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TMI Blog2015 (2) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... firm the findings of the learned Commissioner of Income-tax (Appeals) that the sale value of the consideration taken by the stamp valuation authority was the right amount for the purpose of calculation of long-term capital gain.There is no force in the contention of AR regarding mistake having been committed by the stamp valuation authority in taking the value of TDR and it has been clearly described in the order of the learned Commissioner of Income-tax (Appeals) that the value of TDR also has been taken at 60 per cent. and it has not been taken at 100 per cent - Decided against assessee. Adoption of fair market value while computing the long-term capital gains - CIT(A) confirming the adoption of fair market value as on April 1, 1981 instead of ₹ 5,62,50,775 in respect of the appellant's rights in land at Juhu - Held that:- This issue is squarely covered in favour of the assessee by the decision of of CIT v. Puja Prints [2014 (1) TMI 764 - BOMBAY HIGH COURT] and direct the Assessing Officer to adopt fair market value of the impugned property as on April 1, 1981, at ₹ 5,62,50,775 as per valuation submitted by the assessee of the Registered Valuer - Decided in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total valuation made by stamp office and computation of capital gains being a capital assets without any cost. 1.5 The learned Commissioner of Income-tax (Appeals) failed to appreciate the peculiar nature and status of this property and transaction. 2.0 The learned Commissioner of Income-tax (Appeals) erred in law and on facts in confirming the adoption of fair market value as on April 1, 1981, at ₹ 3,10,14,000 instead of ₹ 5,62,50,775 in respect of the appellant's rights in land at Juhu while computing the long-term capital gains. 2.1 The learned Commissioner of Income-tax (Appeals) erred in law and on facts in ignoring the valuation report of Shri Rajesh Shah of M/s.Shah and Shah, Government approved valuer valuating the appellant's rights as on April 1, 1981. 2.2 The learned Commissioner of Income-tax (Appeals) failed to appreciate the peculiar nature and status of this property and transaction. 3.0 The Commissioner of Income-tax (Appeals) failed to appreciate that the provisions of section 50C cannot be applied in a case where there is no proof, or even a suggestion that something more is paid, over an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1970, reaffirming the covenants and clarifying the consent for obtaining financial assistance by way of mortgage, etc. The assessee sold the reversionary right in the property before the expiry of lease period of 98 years, which commenced from March 4, 1968, vide an agreement for sale dated August 5, 2008, for a consid eration of ₹ 41,51,00,000. 3. As it can be seen from the above facts the assessee sold the reversionary right in the said property before the expiry of lease period of 98 years which commenced from March 4, 1968, vide an agreement for sale dated August 5, 2008, for a consideration of ₹ 41.51 crores. 4. Initially the assessee filed return (first return) in which the sale consideration was taken at ₹ 57,74,51,000 as taken by the Collector of Stamps and computed the long-term capital gain at ₹ 7,57,75,034 as under : (Rs.) (Rs.) Sale consideration-market value as assessed by the Collector of Stamps, Mumbai (actual consideration ₹ 41,51,00,000) 57,74,51,000 Fair market value as on 1-4-1981-estimated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. All the above facts are mentioned in the statement of facts filed by the assessee before the learned Commissioner of Income-tax (Appeals). 6. Before the learned Commissioner of Income-tax (Appeals) the assessee firstly contested the action of the Assessing Officer in adopting the sale consideration of ₹ 57,74,51,000 as against actual sale consideration of ₹ 41.51 crores. The assessee also contested the action of the Assessing Officer in adopting fair market value as on April 1, 1981, at a sum of ₹ 3,10,14,000 in place of value determined by the Government approved valuer at ₹ 5,62,50,775. 7. Before proceeding further it may also be mentioned here that for the purpose of determining the value all the valuers who have valued the impugned property either at the time of sale or as on April 1, 1981, have adopted different ratio of apportionment of fair market value and such difference in the various valuation reports have been brought out by the assessee in a table which is reproduced at page 3 in paragraph 1.2 of the order passed by the learned Commissioner of Income-tax (Appeals) and the said table is reproduced below : 3. All the valuers adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indraprastha Ice and Cold Storage Ltd. v. Union, AIR 1987 Delhi 171 87.5 12.5 9. Further, the assessee objected to the adoption of valuation done by the DVO as on April 1, 1981, relying upon several decisions of the Income-tax Appellate Tribunal in which it was held that section 55A authorises the Assessing Officer to refer for valuation if in the opinion of the Assessing Officer the value of the asset as claimed by the assessee is less than its fair market value or say, value in his opinion could be higher than that disclosed by the assessee and all these decisions of the Tribunal are mentioned in paragraph 1.2 of the order of the learned Commissioner of Income-tax (Appeals). It was also pleaded that the amendment which enable the Assessing Officer to refer the issue regarding valuation even in a case where the value is less than its fair market value is brought on the statute only with effect from July 1, 2012, which could not be applied to the case of the assessee as the amendment is not retrospective. 