THEKKEURUMBIL VIJAYA SANDEEP,SUNTICOPPA vs. DEPUTY COMMISSIONER OF INCOME-TAX, INTERNATIONAL TAXATION, CIRCLE-2(2), BENGALURU

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER

IT(IT)A No.608/Bang/2023

Assessment year : 2020-21

Thekkeurumbil Vijaya Sandeep Vs. The Dy. Commissioner of Income- Magoor Estate, tax, Athur Nallur Post, International Taxation, 7th Hoskote Sunticoppa-571237. Circle-2(2), Bengaluru. PAN – EBMPS 3210 K APPELANT RESPONDENT

Appellant by : Shri Suresh Muthukrishna, C.A Respondent by : ShriD.K Mishra, CIT(DR)

Date of hearing : 11.10.2023 Date of Pronouncement : 11.10.2023 O R D E R Per Chandra Poojari, Accountant Member

This appeal by the assessee is directed against the order passed by the AO u/s 143(3) r.w.s 144C(13) of the Income-tax Act, 1961 dated 26/06/2023 for the assessment year 2020-21.

ITA No.608/Bang/2023 Page 2 of 11

ITA No.608/Bang/2023

Page 3 of 11

Appellant failing to appreciate that the same is the value that ought to have been adopted in terms of Section 55(b)(2) of the Act. 3.5 Without prejudice to the above, the learned DRP has failed to appreciate that the learned AVO has considered an incorrect guideline value of Rs.50,000/- as against Rs.1,20,000/,- which ought to have been considered thereby rendering the valuation report incorrect and not in accordance with the provisions of Section 55(b)(2) of the Act. 3.6 The authorities below while computing the cost of acquisition of the building have erred in adopting the cost of construction of the building at Rs.450/- Per Square feet on the basis of the report of the learned Assistant Valuation officer as against Rs.600/- per square foot adopted by the Appellant, ignoring the fact the Appellant had computed the same on the basis of a Report from a registered Income tax valuer and as such no interference was called for in the same. 4. GROUNDS RELATING TO SALE OF PROPERTY NO.2 4.1 The authorities below are not justified in determining long term capital gain of Rs. 1,02,78,580/- on the sale of property at Sy.No.1 15/1 measuring 84.31 cents [referred to as Property No. 2] vide sale deed No. 1891/2019-20 dated 24/01/2020 under the facts and in the circumstances of the appellant's case 4.2 The authorities below have erred in rejecting the cost of acquisition claimed by the appellant and referring the same to the office of the District Valuation officer in terms of Section 55A of the Act, which reference is invalid in as much as the appellant had adopted the guidance value in terms of Section 55(b)(2) of the Act for arriving at the cost of acquisition of the property sold, which is in accordance with the provisions of the Act and ought not to have been interfered with. 4.3 Without prejudice to the above, the authorities below have erred on facts and in law in rejecting revised Computation of Total Income filed by the appellant during the course of the assessment proceedings which computation was on the basis of the actual guidance value of Rs.1,20,000/- Per Cent as at 1-4-2001 of the property no.2 as against the guidance value of Rs.80,000/- Per Cent inadvertently adopted in the Return of Income filed by the appellant.

ITA No.608/Bang/2023

Page 4 of 11

4.4 The learned DRP has erred in rejecting the additional evidence being the guideline value as at 1-4-2001 issued by the Sub Registrar Somwarpet and directing the Learned AO to adopt the FMV as determined by the Learned Assistant Valuation Officer for computing the cost of acquisition of the Appellant failing to appreciate that the same is the value that ought to have been adopted in terms of Section 55(b)(2) of the Act. 4.5 Without prejudice to the above, the learned DRP has failed to appreciate that the learned AVO has considered an incorrect guideline value of Rs.50,000/- as against Rs.1,20,000/- which ought to have been considered thereby rendering the valuation report incorrect and not in accordance with the provisions of Section 55(b)(2) of the Act. 5. GROUNDS RELATING TO SALE OF PROPERTY NO.3 5.1 The authorities below are not justified in determining long term capital gain of Rs.5,97,140/- on the sale of property at Sy.No.115/1 measuring 3 cents [referred to as Property No. 3] vide sale deed No. 1851/2019- 20 dated 20/01/2020 under the facts and in the circumstances of the appellant's case. 5.2 The authorities below have erred in rejecting the cost of acquisition claimed by the appellant and referring the same to the office of the District Valuation officer in terms of Section 55A of the Act, which reference is invalid in as much as the appellant had adopted the guidance value in terms of Section 55(b)(2) of the Act for arriving at the cost of acquisition of the properties sold, which is in accordance with the provisions of the Act and ought not to have been interfered with. 5.3 Without prejudice to the above, the authorities below have erred on facts and in law in rejecting revised Computation of Total Income filed by the appellant during the course of the assessment proceedings which computation was on the basis of the actual guidance value of Rs.1,20,000/- Per Cent as at 1-4-2001 of the property no.3 as against the guidance value of Rs.80,000/- Per Cent inadvertently adopted in the Return of Income filed by the appellant. 5.4 The learned DRP has erred in rejecting the additional evidence being the guideline value as at 1-4-2001 issued by the Sub Registrar Somwarpet and directing the Learned AO

