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TMI Blog2010 (1) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... law have been framed in the appeal by the Revenue against the judgment of the Income Tax Appellate Tribunal dated 29th April, 2008:- "1. Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing the adjustment of the cost of land by cost inflation index and treating the sale of land as a long term capital gain, even though the Respondent A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for the land on which the building was constructed, it would not be open to him to contend that a part of the consideration realized by the assessee on the subsequent sale of the property was for the value of the land. The assessee, it may be noted, sold the property for a consideration of Rs.22 lacs in the Assessment Year in question and claimed that the amount attributable towards the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d claimed depreciation on the land as well as the building, the cost of acquisition of the land would have to be regarded as nil. Appeals were filed before the Tribunal both by the assessee and by the department. The contention of the assessee was that the CIT (A) should have held that the cost of acquisition of the land was the fair market value as on 1st April, 1981 as adjusted for indexation. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified in coming to the conclusion that an amount of Rs.20 lacs out of the total sale proceeds was attributable to the sale consideration for the land. In terms of Section 55(2)(b)(1) the assessee had an option to adopt fair market value as on 1st April, 1981, since the asset was acquired before that date, as its cost of acquisition and to adjust it by the capital gains indexation factor. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property was acquired in 1948 and it was in that situation that the major part of the consideration was regarded as consideration for the purchase of the building. The assessee bonafide treated the entire cost of land and building as representing the cost of the building and this was accepted by the Revenue. Assessments were made and they have attained finality. In these circumstances, no fault c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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