10. The assessee further objected to the adoption of sale value at ₹ 57,74,51,000 based on value adopted by the Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made : The Joint Director, Town Planning (Valuation), Maharashtra State, Pune, has valued the property at ₹ 41,51,00,000 being value as per document. However, the correct calculation of discounted value as per the Town Planning Department should be ₹ 1,55,62,501 instead of ₹ 1,59,74,490. This does not affect the value since document value is ₹ 41,51,00,000 sharing in the ratio of 40 : 60. 12. It was further brought to the notice of the learned Commissioner of Income-tax (Appeals) that the assessee had filed an appeal as well as petition before the higher authorities regarding stamp valuation and the outcome thereof and reference can be made to the following submissions : 4. The assessee filed appeals and petitions before the higher authorities under the Bombay Stamp Act to correct discrepancies in valuation and determine fair value. The same were rejected by all the authorities and forums on technical ground that stamp duty value cannot be revised after registration of document under Bombay Stamp Act and not on merit. However, the Bombay High Court observed that their order shall not be an impediment to the income- tax authorities to ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of TDR FSI as under : TDR FSI 7554.80 sq. meter Utilised area 2379.20 sq. meter Balance 5175.60 sq. meter 5175.60 x 75,600 x 0.60 = 23,47,65,220 (In the aforesaid quotation the numerical written Devanagari script are written in roman script) The figure of 5175.60 is the value of land per sq. meter as indicated in the order itself just above the computation part. The TDR value has been taken at the rate of 60 per cent. and not 100 per cent. as stated by the appellant. In the calculation of Collector of Stamp, Andheri (paper book page 61) : 5175.60 x 75,600 x 0.60 = 23,47,65,220 The area of land for TDR is considered at 5175.60 (after deducting already utilised area from the total area). Even if the area of land is taken to be 60 per cent. and the value of land is taken at full, i.e., 75,600 per sq. meter, we arrived at the same figure of value of TDR which is obvious from the calculation given below : 5175.60 x 0.60 x 75,600 = 23,47,65,220 1.3.4.2 Thus, it is clear that the appellant basically wants double deduction value, i.e., red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee at ₹ 41,51,00,000. He submitted that the sale consideration shown by the assessee is supported by the valuation report of the Joint Director, Town Planning (Valuation), Maharashtra, Pune. He submitted that the learned Commissioner of Income-tax (Appeals) has erred in holding that the assessee did not dispute valuation by stamp duty authorities ignoring the fact that the assessee's appeal under section 53A of the Bombay Stamp Act was pending before the appropriate authorities for finalising value of stamp duty based on valuation report of the Joint Director, Tower Planning (Valuation), Maharashtra, Pune. The learned Commissioner of Income-tax (Appeals) has also failed to appreciate that valuation done by stamp office is excessive and unreasonable. The learned authorised representative further submitted that the learned Commissioner of Income-tax (Appeals) has committed an error in excluding the value of TDR from the total valuation made by stamp duty officer and computation of capital gain being capital asset without any cost and for doing so the learned Commissioner of Income-tax (Appeals) has also failed to appreciate the peculiar nature and status of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative submitted that as per the provisions of section 50C there is no alternative with the Assessing Officer to assess any value less than assessed by the stamp valuation authority and such decision has been given by the learned Commissioner of Income-tax (Appeals) after considering the provision of section 50C. It was further submitted by the learned Departmental representative that the learned Commissioner of Income-tax (Appeals) has recorded a finding of fact that the assessee did not make any objection before the Assessing Officer regarding application of section 50C possibly to avoid valuation by the District Valuation Officer of the Income- tax Department. The learned Departmental representative in this regard referred to the finding recorded by the learned Commissioner of Income- tax (Appeals) in paragraph 1.3.3.12 of the impugned order. 