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TMI Blog2018 (12) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... atistical purposes. Cost of acquisition of the land taken by the AO as against cost of acquisition taken by the appellant in the return of income while working out long term capital gains on sale of property as jointly owned by the assessee along with his brother - Held that:- The valuer was issued notice u/s 133(6) and in response, he submitted that no document/purchase deed was provided by the assessee regarding valuation of land and he has taken the land rate basis the commercial land rates of various areas in Jaipur city for the location Ramgang Bazar to Galta Gate. Further, what those land rates are, there is no data which has been shown as forming part of the valuation report. We therefore find serious deficiency in the approach of the valuer. Firstly, where he has himself described the property as residential located in a residential area and occupied by the assessee for own residence and not rented out, a fact not been disputed even before us, that on basis, he has considered the commercial land rate. Secondly, what stopped the assessee who has appointed the valuer in sharing a copy of the registered purchase deed with the valuer. This shows the conduct of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 3,73,800/- declared by the assessee in the return of income under the head Long Term Capital Gain, which sustaining of addition of ₹ 27,08,092/- under the head long term capital gain is most arbitrary, unjust, untenable and bad in fact and in law and in the alternative it is highly excessive w.r.t facts and circumstances of the case. 2. That on the facts and circumstances of the case sustaining by the learned Commissioner (Appeals) value of the sold property at ₹ 92,80,201/- as adopted by the AO u/s 50C as against apparent sale consideration of ₹ 75,00,000/- is unjustified and not maintainable in law and in the alternative excessive. 3. That on the facts and circumstances of the case upholding by the learned Commissioner (Appeals) cost of acquisition of the land at ₹ 38,500/- as against cost of acquisition adopted by the appellant at ₹ 5,80,000/- in the return of income while working out long term capital gain is highly unjustified and in the alternative very low. 4. That the learned Commissioner (Appeals) erred in sustaining addition of ₹ 36,000/- made by the AO under the head Salary Income by taking the income from salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- shown by the assessee. On appeal, ld. CIT(A) confirmed the said position taken by the AO regarding application of section 50C of the Act. 5. During the course of hearing, the ld AR reiterated the submissions made before the lower authorities. The ld. AR submitted that the notice given by registering authority for adopting higher valuation than what is mentioned in the sale deed cannot become a valid basis of adopting higher valuation until a formal order is passed by the registering authority. It was submitted that the the ld. CIT(A) further failed to appreciate that even after passing of the revised order by the registering authority, the effected parties are given right of appeal under the law and until the revised order as well as appellate order, if any, are finalized the value already adopted by the registering authority at the time of registration of sale deed cannot be changed. 6. We have heard the rival contentions and purused the material available on record. As per registered sale deed dated 12.01.2011, the sale consideration has been stated as ₹ 75,00,000 and at the same value, the property has been registered and the stamp duty has been paid which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the value was passed in that appeal or revision or reference. The matter is accordingly set-aside to the file of the AO to examine the same a fresh after seeking requisite information from the Sub-Registrar authority regarding the final value so determined in respect of impunged property and decide as per law taking into consideration the above discussions. In the result, the ground is allowed for statistical purposes. 7. In respect of Ground No. 2, the assessee has challenged the cost of acquisition of the land taken by the AO at ₹ 38,500/- as against cost of acquisition taken by the appellant as ₹ 5,80,000/- in the return of income while working out long term capital gains on sale of property situated at B-8, Raghunath Colony, Near Galta Gate, Jaipur which was jointly owned by the assessee along with his brother. The assessee has taken the valuation as on 01.04.1981 based on registered valuer s report whereas the Assessing Officer has considered the cost of the acquisition based on the purchase deed dated 17.04.1980 relating to the impunged property wherein the purchase consideration has been shown at ₹ 35,000/- and giving benefit of 10% appreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this valuation report forms part of the paper book being filed simultaneously and separately. 3 That the learned CIT(A) ought to have appreciated that the income declared under LTCG at a loss of ₹ 3,73,800/- as per working given hereunder was quite in order and it should have been accepted as it is. Working of long term capital gain is as under: Sale Consideration ₹ 37,50,000/- Less: 1.Value of the complete house property as on 01.04.1981as per the valuation made by the registered valuer (copy of valuation report enclosed) at ₹ 11,60,000 and assessee's half share comes at ₹ 5,80,000) 5,80,000 2. Indexed cost 41,23,800 ₹ 41, 23,800/- Long Term capital gain (Loss) ₹ 3,73,800/- 4. That the learned CIT(A) erred in not taking into consideration following supporting papers/document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly comes out that earlier to jointly purchase of the land by the assessee and his brother, the land in question was originally purchased by a partnership firm, named M/s. Khandelwal Lands vide registered sale deed registered in the office of Sub-Registrar Jaipur at Serial No.3794 and Book No.1 on 26.12.1970. For one reason or the other this partnership firm Khandelwal Lands got dissolved on 02.12.1975. On dissolution of the partnership firm Khandelwal Lands, the above mentioned plot No. B-8, Raghunath Colony Jaipur came into the share of the seller Shri Ashok Kumar Son of Shri Gopinathji