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2013 (2) TMI 578 - ITAT HYDERABADAddition u/s 50C - area is 13,500 sqy or 15,311 sqy - Held that:- Admittedly, in this case the assessee made a rectification deed correcting the area mentioned therein in the sale deed. The assessee also explained the reasons for delay in executing the rectification deed that the assessee is an old lady of 86 years old and she is not aware of the income-tax law. On behalf of the assessee, assessee’s son has been appearing before the Revenue authorities. The mistake mentioned in the area in the sale deed was found at a later stage and on this count rectification deed was executed on 11.12.2009 and registered on 16.12.2009. Thus seen from the contents of the Remand Report, AO confirmed that the area transferred is 13,500 sqy instead of 15,311 sqy. The only reason for not accepting the area transferred at 13,500 sqy by the CIT(A) is that the rectification deed was belatedly executed. Thus as the assessee explained the reasons for executing the Rectification Deed belatedly the area transferred is only 13500 sqy. Being so considering the area at 13,500 sqy as per Rectification Deed which is duly registered with the Sub-Registrar and in the circumstances the value mentioned by the assessee for transferring of 13500 sqy is not less as compared to the value adopted by the State authorities for stamp duty valuation, the addition cannot be sustained on this count. Accordingly, this addition is deleted. Addition towards indexed cost of acquisition - AO took the SRO value as on 1.4.1981 at Rs. 25 per sqy and on the other hand, the assessee submitted that a valuation report from a private valuer stating that the cost of land as on 1.4.1981 was Rs. 300 per sqy - Held that:- The value is to be considered at Rs. 300 per sqy which is based on the Registered Valuer report which is very reasonable as compared to the value of the property as on the date of sale at Rs. 11,000 per sqy. Considering the Registered Valuer report and by applying the reverse indexation method, the value is to be considered at Rs. 300 per sqy as on 1.4.1981 is very reasonable, thus agreeing with the assessee. Addition towards compensation paid with whom agreement for sale was entered into by the assessee in the year 1993 which was not honoured - Held that:- AO has no grievance for allowability of Rs. 1.72 crores and the only objection is with regard to Rs. 64 lakhs out of Rs. 2.36 crores. Accordingly this payment is genuine to the extent incurred by the assessee in relation to the transfer of property. Accordingly, this ground is partly allowed. Addition towards compensation paid to Sri B. Rajendra Prasad - Held that:- AO accepted the payment of Rs. 15 lakhs as genuinely incurred for the purpose of transfer of property. However, he has not accepted payment of Rs. 13 lakhs. Thus when the AO himself accepted the payment of Rs. 15 lakhs as genuine, there is no reason to disallow the same and the same is accepted and allowed. This ground is partly allowed. Municipal taxes paid by the assessee on yearly basis cannot be considered as a cost of acquisition or cost of improvement allowed while determining the capital gain. On the other hand, if it is incurred as a betterment/development charges which is a onetime payment, that is to be considered as part of cost of acquisition of the capital asset and the same has to be considered while computing the capital gain. This issue is remitted back to the file of the Assessing Officer to decide the same accordingly.
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