Sh. A.S. Arya, Roorkee V. JCIT, Haridwar

ITA 1953/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81487 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 11-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: VIKALP NASWA; HEMANT KUMAR ARORA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Period of limitation; Cost of acquisition; Fair market value; Valuation report; Competent authority; Time period of passing order
• Section: 54; 37; 139

Judgement Text

PAGE 1 OF 12 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, A.M. AND SHRI A.T.VARKEY , J.M. ITA NO. 1806 /DEL/201 3 ASSESSMENT YEAR : 200 9 - 10 ACIT, CIRCLE HARIDWAR VS. AS ARYA, 401, SUPERTECH RESIDENCY D 29 AND 30, INDL.AREA SECTOR 5, VAISHALI HARIDWAR GHAZIABAD PAN: ABNPA 9456 A ITA NO. 1953 /DEL/201 3 ASSESSMENT YEAR : 200 9 - 10 SH. A.S.ARYA VS. CIT(A), DEHRADUN C/O M/S HEMANT ARORA & CO. ROORKEE (APPELLANT) (RESPONDENT) ASSESSEE BY: - SH. HEMANT KUMAR ARORA, C.A. AND SHRI VIKALP NASWA, C.A. DEPARTMENT BY: - M S.Y.KAKKAR, SR.D.R. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF THE LD.CIT(APPEALS) - I, DEHRADUN DATED 25.1.2013 PERTAINING TO THE ASSESSMENT YEAR 2009 - 10. 2. FACTS OF THE CASE: - THE ASSESSEE IS AN INDIVIDUAL. HE IS AN EMIRATUS PROFESSOR OF IIT, ROORKEE. DURING THE YEAR T HE ASSESSEE SOLD A RESIDENTIAL HOUSE ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 2 OF 12 VIDE SALE DEED DATED 3.5.2008 FOR RS.2,51,00,000/ - AND DECLARED LONG TERM CAPITAL GAIN OF RS.2,62,210/ - AFTER CLAIMING EX EMPTION U/S 54 OF THE ACT. IN THE COMPUTATION OF CAPITAL GAINS THE ASSESSEE HAS ADOPTED FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 AS VALUED BY A REGISTERED VALUER AS THE COST OF ACQUISITION. THE COST OF PLOT WAS ADOPTED @ RS.52.50/ - PER SQ.FT. AN D THAT OF THE SUPERST RUCTURE AT RS.2,25,265/ - . HE SUBMITTED THE REPORT FROM A REGISTERED VALUER IN SUPPORT OF THIS VALUATION. THE ASSESSING OFFICER OBSERVED THAT THE VALUER HAD ADOPTED THE COST OF THE PLOT RS.52.50 PER SQ.FT. WHILE THE PRESCRIBED CIRCLE RATE , FOR STAMP DUTY PURPOSES , AS ON 4.7.1980 WAS RS.20/ - PER SQ.FT. AND THAT ON 11.11.1982 IT WAS RS.50/ - PER SQ.FT. THE VALUER HAD ADOPTED THE MEAN OF THE TWO FIGURES I.E. RS.35/ - PER SQ.FT. AND SCALED IT UP BY 50% ON THE GROUND THAT THE BUILDING, E VEN THOUGH RESIDENTIAL, WAS LOCATED IN A COMMERCIAL AREA. THE ASSESSING OFFICER FOUND A CONTRADICTION IN THE ASSESSEE S APPROACH BECAUSE, ON THE ONE HAND, HE WAS CLAIMING DEDUCTION U/S 54 OF THE ACT AS IF THE ORIGINAL ASSET WAS A RESIDENTIAL HOUSE AND, ON THE OTHER HE WAS VALUING ITS COST AS IF IT WERE A SEMI - COMMERCIAL PROPERTY. HE TREATED THIS AS INCORRECT AND ADOPTED THE RATE OF RS.20/ - PER SQ.FT. FOR DETERMINING THE COST OF ACQUISITION OF THE PLOT. THIS ASPECT OF THE ASSESSING OFFICER S COMPUTATION H AS BEEN CHALLENGED IN APPEAL. 