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TMI Blog2024 (1) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... on 01-04-1981 - Assessee has taken the value of cost of acquisition, by considering the same to be non-agricultural property at the time of purchase. However, we are of the considered view that there is apparently no justification for considering the cost of acquisition of the aforesaid property as non-agricultural land as on 01-04-1981, when such property was agricultural property as on the date of acquisition and such property had been converted into non-agricultural property only during the impugned year under consideration, prior to sale. Valuation adopted by the assessee has not given any comparative sale instances and has simply arrived at value of cost of acquisition of land by adopting reverse formula i.e. by taking sale rate of non-agricultural property in the current year and applying inflation index. CIT(A) has correctly observed that the land sold in current year is non-agricultural land but the land was agricultural land as on 01-04-1981 and therefore cost of land as on 01-04-1981 cannot be determined based on sale rate of non-agricultural land for the current year and thereafter applying reverse formula thereon. CIT(A) has correctly concluded that fair value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... want of evidence. He disregards the fact that for a property worth Rs.3 cr. Improvement cost of Rs. 9L is a meager amount and should not be denied. Thus the disallowance sustained by the Ld. CIT (A) suffers from legal infirmity. The same may kindly be deleted. 4. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of appeal. 3. The assessee has taken the following additional grounds:- 1.1 That both the lower authorities have failed to appreciate that the provision of Sec 55A (a) does not permit AO/DVO to make variance if the value determined by the assessee is higher than FMV of the immovable property proceedings estimated by DVO. 1.2 That in the facts and circumstances of the case, as well as in law, the valuation adopted by AO was illegal, unlawful and without jurisdiction in view of the Sec 55A(a) prior to amendment brought w.e.f. 01.07.2012. 4. The brief facts of the case are that during the year under consideration, the assessee sold non-agricultural land jointly for a sum of Rs. 3,85,71,000/-. The assessee received a sum of Rs. 1,00,66,666/- as her sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that the valuer on which reliance was placed by the assessee had estimated the value of the land as on 01-04-1981 @ Rs. 163.20 per square meter without any basis . The valuer had not given any comparative sale instances as given by the DVO. The valuer appointed by the assessee had arrived at value of cost of acquisition of land by adopting reverse formula i.e. by taking base of sale rate in current year and applying inflation index. However, the aforesaid method for valuing the cost of acquisition is not acceptable since the land sold in the current year is after converting such land into non-agricultural land during the current year itself, but the said land was agricultural as on 01-04-1981 and hence the cost of land as on 01-04-1981 being agricultural land cannot be determined based on sale of rate of non-agricultural land in the current year. Thus, the ld. CIT(A) of the view that fair value of land adopted by valuer appointed by the assessee is misleading and incorrect and that too without any supporting evidences. Accordingly, the ld. CIT(A) held that firstly, assessee s contention that as per the provisions of section 55A as existing prior to 01-07-2012, the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... griculture land only on 01/4/1981 and said land became non agriculture land in current year. Though appellant has submitted the valuation report, AO has observed that valuer is not approved registered valuer by the Income Tax department and valuer is not authorised to value agriculture land by Government of Gujarat. During the course of appellate proceedings, appellant has submitted registration certificate of valuer by office of CCIT, Ahmedabad II vide letter dated 03/02/2004. However, this certificate is not produced before the AO during assessment proceedings. Even the said certificate clearly give registration of valuer for immovable properties other than agriculture land whereas in appellant's case, valuation of land as on 01/04/1981 is required to be made for agriculture land and not for non agriculture land. Even the valuer has estimated the value of land as on 01/4/1991 at Rs.163.20 per Square meter without any basis. He has not given any comparative sale instances as provided by DVO. The valuer appointed by appellant has arrived at value of land by adopting reverse formula i.e. by taking base of sale rate in current year and applying inflation indexed . It is observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, we are of the considered view that ld. CIT(A) has correctly observed that the land sold in current year is non-agricultural land but the land was agricultural land as on 01-04-1981 and therefore cost of land as on 01-04-1981 cannot be determined based on sale rate of non-agricultural land for the current year and thereafter applying reverse formula thereon. In our view, the ld. CIT(A) has correctly concluded that fair value of land adopted by the valuer appointed by the assessee is incorrect and that too without any supporting evidences. Further, the decisions relied upon by the assessee have been rendered on their own set of facts and even in our view correctly discussed and distinguished by ld. CIT(A) in the appellate order. In the case of Meccano Industries 14 ITD 151 (Mad.) (TM) , the ITAT held that in case of sale of agricultural land, which was not capital asset at time of its acquisition by assessee but was subsequently converted into capital asset by its division into plots prior to sale, cost of acquisition of such capital asset for working out capital gains would be taken as its original cost of acquisition to assessee and not its market value on date of its c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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