Gupta, Jaipur. vi That in the course of assessment proceedings the assessee filed a valuation report of registered valuer. The registered valuer has clearly certified and taken the fair market value of the total land as on 01.04.1981 at ₹ 5,49,780/-. In all humbleness it is submitted that the valuation given by the approved valuer should have been taken on face value and indexed cost of land should have been taken on the basis of valuation made by the approved valuer. Taking of lesser value than the value taken by the approved valuer for valuation purposes is not justified under any ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g] Officer is of opinion that the value so claimed is less than its fair market value; (b) in any other cases, if the Assessing Officer is of opinioni) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage of the value of the asset as so claimed or by more than such amount as may be prescribed in this behalf; or ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do, and where any such reference is made, the provisions of sub-section (2),(3),(4),(5) and (6) of section 16A, clauses (ha) and (i) of subsection (1) and sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957(27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under subsection (1) of section 16A of that Act. Explanation - In this section, valuation officer' has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 It was submitted by the ld AR that from reading the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Gauhati High Court in the case of Bhola Nath Majumdar Vs. ITO and Others reported in (1996) 221 ITR 608. 10. The ld DR is heard who has relied on the findings of the lower authorities. Further, he referred to the findings of the ld CIT(A) which are contained at para 2.3 of her order which is reproduced as under:- 2.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. The facts of the case are that the assessee had shown a long-term capital loss of ₹ 3,73,800/- on his half share of property at Raghunath colony, Jaipur sold for ₹ 75 lakhs as per the registered sale deed. The AO noted that the cost of acquisition has been shown at ₹ 11.60 lacs which included ₹ 5,49,780/- for cost of land whereas as per the purchase deed dated 17/04/1980 the plot was purchased for ₹ 35,000/- on 17/04/1980 that is within a period of 11 months the cost of acquisition has enhanced from ₹ 35,000/- to ₹ 5,49,780/-. In support of the acquisition cost, the valuation report of an approved valuer had been filed in which the AO noted that while the property is recorded as residential but commercial rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, no details furnished by the registered valuer for information called for by the AO under section 133(6) in this regard. The property is residential as per the valuers report, however he has applied commercial rates without supplying any justification. It was also submitted in the present proceedings that the land was originally allotted to M/s Khandelwal Lands and as the firm got dissolved it was allotted to the partners, this by itself does not make the land as commercial. Rather in the purchase deed it is recorded on page 4 para 2 as follows: Further, considering the plea of the Authorized Representative, a 10% increase has already been granted by the Assessing Officer in the cost of construction. In view of the discussion as above, the cost of acquisition has been correctly arrived at by the AO as well as application of section 50C and the long-term capital gain arrived at by the AO are confirmed. Ground of appeal is dismissed. 11. We have heard the rival contentions and perused the material available on record. Firstly, on perusal of the purchase deed dated 17.04.1980, the recital talks about verbal agreement to purchase the impunged property in February ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) and in response, he submitted that no document/purchase deed was provided by the assessee regarding valuation of land and he has taken the land rate basis the commercial land rates of various areas in Jaipur city for the location Ramgang Bazar to Galta Gate. Further, what those land rates are, there is no data which has been shown as forming part of the valuation report. We therefore find serious deficiency in the approach of the valuer. Firstly, where he has himself described the property as residential located in a residential area and occupied by the assessee for own residence and not rented out, a fact not been disputed even before us, that on basis, he has considered the commercial land rate. Secondly, what stopped the assessee who has appointed the valuer in sharing a copy of the registered purchase deed with the valuer. This shows the conduct of the assessee and his intention of seeking a valuation report which supports his case of a higher value instead of determining a fair market value which is the mandate of law. Therefore, we are of the considered view that the lower authorities have rightly rejected the valuation report and do not agree with the contention of the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2011-12 and not of financial year 2010-11. In fact, total salary of assessee in the previous year relevant A.Y. 2011-12 is ₹ 1,44,000/- and not ₹ 1,80,000/-. The mistake occurred on account of wrong understanding by the accountant and not thoroughly going through it by the directors while putting their signatures is very much regretted. It is respectfully submitted that this being a typographical error, the same may kindly be ignored and addition of ₹ 36,000/-may kindly be deleted. A copy of correct salary certificate for the previous year relevant to A.Y. 2011-12 was duly filed with the learned CIT(A) and a copy thereof forms part of the paper book being filed simultaneously and separately which may be considered. 15. We have heard the rival contentions and purused the material available on record. The ld AR has contended that the salary for the impunged year is ₹ 144,000 and salary for the next year is ₹ 180,000 and by mistake, salary certificate for the next year has been submitted during the assessment proceedings, however a correct certificate has been submitted during the appellate proceedings. The AO is directed to verify the salary certif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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