Case Law Details
Brief of the case
In the case of Shri Barjinder Singh Bhatti vs. ITO ITAT has held that in absence of not having any evidence or material before him to contradict the report of the Registered Valuer, AO cannot reject valuation report of Registered Valuer.
Facts of the case
1. During the year under consideration, the assessee had sold some lands at village Barnala Kalan on different dates and worked out capital gain of RS 4684429/-.The value of the land as on 01.04.1981 was taken on the basis of valuation made by a registered valuer . The Assessing Officer noticed from the valuation report that the valuation was done at 3.5 times of the sale rate as per the registered deed in 1981 @ 24,000/-per kanal .
2. The Assessing Officer was of the view that the valuer had ignored concrete evidence i.e. sales registration deed made in 1981, which was the base for the valuation report and had, resorted to expectation and imagination that in that area, pr ice/ value of land must have been 4 to5 times higher than that shown in the registration deed. He accordingly adopted the rate of Rs. 24,000/- per kanal as on 01.04.1981 for the purposes of computing capital gain.
3. Aggrieved by the order of AO, assessee preferred an appeal before CIT(A), who has dismiss assessee appeal by holding that;
3:3.3 The Assessing Officer has computed the cost of acquisition as on 01.04.1981 by applying the rate mentioned by the registered valuer in his valuation report i.e. Rs. 24,000/- per kanal , The registered valuer has mentioned in his report that it was expected that the price of land in that area must have been 4 to 5 times higher than what was shown in the registration deed, but to be on the safer side he was adopting it to be at 3.5 times of what was shown in the registration deed. At the outset, it may be mentioned that there was no scientif ic/rational basis for the registered valuer to take the rate of 3.5 times of the rate of registration. Moreover, if he was taking the cost of acquisition at 3.5 times of the registered deed, the same factor/mul tipl ier should have been used for declaring the sale consideration which was not done. Be that as it may, the Assessing Of f icer has rightly adopted the rate of Rs. 24,000/- per kanal as on 01.4.1981, which is the rate at which the registration had been done in 1981 and his action in this regard is upheld. Grounds of appeal Nos. 2, 3 and 4 are dismissed.”
4. Aggrieved by the order of CIT(A), assessee preferred an appeal before Tribunal.
Issue
Whether Assessing Officer is correct in rejecting market valuation as on 01.04.1981 as calculated by the Registered Valuer at Rs. 8,35,217/- and against calculated fair market value at Rs. 2,32,800/- without taking expert opinion.
Assessee ‘s Contention
1. It is also stated that ld. CIT(Appeals) erred in up-holding the order of the Assessing Officer in over – riding the report of technical valuer , without supporting evidence from a DVO which is bad in law.
2. Assessee submitted that the Assessing Officer , for rejecting the report of the Registered Valuer should have refer red the matter to the DVO and in the absence of any evidence on record, the report of Registered Valuer should be accepted with regard to the market value as on 01.04.1981 for the purpose of computing capital gains. Therefore, orders of the authorities below may be set aside.
Revenue Contention
DR relied upon orders of the authorities below viz. that the valuer had ignored concrete evidence i .e. sales registration deed made in 1981, which was the base for the valuation report and had, resorted to expectation and imagination that in that area, pr ice/ value of land must have been 4 to5 times higher than that shown in the registration deed. it may be mentioned that there was no scientific/rational basis for the registered valuer to take the rate of 3.5 times of the rate of registration.
ITAT decision / observations
1. The assessee filed report of Registered Valuer in support of the market value as on 01.04.1981. The Assessing Officer was not having any evidence or material before him to contradict the report of the Registered Valuer.
2. The Assessing Officer , if was not satisfied with the report of the Registered Valuer , could have made a reference to the Departmental Valuation Officer under section 55A of the Act for the purpose of computing income from capital gains. The Assessing Officer has thus, not acted in accordance with law and without any basis or evidence in his possession, did not accept report of the Registered Valuer.
3. In the absence of any material on record, Assessing Officer should not have made his own calculation for the purpose of computing the capital gains. The orders of the authorities below, thus, cannot be sustained in law. We, accordingly, set aside the orders of authorities below and direct Assessing Officer to accept valuation reported by the assessee as per report of the Registered Valuer as on 01.04.1981 and accept the computation filed by the assessee.
