INCOME TAX ACT, 1961

Section 55

Capital gains - Cost of acquisition - Whether rates of the registered valuer could be rejected by AO without having referred the matter to the DVO -

Assessee had sold a residential house and while computing capital gain, she had deducted the cost of acquisition by taking fair market value (FMV) as on 1-4-1981, based on the valuation report obtained from a registered valuer. AO noted that assessee had increased the rate of land by five times of the existing rates for the purpose of determining the FMV. Assessee contended that the rates of the registered valuer could not be rejected by the AO without having referred the matter to the DVO. However, AO contended that reference was made to DVO but DVO had expressed his inability to carry out the valuation of the property, as there was no existing structure which could be measured for the purpose of arriving at the FMV of the property. Held: AO was not right in discarding the report of the registered valuer without having made a reference to the DVO. Accordingly, AO was directed to re-compute the FMV of the land as on 1-4-1981 by taking into account the rate as adopted by the registered valuer.

Followed: CIT v. Raman Kumar Suri (2013) 255 CTR 107 (Bom) : 2013 TaxPub(DT) 0371 (Bom-HC),Commissioner of Wealth-Tax v. Raghunath Singh Thakur (2008) 304 ITR 268 (HP) : 2008 TaxPub(DT) 1886 (HP-HC), Pyare Mohan Mathur, HUF v. ITO [ITA No. 471/Agra/2009 vide Order dt. 21-4-2011) : 2011 TaxPub(DT) 2138 (Agra-Trib) Relied: Barjinder Singh Bhatti v. ITO [ITA No. 1101/CHD/2014, dt. 9-7-2015],Adarsh Kumar Agarwal v. ACIT [ITA No. 66/Lkw/2014 : 2015 TaxPub(DT) 4077 (Luck-Trib), Sosamma Paulose v. Jt. CIT (2003) 79 TTJ 573 (Coch.) : 2003 TaxPub(DT) 1025 (Coch-Trib)-

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2011-12

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