9911796707
TMI Blog2024 (9) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal are thus contrary to what is stated in the valuation report which is placed on record, wherein the registered valuer has taken into consideration the value of lease hold rights and reduced the same from the total value of the land. Therefore the contentions raised on behalf of the Revenue that the valuation of the land is required to be arrived at from the perspective of the lessee and not from the lessor is without any basis as the valuation of the land is to be considered after taking into consideration the lease hold rights existing on such land as on 01.04.1981. The registered valuer has after considering such value of the lease hold right and reducing the same from the Fair Market Value as on 01.04.1981 has rightly arrived at the valuation of Rs. 57,75,000/-. Therefore there was no need for the Tribunal to estimate the value of the land as on 01.04.1981 after making suitable deduction on account of the assessee not being the full owner of the land. On perusal of the valuation report, the registered valuer has already made a suitable deduction on the capitalized value of the lease rent from the total Fair Market Value of the land as on 01.04.1981 and thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice was served upon the assessee under Section 143 (2) of the Act and 142 (1) of the Act. 3.2. The appellant was engaged in the business of exhibition of Cinema in the name and style of M/s. Natraj. The business was carried out on a Theater building on a lease hold land. The appellant acquired the lease-hold rights on the land admeasuring 5082 square yards for a period of 98 years vide lease deed dated 15.09.1966. The appellant firm agreed to surrender release and relinquish all the rights title and interest in favour of the lessor in respect of all the residue of the unexpired term created by the registered lease in consideration as per the Memorandum of Understanding dated 10.12.2014. In execution of the Memorandum of Understanding, the land was sold for a consideration of Rs. 8,38,53,000/- vide sale deed dated 11.05.2006, out of which the appellant received consideration of Rs. 5,03,11,800/-. The appellant claimed the cost of acquisition after indexation of Rs.2,99,72,250/- and expenses of Rs. 18,62,546/- on the basis of the valuation report dated 11.09.2006 of M/s Dalal Company, a Government Registered Valuer, determining the value of the property at Rs. 57,75,000/- as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. However, no such exercise was undertaken by the assessee or by the department to find out the net annual income of the land in this case and no data of net annual income is available. In such a situation, other method of valuation of fair market value as on 1.4.1981 would be to value free hold land as on the relevant valuation date, and thereafter due deduction on account of the land being leasehold may be allowed. We find that no specific sale instances of free hold/lease hold lands in the vicinity of the land in question have been cited either by the assessee or by the Revenue. The AO has chosen not to refer the issue of valuation of the land in question as on 1.4.1981 to the Departmental Valuation officer. The assessee has filed a copy of the valuation report of the Approved valuer dated 11.9.2006 valuing the land in question as on 1.4.1981 at Rs. 57,75,000/- and copy thereof has been filed in the compilation before the Tribunal. We find that no effort has been made by the Revenue to controvert the value of the land as on 1.4.1981 as estimated by the approved valuer. We have perused the copy of the Approved valuer's valuation report filed in the compilation before us. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in the land at Ashram Road as on 1.4.1981 at Rs. 800/- per square yard after making suitable deduction on account of the land not being free hold and the assessee's right being that of lessee for long period of time. We direct the AO to determine the long term capital gain after taking the value of the lease hold rights of the assessee at Rs. 800/- per square yard as on 1.4.81 and after allowing indexed cost of acquisition to the assessee and also the expenses already allowed by the AO in the assessment out of the total consideration received by the assessee and to determine the long term capital gain of the assessee, and accordingly, the grounds of the assessee are partly allowed. 3.5. Being aggrieved by the order passed by the Tribunal, the Revenue preferred the Tax Appeal No.753 of 2013 which was disposed of on account of the low tax effect. Therefore these cross-objections are to be treated as Tax Appeal arising from the impugned order of the Tribunal as per the admitted substantial questions of law. 4. Learned advocate Mr. B.S. Soparkar for the appellant submitted that the Tribunal has committed an error while considering the Fair Market Value of the land as Rs. 800/- p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appeal being devoid of any merit is liable to be dismissed. 6. Considering the submissions made by both the learned advocates, it appears that on perusal of the reasoning given by the Tribunal to determine the cost, the Tribunal has not ignored the valuation report placed on record. The valuation report placed on record reads as under: PART-II VALUATION VALUATION REPORT OF LANI BEARING FP. NO. 485, TPS-3 MAJE CHANGISPUR, ASHRAM ROAD, AHMEDABAD KNOWN AS 'NATRAJ ASHRAM ROAD, AHMEDABAD Under the Instruction of the one of the owners, I visited the above property Le, a piece of open land (as sold) with a view to access its value as on 1/4/81 for the purpose of Capital Gain Tax and relying upon all necessary information and details given by the owner. The property under consideration is a lease hold land. The lessee constructed the building on the said plot of land at their cost. The building was used as cinema theatre and commercial offices. The property is sold after demolishing the existing building and the plot has been made completely open and vacant possession is given. Hence for the purpose of valuation only open land without any structure is considered. The property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther he has allowed some deduction on account of the fact that the assessee has only the leasehold rights in the plot, we hold that it shall be reasonable to estimate the value of the land as on 1.4.1981 after making suitable deduction on account of the assessee not being full owner of the land 8. The above observation of the Tribunal are thus contrary to what is stated in the valuation report which is placed on record, wherein the registered valuer has taken into consideration the value of lease hold rights and reduced the same from the total value of the land. 9. Therefore the contentions raised on behalf of the Revenue that the valuation of the land is required to be arrived at from the perspective of the lessee and not from the lessor is without any basis as the valuation of the land is to be considered after taking into consideration the lease hold rights existing on such land as on 01.04.1981. The registered valuer has after considering such value of the lease hold right and reducing the same from the Fair Market Value as on 01.04.1981 has rightly arrived at the valuation of Rs. 57,75,000/-. Therefore there was no need for the Tribunal to estimate the value of the land as on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
