S.B.SINHA, J. - (1.) LEAVE granted.
(2.) THE Appellant herein is an assessee under the Income Tax Act. It is an HUF. For the assessment year 1998-99, an income of Rs.30,80,030/- was declared by it, inter alia, showing a long term capital loss of Rs.34,12,000/-. THE said capital loss was said to have arisen on account of sale of property being land and building known as 'Jekison Niwas, 220 Walkeshwar Road, Mumbai. Admittedly, the Appellant had 1/4th share therein. It entered into an agreement for sale of undivided 1/4th share in the said property for a sum of Rs.8 crores with one M/s. Layer Exports Pvt. Ltd. For the purpose of valuation of the said property, one Shri U.D. Chande, a registered valuer, was appointed. On 01.04.1981, the value of the said 1/4th share in the property was determined at Rs. 2,52,00,000/-. In the said valuation report, it was stated that the purpose was valuation for computation of capital gains. THE report was filed in the prescribed form. All the required particulars/ information were furnished. In the said report, description of the property, location thereof, whether situated in residential/commercial/mixed/industrial area, and classification thereof were shown. As regard, proximity to civic amenities, it was stated that the plot is very close to "Raj Bhawan". All other amenities except cinema were within 1 k.m. Means and proximity to surface communication by which the locality is served were also stated. All other requisite particulars, as specified, were stated. After noticing that the total development area of land is 4605 sq. yds with an F.S.I. of 1.33, it was stated JUDGEMENT_4323_AIR(SCW)_2007Html1.htm As regard existence of sale instances, however, although a sheet was said to have been attached thereto, no such thing was done. As against column 40, namely, 'if sale instances are not available or not relied upon, the basis of arriving at the land rate', it was stated : "In addition to Sales Instances and "Accommodation Times" are used." The Valuer in his report, inter alia, stated : "When I inspected the premises I found the building in a dilapidated condition. In fact part of the building has collapsed. I am informed that in 1981 the building was in similar condition I am therefore inclined to consider only the scrap value of the building and the value of only land as the basis of my valuation."
(3.) IN the year 1997 by reason of a consent decree passed in Suit No.3845 of 1997, 1/4th undivided share in Jekison Niwas was sold and possession was transferred to M/s Layer Export Pvt. Ltd. against final payment. The return filed by the Appellant on 30.09.1998 came up for scrutiny before the First Respondent, who in exercise of its power under Section 55 A of the Income Tax Act, 1961 (for short, 'the Act') referred the matter for valuation of the said 1/4th undivided share of the Appellant as on 01.04.1981 to the District Valuation Officer; whereupon the District Valuation Officer submitted a report dated 29.06.2000 wherein the 1/4th undivided share of theAppellant in the said property as on 01.04.1981 was determined at Rs. 1,14,92,907, the basis whereof is said to be as under : JUDGEMENT_4323_AIR(SCW)_2007Html2.htm ;