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TMI Blog2014 (5) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... the same was converted into non-agricultural land subsequently in the year 2005 when the same was sold as non-agricultural land - lower authorities have rightly treated this land as agricultural land as on 01- 04-1981 and assessing officer has rightly taken the valuation of the land @ 2.32 per sq. ft on the basis of comparable instances obtained by him from the concerned authorities - as per the provisions of section 55A of the Act, the AO may refer the matter to DVO in case valuation of any property on the basis of registered valuer has been shown by the assessee less than the market value - the situation is revere as in this case the assessee has shown value of the land as on 01-04-1981 more than the market value – the order of the CIT(A) is upheld – Decided against Assessee. - ITA No. 3290/Ahd/2010 - - - Dated:- 31-7-2013 - Sri D. K Tyagi And Shri Anil Chaturvedi,JJ. For the Petitioner : Sri P. L. Kureel, Sr. D. R. For the Respondent : Sri S. N. Divetia, A. R. ORDER Per : D. K. Tyagi, Judicial Member:- This is the assessee s appeal against the order of Ld. CIT(A)-II, Baroda dated 24-09-2010. 2. The assessee has taken following grounds of appeal:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. This land was an agricultural land and the same was converted into non-agricultural on 21-03-2005. Thereafter, this land was sold for the total consideration of Rs. 89,64,000 and the assessee received his half share of Rs. 44,82,000/- during the year and balance amount in subsequent year. While going through the computation of income, assessing officer noted that while computing the income from capital gain on sale of land the index cost of acquisition was taken at Rs. 49,26,608/- (half share) based on valuation report dated 11-02-2008 valued by approved architect and valuer Sri I.N Gajjar. Since, the land was ancestral property and the land was received in inheritance, the value of the land for the purpose of computing the income from capital gain was valued as on 01-04-1981. The value was taken by the registered valuer as on 01-04-1981 @ 18 per sq. ft. On going through the valuation report, it was observed by AO that as per column no. 40, it was stated by the valuer that rate has been obtained by the local inquiries. The valuation of the immovable property was valued treating the land as other than agricultural land . The AO was of the view that value of land as on 01- 04-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Without prejudice to above, if the value of land as on 01.04 1981 is adopted of agriculture land, then deduction for, expenses of Rs. 2,86,481/- being N.A. charge paid of Rs. 17.845/- being scrutiny fees paid to VUDA may please bee granted as deduction at cost price indexation of the same may please be granted . 4. After taking into consideration the submission of the assessee the AO calculated the long term capital gain at Rs. 38,47,040/- by observing as under: 7. The contentions put forward by the assessee are not at all on the facts as well as on the records/information procured from the Local Bodies /Govt. Entities. The records of the Government entities are substantially authentic and scientific than what the assessee has submitted. There is no denying to fact that the land in question was agricultural land in the initial stage and it should be the basis for the purpose of indexation from 01.04.1981. In no case the valuation should be adopted on the character of the land as non-agricultural land. As a matter of fact, the undersigned had given an opportunity to the assessee to produce the cogent proofs if at all any improvement any cost had incurred by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he detailed submission on both the contention are as under. 3.4.1. Regarding the first contention of the Ld. A.O. that the fair market value of the subject land is to be considered as agricultural land, the appellant most humbly submit that the contention of the Ld. AO is erroneous both in law and facts of the matter. Since the said land was converted by the appellant at his own cost to nonagricultural land and sold as non-agricultural land, the value of the said land should has been considered as non-agricultural land. 3.4.2. The appellant further submits that as per the provision of Section 55(2) (b) where the capital asset becomes the property of the assesses before 1.4.81, the cost of acquisition of as such assets can be substituted by the fair market value of such asset on 1st April 1961 at that option of the assesses. The appellant most humbly submit that this provision has to be interpreted logically and cannot be interpreted in absurd manner. When the subject land has been sold as nonagricultural land, its fair market value has to be considered on 1.4.81 as non-agricultural land only. It is important to note that the land sold by the appellant is non-agricultural and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs like location, surrounding, size, payment period, installments, need of seller, need of buyer, taxation cost, FSI etc. and in the sale instance quoted by the Ld. A.O. is totally silent on it and it seems either he has no such information or it has been not provided to the appellant. He is totally silent why is adopting same, he neither compared with the appellant's land specification with that of sale instance relied on by him. The Ld. A.O. has in real sense given only 1 instances and has chosen it as it was suitable to him, but he has not all proved that the value determined by the Approved Valuer is high. In view thereof, the appellant most humbly submit that the sales instances quoted by the Ld. A.O. are not reliable, on the contrary it is self contradictory and hence the same cannot be considered. 3.4.5. As far as the value adopted by the appellant is concern the appellant most humbly submit that the same is the fair market value as the same is based on report of registered valuer who is qualified as Architect Civil Engineer. He is also an approved as valuer by the Income Tax Department. He has vast experience in the field including valuation. The appellant fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the copy of valuation report of the nearby land as Annexure 6. From the same your honour will observe that the value of the similar land in the same area as on 21/5/1931 was Rs. 45.35/- per Sq. Ft. (Rs. 499/- per Sq. Mts). This land is on Atladara - Padra main road so has better location but it is about 1 km away from appellant's land. Accordingly the fair market value of the appellant's land at Rs. 18/- per Sq. Ft. is reasonable as against Rs, 46.35/-. 6. After taking into consideration the submission of the assessee Ld. CIT(A) partly allowed the appeal of the assessee by holding that since land under consideration was agricultural land as on 01-04-1981, the valuation taken by the AO at Rs. 2.32 per sq. ft as on 01-04-1981 has rightly been taken for calculating the long term capital gain. While doing so, Ld. CIT(A) has also distinguished the case law of Jahanganj Cold Storage (Agra) (133 TTJ 278) relied by the AO. Ld. CIT(A) however directed the AO to include the cost incurred for improvement/conversion for the purpose of working of capital gain. 7. Assessee still aggrieved has come in appeal before us. 8. At the time of hearing learned counsel of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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