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2010 (7) TMI 832 - AT - Income TaxWhether the reference made by the AO to the DVO u/s 55A is bad in law - HELD THAT:- we are of the view that reference by the AO to the DVO u/s 55A for valuation of FMV of the property as on 1-4-1981 is not valid for the reasons that FMV declared by the assessee as per Government registered valuer’s report was more than the FMV as estimated by the DVO. Since determination of the FMV as on 1-4-1981 was based on the report of the DVO, the same is held to be invalid. Consequently, estimation of the FMV of the property as on 1-4-1981 as made by the assessee is directed to be accepted. Ground No. 1 of the assessees is allowed. disallowance of valuation expenses - HELD THAT:- we are of the view that as far as expenses on construction of dividing wall, electricity and water meter transfer charges are concerned, they are to be considered as expenditure incurred wholly and exclusively in connection with such transfer within the meaning of section 48(i). The AO is directed to allow the claim of the assessee in this regard. However, valuation expenses claimed by the assessee are only to support of its computation of capital gain for income-tax purpose. They cannot be said to be expenditure incurred wholly and exclusively in connection with sale of the capital asset. To the extent of disallowance of valuation expenses, order of learned CIT(A) is confirmed. Thus, ground No. 3 raised by the assessees is partly allowed. claim for exemption u/s 54EC - HELD THAT:- In the present case, the assessees transferred the capital asset on 25-10-2005 and therefore time for making investment has been extended up to 31-9-2006. The assessees have made the investment in long-term specified asset on 10-7-2006 within the extended time-limit laid down by the Circular referred. In view of the above, the assessees were entitled to claim deduction u/s 54EC. We direct the AO to allow claim of the assessees for exemption u/s 54EC. Thus, ground No. 4 is allowed.
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