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TMI Blog1991 (11) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... usthan Development Corpn. Ltd. for the total consideration of Rs. 5,88,000 (each buyer paying Rs. 2,94,000), and filed a return for the asst. yr. 1972-73, disclosing long-term capital gain of Rs. 92,000. For the purpose of determining the cost of acquisition of the property the assessee exercised option under s. 55 of the IT Act to take into account the fair market value of the said property as on 1st Jan., 1954, in full vacant condition which was estimated by the approved valuer of the assessee M/s Talbot & Co. at Rs. 4,96,000. The valuation of the approved valuer is on the basis of land and building method. The ITO considered the fair market value disclosed by the assessee as per registered valuer's report to be not correct and hence made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Departmental Representative on the other hand relied on the ITO's and CIT(A)'s order. 7. We have considered the rival submissions and hold that the ITO was within his right to refer the case to a Valuation Officer if he finds that the value shown by the assessee is not correct. The very wordings of s. 55A clearly empowers the ITO to refer the matter to Valuation Officer, when it is necessary to do so. In the instant case, valuation as made by M/s Tabot & Co. is not correct and acceptable as he has not followed the accepted method of valuation when the property is let out. As regards the second argument for adopting the value which is favourable to the assessee, we may mention that the said argument also cannot be accepted on the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h all the qualifications and conditions attached to it on a later date, i.e. 16th April, 1971, date of sale. Therefore, the valuation by the Departmental Valuer is not in order and the valuation of Talbot & Co. is in order as the same is on land and building method which should be accepted. 10. The learned Departmental Representative on the other hand supported the order of the ITO and the CIT(A). 11. We have considered submissions of both the parties, gone through the papers and hold that the CIT(A)'s order deserves to be upheld. We find that the cost of acquisition of the property was opted by the assessee under s. 55(2) for determining the fair market value of the asset as on 1st Jan., 1954. As per s. 55(2), cost of acquisition in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g let out to the tenant during the financial year 1953-54, and the open green lawn appurtenant thereto was also under the occupation of the tenant, and also considering the locality of the Judges Court Road, which is a posh locality, and also considering the fact that building is surrounded by open land which had vast potentiality or future development, we fix the fair market value at Rs. 3,00,000, which we consider as reasonable. The ITO should work out the capital gains taking the fair market value of the property at Rs. 3,00,000, as on 1st Jan., 1954.
13. The last ground is not pressed and hence the same is accordingly dismissed.
14. In the result, the appeal is partly allowed as stated above. X X X X Extracts X X X X X X X X Extracts X X X X
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