3. BEFORE THE LD.CIT(APPEALS) THE ASSESSEE RELIED ON THE DECISION OF THE ITAT AGRA BENCH IN THE CASE OF PYARE MOHAN MATHUR, HUF VS. ITO ( I N ITA NO. 471/AGRA/2009 ) . TH IS DECISION OF THE TRIBUNAL WAS HELD AS NOT APPLICABLE TO THE FACTS OF THIS CASE BY THE LD.CIT(APPEALS) . HE HELD THAT THE FAIR MARKET VALUE ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 3 OF 12 ARRIVED AT BY THE REGISTERED VALUER WAS SOLELY ATTRIBUTABLE TO HIS OPINION THAT THE PROPERTY WAS COMMERCIAL PROPERTY AND THAT THIS IS FACTUALLY INCORRECT. HE POINTED OUT THAT WHEN THE VALUER W AS CONFRONTED WITH THIS QUESTION, HE ISSUED A CERTIFICATE TO THE EFFECT THAT THE BUILDING WAS RESIDENTIAL BUT HAD HIGHER VALUE BECAUSE IT WAS SITUATED WITHIN THE MUNICIPAL LIMITS OF ROORKEE AND WAS SITUATED IN AN AREA WHICH IS PREDOMINANTLY INSTITUTIONAL AND COMMERCIAL. HE HELD THAT AS THERE IS NO REQUIREMENT OF HAVING TECHNICAL EXPERTISE FOR DETERMINING FAIR MARKET VALUE AND HENCE THERE WAS NO REQUIREMENT OF REFERRING THE MAT TER TO ANOTHER TECHNICAL PERSON I.E. THE DISTRICT VALUATION OFFICER. HE OBSERVED THAT THE CIRCLE RATE WAS RS.21/ - PER SQ.FEET AS ON 4.7.1980 AND WAS RS.50/ - PER SQ.FEET AS ON 11.11.1982 AND HE ESTIMATED THE FAIR MARKET VALUE AT RS.30/ - PER SQ.FEET. AGGR IEVED BY THIS ESTIMATE, BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. 4. THE SECOND ISSUE IS ON THE CLAIM FOR DEDUCTION FOR EXEMPTION U/S 54 OF THE ACT. THE LD.CIT(APPEALS) AS WELL AS THE ASSESSING OFFICER HAVE COME TO A CONCLUS ION THAT THE ASSESSEE HAS UTILIZED A PORTION OF SALE CONSIDERATION FOR PURCHASE OF A NEW HOUSE, WITHOUT ACTUALLY DEPOSITING THE SALE CONSIDERATION IN A CAPITAL GAINS ACCOUNT . O N THE GROUND THAT THE ASSESSEE HAS PURCHASED A NEW ASSET, BUT HAS NOT CONSTRUC TED A NEW HOUSE, THE LIMITATION PERIOD FOR INVESTMENT WAS HELD AS TWO YEARS. THE CLAIM OF THE ASSESSEE THAT THIS IS AN INVESTMENT IN CONSTRUCTION OF A NEW HOUSE WAS REJECTED. IT WAS HELD THAT THE INVESTMENT WAS ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 4 OF 12 MADE BEYOND THE PERIOD OF LIMITATION OF T WO YEARS, AND HENCE THE CLAIM FOR EXEMPTION U/S 54 OF THE ACT WAS DENIED. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAVE ERRED BY ARBITRARILY ALTERING THE FAIR MARKET VALUATION OF RS. 52.50 PER SQ. FT. DETERMINED BY THE REGISTERED VALUER FOR THE PURPOSE OF COMPUTATION OF INDEXED COST OF ACQUISITI ON. 2. THAT THE LD. CIT(A) HAS ERRED IN APPRECIATING THE FMV OF THE PLOT AS ON 01.04.1981 TO RS. 30 PER SQ. FT ON ESTIMATION BASIS NEGATING THE COMMERCIAL VALUE OF PROPERTY WHICH IS ALSO REFLECTED IN ITS SALE PRICE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED BY NOT CONSIDERING THE PROPERTY AS CONSTRUCTED BY THE ASSESSEE BUT INSTEAD TREATING IT AS PURCHASED FOR DETERMINING THE TIME LIMIT FOR THE PURPOSE OF INVESTMENT OF CAPITAL GAIN. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAVE ERRED BY DISALLOWING THE AMOUNT OF RS. 20,00,000/ - DEPOSITED IN CAPITAL GAINS ACCOUNT SCHEME WITHIN THE EXTENDED TIME ALLOWED U/S 139 OF THE INCOME TAX ACT, 1961 . 5. THAT THE APPELLANT CRAVES FOR RIGHT TO AMEND /MODIFY/DROP OR ADD TO THE ABOVE GROUNDS OF APPEAL. 6. THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT OF EACH OTHER. 7. DETAILED STATEMENT OF FACTS SHALL BE FILED AT THE TIME OF HEARING OF THE APPEAL. 6. THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS. 1. WHETHER LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ESTIMATING THE FMV OF THE PURCHASED PROPERTY ADOPTING THE CIRCLE RATE @ RS. 30/ - PER SQ.FT. INSPITE OF THE FACT THAT THE CIRCLE RATE PREVALENT AS ON 01.04.1981 WAS RS. 20/ - PER SQ.FT. AS PER CIRCULAR NO. 1291 DATED 04.07.1980. ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 5 OF 12 2. WHETHER LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THE ISSUE 'WHETHER THE FACT, THAT LAW ALLOWS AN ASSESSEE TO FURNISH A RETURN U/S 139 TILL ONE YEAR FROM THE END OF THE ASSESSMENT YEAR AND EVEN A LATE RETURN FURNIS HED U/S 139(4) IS A VALID RETURN, HAS EFFECT OF ENABLING UTILIZATION OF CAPITAL GAINS TILL THE PERMISSIBLE DATE FOR FURNISHING LATE RETURN U/S 139(4) EVEN IN A CASE WHERE THE RETURN WAS ACTUALLY FURNISHED BEFORE THAT DATE' IS DEBATABLE. 3. WHETHER LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN GIVING A BENEFIT OF DOUBT AND IN HOLDING THAT THE TAXABLE CAPITAL GAIN IS THAT SUM WHICH IS NOT UTILIZED BY HIM TILL DATE OF FURNISHING OF RETURN I.E. 08.03.2010 IN THE PRESENT CASE AND NOT THE DUE DATE U/S 139(1) I. E. 31.07.2009 IN THE CASE OF THE ASSESSEE. 4. WHETHER LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT SECTION 139(1) OF THE INCOME TAX ACT, 1961 STATES TO FURNISH THE RETURN OF INCOME BY THE DUE DATES AS MENTIONED IN EXPLANATI ON 2 TO SECTION 139(1) AND ALSO THE FACT THAT SUB - SECTION 4 OF SECTION 139 PROVIDES ONLY EXCEPTIONS WHERE SOME MORE TIME IS ALLOWED TO THE ASSESSEE IN CASE OF FAILURE IN FURNISHING THE RETURN WITHIN THE TIME ALLOWED TO ASSESSEE UNDER SUB - SECTION (1). 5. WHETHER LD. CIT(A) HAS ERRED IN LAW AND ON FACT, WHILE DECIDING THE ISSUE OF DATE OF FURNISHING THE RETURN, IN NOT CONSIDERING THE PROVISIONS GIVEN IN CAPITAL GAINS ACCOUNTS SCHEME, 1988 WHEREIN VIDE RULE 4(4) OF THE SCHEME IT HAS BEEN STATED THAT, 'SUC H DEPOSITS MAY BE MADE IN ONE LUMPSUM OR IN INSTALLMENTS AT ANY TIME ON OR BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME UNDER SUB - SECTION (1) OF SECTION L39 OF THE IT ACT AS IS APPLICABLE IN THE CASE OF THE DEPOSITOR, AND FURTHER THE PROVISIONS G IVEN IN CBDT VIDE CIRCULAR NO. 520 DATED 11.08.1988, VIDE WHICH EXTENSION OF TIME WAS ALLOWED AS MENTIONED IN CGAS,1988. 6. THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 6 OF 12 7. THE LD.COUNSEL FOR THE ASSESSEE SHRI HEM ANT K U MAR ARORA, C.A. SUBMITTED THAT THE LD.CIT(APPEALS) WAS FACTUALLY INCORRECT IN HOLDING THAT THE SALE CONSIDERATION DISCLOSED DOES NOT REFLECT OR SUPPORT , THE FACT THAT THE VALUE OF THE PROPERTY WAS HIGHER THAN THE CIRCLE RATE PRESCRIBED IN THE LOCATION. HE ARGUED THAT THE CIRCLE RATE OF THE PROPERTY AS ON THE DATE OF SALE WAS RS.1,76,42,000/ - , WHEREAS THE SALE CONSIDERATION WAS RS. 2,51,00,000/ - WHICH SHO WS THAT THE ACTUAL RATE WAS MUCH MORE THAN THE CIRCLE RATE. THUS HE SUBMITS THAT THE RATE AS ON 1.4.1981 DOES NOT REFLECT THE FAIR MARKET VALUE OF THE PROPERTY AS ON THAT DATE. HE ARGUED THAT THE PROPERTY WAS LOCATED ON THE NATIONAL HIGH WAY BETWEEN DE LHI AND HARIDWAR WHICH IS A COMMERCIAL BELT. IN SUPPORT OF THIS FACT HE FILED A COPY OF THE SALE DEED. HE PLACED RELIANCE ON THE DECISION IN THE CASE OF PYARE MOHAN MATHUR, HUF VS. ITO (SUPRA). HE VEHEMENTLY CONTENDED THAT THE VALUE GIVEN BY A REGISTER ED VALUER EMPANELLED WITH THE DEPARTMENT IS AN EXPERT OPINION AND THIS CANNOT BE SUBSTITUTED BY AN OPINION BY THE LD.CIT(APPEALS). 8. ON THE ISSUE OF EXEMPTION U/S 54 OF THE ACT HE ARGUED THAT THE ASSESSEE HAS PURCHASED UNSPECIFIED AND UNDIVIDED SHARE OF LAND FROM A BUILDER AND ENTERED INTO A CONSTRUCTION CONTRACT WITH HIM FOR CONSTRUCTION OF A FLAT AND HENCE IT IS A CASE OF CONSTRUCTION AND NOT PURCHASE AND THE PERIOD OF LIMITATION OF 3 YEARS SHOULD APPLY AND NOT TWO YEARS. HE FURTHER POINTED OUT T HAT THE REVENUE AUTHORITIES HAVE COMMITTED A FACTUAL ERROR IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS NOT DEPOSITED THE SALE PROCEEDS IN A CAPITAL GAINS ACCOUNT ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 7 OF 12 SCHEME WITHIN THE STIPULATED TIME . HE FILED EVIDENCES TO PROVE THAT THE AMOUNT WAS DEP OSITED IN THE CAPITAL GAINS A/C SCHEME WITHIN THE EXTENDED TIME ALLOWED FOR FILING RETURN OF INCOME U/S 139 OF THE ACT. 9. MS. Y. KAKKAR, THE LD.SR.D.R. ON THE OTHER HAND REFERRED TO THE ASSESSMENT ORDER AND DREW THE ATTENTION OF THE BENCH TO PAGE 2 OF THE ASSESSMENT ORDER. SHE SUBMITTED THAT THE CIRCLE RATE ON 4.7.1980 WAS TO BE APPLIED, FOR THE REASON THAT WAS THE ONLY AVAILABLE APPLICABLE RATE BEFORE 1.4.1981. SH E SUBM ITTED THAT THERE IS NO LOGIC WORKING OUT THE AVERAGE RATE ON THE BASIS OF A CIRCULAR DT. 11.11.1982, WHICH RELATES TO A PERIOD MUCH AFTER THE VALUATION DATE 1.4.1981. SHE ARGUED THAT IT IS FOR THE ASSESSEE TO LEAD EVIDENCE IN SUPPORT OF HIS CLAIM THAT A PARTICULAR AMOUNT W AS THE MARKET VALUE AS ON 1.4.1981. ON THE SECOND ISSUE OF INVESTMENT, SHE SUBMITTED THAT THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS) HAVE COME TO A CONCLUSION THAT IT WAS A CASE OF PURCHASE OF CAPITAL ASSET AND NOT CONSTRUCTION OF AN APARTMENT. SHE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 10. WE HAVE HEARD RIVAL CONTENTIONS. THE FIRST ISSUE