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2015 (10) TMI 1401 - AT - Income TaxDetermination of FMV as on 1.4.1981 - Held that - CIT(A) has considered the advantages relating to the plot; report submitted by the approved valuer and all other characteristics attached to the plot. Accordingly, he determined the FMV as on 1.4.1981 at ₹ 5200/- per sq. yard. We further notice that the ld. CIT(A) has also given liberty to AO to substitute the value determined by the DVO as and when the report received from DVO. Under these set of facts, we do not find any infirmity in the order of the ld. CIT(A) on this issue. - Decided against revenue. Deduction claimed u/s 54 - Held that - The department could not furnish any material to contradict the findings given by the ld. CIT(A). Under these circumstances, we are inclined to agree with the decision of the ld. CIT(A) that the assessee has sold the land and residential building and hence he is entitled for deduction u/s 54 of the Act. - Decided against revenue.
Issues:
1. Fair Market Value as on 1.4.1981 2. Indexation of cost of acquisition 3. Deduction under section 54 of the Income Tax Act, 1961 4. Deduction u/s 54F of the Act Issue 1: Fair Market Value as on 1.4.1981 The dispute centered on determining the Fair Market Value (FMV) as on 1.4.1981 for the computation of Long Term Capital Gains. The assessee's valuation was contested by the Assessing Officer (AO), who estimated a lower FMV. However, the ld. CIT(A) considered various factors and approved a higher FMV of &8377; 5200 per sq. yard. The Tribunal upheld this decision, noting the reasoning provided by the ld. CIT(A) and granting the AO the option to revise based on a report from the Departmental Valuation Officer (DVO). Issue 2: Indexation of Cost of Acquisition The question here was the availability of indexation benefit from 1.4.1981 onwards for computing the indexed cost of acquisition. The AO limited indexation from the year of property receipt, but the ld. CIT(A) followed a Special Bench decision allowing indexation from 1.4.1981. The Tribunal upheld the ld. CIT(A)'s decision, citing adherence to the Special Bench ruling. Issue 3: Deduction under Section 54 of the Income Tax Act, 1961 Regarding the deduction claimed under section 54, the AO disputed the claim as the possession letter indicated only the sale of a plot, not a residential house. However, the ld. CIT(A) analyzed documents including a family settlement deed and valuation reports, concluding that the property included a building. Consequently, the ld. CIT(A) allowed the deduction under section 54, a decision supported by the Tribunal due to lack of contradictory evidence from the department. Issue 4: Deduction u/s 54F of the Act The alternative claim for deduction under section 54F was rejected by the AO due to alleged ownership of two residential properties. The ld. CIT(A) clarified that only one property was residential, making the assessee eligible for deduction under section 54F. As the Tribunal upheld the deduction under section 54, the consideration of the alternative claim was deemed unnecessary. In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the decisions of the ld. CIT(A) on all issues. The judgment highlighted the importance of thorough documentation and valuation in determining tax liabilities and deductions under the Income Tax Act, 1961.
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