ACIT NON CORPORATE CIRCLE 7(1), CHENNAI vs. VISHWAS UDUPA, CHENNAI

PDF · subscribers
ITA 2918/CHNY/2018Status: DisposedITAT Chennai27 March 2018AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) erred in deleting the addition by relying on a valuer's report, especially when the valuer was registered for Wealth Tax purposes only and not Income Tax. The AO's valuation was based on public domain data, and the assessee failed to establish their valuation with supporting documents.

What were the facts?

The assessee sold an immovable property and computed capital gains based on a valuer's report. The Assessing Officer recomputed the capital gains using rates from the public domain, which were lower than the assessee's claimed cost of acquisition.

What were the issues?

Whether the valuation report from a valuer registered under the Wealth Tax Act can be considered for Income Tax purposes, and the validity of capital gains computation based on such a report versus public domain data.

Which sections of the Income-tax Act were involved?

Section 54

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH : CHENNAI

Before: SHRI ABRAHAM P. GEORGE & SHRI DUVVURU RL REDDY]

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER

1.

In this appeal filed by the Revenue, which is directed against an order dated 10.08.2018 of Commissioner of Income-tax (Appeals)-7, Chennai, it has taken altogether three grounds of which grounds 1 & 3 are general, needing no specific adjudication.

ITA No.2918 /2018 :- 2 -:

Ground No.2 is reproduced hereunder:- 2.

‘’2.1 The CIT(A) erred in deleting the addition made under the Long Term Capital Gain by directing the AO to adopt the value as given by the valuer, who had been recognised by the IT department by holding that the valuation report submitted by him is to be considered as being issued by a competent authority.

2.2 The CIT(A) ought to have appreciated the fact that the valuer Shri. T.R. Shivanandaiah has been registered as valuer under Wealth Tax Act 1975 purpose only and not for Income Tax purpose. 2.3 The CIT(A) omitted to consider the fact that the value adopted by the AO was based on the public domain. Whereas the assessee failed to establish the value adopted by him, was the same as value adopted by the other land/building owners in the same location by relying the SRO documents. 2.4 The CIT(A) erred in allowing the assessee to carry forward Long Term Capital Loss of Rs.20, 12,784/- after setting of exemption claimed u/s.54 of the Act, when there is no such provision available in the Act. 2.5 The CIT(A) ought to have appreciated the fact that exemption u/s.54 can be allowed only to the extent of Long Term Capital Gains available’’.

3.

Facts apropos are that assessee had sold an immovable property situated at No.22, Vishwas, Survey No.14, Peenya Village, Yeshwantpura, Bangalore North for a consideration of �6.35 crores.

Assessee had computed capital gains taking cost of acquisition of land at �325/- per sq.ft. and that of the building at �675/- per sq.ft, as the base for 1981, while doing the indexation. Ld. Assessing Officer ascertained the rates of land of Jalahalli area from public domain and ITA No.2918 /2018 :- 3 -: came to a conclusion that assessee’s plot could not have had a value of more than �70/- per sq.ft for the year 1981. He therefore recomputed capital gains substituting �70/- per sq.ft for land as the cost against �325/- considered by the assessee. Similarly cost per sq.feet for the building was reduced from �675/- to �200/- per sq.ft.

4.

Assessee’s appeal before ld. Commissioner of Income Tax (Appeals) was successful. Ld. Commissioner of Income Tax (Appeals) recomputed the capital gains and arrived at a capital loss considered the cost for 1981 as fixed by the registered valuer. According to him, value fixed by the registered valuer could not be ignored.

5.

Now before us, the ld. Departmental Representative strongly assailing the order of the ld. Commissioner of Income Tax (Appeals) submitted that ld. Commissioner of Income Tax (Appeals) gave undue importance to the report of the registered valuer.

Per contra, ld. Authorised Representative strongly supported 6.

the order of the ld. Commissioner of Income Tax (Appeals).

7.

We have considered the rival contentions and perused the orders of the authorities below. The valuation report produced by the assessee was from one Shri. T.R. Shivanandaiah, B.E. In the said valuation report, the rate per sq.ft. for land for 1981-82 was given as ITA No.2918 /2018 :- 4 -:

�150/ - and that of building as �190/- per sq.f.t. The report clearly indicated that the rates were based on Sub Registry fixation. The ld. Commissioner of Income Tax (Appeals) had also clearly mentioned that Shri. T.R. Shivanandaiah, the valuer was approved for that purpose by the Department. That apart, ld. Assessing Officer despite being put on notice by the ld. Commissioner of Income Tax (Appeals) on the submissions made by the assessee, had elected not to give any reply. In the circumstances, we do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals).

In the result, the appeal of the Revenue stands dismissed. 8.

More judgments on Section 54

All 1,745 judgments and leading authorities on Section 54 →

Recent GST High Court judgments

Search GST case law →