2016 (1) TMI 934 - AT - Income Tax

Capital gain computation - adoption of fair market value as on 01.04.1981 - Held that - The Tribunal has directed the Assessing Officer to adopt the fair market value of the asset as on 1.4.1981 at ₹ 102/- only. Nothing contrary was brought to our knowledge on behalf of the Revenue. Facts being similar, so following same reasoning, the Assessing Officer is directed to adopt the fair market value of the asset as on 1.4.1981 at ₹ 102/- per sq. meter and re-compute the same accordingly.

Summary

Issues involved:
1. Appeal by Revenue against deletion of long term capital gain addition.
2. Cross-objections by different assessees challenging reopening of assessment and addition of long term capital gain.

Analysis:
1. The appeal by the Revenue was against the deletion of the addition made on account of long term capital gain for Assessment Year 2008-09. The assessee had sold inherited agricultural land, and the dispute arose regarding the fair market value of the land as on 01.04.1981. The Assessing Officer determined the long term capital gain based on a lower fair market value, which was contested by the assessee. The First Appellate Authority directed the Assessing Officer to adopt a higher fair market value, which led to the deletion of a portion of the addition. The Tribunal upheld the direction to adopt a fair market value of &8377; 102 per sq. meter, resulting in the dismissal of the Revenue's appeal.

2. The cross-objections filed by the assessees were related to the reopening of the assessment and the addition of long term capital gain. The assessees contested the reopening of the assessment under section 147 and the confirmation of the addition made by the Commissioner of Income-tax (Appeals). The Tribunal, considering similar facts and circumstances, directed the Assessing Officer to adopt a fair market value of &8377; 102 per sq. meter as on 01.04.1981. Consequently, the cross-objections were partly allowed, and the addition on account of long term capital gain was reduced for the assessees.

3. The Tribunal's consolidated order addressed the appeals and cross-objections collectively due to their association with the same group. By applying consistent reasoning and directing the adoption of a specific fair market value, the Tribunal resolved the disputes regarding the long term capital gain additions for the relevant assessment year. The decision provided clarity on the valuation methodology and resulted in the dismissal of the Revenue's appeal while partially allowing the cross-objections filed by the assessees.

This detailed analysis summarizes the legal judgment involving the appeal by the Revenue and the cross-objections by different assessees in a comprehensive manner, focusing on the issues related to the long term capital gain addition and the fair market value determination for inherited agricultural land.