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2013 (2) TMI 231 - AT - Income TaxApplicability of provision of section 55(2)(a)(ii) - Disallowing indexed Fair Market Value as on 1-4-1981 in respect of the Leasehold Land acquired as the appellant had not incurred any cost for acquiring the said leasehold land i.e. NIL value - Held that:- Where the assessee has acquired some land for NIL value prior to a year starting from 1.4.1981, even then the provision of section 48 shall be applicable and the fair value of the land in question as on 1.4.1981 along with indexed cost of acquisition has to be determined in order to arrive at the figure of "long term capital gain" and the value for which the assessee has acquired the land in question prior to 11.4.1981 is not relevant for determining the "fair market value" of the land as on 1.4.1981. It is well settled that when certain provision of law has clear language and leaves no room for ambiguity, there should be no violence to the provision as enacted by the Legislature and no words should be added or omitted while reading a specific provision of law. As find that the Legislature has intentionally not added word "land" in the provision of Section 55(2(a) and therefore, the provision of section 55(2)(a)(ii) of the Act would not be applicable while valuing the "cost of acquisition" of the land for the purpose of computation of "long term capital gain" of the assessee. Accordingly, the value of the lease-hold rights in the land in question of the assessee, has to be determined in accordance with the provision of section 48 by valuing "fair market value" of the land as on 1.4.1981 and the index cost of acquisition has to be determined in order to assess long term capital gains in the hands of the assessee. Fair market value of the land in question as on 1.4.1981 for the lease hold right of the assessee in the land at Ashram Road, Ahmedabad - Held that:- Approved valuer's valuation report has one glaring mistake by not making suitable deduction on account of assessee's right in the land being only that of "lessee" for 98 years and the assessee not being owner thereof. As the approved valuer has recorded that he has taken into consideration surrounding sales and its location, size, frontage, neighbourhood, prospects of developments, distance to the commercial establishments etc. while determining the land rate of Rs. 1200/- per square yard as on 1.4.1981, this value of the land estimated may be reasonable for a free hold land as on 1.4.1981, but the value of a free hold land could not be equated with the value of leasehold rights of "lessee" in a particular piece of land. Considering the entire factual matrix of the case, and holding that fair market value of the land in question as on 1.4.81 has been reasonably estimated at Rs.1,200/- per square yard by the approved valuer as on 1.4.1981, it shall be fair and justified to value the leasehold rights of the assessee in the land at Ashram Road as on 1.4.1981 at Rs.800/- per square yard after making suitable deduction on account of the land not being free hold and the assessee's right being that of "lessee" for long period of time - appeal of the assessee partly allowed.
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