20. So far as it relates to the contention of the learned authorised representative regarding the so called mistake in calculating the value of TDR for the purpose of stamp valuation it was submitted by the learned Departmental representative that in paragraph 1.3.4 the learned Commissioner of Income-tax (Appeals) has held that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration is taken as valuation done by the stamp valuation authorities then there is a mistake in calculation of sale consideration as TDR value has been taken at 100 per cent. 24. The sale consideration taken at ₹ 57,74,51,000 has been agitated firstly, on the ground that as per valuation done by the Joint Director, Town Planning (Valuation) Maharashtra, Pune on June 18, 2010, the value has been ascertained at ₹ 41.51 crores, therefore, any value more than that cannot be taken as sale consideration. The Assessing Officer has taken sale consideration as per the provisions of section 50C which is a special provision regulating full valuation of consideration in certain cases. It clearly describes that in a case where consideration received or accruing as a result of transfer by an assessee of capital asset, which, inter alia, include land or building or both is less than the value adopted or assessed or assessable by any authority of a State Government (stamp valuation authority) for the purpose of payment of stamp duty in respect of such transfer the value so adopted or assessed or assessable, shall, for the purposes of section 48, be deemed to be the full value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d filed an appeal before the Additional Controller of Stamps, Mumbai, which was registered as GSO/32-B/05/2009 under section 32B of the Bombay Stamp Act, 1958, which was decided vide order dated August 4, 2009 and copy of this order is filed at page 105 of the paper book. The Additional Controller of Stamps, Mumbai, has dismissed this appeal of the assessee on the ground that the appropriate authority for deciding correctness of valuation done by stamp valuation authority lies with the Chief Controlling Revenue Authority and he has given the liberty to the assessee to file revision application before the Chief Controlling Revenue Authorities under section 53A of the Bombay Stamp Act, 1958 and disposed of the appeal filed by the assessee. Subsequently, the assessee filed a petition for revaluation before the Chief Controlling Revenue Authority, Maharashtra State, Pune against the aforementioned order dated August 4, 2009 and this was registered and miscellaneous application of the assessee was disposed of vide order dated February 6, 2012 and the copy of this order was filed at pages 110 to 114 of the paper book. The sum and substance of the order passed by the Chief Controlling Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eafter, the petitioners filed a revised return of income on August 26, 2010 and a revised long-term capital gain in respect of the transfer of the subject property declaring a revised income of lesser amount. 7. From the aforesaid facts, it is evident that the petitioners approached the authorities in respect of challenge to the fixation of market value and stamp duty payable on the indenture in respect of the subject property after considerable delay and only as an after thought having realised that the valuation by the stamp authorities may come in its way in determining the capital gains tax payable by the petitioners. The obligation to pay the stamp duty was on the purchaser-Hotel Horizon Pvt. Ltd. who had paid the stamp duty without any protest. The petitioners, if at all aggrieved ought to have approached the authorities in the first instance. Prima facie, it does appear that it is only at the time of filing of the revised return of income that the petitioners have sought to challenge the order of adjudication and valuation by the Collector of Stamps so as to claim some tax relief in the incidence of long-term capital gain tax. 8. In light of the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph 3.9 of this order. We, therefore, decline to interfere in such findings of facts recorded by the learned Commissioner of Income-tax (Appeals) and this contention of the learned authorised representative is rejected. 29. Now coming to the issue raised in ground No. 2, this issue is squarely covered in favour of the assessee by the decision of the hon'ble Bombay High Court in the case of CIT v. Puja Prints [2014] 360 ITR 697 (Bom). Respectfully following the same we decide this issue in favour of the assessee and direct the Assessing Officer to adopt fair market value of the impugned property as on April 1, 1981, at ₹ 5,62,50,775 as per valuation submitted by the assessee of the Registered Valuer, copy of which is filed at pages 1 to 25 of the paper book and at page 15 the value has been arrived at ₹ 5,62,50,775. 30. Before parting with this ground we may mention here that in the second return of income filed by the assessee, the capital gain has been computed on the basis of valuation done by Shri S. S. Rahalkar as on April 1, 1981, who has assessed the value at ₹ 7,08,94,016. During the course of hearing of the appeal neither the learned authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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