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2014 (1) TMI 1860 - AT - Income TaxTaxation of capital gain on part of agricultural land sold by the assessee - Nature of land sold - whether land in question was capital asset u/s 2(14)? - assessee contended that FMV of the land as on 1.4.1981 should have been taken by computing the gain - HELD THAT:- We find that value of land differs drastically due to its surroundings, distance from road, disputes, possession etc. There is no dispute on the issue that the in the instances quoted by the AO, the buyers were already in the possession of land in question which is major factor which affects the rates of the transaction and attached obligations. There are issues regarding proximity from road and scattered land. We also find that AO has given a finding that multistoried projects have been developed near the assessee's land and the buyer of the assessee's land is also developing some project on this land. No such development of the comparable land has been brought on record by the AO. CIT(A) also agreed that the instance quoted by the AO is not comparable. However, he has taken a arbitrary value without any basis. In these facts and circumstances, where no comparable case is available, the best way to estimate the cost would be to compute the Fair Market Value on the basis of reverse calculation considering the cost inflation index as held in Jahanganj Cold Storage (2010 (4) TMI 765 - ITAT, AGRA) in which one of us was also a party. Accordingly, the estimation made by the assessee in this respect had to be accepted. We thus allow this ground of appeal of the assessee and reject the ground of the departmental appeal. Rejecting the agricultural income - As already found by us, the assessee has shown evidences of land being cultivated. The agriculture income has been accepted in the previous year and also in the subsequent years. In these facts and circumstances, size of land, government records of crop and the amount of agricultural income shown, we find no reason to reject the assessee's claim. We accordingly allow this ground of the assessee's appeal also. Provision of section 50C applicability as the land was sold by the assessee through agreement and the sale deed was not registered - AO had observed that land has been developed and is in the possession of the buyers and sale consideration has been received in toto by the assessee - Assessee has claimed that the property has not yet been registered and hence, provisions of section 50C are not applicable - HELD THAT:- In the first appeal, CIT(A) made a reliance on the decision of Hon'ble Jodhpur Tribunal in the case of Navneet Kumar Thakkar v. ITO [2007 (3) TMI 317 - ITAT JODHPUR] where it was held that to attract section 50C, the property under transfer from the assessee to another person should have been assessed for stamp valuation purpose at a higher value than that received or accruing to the assessee. Unless the property transferred have been registered by sale deed and for the purpose the value had been assessed and stamp duty have been paid by the parties, section 50C could not come into operation. Further reliance on Smt. Vijay Laxmi Dhaddha v. ITO [ 2008 (9) TMI 944 - ITAT JAIPUR] and Hon'ble Lucknow Tribunal in the case of Carlton Hotel (P.) Ltd. v. Asstt. CIT [2008 (11) TMI 295 - ITAT LUCKNOW-A] held that if the property sold is not registered then section 50C would not have any application. Accordingly, Ld. CIT(A) held that in the present case, the sale deeds had not been registered and the buyers had not paid any stamp duty therefore section 50C would not have any application and directed the ld. AO to adopt the sale consideration at ₹ 1,04,00,000/- instead of ₹ 1,40,00,000/-. The present case is for A Y 2008-09, i.e. prior to amendment made in the provisions of section 50C to take into consideration the transfers which have not been registered for stamp duty purpose. In view of the various decisions quoted by the ld. CIT(A), we are in agreement with his order and confirm the same. This ground of the departmental appeal is also rejected.
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