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TMI Blog2014 (9) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... s during the course of hearing of the appeal and both of them have agreed that to determine the fair market value for the purpose of determining the sale consideration assessable as capital gain in the above manner, the matter may be restored back to the file of AO. Therefore, we restore the issue to the file of AO with a direction to determine the consideration on which the assessee is liable to pay capital gain as described in the manner aforesaid after giving the assessee a reasonable opportunity of hearing Adoption of value determined by DVO as cost of acquisition - reference to DVO for the purpose of valuation - taking the cost of the property as on 1/4/1981 - HELD THAT:- Tribunal held that in view of section 55A(a) it was not permissible for the AO to make a reference to DVO for the purpose of valuation as the value of property declared by the assessee was more than its fair market value. Thus, the Tribunal accepted the contention of the assessee that indexed cost should be taken as per value determined by a Registered Valuer of the assessee. Such order of Tribunal was confirmed by their Lordships. Their Lordships also rejected the contention of the Department that in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /11/2006 with M/s. Lalani Builders and Developers. According to Development Agreement the assessee being owner of the land was beneficiary of 35% of the developed carpet area and developer being beneficiary of 65% of the carpet area of the developed land. According to the calculation made by the AO the assessee was beneficiary of 38,457.50 sq.fts to which calculation the assessee has no grievance. However, the grievance of the assessee is with regard to valuation adopted by the AO of the said area which has been computed @ ₹ 2,427/- per sq. ft. and the sale consideration has been determined at ₹ 9,33,36,352/-. The basis of rate taken by the AO at ₹ 2427/- per sq.ft. is based upon clause 3(g) of the development agreement which read as under: (g) Against the aforesaid refundable deposit, the Developer shall be entitled to hold the approximate area of 2060 sq.ft. carpet area i.e. 3 Flats of 2 BHK admeasuring approx. 689 sq.ft. each ( which is equivalent to the estimated sale price anticipated as per today s calculations i.e. @ ₹ 2427/- per sq.ft. on carpet area) from the share of the Owner from the proposed new building/ or buildings to be constructed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No.4 taken by the assessee before Ld. CIT(A). The ground which is reproduced at page-2 of the order of Ld. CIT(A) states as under: IV. Without prejudice to the above grounds, on the facts and circumstances of the case and in law the AO has erred in determining the impugned capital gain as ₹ 9,66,35,052/- as against ₹ 3,45,87,500/- determined by the stamp valuation authority. 3.4 Further, the assessee had produced additional evidence before Ld. CIT(A) with a request to admit the same under rule 46A. Evidence was in the shape of valuation report of the property by the Registered Valuer showing the value of the property as on 1/4/1981 at ₹ 50,08,320/-. Ld. CIT(A) referred the same of the Valuation Officer who valued the property at ₹ 21,89,000 as on 1/04/1981. The Ld. CIT(A) has upheld the action of the AO in assessing the capital gain value by taking consideration at ₹ 9,33,36,352/- and he has given direction to AO to compute the indexed cost on the basis of value determined by District Valuation Officer(DVO) which was a sum of ₹ 21,89,000/-. 3.5 Upon aforementioned facts, in ground No.3 the assessee is agitating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus he pleaded that the order by Ld. CIT(A) should be upheld. 5.1 So far as it relates to ground No.5, Ld. DR submitted that the value has been determined by DVO and Ld. CIT(A) has given the reason for upholding the value determined by the DVO. He submitted that the valuation done by DVO has been given preference by Ld. CIT(A) on the ground that it was based on comparable cases. He submitted that as against that in the valuation submitted by the assessee no comparables were taken into consideration. 6. We have heard both the parties and their contentions have carefully been considered. We have also carefully gone through the clause 3(g) of the development agreement relying upon which AO has determined the sale consideration @ ₹ 2427/- per sft. of the carpet area which was to be allotted to the assessee on completion of the developed project and clause 3(g) has already been reproduced in the above part of this order. It describes that against refundable deposit of ₹ 50.00 lacs the developer will be entitled to hold approximate area of 2060 sq.ft. carpet area i.e. three flats of 2 BHK admeasuring approximately 689 sq.fts. It has specifically been written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oject as mentioned in the development agreement signed by the assessee. This factor was brought to the notice of both the parties during the course of hearing of the appeal and both of them have agreed that to determine the fair market value for the purpose of determining the sale consideration assessable as capital gain in the above manner, the matter may be restored back to the file of AO. Therefore, we restore the issue raised by the assessee in Ground No.3 to the file of AO with a direction to determine the consideration on which the assessee is liable to pay capital gain as described in the manner aforesaid after giving the assessee a reasonable opportunity of hearing and placing all relevant material on record. After giving such opportunity the AO will redetermine the consideration upon which capital gain could be computed as per provisions of law. We direct accordingly and ground No.3 is considered to be allowed for statistical purposes in the manner aforesaid. 6.1 Now coming to ground No.5, we have carefully gone through the decision of Hon ble Bombay High Court in the case of CIT vs. Puja Prints (supra). In the said case in respect of assessment year 2006-07 the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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