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TMI Blog2023 (4) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... tr. - As both the DVO valuation as well as Government approved valuations are nothing but estimation of value as on specific date, it will be reasonable and justified if the average of two rates are taken as fair market value of the said land as on 01.04.1981. This way ld CIT(A) took the average rate of FMV of land vide RS No.118/97 will be Rs.69 (Rs.135 + 2.55/2) and FMV of land vide Rs no.123/103/1 will be Rs.69 (Rs.135 + 3.14/2). Average FMV as on 01.04.1981 determined by ld CIT(A) is still lower side therefore, considering the facts of the assessee as narrated above, the FMV of land as on 01.04.1981 should be adopted at Rs.90 per sq. meter. We note that determination of fair market value as on 01.04.1981, after all, is an estimate only and therefore we are of the view that ends of justice would be met, if a rate of Rs.90 per sq. meter is adopted as fair market value as on 01.04.1981 for the purpose of indexed cost of acquisition, as the same would take care of the inconsistencies between DVO report and report of registered valuers of the assessee. Therefore, we direct the assessing officer to recompute capital gain on sale of land by taking fair market value of land at Rs.9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gain after taking the average of values submitted by DVO and Govt. Approved Valuers, of captioned properties as of 01/04/1981 at Rs.69/- per square meter as against Valuation of Rs.135/- per sq.mtr. and Rs.175/- per sq.mtr. evaluated/ determined by Government Approved Valuers Mr.Ramesh Jain and Mr.P.K.Desai respectively. 7. For various reasons and on different grounds, the partial addition of Rs.56,55,041/- made by the AO and upheld by the Learned CIT(A) Valsad, deserves to be deleted. 8. The above Grounds of Appeal are without prejudice to and are independent of each other. 9. Your Assessee craves, leave to amend, alter, delete and /or add to foregoing Grounds of Appeal any time before the appeal is decided. 3. Succinct facts are that assessee has filed return of income on 24.07.2013 declaring the total income of Rs.32,56,850/- including Capital Gain of Rs.31,84,832/- for assessment year 2013-14. The return of income was processed by the Department under section 143(1) of the Act, accepting returned income. Thereafter, case was selected for scrutiny, therefore statutory notice u/s 143(2) was issued on 30.09.2014, which was duly served upon the Assessee. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Estimated Market Value As on Declared Value Rs.21578/- 01/04/1981 Rs.93,52,668/- You are therefore requested to show cause as to why the Long Term Capital Gain arise on this account of an amount of Rs.91,68,824/- should not be added to your total income and taxed as per provisions of income-tax Act. 4. In response to the above show cause notice, the assessee has filed reply on 31.03.2016. However, Assessing Officer has rejected the contention of the assessee and observed that one has to obtain value of land situated nearly the alleged land in question. As per the valuation obtained by AO, the value per sq. mtr. comes to Rs.3.44 only whereas the assessee has taken the value at Rs.175/- per sq. mtr. Therefore, assessing officer noted that cost of acquisition shown by the assessee is on higher side, that is, the assessee has shown higher value to suppress the capital gain arising out of sale consideration. Therefore, the difference between the values as obtained by Assessing Officer and as shown by the assessee, was added to the total income. The wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 01.04.1981 at Rs. 69 per square meter. Even the assessee is not satisfied about the fair market value adopted by ld CIT(A), at Rs. 69 per square meter. The ld Counsel submitted that as per valuation report of Government approved valuer Shri Ramesh Jain wherein the FMV as on 01.04.1981 was derived at Rs.135 per sq. meter. The another Government approved valuer, Shri P. K. Desai, calculated the FMV of the land as on 01.04.1981 at Rs. 175 per sq. meter. The FMV adopted by ld CIT(A) at Rs. 69 per sq. meter is very lower side as compared to value declared by above these two valuers at Rs. 135 and Rs.175 per sq. meter. Therefore, ld Counsel contended that FMV as on 01.04.1981 should be somewhere between Rs.135 per sq. meter and Rs.175 per sq. meter. 9. The Ld. Counsel further submitted that assessee has furnished valuation report of two registered valuers who have valued the property at Rs.175 and Rs.135 per sq. meter respectively and the report of the registered valuer should not be ignored and for that ld. Counsel relied on various decisions. The Ld. Counsel took us through the valuation report of the registered valuer which is placed at paper book page no.45 and contended that r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as compared to Rs.3.44 per square meter adopted by the Assessing Officer, therefore the assessee does not deserve further more relief. The Ld. CIT(A) has considered entire factors and situation of land and arrived at the fair average value as on 01.04.1981 at Rs.69 per square meter. The Ld. DR also submitted that the valuation report of the registered valuer of the assessee should not be relied. The assessee submitted the valuation report of two registered valuers and in both the cases, the registered valuer has taken the fair market value as on 01.04.1981 at very higher side. Therefore, Ld.DR contended that fair market value at Rs.69 per square meter sustained by the Ld. CIT(A) should be upheld and assessee s appeal should be dismissed. 12. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We do not agree with the argument of ld Counsel to the effect that in case of assessee`s co-owner the FMV as on 01.04.1981 was accepted at Rs.175 per sq. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.04.1981 to 31.03.2013 which is rightly rejected by the AO as the agriculture land and gold are two different assets class. Further, Shri Desai did not bring out the sale instances available for nearby properties as has been done by another Government approved valuer Shri Ramesh Jain. Thus, ld CIT(A) observed that the initial fair market value at Rs.175 per sq. mtr. as on 01.04.1981 is rightly rejectable and same has been done by the AO. 14. As regards the assessee s contention for acceptance of the computation of FMV of Rs.135 per sq. mtr. by Shri Ramesh Jain (Valuer) which is based on the comparable sale instances, the AO has stated in the remand report that he is bound to follow the DVO s report of Rs.2.55 per sq. mtr Rs.3.14 per sq. mtr. After going through the DVO s report, the ld CIT(A) noted that the DVO has already considered the valuation report of Ramesh Jain and it was clearly pointed out that the FMV worked out at Rs.135 per sq. mtr. by Shri Ramesh Jain was based on sale instances were away from vicinity of the land under consideration and were for the areas like Udhna and Bhestan which were within the boundary of Surat City. Considering this specific findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of vacation whereas the valuation rate of Shri Ramesh Jain (Government approved valuer) indicate another extreme of valuation. DVO's valuation rate is based on actual sale instances of agriculture land and keeping in mind the fact that these lands are still under agriculture user only. On the other extreme, the valuation rate of Shri Ramesh Jain is based on sale instances of developed N.A Plots with very small areas and pertaining also to faraway places like Udhna Bhestan (within Surat city). Both these rates independently do not indicate the valuation rate near to the actual realistic situation. As both the DVO valuation as well as Government approved valuations are nothing but estimation of value as on specific date, it will be reasonable and justified if the average of two rates are taken as fair market value of the said land as on 01.04.1981. This way ld CIT(A) took the average rate of FMV of land vide RS No.118/97 will be Rs.69 (Rs.135 + 2.55/2) and FMV of land vide Rs no.123/103/1 will be Rs.69 (Rs.135 + 3.14/2). 16. We note that average FMV as on 01.04.1981 determined by ld CIT(A) is still lower side therefore, considering the facts of the assessee as narrated ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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