9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 672 - AT - Income TaxCapital gain computation - cost of acquisition of the immovable property sold as claimed by the assessee at ₹ 250/- per sq. yard being the fair market value as on 01.04.1981 - HELD THAT - A perusal of the relevant findings/observations recorded by the learned PCIT in the order passed under Section 263 clearly shows that the similar issue was examined by him in the light of the submissions made on behalf of the assessee as well as the fresh valuation report of another Govt. approved Registered Valuer submitted by the assessee. After taking into consideration this relevant documentary evidence, the learned PCIT arrived at a conclusion that the value of land in question as on 01.04.1981 taken by the Assessing Officer cannot be taken at ₹ 80/- per sq. yard as the same was not proper considering the location of land, its distance from Airport, Railway line etc. He found that the value adopted by the Assessing Officer at ₹ 250/- per sq. yard was neither less nor more and it was reasonable considering the location and other factors like proximity distance from Airport, Railway line etc. In this regard, he also derived support from the valuation report of another approved valuer submitted by the assessee wherein the rates of ₹ 350/- per sq. yard, ₹ 400/- per sq. yard and ₹ 210/- per sq. yard were quoted as comparable instances. In our opinion, the similar issue thus has already been decided on merit by the learned PCIT in the case of Shri Yogeshbhai Laxmanbhai Makwana, one of the co-owners of the property in question, after taking into consideration all the relevant aspects and we do not find any justifiable reason to take a different view in the matter. We accordingly direct the Assessing Officer to adopt the rate of ₹ 250/- per sq. yard as the cost of acquisition as on 01.04.1981 being the fair market value of the property in question while computing the Long Term Capital Gain and allow Ground No.2 of the assessee s appeal. Area of land to be taken into consideration for determining cost of acquisition to be deducted while computing Long Term Capital Gain - HELD THAT - We are of the view that what is to be considered for the purpose of computing the cost of acquisition which is deductible while computing the Long Term Capital Gain is the area of 5954 sq. yard of land which is actually transferred by the assessee and other co-owners to the purchaser and not the total area of land of 8470 sq. yards as originally acquired by them. In that view of the matter, we uphold the impugned order of the learned CIT(A) on this issue and dismiss Ground No.3 of the assessee s appeal. Whether the property sold by the assessee was comprising of any residential or commercial construction as claimed by the assessee? - HELD THAT - As already noted that the findings recorded by the Assessing Officer as well as by the learned CIT(A) on the basis of the relevant documentary evidences especially the banakhat and final sale deed are sufficient to show that what was transferred by the assessee was only the non-agricultural open land and there was no transfer of any residential or commercial construction. The deduction on account of cost of acquisition is to be allowed with reference to the property sold or transferred by the assessee and since there is nothing on record to conclusively prove that the residential and commercial construction was also transferred by the assessee, we find ourselves in agreement with the authorities below that what was transferred or sold by the assessee was only the non-agricultural open land and the assessee, therefore, was not entitled for deduction on account of cost of acquisition of residential and commercial construction. Ground No.4 of the assessee s appeal is accordingly dismissed. Claim for deduction under Section 54 on account of investment made in residential house - HELD THAT - As agreed by the learned representatives of both the sides, this issue is consequential to the issue involved in Ground no.4 of this appeal and since the same has already been decided by us against the assessee by holding that what was transferred by the assessee was the non-agricultural open land without there being any construction of residential house thereon. Following this conclusion drawn by us, we hold that the assessee is not entitled for exemption under Section 54 of the Act, but he is entitled for exemption under Section 54F as allowed by the authorities below. Ground No.5 of the assessee s appeal is accordingly dismissed.
Issues Involved:
1. Determination of the fair market value of the property as on 01.04.1981. 2. Consideration of the total area of land for the purpose of computing Long Term Capital Gain. 3. Inclusion of cost of construction in the computation of Long Term Capital Gain. 4. Entitlement to exemption under Section 54 or Section 54F of the Income Tax Act. Detailed Analysis: 1. Determination of the Fair Market Value of the Property as on 01.04.1981: The assessee claimed the fair market value of the property at ?250 per sq. yard based on the valuation report of a Registered Valuer. The Assessing Officer (AO) found calculation mistakes in the valuation report and corrected the rate to ?80 per sq. yard, which was accepted by the Registered Valuer. The assessee argued that in the case of a co-owner, the Principal Commissioner of Income Tax (PCIT) had accepted ?250 per sq. yard. The Tribunal noted that the PCIT had dropped the proceedings under Section 263 after considering a fresh valuation report and found ?250 per sq. yard to be reasonable. Consequently, the Tribunal directed the AO to adopt ?250 per sq. yard as the fair market value as on 01.04.1981. 2. Consideration of the Total Area of Land for the Purpose of Computing Long Term Capital Gain: The assessee contended that the total area of the property originally was 8470 sq. yards, but 908 sq. yards were deducted for road and 1608 sq. yards reserved for Corporation as per the Town Planning Scheme. The AO and CIT(A) held that only 5954 sq. yards were sold/transferred, and the cost of acquisition should be determined based on this area. The Tribunal upheld the decision, stating that only the area actually transferred (5954 sq. yards) should be considered for computing the cost of acquisition. 3. Inclusion of Cost of Construction in the Computation of Long Term Capital Gain: The assessee claimed that the property included residential and commercial constructions. The AO and CIT(A) found that the sale deed and banakhat indicated the transfer of non-agricultural open land only. The Tribunal reviewed the documentary evidence and upheld the authorities' decision, concluding that the property sold was non-agricultural open land without any residential or commercial construction. Therefore, the cost of construction was not deductible. 4. Entitlement to Exemption under Section 54 or Section 54F of the Income Tax Act: The assessee claimed exemption under Section 54 for investment in a residential house. The AO allowed exemption under Section 54F on a proportionate basis, as the property sold was non-agricultural open land. The Tribunal agreed with the authorities, holding that the assessee was not entitled to exemption under Section 54 but was entitled to exemption under Section 54F. Conclusion: Both appeals were partly allowed. The Tribunal directed the AO to adopt ?250 per sq. yard as the fair market value as on 01.04.1981. The area of land for computing the cost of acquisition was confirmed as 5954 sq. yards. The cost of construction was not included in the computation of Long Term Capital Gain, and the exemption was allowed under Section 54F instead of Section 54.
|
