Case Law Details
Millie Dey Vs ITO (ITAT Kolkata)
BRIEF FACTS OF THE CASE:
Assessee; being a Co-owner of a house property sold the property in the financial year 2015-16 pertaining to assessment year 2016-17. The return for the year was duly submitted by the assessee showing a long term capital loss as arrived by the assessee on the basis of a registered valuers valuation report and got assessed u/s 143(1)(a) with NIL demand. Subsequently in the year 2021, the proceedings u/s 147 was initiated by the department of revenue and the calculation of capital gain was challenged by the L.D AO. The LD.AO made an addition of Rs 44,90.630/- in his order u/s 147 of the IT Act which was arrived after deducting the 50% share of the cost of acquisition figure which was Rs 5,00370/- from the sale consideration of Rs 50, 00,000/- as received by the assesse as her share. While calculating the Long Term capital Gain the LD. AO considered the cost of acquisition as derived by the registered valuer as on 01.04.1981 and ignored the FMV of the property in the year of sale which was also derived by the valuer in his valuation report with a reason that the base year value was arrived at by the valuer by applying a reverse indexation method hence the base year value has to be adopted.
Appeal Proceedings:
Aggrieved by the order the assesse preferred an appeal before LD.CIT Appeals NFAS New Delhi where the order of the LD AO was upheld by the LD CIT (Appeals) NFAS New Delhi and the appeal of the assesse was dismissed. The LD.CIT (Appeals) held the same view as of the LD ITO and did not agree with the methods adopted by the valuation officer in determining the FMV of the property in the year of its sale. LD.CIT(Appeals) NFAC New Delhi supported the view of the LD.AO of considering the base year value as the cost of acquisition of the property.
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