroneously taken a higher value. The letter itself indicates that the enquiry was made subsequent to the completion of assessment and we are of the opinion that the information obtained subsequently cannot be a basis for reopening the assessment under section 263. That can be a good information for invoking other provisions of the Act but cannot be stated that the order passed by the A.O. was erroneous and prejudicial to the interest of Revenue on the basis of the subsequent information obtained by the A.O., for the purpose of invoking section 263, as that information was not available on record at the time of completion of assessment. The A.O. has accepted the average value in arriving at cost of acquisition and passed a detailed order recalculating the capital gains after due examination. In view of this, it can be concluded that the A.O. has taken one of the possible views in adopting the cost of acquisition as supported by the valuation report. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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