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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 ..... d in determining the value of Land at Rs.69/- per sq.mtr. as of 01/04/1981 being the average amount of valuation made by DVO and by Shri Ramesh Jain, Government approved valuer of Agricultural Land. 3. On the facts and in the circumstances of the case and in law, the ld. CIT (A), Valsad has erred in ignoring the value of Land as of 01/04/1981 at Rs.175/- per sq.mtr., determined in the valuation report given by Mr.P.K.Desai, a Government Approved Valuer, duly adopted by assessee while filing return of income. 4. Without prejudice to above mentioned ground No.3, on the facts and in the circumstances of the case and in law, the Id. CIT (A), Valsad has erred in not considering the value of Land as of 01/04/1981 at Rs.135/- per sq.mtr., as provided in the valuation report submitted by Shri Ramesh Jain, a Government Approved Valuer of Agricultural Land. 5. On the facts and in the circumstances of the case and in law, the ld. CIT (A), Valsad has erred in partly upholding the addition of Rs.56,55,041/- out of total addition of Rs.91,68,824/- made by AO. 6. On the facts and in the circumstances of the case and in law, the ld. CIT (A), Valsad was not justified in re-computing taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was noticed by AO that the assessee has shown purchase value on the basis of valuation report, cost of the property is at Rs.10,97,731/- as on 01.04.1981. The assessee has claimed indexed cost of acquisition at Rs.94,12,668/- at a very higher side as compared to the market value. Therefore, a show cause notice was issued to the assessee, which is reproduced as under: "In connection with the assessment proceedings for the assessment year 2013-14, you had sale two agricultural lands situated at Block No.118 & Block No.123, at Kharwasa, Tal. Choryashi Dist. Surat at the cost of Rs.3,01,50,000/- and Rs.2,00,00,000/- respectively with 4 co-owners. 2. In this case you have submitted valuer report for the market value as on 01.04.1981 at the cost of Rs.175/- per. Sq. mt. It is very higher rate, therefore the rate of nearby land situated reported by departmental valuer Rs.3.44 per sq. mtr therefore as per the value noticed, your land valuation comes to Rs.86,313/- (25091 sq. mtr X Rs.3.44), therefore in your case admissible value will be Rs.21,578 x 852 index = Rs.1,83,844/- only whereas you have claimed at Rs.93,52,668/-, which is higher side and not acceptable. Estimated Market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh R. Parikh (HUF) vs ITO (ITA o.1578/AHD/2011 dated 30.09.2015). Thus, 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 + 3.44/2). Accordingly, the ld CIT(A) directed the assessing officer to recompute capital gain on sale of land by taking fair market value of land at Rs.69 per. Sq. mtr, as against Rs.3.44 per sq. mtr. taken in the assessment order. This way, ld CIT(A) partly allowed the appeal of the assessee. 7. Aggrieved by the order of Ld. CIT(A), the assessee is in further appeal before us. 8. Shri Sapnesh Sheth, Learned Counsel for the assessee, pleads that in assessee`s case the fair market value, as on 01.04.1981 is in dispute. The assessing officer took the fair market value as on 01.04.1981 at Rs.3.44 per square meter. On appeal by the assessee, the ld CIT(A) took the fair market value as 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the co-owner has also getting reflected in page no.146 of paper book. The capital gain computed by co-owner by taking the fair market value of the registered valuer at the rate of Rs.175 per square meter, is placed at paper book page no.147. The Ld. Counsel also took us through the computation of capital gain made by another co-owner of the land, Mr. Manojkumar Gunvantlal Naik, wherein the co-owner has taken an indexed cost of acquisition at the rate of Rs.175 per square meter which is placed at paper book page no.150, therefore, Ld. Counsel contended that assessee should not be treated differently, and value adopted by registered valuer should be considered. 11. On the other hand, Learned Departmental Representative (Ld. DR) for the Revenue submitted that Ld. CIT(A) has given enough relief to the assessee and adopted the fair market value at Rs.69 per square meter 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO against the fair market value as on 01.04.1981 derived by the DVO and pointed out several objections in the said letter. The assessee had filed before ld CIT(A) another valuation report of Government approved valuer Shri Ramesh Jain wherein the FMV as on 01.04.1981 was derived at Rs.135 per sq. mtr. In the remand proceeding, the assessee has also requested the AO to send the matter of valuation to the DVO once again for reconsideration in the light of the objections pointed out in the letter dated 09.08.2017. However, the AO did not refer the issue for reconsideration of the DVO. After going through the report of Government approved valuer Shri P. K. Desai calculating the FMV of the land as on 01.04.1981 at Rs. 175 per sq. mtr, the ld CIT(A) observed that Shri P. K. Desai had calculated fair market value of the land on the basis of gold price fluctuation on 01.04.1981 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on rate of 10% per annum as on 31.03.2013. But the Government jantry rate as on 31.03.2013 was Rs. 1450 per sq. mtr. indicating thereby that the valuation of land as on 01.04.1981 is highly unreasonable. Similar Situation is found when the valuation rate as on 01.04.1981 is multiplied by inflation index of given by Income tax Act. (d) The assessee also objected to the DVO's remark that the property is having agriculture potential only as on today on the ground that the property has good NA potential as well as development potential. 15. The Ld CIT(A) noted that objections pointed out by the assessee is not out rightly rejectable as these were actual prevailing situations which needed to be factored in by the valuers valuing the FMV rate as on 01.04.1981. Thus, the DVO's valuation rate of Rs.2.55 per sq. mtr. & Rs.3.14 per sq. mtr. shows one extreme 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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