Fair Market Value determined by Registered valuers for Computation of Taxable value should not be ignored: ITAT [Read Order]

The Surat Bench of Income Tax Appellate Tribunal (ITAT) has held that the fair market value determined by the registered valuers for the purpose of computation of taxable value should not be ignored.

AssesseeHarivadanbhaiMaganlal Patel was an individual. The four co-owners had sold immovable properties. On-going through the sale deed, the assessing officer noted that stamp duty payment which means that the property was valued differently by the Stamp Duty Value Authorities. The assessee was holding 1/5th share in the property and hence, the deemed sale consideration in the hands of assessee, as per the provisions of section 50C of the Act another as shown by the assessee.

 During the course of assessment proceedings, it was noticed that the assessee has entered into one more immovable property transaction during the year under consideration and had not considered the entire sale consideration for taxation purpose.

AO held that the assessee had deliberately avoided one property while computing taxable income to reduce the tax liability and fair market value was determined a different addition was made. 

Sapnesh R Sheth,on behalf of the assessee submitted that the DVO had taken an indexed cost of acquisition at Rs. 31/- per square metre,  which was a very low side. As per registered valuer of the assessee, the indexed cost of acquisition was at 80- per square metre,in case first property and 90 in case of second property and the same should be considered to compute the indexed cost of acquisition. 

VinodKumar appeared on behalf of the revenue.

The two member Bench of Pawan Singh, (Judicial Member) and A. L. SAINI, (Accountant Member) held that the registered valuer of the assessee had taken into account all these facts and circumstances of the land to determine the fair value, therefore fair market value determined by the registered valuers should not be ignored.

The Bench partly allowed the appeal by determining the fair value of both the properties at the rate of Rs.80/- per square metre  for the purposes of computation of indexed cost of acquisition to determine the taxable long term capital gain holding that would meet the end of justice.

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