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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 ..... aving failed to take opportunity and mandate under law to call for a DVO report and on the other hand having discredited the valuation report of the assessee without substantial reasons makes the order of Tax Authorites Below erroneous and not sustainable under law. The factual submissions made on behalf of the assessee with regard to the fact that actual saleable land was two third itself makes the fair market value of property arrived at Rs. 38 by AO to be not sustainable. The substantial expenses also indicate that the market value of the land had to be taken on a more reasonable basis. Acceptance of market in the subsequent years also benefits the assessee as the same shows that in the present AY the Tax Authorities, while passing the impugned orders, did not appreciate the facts in correct perspective. Appeal of assessee is allowed. - ITA No. 5592/Del/2018 - - - Dated:- 13-6-2023 - Sh. Anil Chaturvedi, Accountant Member And Sh. Anubhav Sharma, Judicial Member For the Assessee : Sh. S.K.Bansal, CA For the Revenue : Shri Kumar Parnav, SR DR ORDER PER ANUBHAV SHARMA, JM: The Assessee has come in appeal against the appellate order dated 18.05.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10.1970 and 04.02.1971. The total area of the land on lease is 3,32,909.69 Sq. mts. Therefore, per Sq. mts. Cost of plot of land 1970-71 was arrived at Rs. 6.01/- only. Ld. AO thus, concluded that assessee has arbitrarily considered that fair market value at Rs. 100 which is 1663 % of the actual cost of acquisition. Ld. AO observed that therefore, the fair market value of the property as on 01.04.1981 determined by registered valuer should be considered for computation of Cost of Acquisition. As the assessee company has not 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 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umed 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 carry the signature of the lessee. The area is shown as industrial and middle class. The Valuer has arrived at fantastic valuation, as if he was capable of reading in the past. The valuer's action is absolutely without any basis and is a convenient figment of his imagination. On the contrary, the AO has been more than fair when she has determined the value as on 01.04.1981at Rs. 38 per square meter. 5. Ld. CIT(A) thus sustained the addition with following observations in para 4.14 reproduced as under :- 4.14. The above analysis shows that the appellant has prima facie shown a super fast and stupendous growth in the value of land from 1971 till 1981. However, this growth is not backed by any evidence or Robust Data. The appellant, apparently, has adopted this stratagem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was left out and only a saleable area of 222665 sq. mts. was available from total land 332909.69 sq. mts. It was submitted that Ld. AO and the Ld. CIT(A) have both ignored that there were various costs on development of the land to make it saleable. Specially, referring to letter dated 12.01.2011 available at page no. 74 to 75 of the paper book, it was submitted that while giving permission to sell the land in the form of plots UPSIDC had directed that a minimum of Rs. 50 per sq. mts. will be paid by the assessee as sub-division fees. Ld. AR heavily relied the valuation report 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption should be in favour of the assessee rather than discrediting the report to be self serving. The Bench is of considered opinion that when the onus is on a party to prove a fact by a valuation report then the valuation report cannot be considered to be a self serving document of that party without being disputed on facts. Ld. CIT(A) has mentioned that report is cursory without pointing out any shortcomings. The opinion of an expert cannot be brushed aside in a whimsical manner. Specially when law mandates the evidence of an expert to be admissible for proving specific question of fact as in the present case, the fair market value of the property. Thus, at one hand having failed to take opportunity and mandate under law to call for a DVO report and on the other hand having discredited the valuation report of the assessee without substantial reasons makes the order of Ld. Tax Authorites Below erroneous and not sustainable under law. 11. The factual submissions made on behalf of the assessee with regard to the fact that actual saleable land was two third itself makes the fair market value of property arrived at Rs. 38 by Ld. AO to be not sustainable. Further the substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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