ITA No.608/Bang/2023 Page 5 of 11

to adopt the FMV as determined by the Learned Assistant Valuation Officer for computing the cost of acquisition of the Appellant failing to appreciate that the same is the value that ought to have been adopted in terms of Section 55(b)(2) of the Act. 5.5 Without prejudice to the above, the learned DRP has failed to appreciate that the learned AVO has considered an incorrect guideline value of Rs.50,000/- as against Rs.1,20,000/- which ought to have been considered thereby rendering the valuation report incorrect and not in accordance with the provisions of Section 55(b)(2) of the Act. OTHER GROUND'S 6. The authorities belowhave erred on facts and in law by enhancing the income of the Petitioner by Rs.94,462/- by holding that the Petitioner has not offered to tax the Interest income received in NRO account maintained with Canara Bank& HDFC bank under the facts and circumstances of the Appellant's case. 7. The appellant craves leave of your Honour to add, alter, amend, rectify, and delete any of the grounds urged above. 8. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”

ITA No.608/Bang/2023 Page 6 of 11

immovable properties and claimed refund from the TDS made by the purchasers as required under the provisions of Income Tax Act, 1961. During the assessment year, the assessee declared capital gain on sale of three immovable properties which is as under:-

ITA No.608/Bang/2023 Page 7 of 11

01/04/2001 and furnished a copy of the valuation report from a Private Valuer in support of his claim of fair market value of the property as on 01/04/2001. During the course of assessment proceedings, independent enquiries have also been made and notice u/s 133(6) of the Act dated 19/03/2022 was issued to the Sub Registrar, Kushalnagar, Somwarpet Taluk, Kodagu Distt. In the process of independent enquiry, AO has received a copy of the guidance value/fair market value of the land from the Sub Registrar Somwarpet. On perusal of the same, it has been stated that the fair market value of the commercial property at BM Road was fixed at Rs.40,000/- per cent and residential property at BM Road was fixed at Rs.30,000/- per cent. Accordingly, a show cause notice dated 12/05/2022 was issued to the assessee proposing to complete the assessment as per fair market value received from the concerned Sub Registrar Office. In response, the assessee has filed his submissions vide letter dated 25/05/2022 and objected to the proposed rates. Further, it is also seen that the assessee in his submissions has stated that the lands sold by him falls between Hotel Kaleghat and GMP School adjoining the main road at the Commercial

ITA No.608/Bang/2023 Page 8 of 11

Centre and the fair market value of the said land as on 01/04/2001 is at Rs.1,20,000/- per cent as against Rs.80,000/- per cent adopted by the valuer. The assessee has requested to enhance his claim of cost of acquisition by adopting higher rate at Rs. 1,20,000/- per cent. 5. In support of the cost of acquisition as on 01/04/2001, the assessee furnished copy of valuation report from the private valuer in support of his claim. Contrary to this, the AO referred the matter to the DVO and called for valuation report. The DVO submitted that valuation report of these properties on 01/04/2001. On the basis of the valuation report, the assessment was completed u/s 55A of the Act.

ITA No.608/Bang/2023 Page 9 of 11

the stamp duty value for the purpose of the payment of stamp duty in respect of the said property. Thus, he submitted that AO should adopt the stamp duty value in respect of the said properties and the assessee has already submitted the fair market value of the above property in Kushalnagar as per the guidelines value 1998, 1999, 2000 till 14/10/2001 and the AO ought to have adopted that value instead of referring it to the DVO.

In the following cases, the assessee has an option to take either

ITA No.608/Bang/2023 Page 10 of 11

the actual cost of acquisition or the fair market value of the asset as on 1.4.2001 to be the cost of acquisition for computation of capital gains: (i) where an asset has been acquired by the assessee himself before April 1, 2001, he has an option to take either the actual cost of acquisition or the fair market value of the asset as on 1.4.2001 to be cost of acquisition for computation of capital gain. (For availing the option the assessee will obviously opt for that value which is more.) (ii) where the assets were acquired by the assessee through a mode given under section 49(1) (Deemed Cost of Acquisition) and the previous owner acquired that asset before 1.4.2001. In this case, the assessee has an option to take the cost of acquisition as the cost to the previous owner or the fair market value of that asset as on 1.4.2001 for the purpose of the computation of Capital Gains.”

ITA No.608/Bang/2023 Page 11 of 11

assessee. Accordingly, this issue is remitted to the file of AO for fresh consideration with the above observation in accordance with law.

Bangalore, Dated, 11th Oct, 2023 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.