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2016 (11) TMI 203 - ITAT VISAKHAPATNAMCost of acquisition of the property - FMV - A.O. has determined cost of acquisition of the property based on the SRO value of the property fixed by the State Government for the purpose of determination of stamp duty - Held that:- . In the present case on hand, the assessee has adopted fair market value of the property as on 1.4.1981 as cost of acquisition which is based on a certificate issued by the registered valuer. The A.O. without assigning any reasons disbelieved registered valuer’s report and adopted SRO value of the property for the purpose of determination of computation of cost of acquisition, when Act specifically provides powers to the A.O. under the provisions of section 55(2) of the Act, to refer the valuation of the property to the valuation officer, when he is of the opinion that the fair market value of the property adopted by the assessee is higher than the fair market value of the property. The A.O., without exercising the option of referring the matter to the valuation officer, simply adopted SRO value which is fixed in a different context to determine the cost of acquisition of the property. Therefore, we are of the opinion that the A.O. was erred in adopting SRO value to substitute the fair market value adopted by the assessee, which is based on a registered valuer certificate. CIT(A) after considering the relevant details has rightly directed the A.O. to substitute value adopted by the assessee as fair market value of the property as on 1.4.1981 to compute cost of acquisition. We do not find any reasons to interfere with the CIT(A) order. Hence, we inclined to upheld CIT(A) order and reject ground raised by the revenue. Benefit of indexation - Held that:- In the present case on hand, the assessee got right over property by way of inheritance through a partition deed which was acquired by his father prior to 1.4.1981. When the assessee got right over property by any of the mode specified u/s 49(1) of the Act, then for the purpose of computation of indexed cost of acquisition, the period of holding of previous owner has to be considered. The CIT(A) after considering the relevant details rightly held that the assessee is eligible for indexation benefit from the period the asset was first held by the previous owner or 1.4.1981 whichever is later as per the provisions of section 49(1) of the Act. We do not see any reasons to interfere with the order of CIT(A). Hence, we inclined to uphold the CIT(A) order and reject ground raised by the revenue.
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