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TMI Blog2023 (6) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... referred as the Ld. AO). 2. The facts in brief are that assessee company is into the real estate development by converting the leasehold land as Stock in trade and to sell the plots of smaller sizes after proper development and approval from UPSIDC. The return of income declaring nil income was filed and the case of assessee was taken up for scrutiny under CASS. Ld. AO noticed that assessee had sold a total of 16976.5 Sq. Mtr. of land at Kavinagar through Pranjal Vyapar Pvt. Ltd. As per the MOU dated 12th December 2011, the assessee is entitled to receive Rs. 8,200/- per Sq. Mtr. for land sold. Ld. AO considered that the Market rate of the property is Rs. 10,000/- Sq. Mtr. as per the valuation report submitted by the assessee company. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot produced the valuation report of the property as on 01.04.1981. The Ld. AO determined the FMV using Compounded Annual Growth Rate Method (CAGR) which Ld. AO considered more rational and reasonable method for calculating fair market value. Thereafter Ld. AO proceeded to make the computation method "3.4 In this case, the beginning value is to be taken as Rs 6.01 i.e. the rate of the property on the date of lease in the FY 1970-71. End value is to be taken as Rs 10,000/-, the rate at which the deemed sales consideration is taken for the computation of Long term Capital Gains for the property converted in to stock-in-trade in the FY 2010-11. Using the above formula, the Compounded Annual Growth Rate for the period of 40 years is determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite of opportunity. Ld. CIT(A) was not satisfied with the valuer report and considered it to be cursory and self serving document and accordingly observed in para 4.12 as follows : "4.12 Item no. 40, of the valuation report is as follows - 40. If sale instances are not available or not relied upon the basis of arriving at land rate. The land rates have assumed on the basis of market rates prevailing As on 01.04.1981 which have been varified from several reputed Real Estate Agents. I find that the report of the assesse's Valuer is very cursory and is a serving document. No real instances or details of inquiries supported by robust evidence are brought forth by the Valuer (and the appellant). The report of the Valuer does not even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.7483582/- to long term capital gain. The Assessing officer rejected the fair value as on 01-04-1981, of Rs.100/- per Square Mtr. as adopted by Assessee based on approved Valuer report for computation of Capital Gain. 2. That the Learned CIT(A) has erred on facts & in law by dismissing the ground of Appeal no. 1, confirming the addition of Rs.7483582/- to long term capital gain. The Learned CIT(A) erred in confirming the addition made by Assessing officer based on suspicion, assumption and surmises by calculating herself the fair 01/04/1981 at Rs.38/- per sq. mts. instead of referring the matter to the department valuer as of the Act. 3. That the Learned CIT(A) has erred on facts & in law by dismissing the ground of Appeal no. 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort made available at page no. 37 to 40 to submit that the valuer has made a calculation at the rate of 100 per sq. mts. for the total land 332909.69 sq. mts. while in fact only one third land was available. It was submitted by the Ld. AR that the land was converted into 384 plots and 33.15 % of the total land of the company had to be surrendered to UPSIDC for roads etc and was not saleable. The assessee was under obligation to pay 12.5% of the UPSIDC estimates of cost towards administration and supervision charges to the UPSIDC as mentioned in the permission letter at point no. 2 of the paper book at page no. 74. It was submitted that further expenditure were made for drains, parks, public utilities etc. It was also submitted that after de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t satisfied with the fair market value of the capital asset then reference can be made to DVO for the valuation. That is the only way with the Ld. AO to shift the onus on the assessee to justify any other valuation adopted by the assessee. Tribunal Mumbai Bench in Macrotech Developers Ltd. Vs. DCIT-7(3), ITA No. 2266 & 2239/Mum./2022 for A.Y. 2017-18 and 2018-19 has deleted addition made u/s 43CA on the ground that revenue failed to follow the mandate of Section 43 CA(2) r.w.s. 50C(2) by not referring valuation of property sold to Valuation Officer. 10. Further, Ld. CIT(A) has failed to take into consideration the fact that once a valuation report was sent to the Ld. AO calling remand report and he had preferred not to respond to same, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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