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2016 (11) TMI 1646 - AT - Income TaxEligibility for deduction u/s 54B - whether the AO was justified in adopting the indexed cost of acquisition as per the value of DG Stamps ? - HELD THAT:- As the particular property in question has its own location and other parameter as very important mentioned in the above parameter of factor affecting the valuation report, hence increasing it by 10% cumulatively upto 1981, which becomes ₹ 21.43 per sq.mts for the year 1991. Hence he adopted the land value at ₹ 3,36,451/-. AO has adopted the rate on the basis of sale deed registered with the Stamp Valuation Authority situated in the nearby area. The law is well settled that the DG Stamps valuation would not be a proper indicator for ascertaining the Fair Market Value. However, the registered valuer has applied the rate as per the Circular issued by the Government of Rajasthan. Such valuation ought not to have been set aside without referring the matter to the DVO as per section 55A(a) of the Act. Therefore, we set aside the order of the AO on this issue and direct the AO to adopt the valuation as reported by the Registered valuer at ₹ 3,36,451/-. This issue is decided in favour of the assessee and against the revenue. Entitled for indexed cost of improvement - AO has not allowed the indexed cost of improvement on the basis that no evidence has been furnished - HELD THAT:- No direct evidence with regard to the expenditure is placed on the record demonstrating the incurrence of the expenditure. But the fact that in the agricultural land such expenditures are incurred in the course of time. This fact cannot be lost sight of. Therefore, after considering the facts, we allow 50% of the indexed cost of improvement as claimed by the assessee being the reasonable expenditure incurred by the agriculturist on the improvement of the land. The assessee gets relief of ₹ 6,52,398/-. This ground of the assessee is partly allowed. Claim of deduction u/s 54B for making investment in the agricultural land in the name of the wife - HELD THAT:- As decided in KALYA VERSUS COMMISSIONER OF INCOME-TAX [2012 (6) TMI 239 - RAJASTHAN HIGH COURT] the word assessee used in the Income Tax Act needs to be given a ‘legal interpretation’ and not a ‘liberal interpretation’, as contended by the learned counsel for the appellant. If the word ‘assessee’ is given a liberal interpretation, it would be tantamount to giving a free hand to the assessee and his legal heirs and it shall curtail the revenue of the Government, which the law does not permit - decided against assessee Not allowing the deduction u/s 54F - HELD THAT:- Section requires the assessee to acquire a ‘residential house’ and so long as the assessee acquires a building, which may be constructed, in such a manner as to consist of several units which can, if the need arises, be conveniently and independently used as an independent residence, the requirement of the section should be taken to have been satisfied. Fact that the residential house consists of several independent units cannot be permitted to act as an impediment to the allowance of exemption u/s 54/54F - In the case in hand, out of the sale consideration the assessee purchased a residential house for ₹ 41 lacs on 31.12.2005 adjoining to the existing house. Thereafter the existing house was demolished and a new house was reconstructed so that the house purchased and house reconstructed would meet the requirement of the family. This fact is not rebutted by the revenue by placing any contrary material on record. Therefore, by following the ratio laid down in the case of CIT vs. Syed Ali Adil [2013 (6) TMI 278 - ANDHRA PRADESH HIGH COURT] and Gita Duggal vs. CIT [2013 (3) TMI 101 - DELHI HIGH COURT] we hereby direct the AO to allow the claim of deduction under section 54F
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