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2017 (11) TMI 114 - AT - Income TaxComputation of long term capital gain on sale of a flat - determination of Fair Market Value as on 1.4.1981 - Held that:- As gone through the copy of valuation report furnished before the Tribunal. As notice that the registered valuer has adopted a rate of ₹ 360/- per sq.ft., and accordingly arrived at a value of ₹ 3,33,000/-. He has also qualified his report by stating in para 4 of his report that there are no comparable instances of sales in the area and accordingly determined the value on the basis of personal enquiries. However he has not described the details of enquiries, which renders the valuation report a bald one. Accordingly I am of the view that the valuation report furnished by the assessee may not come to its help for the reasons discussed above. CIT(A) has determined the value of ₹ 1,71,000/- on the basis of sale instance of a flat located in the same society that took place on 23.11.1983. In fact, the above said sale agreement was furnished by the assessee before the AO. Even though sale instance is subsequent to the valuation date of 1.4.1981, yet the Ld CIT(A) has adopted the same without discounting the same. Since the sale instance is a better evidence and in the absence of any other material, Ld CIT(A) was justified in adopting the fair market value as on 1.4.1981 at ₹ 1,71,000/-. Accordingly uphold his order passed on this issue. Deduction of professional fee paid to M/s B.R Dalal & Co for tax consultation and to Shri A.G. Pandit for drafting agreement for sale and transfer of shares of the flat - Held that:- In respect of drafting sale agreement and transfer of shares, it is of the view that the same should be considered as expenses incurred in connection with the transfer, since the agreement is required for effecting transfer and the transfer cannot be considered as complete unless the shares were also transferred. Accordingly reverse the order of Ld CIT(A) on this issue and direct the AO to allow the deduction paid for drafting sale agreement and transfer of shares. Assessee has also claimed the loss of ₹ 2,98,000/- and interest loss of ₹ 4,49,971/- should be treated as cost of flat. First of all, the fair market value as on 1.4.1981 has been substituted as cost of flat and hence the same would subsume all the costs. Secondly, both the items cannot be related to the cost of purchase, as they are independent transactions. Accordingly confirm the orders of tax authorities on this issue. Deduction claimed u/s 54EC - Held that:- The claim of the assessee is allowable as per the decision rendered by Hon’ble Madras High Court in the case of CIT Vs. C. Jaichander & another [2014 (11) TMI 54 - MADRAS HIGH COURT ]
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