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Income Tax Appellate Tribunal, ‘’ SMC’’ BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED
आदेश/O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals)-9, Ahmedabad, dated 20/04/2018 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2014-15.
The assessee has raised the following grounds of appeal:
1. On the law and facts of the case of your appellant, the Ld. CIT(A)- 9 has erred in rejecting the valuation report of approved Registered Valuer without referring to section 55(2)(b)(i) and 55{2)(b)(ii) and thereby rejected the claim of indexed cost of acquisition at Rs. 16,52,800/-. Therefore your appellant prays the Hon. ITAT to allow the claim of your appellant and consider the indexed cost of acquisition at Rs. 16,52,800/- as per the valuation reports
2. On the law and facts of the case of your appellant, the Ld. ClT(A)-9 has erred in applying the decision of the Hon. Supreme Court in the case of Goetze (India) Limited in rejecting the claim of your appellant to consider the indexed cost of acquisition at Rs. 16,52,800/- as per the valuation reports
3. Your appellant craves leave to add, alter, amend, and/or delete any grounds as mentioned above during the course of appeal hearing.
3. The only issue raised by the assessee is that the learned CIT-A erred in confirming the order of the AO by not accepting the cost of acquisition declared by the assessee based on the valuation report.
The facts in brief are that the assessee in the present case is an individual and derives his income from salary and other sources. The assessee in the year under consideration has sold three properties for a value of Rs. 19,00,000.00 only. The assessee against such property has claimed the deduction for the cost of acquisition as detailed below: i. Cost of acquisition as on 1 April 1981 ₹20,000 ii. Cost of improvement ₹55,128 4.1 The assessee has taken the index cost of acquisition for the cost of acquisition and cost of improvement at Rs. 3,35,761.00 only. However, the AO did not agree to allow the deduction to the assessee with respect to the cost of the improvement. The assessee also did not challenge the same.
4.2 However, the assessee, on the direction of the AO, during the assessment proceedings has obtained the valuation report of the impugned property as on 1 April 1981 from the registered valuer. According to the registered valuer the indexed cost of the impugned property was determined at ₹16,54,000. However, the AO did not accept the same on the reasoning that the assessee has not claimed the cost of acquisition as on 1 April 1981 based on the report of the registered valuer in the return of income but it was claimed by way of revised computation of income. Accordingly, the AO disregarded the contention of the assessee with respect to the indexed cost of acquisition claimed by him (the assessee) based on the report of the registered valuer.
4.3 The assessee carried the matter to the learned CIT-A, who also confirmed the same by observing as under: It is seen that appellant in the return of income has taken indexed cost of acquisition of Rs. 1,87,8007- in the computation of capital gain on sale of godown. The appellant has not revised the return of income. The A.O has not disturbed the indexed cost of acquisition adopted by the appellant, therefore, the grievance of appellant is unfound. The appellant's argument that the A.O should have considered the valuation report dated 20/1/2016 for cost of acquisition is not tenable as the Hon'ble Supreme Court in the case of Goetz (India) Ltd. v. CIT 284 ITR 323/157 Taxman 1, has clearly held that A.O cannot entertain any claim otherwise than filing revised return. The valuer in the valuation report, value as on 1/4/81 has noted that the rate of ready reckoner was not in force as on 1/4/81 hence it is not proper to compare the rate of sale deed with rate as on 1/4/81. The valuer has also mentioned that it is not easy to quote the specific instances of the sales to be relied upon to and directly comparable to the land/property u/r in terms of the locality, situation, shape, size, plot, area etc. when instances of the sales are few and undervalued not comparable directly. The valuer has also noted that the annual statement of rates upto 201 1 does not reflect the market rate prevailing at present. The valuer after making the above observation, based on the gold price computed the value of land at Rs. 310 /-per sq.mtr as on 1/4/81. The valuers report is merely an estimate and does not reflect the fair market value of the land as on 1/4/81. As the appellant himself has taken the cost of acquisition as on 1/4/81, the A.O has correctly assessed the capital gain. In view of this, the ground of appeal is dismissed.
Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us.
5.1 The learned AR before us submitted that the authorities below should have considered the valuation report which was filed at the behest of the AO.
5.2 On the contrary, the learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record. In the instant case the issue relates to the confirmation of the addition made by the AO under the head capital gain without considering the indexed cost of acquisition based on valuation report. The valuation report was not considered by the Revenue authorities on the reasoning that the assessee did not make the claim for the same in the original return of income but the same was claimed during the assessment proceedings by way of revised computation of income.
6.1 In this regard, we note that the principles laid down by the Hon’ble Apex Court in the case of Goetz India Ltd. vs. CIT reported in 157 taxman 1 does not restrict the power of the Tribunal to entertain the fresh claim of the assessee, though the same was not claimed in the return of income. Thus, we are not convinced with the finding of the authorities below.
6.2 Accordingly, we hold that the assessee is entitled to make the fresh claim in the revised computation of income.
6.3 However, we note that the fresh claim made by the assessee during the assessment proceeding has not been verified by the authorities below. Accordingly, we set aside the issue to the file of the AO for fresh adjudication de-novo as per law after considering the revised computation of income filed by the assessee. Hence, the ground of appeal of the assessee is allowed for the statistical purposes.
In the result, the appeal of the assessee is allowed for the statistical purposes.
Order pronounced in the Court on 23/03/2022 at Ahmedabad.