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TMI Blog2014 (4) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... rd – Decided partly in favour of Revenue. Determination of Fair Market Value - AO rejected Fair Market Value as determined by Inspector and adopted Fair Market Value at Rs. 3.75 per sq. mtr. – CIT(A) adopted cost of land at rate of Rs. 17 per sq.mtr - Held that:- Sub-Registrar has also cited instances from surrounding villages where rate varies from Rs. 0.96 to Rs. 70/- per sq. mtr. - Other Inspector has worked out average Fair Market Value at Rs. 15-16/- per sq. mtr. - In view of all these different Fair Market Value being determined by different persons - AO cannot take least Fair Market Value since in case of Assessee, Inspector of same office has duly verified nature of land and has also collected various sale instances of comparative villages - Therefore it will be appropriate that Fair Market Value as on 1.4.1981 be taken at Rs. 25/- per sq. mtr. - Fair and reasonable to adopt Fair Market Value as has been worked out by Inspector of Department - Set aside order of CIT(A) on this issue and direct AO to work out Fair Market Value as on 1.4.19981 at Rs. 25/- per sq. mtr. – Decided partly in favour of Revenue. - ITA No. 222/PNJ/2013, ITA No. 223/PNJ/2013, CO No. 42/PNJ/2013, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment Year for a consideration of Rs. 11,63,34,841/-. While computing the Capital Gains, the Assessee claimed deduction of Rs. 3 crores paid to Digambar V. Juwarkar (deceased brother of the Assessee) as per the consent order of the Hon'ble High Court dt. 24.5.2006 as amended vide order dt. 1.6.2007. The said property is an agricultural land gifted to Shri Vallabh Juwarkar and Shri Shripad Juwarkar (brother of the Assessee) by their grandmother, Mrs. Baguiroti Sinai Juwarkra on 24.10.1950. They were in possession and enjoyment of the property since 1950. The total land was 4,46,775 sq. mtrs. out of which a piece of land admeasuring 23,743 was allotted in F.Y 1984-85 to Shri Dattaram Puno Naik by way of gift in settlement of his demand arising out of tenancy rights. The balance area remained 4,23,032 sq. mtrs. which is equally owned by Shri Vallabh Juwarkar and Shri Shripad Juwarkar. Shri Shripad Juwarkar disposed off 1,50,000 sq. mtrs. out of his area vide Sale Deed dt. 31.5.2006. The balance area remains 2,73,032 sq. mtrs. which was sold by various sale deeds by both the co-owners. The gift property was never disputed until it was decided by the legal heirs of late Vinayak Juwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in 1950. At the death of their father, during inventory proceedings, Digambar Juwarkar required inclusion of the subject property in the assets to be inventorized. The other two elder brothers disputed it. The dispute was the subject matter of adjudication before the civil court Panaji. The civil court decreed that the subject property should be included in the assets inventorized and Digambar Juwarkar was entitled to a share in the property. The court further held that the income from the subject property has to be shared among three brothers at last till the inventory is decided. The court issued directions that in the interim, income from the subject property of Rs. 30,000/- per annum for the year 1995 was payable to Digambar Juwarkar. The appellant Vallabh Juwarkar appealed against the order of the civil court before the High court of Bombay at Panaji. During the pendency of appeal, Digambar Juwarkar expired. Vallabh Juwarkar entered into an agreement with the wife of Digambar Juwarkar. According to the consent terms presented before the High Court as modified by the order of the High Court dated 01.06.2007, the appellant argued to pay a sum of Rs. 3,00,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dt. 15.9.2004 was challenged by Shri Vallabh Juwarkar and Shri Shripad Juwarkar in appeal. Shri Digambar Juwarkar in the meantime expired on 24.5.2006. Subsequently, consent terms came to be filed by Shri Vallabh Juwarkar, Shri Shripad Juwarkar and Smt. Urmila Digambar Juwarkar (on behalf of herself and her children, being the legal heirs of late Shri Digambar Juwarkar) by which Shri Digambar Juwarkar agreed to withdraw the application dt. 29.6.1995 for the distribution of the income and the objections raised on 15.2.1994 before the Inventory Court. As per consent order of the Hon'ble Court, the Assessee has to pay Rs. 3.50 crores to the legal heirs of late Shri Digambar Juwarkar. The said order was amended and the consideration was reduced to Rs. 3 crores and accordingly, the Assessee has paid Rs. 3 crores otherwise the Assessee could have not sold the property. The ld. AR relied on the order of the CIT(A) and contended that the order of CIT(A) be confirmed on this issue. 2.3 The ld. DR, on the other hand, relied on the order of the AO and contended by referring to the order of the Hon'ble High Court that the Hon'ble High Court has clearly stated under para 3 of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contending that the said Digambar Juwarkar had no right or claim over the impugned property which was in exclusive ownership and possession of said Shri Vallabh Juwarkar and Shri Shripad Juwarkar. The application made by Shri Vallabh Juwarkar and Shri Shripad Juwarkar remained pending. In the inquiry proceedings filed by Shri Digambar Juwarkar, the ld. CJSD passed the following interim order dt. 15.9.2004 : "For the discussion made herein the cabeca de casal is ordered to pay interim income of Rs. 30,000/- per annum from 1995 till the final distribution of income/assets of applicant Shri Digambar Juwarkar with statement of account to Comarca Court. Order accordingly. Pronounced in the open court." Copy of the order was placed before us at pg. 14-25. From the order, we observed that the order is dt. 15.9.2004 but in the first paragraph of the order, it is mentioned that the applicant has filed application dt. 29.6.1995. Subsequently, we noted that Shri Vallabh Juwarkar and Shri Shripad Juwarkar went in appeal before the Hon'ble High Court against the interim order being Appeal no. 73 of 2004 and a consent order was passed by the Hon'ble High Court on 24.5.2006 by holding in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income from Capital Gains has to be worked out in accordance with Part E of Chapter - IV. Mode of computation has been given under Sec. 48 of the Income Tax Act which states as under : "48. The income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely :- (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) the cost of acquisition of the asset and the cost of any improvement thereto:" From the above provision, it is apparent that income chargeable under head Capital Gains has to be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset, the expenditure incurred wholly and exclusively in connection with such transfer and also the cost of acquisition of the asset and the cost of improvement thereto. We have perused the order of CIT(A). CIT(A) although directed the AO to allow the deduction to the Assessee, has not given any finding whether the payment made by the Assessee represents expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the average rate during 1981 in that area at Rs. 15-16/- per sq. mtr. CIT(A), therefore, directed the AO looking at the overall situation to adopt the Fair Market Value as on 1.4.1981 at Rs. 17/- per sq. mtr. 3.1 We have heard the rival submissions and carefully considered the same alongwith the order of the tax authorities below. The ld. AR before us relied on the Valuation Report of the approved Valuer, Kiren Gedam, copy of which is filed before us at pg. 4-10 of the paper book. We noted from the said Valuation Report that the instances does not relate to the village in which the property sold by the Assessee is situated. Even the instances given in the Valuation Report are not relevant to the time. Even the instances relate to smaller plot, area of which is between 300-500 sq. mtrs. Even the plots do not relate to agricultural land. Under these facts, in our opinion, the instances given by the approved Valuer cannot be regarded to be comparative instances. Comparative instances should relate to the locality, time of the sale and area of the plot must be approximately equal to the impugned area. Even the nature of the land should also be the same. We have also noted that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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