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CONSEQUENCES FACED FOR USING REVERSAL CALCULATION OF COST INDEX BY A CAPITAL GAIN VALUER

KNOWLEDGE BANK FROM B KANAGA SABAPATHY 

LET KNOWLEDGE SPREAD






Message from B. K. sir 17.03.2023

Question :

This is a question related to capital gains.

According to the judgement :

Reversal application of cost inflation indices are not permitted to ascertain the land rate as on 01.04.2001. And that is what, you have been advising us in many seminars and webinars. But practically, I can see many registered valuers are adopting this procedure as requested by the clients in order to favour them not to pay the capital gains.

Opinion :

I was given to understand about a case:

A registered valuer had done more capital gains cases in 2021 – 2022. He used to certify the base value by dividing sale by inflation cost index as demanded .

End result is :

All the cases were reopened by the department and the concerned assessees were ordered to pay capital gain tax with interest and penalty.

The valuer was summoned, interrogated, debarred and he was warned not to practice.

 





With best wishes,

B. KANAGA SABAPATHY
bkvaluer@gmail.com
www.bkanagasabapathy.com

About the Author:-

  • Mr. B. Kanaga Sabapathy born in 1951, is a Civil Engineer who belongs to the 1972 batch of Regional Engineering College, Tiruchirappalli in Tamilnadu.
  • He is a Registered valuer of the Central Board of Direct Taxes, a Professional Engineer and also a Chartered engineer. Valuation is his main profession..
  • He was the National Vice-President of the Institution of Valuers (India) for 11 terms.
  • He is a regular contributor of articles in the Indian Valuer Journal from the year 1985. His articles especially his regular column “Questions & Opinions” are very popular among the practising valuers in India.
  • His book “Guidelines on Valuation for Banks” (2002) is used to be referred by many banks. The valuation formats designed by him were accepted and adopted as the formats by many banks in the country.
  • His son K. Arun and daughter B.K. Aruna are also approved valuers and they also contribute articles to the Indian valuer journal.
  • His guru: Mr. C.H. Gopinatha Rao, Chennai.
  • His mentor: Mr. R.K. Gandhi, Mumbai.
  • His role model: Mr. S. Rajaratnam, Chennai.
  • His best students: Thousands of valuers in the country



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