TO BE DECIDED IS THE MARKET VALUE AS ON 1.4.1981. THE CIRCLE RATE AS ON THE DATE OF SALE WAS RS.1,76,42,000/ - . THE ASSESSEE HAD SO LD THE PROPERTY FOR RS.2,51,00,000/ - . THIS DEMONSTRATES THAT THE VALUE OF THE PROPERTY IS MUCH HIGHER THAN THE CIRCLE RATE. THIS LEADS CREDENCE TO THE SUBMISSIONS OF THE ASSESSEE THAT THE PROPERTY IN QUESTION IS LOCATED IN VANTAGE POSITION ABETTING THE NATIONAL HIGH WAY AND WAS ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 8 OF 12 COMMANDING A HIGHER VALU E THAN THE OTHER PROPERTIES LOCATED IN THE CIRCLE. UNDER THESE CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT THE VALUATION DONE BY THE REGISTERED VALUER, WHICH TAKES INTO CONSIDERATION THIS FACTUAL POSITION, S HOULD HAVE BEEN ACCEPTED BY THE REVENUE AUTHORITIES. THE VALUATION OFFICER IS AN EXPERT IN THIS FIELD AND HIS REPORT CARRIES MORE CREDENCE THAN THE OPINION OF EITHER THE ASSESSING OFFICER OR THE LD.CIT(APPEALS). THE OBSERVATION OF THE LD.CI T(APPEAL) THAT NO EXPERTISE IS REQUIRED TO DETERMINE THE FAIR MARKET VALUE IS WRONG AND DESERVES TO BE VACATED. 10.1. THE ITAT AGRA BENCH IN THE CASE OF PYARE MOHAN MATHUR, HUF VS. ITO IN ITA NO.471/AGRA/2009 AT PARA 6 HELD AS FOLLOWS. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, THE ORDERS OF THE TAX AUTHORITIES BELOW AND THE RELEVANT PROVISIONS OF THE INCOME - TAX ACT, AS HAS BEEN REFERRED TO. SECTION 55(2) DEFINES THE COST OF ACQUISITION FOR THE PURPOSE OF SECTION 48 AND 49 UNDER WHICH CAPITAL GAIN HAS TO BE COMPUTED. SECTION 55(2)(B) DEFINES THE COST OF ACQUISITION IN RELATION TO CAPITAL ASSET WHICH BECOME THE PROPERTY OF THE ASSESSEE PRIOR TO 1ST APRIL, 1981 TO MEAN THE COST OF ACQUISITION OF THE ASSET OF THE ASSESSEE OR THE FAIR MARKE T VALUE OF THE ASSET AS ON 1.4.1981 AT THE OPTION OF THE ASSESSEE. THERE IS NO DISPUTE THAT THE IMPUGNED PROPERTY WHICH WAS SOLD BY THE ASSESSEE BECAME THE ASSET OF THE ASSESSEE PRIOR TO 01.04.1981 AND THE ASSESSEE HAS OPTED FAIR MARKET VALUE AS ON 01.04.1 981 FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN. FAIR MARKET VALUE IS DEFINED U/S. 2(22B) IN THE FOLLOWING MANNER: '2(22B). 'FAIR MARKET VALUE', IN RELATION TO A CAPITAL ASSET, MEANS - (I) THE PRICE THAT THE CAPITAL ASSET WOULD ORDINARILY FETCH ON SALE IN THE OPEN MARKET ON THE RELEVANT DATE; AND ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 9 OF 12 (II) WHERE THE PRICE REFERRED TO IN SUB - CLAUSE (I) IS NOT ASCERTAINABLE , SUCH PRICE AS MAY BE DETERMINED IN ACCORDANCE WITH THE RULES MADE UNDER THIS ACT.' THIS IS A FACT THAT IN THIS CASE, NO RULES HAVE BEEN DETERMINED FOR THE PURPOSE OF DETERMINING FAIR MARKET VALUE. THE ASSESSEE HAS RELIED ON THE VALUATION REPORT WHICH H E OBTAINED FROM THE REGISTERED VALUER WHO IS TECHNICAL PERSON AND DULY APPROVED BY THE DEPARTMENT. HE HAS SUBMITTED THE COPY OF THE VALUATION REPORT. THE ASSESSING