IN THE ITAT AHMEDABAD BENCH ‘C’
Assistant Commissioner of Income-tax
v.
Prakash Ratanlal Sheth
IT APPEAL NO. 951 (AHD.) OF 2012
[ASSESSMENT YEAR 2008-09]
JULY 31, 2012
ORDER
T.R. Meena, Accountant Member – This is an appeal at the behest of the Revenue which has emanated from the order of CIT(A)-V, Baroda, order dated 15.02.2012 for assessment year 2008-09. The effective grounds of Revenue appeal are as under:-
“(i) The learned CIT(A) erred in law in not considering the applicability of the provisions of section 55A of the IT Act, which empowers the AO to ascertain the fair market value of a capital asset for the purpose of determining capital gains by referring the valuation of the same to Valuation Officer.
(ii) The learned CIT(A) erred on facts and in law in not considering the facts that assessee had constructed additional floor at different times and had given the wrong computation of Long Term Capital Gain by adopting incorrect indexation.”
2. The factual matrix of the case is that the assessee has shown long term capital loss on property A-1-23, Ishwarshanti Society, Karelibaug sold on 28.02.2008 at a price of Rs. 14,00,000/-. The cost of acquisition is Rs. 10,49,237/- as on 1991 which after Indexation comes to Rs. 29,05,174/-. As the appellant claimed loss under the head capital gain, therefore, ld. A.O. has referred the property u/s 55A of the IT Act for fair market value of the property on date of sale to the District Valuation Officer who estimated the fair market value of the property Rs.24,04,400/- against the consideration of Rs. 14,00,000/- shown in the sale agreement. It is also found from the Valuation Report that the appellant had constructed ground floor in 1991 and first floor & second floor in 1994 to 95-96 respectively. The appellant, however, claiming the benefits of indexation from F.Y. 1991-92. The A.O. had given reasonable opportunity to the assessee before computing a capital gain on the basis of DVO Report. The appellant admitted before the A.O. vide his letter dated 22.12.2010 that property was acquired on 16.10.1991 and admitted that some construction on ground floor, first floor and second floor was done by him. The ld. Counsel for the appellant as well as ld. A.O. relied upon various case laws. Finally, the A.O. computed the capital gain as under:-
“13. Revised calculation of indexation for determining the cost of acquisition:
