2018 (11) TMI 1831 - ITAT SURAT - Income Tax

Head Note / Extract:
Computation of long-term capital gain on transfer of the property - Adoption of fair market value of the property as on 1.4.1981 - AO adopted fair market value of the property at ₹ 80/- per sq.yard in the cases of other three family members, who have sold land in same survey number, and thereafter computed capital gain - HELD THAT:- Way back in 1955 Board has issued a circular bearing No.14/XN dated 11.4.1955 prohibiting its authorities not to take advantage of ignorance of assessees in order to collect more tax. This circular has not been questioned till date. The quasi-judicial authorities are being respected not on account of their power to legalise injustice on technical ground but because, they are capable of removing injustice and is expected to do so. Once a piece of land has been valued in the case of other co-owners and accepted by the AO then for other co-owners that rate should not be differed with unless some other substantial circumstances are there, showing more potentiality of the land viz. the land is abutted to National high-ways or some other factors which fetch more value to the area. No such factor has been noticed by the AO or available in the present case. Therefore, we allow first fold of grievance raised by the assessee. We direct the AO to compute long term capital gain after adopting fair market value of the property as on 1.4.1981 at ₹ 80/- per sq.yard. AO shall thereafter give benefit of indexation at this rate and calculate along with cost, which is to be reduced from the ultimate sale consideration deemed in the hands of the assessee under section 50C - AO has further granted total deduction of ₹ 15,24,464/- being deduction under section 54D for new agricultural land of ₹ 4,67,720/- and ₹ 10,56,744/- under section 54F for purchase of residential house. These deductions are not being disturbed by us. They will be granted to the assessee after computation of long term capital gain as indicated above.