MS. MADHU SHARMA Vs. ITO

JUDGEMENT

(1.) THESE cross -appeals are preferred on behalf of the assessed as well as the revenue assailing the order of the Commissioner (Appeals), who has re -estimated sale and purchase price of the properties and recomputed capital gains and the additions under section 69 of the Income Tax Act, 1961.

(2.) BEFORE adverting to the main controversies raised in these appeals, we would like to narrate salient facts of the case. During the year in question the assessed has sold her residential house, C - 2/141, Ashok Vihar, Phase - II, on 15 -10 -1997, for a sum of Rs. 12,00,000. Doubting the sale consideration, the assessing officer referred the matter to the valuation officer under section 55A to ascertain the fair market value of the property on the date of sale. The valuation officer accordingly estimated the fair market value at Rs. 31,74,349. A copy of the valuation report was made available to the assessed and objections were called for, and in response thereto the assessed filed her objections to the reference of the valuation report, and placed reliance on the decision of the Apex Court in the case of K.P. Varghese v. : [1981]131ITR597(SC) but the assessing officer was not convinced with the Explanations of the assessed and he estimated the sale consideration at Rs. 31,74,349 and worked out long -term capital gain at Rs. 5,68,019.

(3.) DURING the year, assessed also purchased a residential house No. 21 -B/4, New Rohtak Road, for a declared price of Rs. 10,50,000, but the assessing officer was not satisfied with the declared cost of this house and he referred the matter to the DVO under section 55A of the Income Tax Act, Relying upon various decisions on a question of valid reference, the DVO estimated the fair market value of the property purchased at Rs. 83,40,097. Copy of the valuation report was delivered to the assessed and the assessed filed her objections, but the assessing officer was not satisfied with the objections and accepted the fair market value determined by the DVO at Rs. 83,40,097, and difference of Rs. 65,90,097 was added to the income of the assessed under section 69 of the Act.