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2014 (4) TMI 204 - AT - Income TaxCapital Gains u/s 48 r/w Sec. 55 - deduction of expenditure incurred towards transfer of capital assets - cost of transfer or cost of acquisition - CIT(A) allowed deduction of Rs. 3 crore in computing Long Term Capital Gains – Held that:- CIT(A) although directed AO to allow deduction to Assessee, has not given any finding whether payment made by Assessee represents expenditure incurred wholly and exclusively with regard to transfer or it is cost of acquisition or it is cost of improvement thereof. High Court has directed Assessee to pay a sum of Rs. 3 crores to Shri Digambar Juwarkar for withdrawal of application filed by Digambar Juwarkar dt. 29.6.1995 and 15.2.1994 before Civil court - Set aside order of CIT(A) and restore this issue to file of CIT(A) with direction that CIT(A) will reconsider this issue afresh and give a clear-cut finding under which head expenditure has to be allowed under provisions of Sec. 48 of Act - Assessee should be given proper opportunity before deciding issue afresh so that Assessee may adduce necessary evidence in this regard – Decided partly in favour of Revenue. Determination of Fair Market Value - AO rejected Fair Market Value as determined by Inspector and adopted Fair Market Value at Rs. 3.75 per sq. mtr. – CIT(A) adopted cost of land at rate of Rs. 17 per sq.mtr - Held that:- Sub-Registrar has also cited instances from surrounding villages where rate varies from Rs. 0.96 to Rs. 70/- per sq. mtr. - Other Inspector has worked out average Fair Market Value at Rs. 15-16/- per sq. mtr. - In view of all these different Fair Market Value being determined by different persons - AO cannot take least Fair Market Value since in case of Assessee, Inspector of same office has duly verified nature of land and has also collected various sale instances of comparative villages - Therefore it will be appropriate that Fair Market Value as on 1.4.1981 be taken at Rs. 25/- per sq. mtr. - Fair and reasonable to adopt Fair Market Value as has been worked out by Inspector of Department - Set aside order of CIT(A) on this issue and direct AO to work out Fair Market Value as on 1.4.19981 at Rs. 25/- per sq. mtr. – Decided partly in favour of Revenue.
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