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2016 (10) TMI 1284 - AT - Income TaxCapital gain from the transfer of agriculture land - Fair market value as on 01/04/1981 of the agricultural land - land transferred by the assessee and his father (each having half share) to M/s. Soma New Towns Private Limited - Revenue has objected to the additional evidences admitted by CIT(Appeals) in respect of fair market value of the land in question as on 01/04/1981 - HELD THAT:- From the facts of the case, we find that the assessee was not granted sufficient opportunity of hearing by the AO for producing evidence in support of fair market value, which is evident from the assessment order and, therefore, in our opinion, the action of the CIT (Appeals) of admitting the additional evidence is in interest of justice and in accordance to the law. Thus, ground No. 2 of the appeal is dismissed. Fair market value as on 01/04/1981 of the agricultural land - We find that the Tehsildar has not provided any basis for taking four times of the stamp duty value as the fair market value of the land in question. Thus, the fair market value of ₹ 10,45,000/- as on 01/04/1981 stated by the Tehsildar is not based on value adopted by his office for the purpose of stamp duty valuation. The valuation of the Tehsildar is based on guesswork and not based on the sound evidences or Rules, which could justify the market value as four times the value adopted for stamp duty purposes. In such circumstances, in our opinion the directions given by the learned Commissioner of Income-tax (Appeals) to the Assessing Officer to adopt the fair market value of the agricultural land transferred as on 01/04/1981 at ₹ 10, 45,000/- is not justified. ' We feel it appropriate to restore the matter to the file of the Assessing Officer with the direction to make a reference to the valuation officer in terms of section 55A of the Act for ascertaining the fair market value of the land transferred by the assessee and then compute the capital gain in accordance with law. Eligibility for exemption u/s 54B - HELD THAT:- We find from the plain language of section 54B of the Act that benefit under section would be allowed when the capital gain arising on transfer of land used for agricultural purposes, is invested in the purchase of new agricultural land within two years from the date of the agricultural land transferred. Thus, the thrust is on the utilization of the money received on sale of the agricultural land leading to capital gain towards purchase of new agricultural land. Sale consideration on transfer of the asset was received by the assessee on 24/10/ 2008 and investment in the new agricultural land was made on 13/10/2008 and 23/10/2008, which is prior to the receipt of sale consideration and, therefore, the money received on account of capital gains has not been utilized towards purchase of new asset - Assessee has not fulfilled the conditions for availing the benefit under section 54B of the Act. In our opinion, the order of the learned Commissioner of Income-tax (Appeals) on the issue in dispute is well reasoned and no interference on our part is required. Accordingly, the ground of the appeal is dismissed.
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