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TMI Blog2019 (6) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... tain the correctness of FMV as on 1.4.1981 adopted for computing the Long Term Capital Loss. Reliance is placed on the decision of Hon. Delhi Court in the case of CIT II Vs Jansampark Advertising and Marketing P Ltd in IT A No 525/2O14 dated 11.3.2015. 3. "On the facts and in the circumstances of the case and in Law, whether the Ld.CIT(A) is justified in the deleting the disallowance of Short Term Capital Loss of Rs. 16,80,60,000/-and Long Term Capital Loss of Rs. 3,83,35,481/- on sale of shares of Global Trendz Ltd to group concern for sale consideration of Rs. 1 per share as against the NAV of Rs.(-)3.18 per share". 3. Apropos disallowance of long-term capital loss The assessee in this case is a company engaged in the business of manufacturing and dealing in industrial chemicals. During the course of assessment the assessing officer proceeded to examine the claim of long-term capital loss shown by the assessee in the return of income. The assessing found that the impugned asset was land at Kalyan. The assessing officer found that assessee had purchased the said land on 1947. The assessee had given the said land on lease to West Pioneer properties India private limited a gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e current market rate should be about Rs. 18,777/-. This value is nowhere close to the current market price of the land. It is much higher. That it therefore appears that the assessee in unison with the valuer has worked out a favourable rate of land as on 01.04.1981. That on the basis of this valuation, the assessee has claimed LTCL in the return and has carried forward the same. That in view of the above discussion, the long term capital loss of the assessee at Rs. 19,67,85,586/- is not genuine, is fabricated and not as per the intent of law. That the same is therefore reduced to zero. 5. Without prejudice to the above the assessing officer observed that the land has been sold to the group company which had already been occupying the same land on the long-term lease of 99 years and had been operating a shopping mall on the same. This lease was entered on 5/5/2005. AO observed that the transaction for sale is only with respect to reversionary interest of the assessee in the said Kalyan property and not the actual sale of land. Therefore the assessing officer held that the valuation of land as such is only two hoodwink the revenue and the valuation report is only a colourable devi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of income tax reversed the order of assessing officer and allowed the long-term capital loss claimed at Rs. 19,67,85,586/- . 9. Against the above order the Revenue is in appeal before us. 10. We have heard both the counsel and perused the records. Learned DR submitted that learned CIT(A) has clearly erred in accepting the valuation report which has not been prepared by the registered valuer. He submitted that facts and circumstances above clearly indicate that the assessee's transaction is not aboveboard. He submitted that the assessee only had leasehold right on the property and it has leased out the same to the assessee's sister concern already. Thereafter during continuation of lease transfer of reversionary interest has taken place. Despite showing huge book profit the assessee has shown long term capital loss by putting fair market value as on 1.4.1981 by a valuation report which cannot be accepted. He submitted that valuer has done nothing but to taken stamp duty rate of 2012 and worked it backward taking 10% as growth rate. Learned DR further submitted that in contemporaneous situation reliance by the Assessing Officer on the website of Megabricks cannot be reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the huge difference found by the Assessing Officer when compared to data noted from website of Megabricks. The learned counsel of the assessee has submitted a case law from ITAT that such website information cannot be the sole basis for any value determination. But in the instant appeal, the surrounding circumstances couple with these information clearly indicate towards of lack of veracity in said valuer's determination. 13. Decision of Hon'ble Allahabad High Court in the case of Smt. Vidhi Agarwal (supra) mentions that opinion of the approved valuer can be said to be sufficient. This case law does not help the assessee on the surrounding circumstances pointed out in this case. The case law from Azadi Bacho Andolan (supra) does not help the case of the assessee. It is the tax planning by legitimate means that is permissible but not any attempt to hoodwink revenue. In our considered opinion on the facts and circumstances of the case, the issue needs to be remitted to the file of the Assessing Officer. The Assessing Officer is directed to consider the issue afresh after obtaining valuation report from the departmental valuer. Needles to add assessee should be provided adequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had really made profits in the transaction, it was not permissible for him to add back to assessee's return any fictional income. Learned CIT(A) further referred to the decision of Hon'ble Apex Court in the case of Union of India Vs. Azadi Bachao Andolan (263 ITR 706). 16. Learned DR relied on the order of the Assessing Officer. 17. Per contra, learned Counsel of the assessee submitted that learned CIT(A) has passed correct order. NAV of the company whose shares were sold would come to negative at Rs. 3.18 hence, learned counsel submitted that no fault can be placed on sale of shares by price which is more than the NAV i.e. Rs. 1 per share. He submitted that the order of learned CIT(A) is correct and needs to be confirmed. 18. Upon careful consideration we find that the Assessing Officer has no material whatsoever with him to conclude that transactions of sale are not genuine or that the price based on the sale is understated rather he has not at all doubted the fact that net asset of the company was negative and NAV was minus Rs. 3.18/-. In these circumstance we are of the considered opinion that the findings of learned CIT(A) and case laws relied upon by him are flawles ..... X X X X Extracts X X X X X X X X Extracts X X X X
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