SUDHEYA NAIMISH KHANDHADIA AS SON AND LEGAL HEIR OF LATE NAIMISH DHANSUKHLAL KHANDHADIA,VASAI ROAD vs. ITO WARD 4(3), THANE, THANE

Per: SHRI JAGADISH, A.M.:

ITA No.1569/M/2024 Sudheya Naimish Khandhadia as Son and Legal Heir of Late Naimish Dhansukhlal Khandhadia

ITA No.1569/M/2024 Sudheya Naimish Khandhadia as Son and Legal Heir of Late Naimish Dhansukhlal Khandhadia properties situated at village Malonde, Taluka Vasai. The Assessing Officer observed that the assessee had sold two parcels of land for substantial consideration and while computing capital gains had adopted fair market value as on 01.04.1981 at Rs.400 per sq. mtr. on the basis of valuation report of a registered valuer, resulting into declaration of long term capital loss. The Assessing Officer, being of the view that the valuation adopted by the assessee was excessive, referred the matter to the District Valuation Officer (DVO). The DVO, after inspection of the property and considering certain sale instances, determined the fair market value as on 01.04.1981 at Rs.14.28 per sq. mtr. The assessee objected to the valuation made by the DVO contending that the sale instances relied upon were not comparable and were situated at distant locations. However, the Assessing Officer, not being satisfied with the explanation of the assessee and noting absence of supporting material from the valuer, adopted the value determined by the DVO and computed long term capital gains in respect of both properties. 4. In appellate proceedings, during remand, the DVO revised the FMV to Rs.188 per sq. mtr. and the Ld. CIT(A) upheld the said valuation and confirmed the addition to that extent. The assessee is in further appeal before us. 5. The Ld. AR reiterated the submissions made before the lower authorities and assailed the valuation adopted by the DVO. It was submitted that the DVO has adopted inconsistent values at different stages, and even the comparable instances relied upon by him indicate a higher range between Rs.260 to Rs.590 per sq. mtr, the average of which comes to Rs.382.16 per sq. mtr. It was further contended that the subject land is better located and more developed as compared to the instances relied upon by the DVO and therefore the valuation

ITA No.1569/M/2024 Sudheya Naimish Khandhadia as Son and Legal Heir of Late Naimish Dhansukhlal Khandhadia adopted by the assessee at Rs.400 per sq. ft. deserves acceptance. The Ld. AR also relied upon a plethora of judicial precedents in support of the proposition that valuation should be based on comparable instances and proper reasoning. 6. Per contra, the Ld. DR relied upon the orders of the lower authorities and submitted that the DVO has taken into account relevant factors and therefore the valuation adopted by him and sustained by the CIT(A) does not call for interference. 7. We have carefully considered the rival submissions and perused the record. It is an undisputed fact that there is substantial variation in the valuation determined by the DVO at different stages, i.e., Rs.14.28 per sq. mtr. in the original report and Rs.188 per sq. mtr. in the remand proceedings. Further, the comparable sale instances referred to by the DVO themselves indicate a higher range, which has not been reconciled with the final value adopted. 8. In our considered view, when comparable instances indicate a particular range, the valuation adopted ought to fall within a reasonable bandwidth of such range, unless there are distinguishing features justifying deviation. In the present case, neither the Assessing Officer nor the CIT(A) has addressed this inconsistency. At the same time, the valuation adopted by the assessee also requires moderation in absence of complete supporting material.

ITA No.1569/M/2024 Sudheya Naimish Khandhadia as Son and Legal Heir of Late Naimish Dhansukhlal Khandhadia 31.12.2011 and therefore capital gains, if any, are taxable in A.Y. 2012- 13 and not in A.Y. 2013-14. Reliance was placed on the decision of Hon’ble Supreme Court in the case of Gurbux Singh vs Kartar Singh. The Ld. AR further relied upon various judicial pronouncements to support the proposition that date of agreement should be considered as date of transfer. 11. The Ld. DR, on the other hand, submitted that the property was registered on 30.04.2012 and therefore the transfer is complete in the previous year relevant to A.Y. 2013-14. It was further submitted that the assessee has not demonstrated fulfillment of conditions of section 2(47)(v) of the Act. 12. We have considered the rival submissions. It is observed that the document dated 31.12.2011 is only an agreement and the property has been registered on 30.04.2012. The assessee has not brought on record any material to demonstrate that possession was handed over in part performance of contract or that the conditions of section 53A of the Transfer of Property Act were satisfied. In absence of such evidence, the date of registration assumes significance for determining the date of transfer. 13. Accordingly, we do not find any infirmity in the finding of the CIT(A) that the capital gains are taxable in A.Y. 2013-14. Ground No.2 is dismissed. Ground No.3 being without prejudice is covered by our findings in Ground No.1. 14. Ground No.4 relates to denial of exemption u/s 54F. The Ld. AR submitted that the appellate authorities are empowered to admit and adjudicate additional claims and relied upon the decision of the Hon’ble Supreme Court in the case of Goetz India Ltd. It was further submitted that the assessee has invested Rs.80,00,000/- in purchase of residential house property and therefore the claim deserves to be examined. 5

ITA No.1569/M/2024 Sudheya Naimish Khandhadia as Son and Legal Heir of Late Naimish Dhansukhlal Khandhadia

Order pronounced in the open court on 04/05/2026.

Sd/- Sd/- (SANDEEP GOSAIN) (JAGADISH) Judicial Member Accountant Member

Mumbai, Dated: 04/05/2026 Ashwani Rao Sr. Private Secretary

ITA No.1569/M/2024 Sudheya Naimish Khandhadia as Son and Legal Heir of Late Naimish Dhansukhlal Khandhadia Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T. By order

(Assistant Registrar) ITAT, Mumbai