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Issues Involved:
1. Enhancement of the value of land for capital gains computation. 2. Determination of the fair market value of the land as on 1-4-1981 for computing capital gains. Detailed Analysis: 1. Enhancement of the Value of Land for Capital Gains Computation: The primary issue in these appeals is the enhancement of the value of land from Rs. 400 per sq. mtr. to Rs. 5,000 per sq. mtr. by the Commissioner of Income-tax (Appeals) [CIT(A)], which was contested by the assessee. The Assessing Officer (AO) had estimated the land value at Rs. 700 per sq. mtr., while the assessee declared it at Rs. 483 per sq. mtr. The CIT(A) justified the enhancement by noting that the sale deed was registered much later after the initial payments, indicating that further payments were likely received after the initial transaction. The CIT(A) also considered the revised Jantry (stamp duty valuation) rates applicable from April 2008, which were based on market rates during 2005-2006, thus adopting Rs. 5,000 per sq. mtr. as the fair market value. However, the Tribunal found that the sale consideration received by the assessee was Rs. 483 per sq. mtr., which was higher than the circle rate fixed by the Stamp Duty Authorities at Rs. 400 per sq. mtr. The Tribunal noted that the provisions of section 50C of the Income-tax Act, which create a legal fiction for taxing capital gains based on the stamp duty valuation, were applicable. Since the sale consideration was higher than the stamp duty valuation, the Tribunal ruled in favor of the assessee and deleted the addition made by the lower authorities. 2. Determination of the Fair Market Value of the Land as on 1-4-1981: The second issue involved the determination of the fair market value of the land as on 1-4-1981 for computing capital gains. The AO had adopted a value of Rs. 25 per sq. mtr. based on comparable sale instances ranging from Rs. 15 to Rs. 32 per sq. mtr. The assessee, however, had adopted a value of Rs. 60 per sq. mtr. based on a valuation report from a registered valuer. The CIT(A) agreed with the AO's valuation, rejecting the higher valuation provided by the assessee's valuer. However, the Tribunal found that the value adopted by the AO had no substantial basis and accepted the assessee's valuation of Rs. 60 per sq. mtr., which was based on a technical report by a registered valuer approved by the department. The Tribunal directed the AO to adopt this value for the computation of capital gains. Conclusion: The Tribunal ruled in favor of the assessee on both issues, reversing the orders of the lower authorities. The appeals of the assessees were allowed, with the Tribunal directing the AO to adopt the value of Rs. 60 per sq. mtr. for the computation of capital gains and to apply the provisions of section 50C, accepting the sale consideration declared by the assessee.
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