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2018 (8) TMI 1724 - AT - Income TaxComputation of capital gains adopting the fair market value (FMV) - value claimed by the assessee as on 01/04/1981 - Held that:- CIT(A) found that the value of the property sold in S. No. 161/3 in 1986 was at ₹ 75, 000/- per acre. Another evidence brought out by the Ld. CIT(A) was in the case of Tegala Murali, PAN : ACPPM7787G at ₹ 20, 000/- per acre as on 01. 04. 1981 in respect of 5. 45 acres of land situated in Survey No. 26/1 in Vepagunta area. Considering all the evidences and information, the Ld. CIT(A) determined the fair market value as on 01. 04. 1981 at ₹ 40, 000/- per acre. During the appeal hearing, the Ld. AR could not place any evidence to show that the FMV of the property sold by the assessee as on 01. 04. 1981 was more than ₹ 40, 000/- per acre. Therefore, we hold that the FMV determined by the Ld. CIT (A) is fair and reasonable, therefore we do not find any reason to interfere with the order of the Ld. CIT(A) and the same is upheld. The appeal of the assessee on this ground is dismissed. Deduction u/s 54F - Held that:- The facts show that the property at 53&54, Priya Gardens, Simhachalam was registered in the name of the assessee’s wife and the property was enjoyed by the assessee’s wife and the same is not disputed by the department. Once the property was registered in the name of the assessee’s wife, the same should not be considered in the hands of the assessee and reject the claim of the assessee for deduction u/s 54F of the Act. It is for the department to establish that the property No. 53 and 54, Priya Gardens is constructed from the sources of the assessee and it was the property of the HUF. The same exercise was not done by the AO. Therefore, we are unable to accept the argument of the department to hold that the property was belonging to the assessee. Accordingly, the said argument is untenable and rejected. The next issue is property at D. No. 9-33/1, Gopalapatnam, Visakhapatnam as per the evidence available on record, the second property at Gopalapatnam is commercial property, but not a residential property - one property belonged to the assessee’s wife and the second property was a commercial property and the assessee owns only one residential house. As per Section 54F for claiming the deduction u/s 54F, the assessee should be either individual or HUF. The long term capital gains should result in transfer of capital asset not being a residential house. The assessee should acquire property within one year before or two years after the transfer of the property in case of purchase and three years after the date of transfer in case of construction. The assessee should not own more than one residential house, other than the new asset. The word used in the section is the residential house but not the commercial property. The property at D. No. 9-33/1, Gopalapatnam is being used and assessed as commercial property, the same cannot be treated as residential house. Similarly, the property, of the wife cannot be attached to the assessee for the purpose of disallowing the deduction u/s 54F. Therefore, the assessee has satisfied all the conditions laid down in Section 54F hence, we hold that the assessee is entitled for deduction u/s 54F - Decided partly in favour of assessee.
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