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2016 (4) TMI 35 - ITAT JAIPURFair Market Value of land for the purpose of Computation of Capital Gain - Indexed cost of acquisition - whether FMV of land for the purpose of Computation of Capital Gain, should have been taken on the date of Notification in official Gazette by which agriculture land became the Capital assets within meaning of section 2(14)(iii)? - Held that:- What is relevant is the actual “cost of acquisition” of the asset in the hands of the assessee and not the FMV on the date on which the asset became a capital asset for the purpose of levy of capital gains tax. The only exception is where the asset was purchased prior to 1.4.1981, the legislation has provided a specific relaxation by virtue of which the actual cost can be substituted for FMV prevailing as on 1.4.1981. The said relaxation cannot be extended, as suggested by the ld. AR, to situations where the FMV on the date an asset becomes a capital asset should be considered. In our view, the position will remain the same whether the asset was a capital asset within the meaning of section 2(14) at the time of initial purchase or it falls within the definition of the capital asset because of subsequent legislative notifications as in the instant case where due to the a specific notification, the agriculture land falls within the specified limits of a municipality and it came within the ambit of a capital asset under section 2(14) of the Act. Accordingly, once an asset becomes “capital asset” and it is transferred thereafter, the capital gains has to be computed in the manner laid down in section 48, and 55(2) of the Act as has been rightly done by the AO in the instant case.- Decided against assessee Deduction claimed u/s 54F - Held that:- Where the assessee has demonstrated the withdrawal of ₹ 15,40,000/- towards construction of residential house from his bank account and cost of construction being supported by the valuer’s report, the AO is directed to give necessary relief by way of deduction under section 54F of the Act.- Decided in favour of assessee Addition on unexplained cash deposit in Bank account - Held that:- AO made the addition simply on the ground that the assessee could not explain the source of deposit. It is pertinent to note that neither the question of deposit of cash was made in query letter dated 29.02.2011. The compliance of query letter was made and copy of same is placed in paper Book. The final reply of various query letter was made, it is evident from the above that the AO never put question about the explanation regarding cash deposits in such circumstances the addition was made without affording the opportunity to the assessee, which is against the principal of natural justice.Considering the totality of the facts and circumstances of the case, the matter is set-aside to the file of the AO to examine the same afresh after providing reasonable opportunity to the assessee. - Decided in favour of assessee by way or remand
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