OFFICER, ON THE OTHER HAND DEPUTED THE INSPECTOR WHO BROUGHT THE CIRCLE RATE OF THE VILLAGE WHERE THE LAND WAS SITUATED AND HAS ADOPTED THE CIRCLE RATE TO BE FAIR MARKET VALUE. WE COULD NOT GET ANY PROVISION UNDER THIS CHAPTER RELATING TO THE COMPUTATION OF THE CAPITAL GAIN, WHICH STATES THAT CIRCLE RATE WILL BE TREATED TO BE THE COST OF ACQUISIT ION. CIRCLE RATES ARE NOTIFIED BY THE STATE GOVERNMENT FOR THE PURPOSE OF LEVYING THE STAMP DUTY FOR REGISTRATION OF THE SALE DEEDS. THE CIRCLE RATES ARE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER U/S. 50C. BU T THIS SECTION NOWHERE STATES THAT CIRCLE RATE AS NOTIFIED WILL BE THE FAIR MARKET VALUE. WE HAVE GONE THROUGH THE PROVISIONS OF SECTION 55A. THIS SECTION EMPOWERS THE ASSESSING OFFICER FOR ASCERTAINING THE FAIR MARKET VALUE A CAPITAL ASSET FOR THE PURPOS E OF COMPUTATION OF CAPITAL GAINS, TO REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER. THE RELEVANT PROVISION HAS BEEN LAID DOWN AS UNDER : 55A. WITH A VIEW TO ASCERTAINING THE FAIR MARKET VALUE OF A CAPITAL ASSET FOR THE PURPOSES OF THIS CHAPT ER, THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER - (A) IN A CASE WHERE THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MADE BY A REGISTERED VALUER, IF THE ASSESSING OFFICER IS OF THE OPINION THAT THE VALUE SO CLAIMED IS LESS THAN ITS FAIR MARKET VALUE; (B) (C) IN ANY OTHER CASE, IF THE ASSESSING OFFICER IS OF THE OPINION - (I) THAT THE FAIR MARKET VALUE OF THE ASSET EXCEEDS THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE BY MORE THAN SUCH PERCENTAGE OF THE VALUE OF THE ASSET AS SO CLAIMED OR BY MORE THAN SUCH AMOUNT AS MAY BE PRESCRIBED IN THIS BEHALF; OR (II) THAT HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY SO TO DO; ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 10 OF 12 AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB - SECTION (2)(3)(4)(5) AND (6) OF SECTION 16A, CLAUSES (HA) AND (I) OF SUB - SECTION (1) AND SUB - SECTIONS (3A) AND (4) OF SECTION 23, SUB - SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957), SHALL WITH THE NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB - SECTION (1) OF SECTION 16A OF THAT ACT.' .. _ ' IN V IEW OF THE AFORESAID PROVISION, WE ARE OF THE VIEW THAT ONCE THE ASSESSEE HAS SUBMITTED THE NECESSARY EVIDENCE BY WAY OF VALUATION REPORT MADE BY THE REGISTERED VALUER, THE ONUS GETS SHIFTED ON THE ASSESSING OFFICER TO CONTRADICT THE REPORT OF THE REGISTER ED VALUER. THE REGISTERED VALUATION OFFICER IS A TECHNICAL EXPERT AND THE OPINION OF AN EXPERT CANNOT BE THROWN OUT WITHOUT BRINGING ANY MATERIAL TO THE CONTRARY ON RECORD. THE INSPECTOR IS NOT A COMPETENT AUTHORITY. HIS REPORT CANNOT BE REGARDED TO BE THE EVIDENCE TO CONTRADICT THE EXPERT'S OPINION. IN CASE, THE ASSESSING OFFICER WAS NOT AGREEABLE WITH THE REPORT OF THE REGISTERED