COMMISSIONER OF INCOME TAX Vs. RAMAN KUMAR SURI

JUDGEMENT

(1.) This appeal by the revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") challenges the order dated 30/4/2010 passed by the Income Tax Appellate Tribunal (hereinafter referred to as "the Tribunal") for the Assessment Year 2006-07. Being aggrieved, the revenue has formulated the following questions of law for the consideration of this Court.

(2.) (A) The respondent is an individual deriving income from salary, house property and other sources. For the Assessment Year 2006-07, the respondent filed return of income declaring a total income of Rs. 2.25 crores and inter alia disclosed a long term capital gain from the sale of property at 3/35, Shanti Niketan, New Delhi (New Delhi Property). The respondent and his brother had inherited New Delhi property from their mother in accordance with her Will dated 11/10/1987. This inherited property was sold by Deed of Conveyance dated 14/10/2005 for a consideration of Rs. 14 crores.

(3.) (A) For the purpose of computing capital gain tax to be paid by the respondent, the costs of acquisition at fair market value as on 1/4/1981 had to be determined. During the course of the assessment proceedings, the respondent had filed a valuation report dated 29/11/2005 with regard to the inherited New Delhi property by a registered valuer who is empanelled by the Income Tax Department. This valuation report dated 29/1/2005 showed the value of the inherited New Delhi property on 1/4/1981 at Rs. 47.74 lacs. During the course of the assessment proceedings, the Assessing Officer took a view that the fair market value of the property has to be arrived at as per Nabhi's Guide to House Tax in New Delhi. The Assessing Officer applied the Nabhi's Guide to house tax and held that the fair market value of the property on 1/4/1981 was Rs. 17.33 lacs and not Rs. 47.74 lacs as arrived at by empanelled registered valuer. Thus on the above basis of the fair market value as on 1/4/1981 being Rs. 17.33 lacs the capital gain was computed after indexation in the assessment order dated 22/12/2008.