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TMI Blog2015 (9) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the cost of building is to be taken at Rs. 87,12,170/- instead of Rs. 5,28,12,000/- as workout by Assessing Officer in a scientific way. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the Assessing Officer to work out short term capital gain on building as per Section 50 of the Act of Rs. 87,12,170/- instead of Rs. 5,28, 12,000/- as work out by Assessing Officer. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the Assessing Officer to consider Rs. 6,32,87,832/- to work out long term capital gain on transfer of leasehold right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO was of the view that there is no sale of land involved and as per the provisions of section 55(2)(a) of the I.T. Act the purchase price is to be taken as the cost of acquisition. Since tenancy rights is covered by the provisions of section 55(2)(a), the market value as on 01.04.1981 need not be allowed to be substituted in the computation of long term capital gains. The AO also called upon the assessee to furnish the cost of acquisition of the building and its year of acquisition along with details of depreciation claimed on it. 5. In response to the notice issued by the AO the assessee submitted that the cost of construction of the building in the year 1965 was approximately Rs. 67,000/-. In this regard the AO observed that the deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of land at Rs. 1.91 crores and the balance amount of Rs. 5.28 crores as sale price of building. It was also pointed out that the land valuation taken by the AO is on the basis of differential premium payable to MIDC on the basis of a letter from MIDC to the AO, which specifically stated that the Corporation has not considered the market value in the above calculation of differential premium. It was also brought to the notice of the learned CIT(A) that according to the Ready Reckoner issued by Government of India the market value of the land in that area was Rs. 1,557/- per sq.ft. Even if the prevailing rate was 30% to 40% higher, as under the new government policy IT industries are to be promoted in that zone, with double FSI and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , vide assignment deed dated 18.06.2007, got the lease on the above land and building by paying Rs. 7.2 crores in addition to payment of a sum of Rs. 19,14,400/- towards differential premium to MIDC. In fact the AO called for information in respect of differential premium from MIDC wherein it was clarified that the Corporation has not considered the market value in above calculation of differential premium which highlights that the premium rates charged by MIDC is different from the actual market value. He also observed that the estimate made by the AO in arriving at the value of building has no basis. The assessee submitted before the AO that the value of the building should be taken at Rs. 87,12,170/- and the AO did not object to the work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned CIT(A) has correctly taken into consideration the fact that the MIDC has not taken into consideration the market value while calculating the differential premium. Since the leasehold rights were transferred to the purchaser at Rs. 7.20 crores, the learned CIT(A) had correctly taken into consideration the fact that the purchaser would have paid the amount essentially based on the land cost and the chance of constructing a new building for new I.T. based industries with adjoining infrastructural facilities and hence it is improper to segregate a large chunk of consideration towards cost of building since the dominant object was to acquire the leasehold rights on the land. Under these circumstances we are of the view that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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