By TIOL News Service

ALLAHABAD, DEC 19, 2013: THE issue before the HC is - Whether when there is no approved layout plan and any instance of sale, resorting to development method is the 'most appropriate method' for purpose of valuation of property. And the verdict goes against the assessee.

Facts of the case

The assessee is an individual. On appeal, Tribunal had remanded the matter for the assessment to be carried out denovo. It was alleged that inspite of clear directions for an estimation of the value of the property to be made by the DVO, if the valuation was more than Rs. 50 lacs, the report was submitted by the Assistant Valuation Officer (AVO). Further the valuation was entirely arbitrary inasmuch as the property could not have been sold under the conditions imposed by the Cooperative Societies for more than Rs.100/- per square meters, and in any case the situation of the plot and the fact, that it was earlier used for brick kiln and was not suitable for raising constructions nor any sanctioned plan was submitted, the valuation was extremely high.

Held that,

++ we find that the CIT (A) and ITAT have considered the grounds, and have held that the question, as to whether the valuation has to be made by the DVO or AVO, is not a ground, which vitiates the valuation arrived at after considering his reports and the objections of the assessee. The CIT (A) considered the description of the property and found that the method of valuation adopted by the AVO is a development method, which is the most appropriate method in the absence of any reliable sale instances and approved layout plan as per master plan. The procedure prescribed in Section 50C (2) was followed in which the objections of the assessee were considered to the valuation report;

++ the CIT (A) and the Tribunal agreed with the elaborate findings given in the report of Valuation Officer in support of the fair market value. The ground, that the valuation in such case could be carried out only by DVO, does not in any way affect the findings as the ground is of technical nature. The valuation report was considered in detail, and the method of valuation and the reasons were found to be valid after considering the assessee's objection. The appeal is concluded by findings of fact recorded by tax authorities and do not raise the questions of law as framed for consideration of the Court;

++ the Income Tax Appeal is accordingly dismissed.

(See 2013-TIOL-1047-HC-ALL-IT)