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2014 (9) TMI 1199 - AT - Income TaxCapital gain computation - adoption of sale consideration - HELD THAT:- Though the value determined by Stamp Valuation Authority would be helpful indicator to determine the fair market value as on the date of development but the same also cannot be taken as what was to be received by the assessee was specific quantity of area of developed property, the value of which will be different from the value of vacant land. As per clause 18(a) the period of completion of project is mentioned as 48 months from the date of receipt of commencement certificate. The constructed area to be received by the assessee is in an undeveloped project which is yet to commence. Therefore, the value which can be assessed as sale consideration in the hands of the assessee should be akin to the value of similar property in an underdeveloped project which was yet to commence and to be completed in 4 years from the date of commencement of the project as mentioned in the development agreement signed by the assessee. This factor was brought to the notice of both the parties during the course of hearing of the appeal and both of them have agreed that to determine the fair market value for the purpose of determining the sale consideration assessable as capital gain in the above manner, the matter may be restored back to the file of AO. Therefore, we restore the issue to the file of AO with a direction to determine the consideration on which the assessee is liable to pay capital gain as described in the manner aforesaid after giving the assessee a reasonable opportunity of hearing Adoption of value determined by DVO as cost of acquisition - reference to DVO for the purpose of valuation - taking the cost of the property as on 1/4/1981 - HELD THAT:- Tribunal held that in view of section 55A(a) it was not permissible for the AO to make a reference to DVO for the purpose of valuation as the value of property declared by the assessee was more than its fair market value. Thus, the Tribunal accepted the contention of the assessee that indexed cost should be taken as per value determined by a Registered Valuer of the assessee. Such order of Tribunal was confirmed by their Lordships. Their Lordships also rejected the contention of the Department that in view of amendment to section 55A(a) the AO was authorized to refer the matter to the valuation officer. Respectfully following the aforementioned decision of Hon’ble Bombay High Court in the case of CIT vs. Puja Prints [2014 (1) TMI 764 - BOMBAY HIGH COURT] we decide this issue in favour of assessee and we hold that the indexed cost should be computed on the basis of valuation done by the Registered Valuer of the assessee i.e. by taking the cost of the property as on 1/4/1981 at a sum of ₹ 50,08,320/-. Ground No.5 of the assessee is allowed.
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