VALUER, HE WAS DUTY BOUND TO REFER THE MATTER TO THE DVO FOR DETERMINING THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 WHI CH HE FAILED TO DO. EVEN NO COMPARATIVE INSTANCE ETC. WAS BROUGHT ON RECORD TO REJECT THE VALUATION REPORT SUBMITTED BY THE ASSESSEE. UNDER THESE FACTS, WE ARE OF THE OPINION THAT THE REVENUE HAS NOT DISCHARGED THE ONUS BUT MERELY REJECTED THE FAIR MARKET VALUE AS HAS BEEN TAKEN BY THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO RE - COMPUTE THE CAPITAL GAIN AFTER TAKING THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981, AS CLAIMED BY THE ASSESSEE. THUS, THE GROUND NO.1 TO 3 ARE ALLOWED. CONSISTENT WITH THE VIEW TAKEN THEREIN WE UPHOLD THE CONTENTION OF THE ASSESSEE AND ALLOW GROUND NOS. 1 TO 3. 11. GROUND NO.4 IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, AS THE CONTENTION OF THE ASSESSEE THAT A FACTUAL ERROR HAS TAKEN PLACE AND THAT THE ASSESSEE HAS IN FACT DEPOSITED THE SALE PROCEEDS I UNDER THE CAPITAL GAIN ACCOUNT SCHEME WITHIN THE EXTENDED TIME ALLOWED FOR ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 11 OF 12 FILING RETURN OF INCOME U/S 139 OF THE ACT. THIS HAS TO BE VERI FIED BY THE LD.AO. FURTHER, T HE CONTENTION OF THE ASSESSEE THAT HE HAD IN FACT PURCHASED AN UNSPECIFIED AND UNDIVIDED SHARE OF LAND FROM THE BUILDER AND ENTERED INTO A CONSTRUCTION CONTRACT WITH HIM FOR CONSTRUCTION OF A FLAT AND HENCE IT IS THE CASE OF CO NSTRUCTING OF A HOUSE AND THE PERIOD TO BE CONSIDERED FOR ALLOWING THE EXEMPTION U/S 54 OF THE ACT IS 3 YEARS AND NOT 2 YEARS, HAS SUFFICIENT FORCE. IF THERE IS A CONSTRUCTION AGREEMENT WITH THE BUILDER, THEN WE HOLD THAT THE PERIOD HAS TO BE 3 YEARS AS IT WOULD BE A CASE OF CONSTRUCTION OF A NEW RESIDENTIAL HOUSE. IN ANY EVENT WE SET ASIDE THIS ISSUE ALSO TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT A SSESSEE S APPEAL IS PARTLY ALLOWED. 12. ITA 1806/DEL/2013 IS REVENUE S APPEAL. 13. IN VIEW OF OUR DECISION IN THE ASSESSEE S APPEAL, GROUND NO.1 IS DISMISSED. AS FAR AS GROUND NOS. 2, 3, 4 AND 5 ARE CONCERNED, WHILE DEALING WITH THIS ISSUE IN THE ASSESSEE S APPEAL WE HAVE COME TO A CONCLUSION THAT THE MATTER SHOULD BE RESTORED TO THE FI LE OF ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. CONSISTENT WITH THE VIEW TAKEN THEREIN THESE ISSUES ARE ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER. IN THE RESULT REVENUE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES . ITA NO.1806/DEL/2013 AND ITA 1953/DEL/13 ASSESSMENT YEAR 2009 - 10 SH. AS ARYA PAGE 12 OF 12 1 4 . IN THE RESULT ASSESSEE S APPEAL IS ALLOWED IN PART AND REVENUE S APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 4TH AUGUST , 2014. SD/ - SD/ - (A.T.VARKEY) ( J. SUDHAKAR REDDY) JUD ICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 4 TH AUGUST , 2014 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR