Income Tax Appellate Tribunal - Chennai
K.R.S. Prasanna, Trichy vs Department Of Income Tax on 21 May, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
'B' BENCH, CHENNAI
BEFORE Dr. O.K. NARAYANAN, VICE-PRESIDENT
AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER
I.T.A.No. 125/Mds/2013
Assessment year : 2008-09
The Assistant Commissioner K.R.S. Prasanna,
of Income-tax, Vs. 42, Aruna Nagar,
Circle-III, Trichy - 620 017.
Trichy. PAN AQKPS5421P
(Appellant) (Respondent)
Appellant by : Dr. S. Moharana, IRS, C IT
Respondent by : Shri M. Narayanan
Date of Hearing : 21st May, 2013
Date of Pronouncement : 21st May, 2013
O R D E R
PER Dr. O.K. NARAYANAN, VICE-PRESIDENT This appeal is filed by the Revenue. The relevant assessment year is 2008-09. The appeal is directed against the order of the Commissioner of Income-tax(Appeals) at Tiruchirapalli dated 19.10.2012. The appeal arises out of the :- 2 -: ITA 124/13 assessment completed under sec. 143(3) of the Income-tax Act, 1961.
2. In the previous year relevant to the assessment year under appeal, the assessee had sold 50% of his share in the property at Nungambakkam. The sale consideration of 50% received by the assessee worked out to ` 9,87,50,000/-.
3. In computing long term capital gains, the assessee adopted the fair market value as on 1.4.1981 at ` 150/- per sq.ft. The Assessing Officer adopted the fair market value at ` 8.33 per sq.ft. Thus, he computed higher amount of long term capital gains assessable in the hands of the assessee. In first appeal, the Commissioner of Income-tax(Appeals) observed that the assessee had produced a report from a qualified valuer and the said valuation report has provided certain guideline to estimate fair market value. He also found that guideline value of the property as adopted by the Assessing Officer did not reflect market value, as there was no transaction for a long period of time. Accordingly, he held that the value adopted by the assessee is more reasonable and directed the Assessing Officer :- 3 -: ITA 124/13 to accept the computation of long term capital gains worked out by the assessee.
4. The Revenue is aggrieved and, therefore, the second appeal before us.
5. The grounds raised by the Revenue in the present appeal read as below :
"2. The CIT(Appeals) failed to observe the fact that the report of the approved valuer cannot be relied upon with regard to valuation of land, since in the report, there is no evidence or basis to adopt the value of the land mentioned in the report.
3. The CIT(Appeals) failed to appreciate the fact that guideline value adopted by the Assessing Officer is authentic one and it has been obtained from the Authority who fixes the value of land for any immovable transactions.
4. The CIT(Appeals) failed to appreciate the fact that the judgment in the case of CIT vs. J.V.K.Rao (258 ITR
90) is squarely applicable in this case, in which it was held that the certificate from Sub-Registrar can be the basis for calculating the cost of immovable property.
5. The CIT(Appeals) failed to appreciate the fact that in the case of Namitha Sarkar vs. CIT (275 ITR 90) it was observed that the authorities are free to agree with the finding of the report given by the approved valuer, at the same time, if it appears that the valuation was inaccurate or unreliable, it would be open to the authority to reject the same.":- 4 -: ITA 124/13
6. We heard Dr. S. Moharana, the learned Commissioner of Income-tax appearing for the Revenue and Shri M. Narayanan, the learned counsel appearing for the respondent-assessee.
7. It is to be seen that the assessee has worked out the fair market value on the basis of a report of a qualified valuer. The assessee has also produced comparable instances to show that the fair market value as on 1.4.1981 should be taken at ` 150/- per sq.ft. on a reasonable basis. Against this, the Assessing Officer tried to work out the fair market value on the basis of guideline value. Statutorily speaking, guideline value has no application in determining fair market value as on 1.4.1981, even though guideline value is one of the basis to work out a reasonable fair market value. But in the present case, guideline value as determined by the Stamp Duty Authority was only academic in nature, as there was no transaction in and around the property for a long period of time. In such circumstances, comparable case brought in by the assessee assumes more relevant.
8. In the facts and circumstances of the case, we find that the Commissioner of Income-tax(Appeals) has rightly accepted the :- 5 -: ITA 124/13 fair market value adopted by the assessee as on 1.4.1981. Therefore, we do not find any reason to interfere with the order passed by him.
9. In result, this appeal filed by the Revenue is dismissed.
Order pronounced on Tuesday, the 21st of May, 2013 at Chennai.
Sd/- Sd/-
(VIKAS AWASTHY) (Dr.O.K.NARAYANAN)
Judicial Member Vice-President
Chennai,
Dated the 21st May, 2013
mpo*
Copy to: 1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
6. GF.