By TIOL News Service

AHEMDABAD, MAY 23, 2017: THE ISSUE BEFORE THE COURT IS - Whether there can be two different estimations of fair market value with respect to the very same land, in case of different co-owners. NO is the verdict.

Facts of the case:

The assessee filed return for AY 2012-2013 which came to be accepted by the AO. That thereafter, by impugned Notice the assessment for AY 2012- 2013 is sought to be reopened. The assessee asked for the reasons for reopening. The reasons came to be supplied after approximately nine months. Assessee immediately raised objection against reopening but the said objections came to be disposed of by the AO. The assessee requested not to proceed further with the re-assessment proceedings and not to pass any order by submitting that the assessee proposes to challenge reopening of the assessment and the decision disposing of the objections. However, without giving any sufficient opportunity/time to the assessee to challenge the reopening of the assessment, AO passed the re-assessment order. Prior to the order of assessment, the assessee already had preferred a writ petition on 22nd December 2016 and by an ad interim order AO was permitted to proceed further with the reassessment proceedings, however, he was restrained from finalizing the reassessing proceedings. However, it appeared that the AO passed an order of assessment in haste on 26th December 2016. By way of draft amendment, the assessee challenged the re-assessment as the same has been passed after filing of the present petition. Feeling aggrieved with the reassessment proceedings and the subsequent assessment order, the assessee preferred the present Special Civil Application under Article 226 of the Constitution of India.

On appeal, the HC held that,

++ there was a delay in supplying the reasons recorded by AO and thereafter the assessment order was passed on 26th December 2016. However, the last date for completing the assessment was 31st December 2016 otherwise, the assessment was getting time bared and therefore, the AO had no other alternative but to pass an order of assessment u/s 147. Therefore, prima facie, it can be said that in the present case, the assessee had not followed the time bound programme/limit prescribed by this Court. However, considering the affidavit-in-reply and material on the record so also the order of assessment, it appears that in the case of brother of the assessee and the co-owner of the very land AO had determined and considered the FMV as on 1st April 1981 at Rs. 10,19,250/= and consequently, the assessment order has been passed in the case of co-owner of the very land in question and accordingly, the long term capital gain has been worked out. It is reported that in the case of co-owner of the very land in question CIT [A] dismissed the appeal preferred by the said assessee, and therefore, the FMV which was applied/estimated in the case of co-owner is required to be considered and applied by the AO, even in the case of the assessee – being the coowner of the very land in question, since there cannot be two different estimations of the FMV as on 1st April 1981 with respect to the same land but in the case of different assessees/co-owners. Under the circumstances, now when the order of assessment is already passed, in the aforesaid peculiar facts of the case, we refuse to entertain the present petition challenging the order of assessment u/s 147 of the Act and relegate the petitioner to prefer the appeal before the CIT [A] against the order of assessment u/s 147. If at this stage, the assessment order under Section 147 of the Act in the case of the petitioner assessee is set-aside, in that case, the same shall affect the case of the Revenue in case of the coowner of the very land in question. As observed hereinabove, as such there cannot be two estimations of the fair market value as on 1st April 1981 in respect of the very land in question, but in case of different assessee/co-owner.

(See 2017-TIOL-968-HC-AHM-IT)