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TMI Blog2019 (10) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... /- for a total of Rs. 30,00,00,000/-. The assessee has worked out LTCG for the assessment year 2015-16, adopting guideline value of the property u/s.50C of the Act at Rs. 36,83,81,500/- (43,339 sq. ft. x Rs. 8500/- per sq. ft.) , allowed selling and legal expenses for Rs. 28,19,570/- and allowed indexed cost of acquisition of land at Rs. 30,35,53,290/ - adopting guideline value as on 1988 at Rs. 684 per sq. ft. (43,339 sq. ft. x Rs. 684 per sq. ft. x 1024/100) based on Registered Valuer's Report and has worked out LTCG at Rs. 6,20,08,639/-. 2.1 During the assessment proceedings the AO issued notice u/s.133(6) to the SRO, Adyar and asked him to furnish guideline value of the land in question as on 01.04.1981. The SRO furnished the guideline ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the name of the assessee M/ s. T.S. Hajee& Co. in the year 1989 and the guideline value supplied by the SRO for the period 01.04.1989 to 31.03.1990 was for Rs. 2,50,000/- per ground which works out to Rs. 104.16 per sq.ft. during the year 1989-90. Based on that the cost of acquisition was worked out for Rs. 45,14,190/- (43,339 sq.ft. x Rs. 104.16 per sq.ft.) and indexed cost of acquisition in the year 1989-90 worked out to Rs. 2,68,75,178/- (Rs. 45,14,190 x 1024/172) and accordingly the AO held that if the indexed cost of acquisition itself works out to Rs. 2,68,75,178/- in the year 1989-90 then how come the cost of acquisition would be at Rs. 30,35,53,290/- (43,339 sq.ft. x Rs. 684 per sq.ft. x 1024 /100) during the year 1981-82 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1981. Even though all infrastructure developments were made by the Government only during 1975-1981, the valuer has adopted only 63% of the average increase method. 3. The Assessing Officer called for the 1981 Valuation from the Sub- Registrar who replied that the 1981-1982 records are damaged and are not available. However, he gave a ridiculously low Guideline value of Rs. 8.33 per sq ft. in 1981. 3. It is submitted that the Honorable Supreme Court in the case of R. Sai Bharath Vs J. Jayalalithaa and others has held the Guideline value is not the Fair Market Value. It is Trite Law that the Guideline Value published by the Registration Department is not a conclusive evidence to work out the Fair Market Value as on 01.04.1981. 4. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the judgment of the Supreme Court referred to above, while considering the issue as to whether the land purchased has been undervalued or not, the Supreme Court observed that the guideline value has relevance only in the context of section 47A of the Indian Stamp Act (as amended by T.N. Act 24 of 1967) which provides for dealing with instruments of conveyance which are undervalued. Guideline value will only afford a prima facie basis to ascertain the true or correct market value. Guideline value is not sacrosanct, but only a factor to be taken note of if at all available in respect of an area in which the property transferred lies. When the assessee relies on the Registered Valuer's report and if Assessing Officer is not satisfied ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its property to Canara Bank as a security to the loan availed by its group concerns. No lay man can execute a deed of mortgage of his property against the loan availed by a third party/ parties, until and unless the individual has substantial interest over them. Thus, it is clear that the assessee availed loan from the Bank under the banner of group concerns by mortgaging its own property and group concerns failed to repay the loan, the bank sold the property and the entire consideration was recovered by the bank. Thus, it cannot be held that the assessee has not received any consideration directly or indirectly, which were liable to tax. 6.1 We have gone through the judgment in the case of CIT v. Attilli N. Rao 252 ITR 880 (SC), wherein, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim. According to it, the full sale price realised by the sale of the immovable property had two components; the first represented the price which could be ascribed to the interest of the assessee in the immovable property and the rest represented the arrears of debt and interest due to the State. In its opinion, as there was a clear charge or mortgage over the immovable property, the amount realised under the charge or mortgage was an amount which never reached the hands of the assessee but which reached the Government by overriding title. 7. From out of the judgment and order of the Tribunal, the questions aforestated were placed before the High Court for its consideration. The High Court observed that the undisputed fact was that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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