DEPUTY COMMISSIONER OF INCOME TAX 8(2)(1), MUMBAI vs. SHYAM AHUJA PRIVATE LIMITED , MUMBAI

ORDER Per Pramod Kumar, VP:

When the hearing of this appeal was concluded on 3rd 1. October, 2019. The bench passed the following order:

“The appeal is allowed so far as ground no 1 and 2 are concerned. The other issues were not pressed. Pronounced in the open court. The detailed reasons to follow. Ravish Sood Pramod Kumar JM VP Assessment year: 2011-12 Page 2 of 7

I. D.V.O adopted higher value instate of deficiencies in the property:

1. 1. The Learned CIT(A) erred in confirming addition of Long term Capital Gain towards sale of property by adopting value determined by the DVO at higher rate as against actual sale price, without considering that the said property had major deficiencies which resulted in no buyer for the property and the assessee had no option but to sell at a lower price . Therefore, value adopted by the DVO was unreasonable and hence addition made on the basis of same is not justified.

2. Without prejudice, mere report of DVO estimating higher value of property cannot be considered as an evidence of actual full value of consideration received or accruing as a result of transfer of capital asset moreso when the assessee had provided the details of land locked plot alongwith supporting evidence of adjoining plot.

5. To adjudicate on the above grievences, only a few material facts need to be taken note of. The assessee before us is an individual who had sold a piece of land at Goregaon (E), Survey No. 83, Hissa No. 4, for a total consolation of Rs. 50 lac. The deed of conveyance was registered on 20.08.2010 and the stamp duty valuation for the purpose of the said deed of conveyance was Rs. 2,31,70,000/-. As the assessee Assessment year: 2011-12 Page 3 of 7 challenged this stamp duty valuation being adopted for the purpose of competition of capital gains, the matter was referred to Departmental Valuation Officer. The Departmental Valuation Officer valued the fair market value of said land as on 20.08.2010 at Rs. 1,11,30,000/- . Accordingly, long term capital gains were computed at Rs. 92,76,967/-. Aggrieved, inter alia, by the deemed sale consolation being adopted at Rs. 1,11,30,000/- under section 50(C), The assessee carried the matter in appeal before the CIT(A). It was pointed out by the assessee that the said property was fully occupied and possessed by M/s. Haldyn Glass Ltd., for more than 20 years, that the said property was landlocked property in as much as it did not have reasonable passage, that the adjoining plot, through which an access was owned by M/s. Raheja Universal Ltd., i.e. the buyer, and that under these circumstances the valuation at Rs. 1,11,30,000/- was highly excessive and reasonable. Learned CIT(A) however did not accept the plea. Rejecting the said plea and confirming the action of the Assessing Officer on this point learned CIT(A), inter alia, observed as follows:-

The above contentions of the assessee are not acceptable. There is no evidence that the property was fully occupied and possessed by M/s Haldyn Glass Ltd. The DVO has also commented that no proof was submitted by the assessee to support his claim that the property was encroached upon since 1965 and no details of the extent of encroachment was submitted for as on 01.04.1981 and 20.08.2010. The assessee has also claimed that the property did not have any access to the road and this impacts its marketability. This claim of the assessee has no force since the Indian Easements Act, 1882 also mandates right of passage to a landlocked plot. The assessee has claimed that the property was reserved for recreational activity but no evidence has been shown and the DVO has reported that on the date of inspection a huge basement was under construction in that area. This does not support the claim of the assessee. Further the claim of the assessee that the land was occupied and full of encumbrances etc.

Assessment year: 2011-12 Page 4 of 7 is not relevant and it is seen that M/s Raheja Universal Ltd. never acquired the possession over the assessee's property when it purchased the land of M/s Haldyn, Glass Ltd. in 2007. It is also noted that all such objections had been taken by the assessee before the DVO also and the DVO's report has factored in all the objection of the assessee in para 8 of his final report wherein the DVO has mentioned that he has given a 50% discount for all the potential grounds for lowering the value of the property. The DVO has rebutted/answered all the arguments of the assessee in detail. In view of the above and considering the technical nature of the job of valuation, it is held that the expert's opinion cannot be tinkered with by the undersigned without any valid reason. In the instant case al! the objections have been considered by the DVO or have been rebutted as above and there is therefore no need to defer from the valuation report which is based on specific sale instances of the relevant period in the vicinity of the plot of the assessee. The Supreme Court in the case of CIT vs. Bharti Cellular Ltd. [2011] 330 ITR 239 (SC) has already held that the role of technical experts is very important in matters of taxation. Therefore the ground of appeal no. 2 of the assessee is dismissed.

6. The assessee is not satisfied that the stands were taken by the learned CIT(A) and as in further appeal before us.