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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM
O R D E R
PER DR. A. L. SAINI, ACCOUNTANT MEMBER:
Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2016-17, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-3, Surat [in short “the ld. CIT(A)”] in Appeal No. CIT(A)- 3/10417/2018-19 dated 11.03.2020, which in turn arises out of an order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as the “Act”], dated 22.12.2018.
Grounds of appeal
raised by the assessee are as follows:
1. On the facts and circumstances of the case as well as law on subject the learned Commissioner of Income-tax (Appeal-3) Surat erred in allowing appeal in part by adopting the fair market value as per department valuation officer report instead of government approved valuer’s report.”
Brief facts qua the issue are that the assessee firm is a Builder and Developer. During the course of the assessment proceedings, the assessing officer observed that the assessee had sold non-agriculture land situated at Chidiyakui Road, Begampura, Surat, City-Survey ward No. 7, Nondh No. 4727/A, assuming area of 383.83 sq.
ITA.102/SRT/2020/AY.2016-17 Sabbirbhai S. Badri mts. And adjoining land situated at Nondh No. 4730 assuming area of 297.83 sq. mts., total non-agriculture assuming area of the land was 680.89 sq. mtr (383.83+297.06) for the consideration of Rs.3,65,98,000/- on 18.06.2015. The assessee had claimed the cost of land-as on 01.04.1981 of Rs.9,10,200/- at the rate of Rs.1336/- sq. mtr. on the basis of registered valuer's report for an inner side land (another land) adjoining to the plot (road side) which was sold A.Y.2003-04, value of the said property was determined by the government approved valuer taking value at Rs.1,000/- and the same was accepted by the department. The assessee vide submission dtd. 17.12.2018 requested 'the assessing officer to refer the property to the DVO to value land as on 01.04.1981. On request of the assessee, a reference was made to the Departmental Valuation Officer to determine the fair market value of land as on 01.04.1981. The DVO report was not received at the time of completion of assessment, hence, relying on sale instance collected by him, the assessing officer determined the indexed cost of Sand as on 01.04.1981 was Rs.7,36,042/- @Rs.100 per sq. Mtr. and re-calculated the song term capital gain at Rs.3,58,61,958/-.
On appeal, ld CIT(A) partly allow the appeal of the assessee. The ld CIT(A) has considered all facts of assessee`s case and then directed the assessing officer to take into account the DVO report to determine the FMV of land as on 01.04.1981 @Rs.920 per sq meter to work out the Long Term Capital Gain. Aggrieved, by the order of ld CIT(A), the assessee is in further appeal before us.
Learned Counsel for the assessee pleaded before us that only grievance of the assessee is that fair market value of land as on 01.04.1981 should be taken @ Rs.1,000/- per sq. mtr. valued by the Registered Valuer instead of Rs.920/- per sq. mtr. as per DVO report.
On the other hand, ld DR relied on the findings of the assessing officer.
We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws
ITA.102/SRT/2020/AY.2016-17 Sabbirbhai S. Badri relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that DVO report was not received at the time of completion of assessment, hence, relying on sale instance collected by AO, the assessing officer determined the indexed cost of Sand as on 01.04.1981 was Rs.7,36,042/- @Rs.100 per sq. Mtr. and re-calculated the song term capital gain at Rs.3,58,61,958/-. The final report of DVO was received on 20.07.2019 (after assessment order) wherein he has valued fair market value of land as on 01.04.1981 @ Rs.920/- per sq. mtr. as against Rs.1,000/- per sq. mtr. valued by the Registered Valuer accordingly, fair market value of the land was determined at Rs. 6,26,420/- as on 01.04.1981. The ld CIT(A) noted that for adoption of the FMV of Rs.920/- per sq.mt. by the Departmental Valuation Officer, it is observed that the assessee was provided grounds to submit his objections before the valuation officer. The report of the valuation officer has been perused which was provided to the assessee also. In the report, it is observed that the valuation officer has arrived at the FMV based on the comparable sales instances taking into account all the factors which effect the land rates such as size, shape, situation, location, specification etc. He had relied on sales instances in the same vicinity of the assessee's land to arrive at the FMV of Rs.920/- per sq.mt. The reasons given for the support of the comparable land instances in the valuation report is mentioned at para 7.1 and 7.2 wherein it was mentioned that on the date of sale, sufficient number of sale instances of the land area rates-were available in the vicinity of the PUC. At para- 9.0 of the Valuation Report, the Valuation Officer has commented on the registered valuer's report, which was provided by the assessee to the valuation officer. The Valuation Officer has mentioned that the report of the registered valuer is not reliable because the said valuation report was for another side not for PUC, sale instances provided by the regd. Valuer were verified and found to be constructed over it. Hence, these cannot be compared with an open land. At para 10.2 of the Valuation Report it is mentioned that the proposed estimate along with the FMV was sent to the assessee by the Valuation Officer calling for objections in writing. The DVO worked out the FMV at Rs.920 per sq. mt. as on 01.04.1981 after considering all the objections and the Registered Valuers Report. Based on this ITA.102/SRT/2020/AY.2016-17 Sabbirbhai S. Badri factual position, the ld CIT(A) directed the AO to take into account the DVO report to determine the FMV of land as on 01.04.1981 @ Rs.920 per sq meter.
We note that assessee was provided opportunity to submit his objections before the valuation officer. It is not a one- sided approach. It is not a case that assessee was not provided an opportunity to “Say” before DVO. In the DVO report, the valuation officer has arrived at the FMV based on the comparable sales instances taking into account all the factors which effect the land rates such as size, shape, situation, location, specification etc. therefore, assessee does not deserve much relief. Therefore, we confirm the order of ld CIT(A)
In the result, appeal filed by the assessee is dismissed.
Order is pronounced in the open court on 30/06/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963.