1 IN HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS 8TH DAY OF JANUARY 2020 PRESENT HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE RAVI V.HOSMANI I.T.A. NO.281 OF 2010 BETWEEN: SRI. Y.A. SUBRAMANYAM (HUF) AGED ABOUT 58 YEARS S/O SRI. LATE SRI. Y.S. ADINARAYANA SETTY R/AT. SUDHAMA HOUSE CHICKPET, BANGALORE-560053. ... APPELLANT (By Sri. S. PARTHASARATHI, ADV.) AND: DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 5(1), BANGALORE. ... RESPONDENT (By Sri. K.V. ARAVIND, ADV.) --- THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 20-4-2010 PASSED IN ITA NO.1098/BNG/2009, FOR ASSESSMENT YEAR 2006-07, PRAYING TO FORMULATE SUBSTANTIAL QUESTIONS OF LAW STATED THERIN. ALLOW APPEAL AND SET ASIDE ORDERS PASSED BY ITAT BANGALORE IN ITA No.1098/BNG/2009, DATED 20-4-2010, IN INTEREST OF JUSTICE AND EQUITY. 2 THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED FOLLOWING: JUDGMENT Mr.S.Parthasarathi, learned counsel for appellant. Mr.K.V.Aravind, learned counsel for respondent. 2. This appeal under Section 260-A of Income Tax Act, 1961 (hereinafter referred to as Act , for short) has been filed by assessee which was admitted by Bench of this Court on following substantial question of law: When once revenue accepts valuation for purpose of capital gains in returns filed over period of years, subsequently can they refuse to accept said valuation as basis, for subsequent years? 3 3. Facts giving rise to filing of appeal briefly stated are that appellant had filed return of income on 04.01.2007 which was processed under Section 143(1) of Act. appellant along with others had owned inherited property. appellant and other members of family had different and specific shares in said property. All co-owners have constructed residential complex on aforesaid land in accordance with terms and conditions of agreement and sold flats which came to their possession as their individual share. capital gains which arose from sales were declared. appellant, for purpose of capital gains, had shown fair market value as per report of valuer in which value was declared as `90.25 per square feet. During assessment proceedings, Assessing Officer was of opinion that fair market value declared by appellant was on higher side as land was situated in underdeveloped area. Finally, 4 Assessing Authority concluded assessment by adopting fair market value so determined at rate of `25.50 per square feet and reworked capital gains and made certain disallowances. Being aggrieved by order of assessment, appellant filed appeal before Commissioner of Income Tax (Appeals). Commissioner of Income Tax (Appeals) partly allowed appeal with observation that there is no reason to adopt difference fair market value since sales were affected from same survey and locality. Accordingly, Appellate Authority adopted `38/- per square feet instead of `25.50 per square feet as adopted by Assessing Authority. Being aggrieved, appellant preferred appeal before Income Tax Appellate Tribunal. Tribunal, by order dated 20.04.2010, partly allowed appeal and fair market value was modified as on 01.04.1981 by `50/- per square feet. Being aggrieved, appellant has filed this appeal. 5 4. Learned counsel for appellant submitted that none of parties have adverted to fact that once revenue accepts value for purpose of capital gains in return filed over period of years, subsequently, they cannot refuse to accept valuation for consequent years. It is further submitted that in all cases, scrutiny assessment was made and therefore, valuation report which was accepted for purpose of capital gains in previous years ought to have been accepted. However, aforesaid aspect of matter has not been adverted to by authorities under Act. 5. On other hand, learned counsel for respondent submitted that if valuation for purpose of capital gain has been accepted in scrutiny assessment for previous years, same shall be adverted to by authorities under Act. 6 6. In view of aforesaid submissions and after perusal of orders passed by authorities under Act, it is evident that issue whether, when valuation for purpose of capital gains in returns filed over period of years, is accepted by authorities, they cannot refuse to accept same for consequent years, has not been adverted to by authorities under Act. 7. For aforementioned reasons, substantial question of law framed by Bench of this Court by order dated 09.08.2010 is answered in favour of assessee subject to condition that valuation report has been accepted in scrutiny assessment at instance of assessee. 8. In result, impugned order dated 20.04.2010 is hereby quashed and matter is remitted to Assessing Officer to decide issue with 7 regard to valuation for purpose of capital gains in light of observations made in this order supra. Accordingly, appeal is disposed of. Sd/- JUDGE Sd/- JUDGE RV Y.A. Subramanyam (HUF) v. Deputy Commissioner of Income-tax Circle 5(1), Bangalore