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2020 (8) TMI 504 - AT - Income TaxCapital gain computation - cost of acquisition as on 01.04.1981 for the land and building - AO referred the property to the Valuation Officer and adopted the value determined by the Assistant Valuation Officer and re-worked the indexed cost of acquisition and then determined the long term capital gain in the respective assessee’s hands - HELD THAT:- When the AO proposed to assessee the value of the land adopting the value shown by the registration authority and adopt the value of the super structure as per the valuation officer’s report, the assessee submitted that the impugned property was given on rent for ₹ 4,000/- per month with a rental advance of ₹ 2,00,000/- and therefore, it is proper to adopt the value on rent capitalisation method as per the provisions of the Wealth Tax Act. AO did not agree with assessees’ plea and proceeded to compute the capital gains based on the value shown by the stamp authorities and the valuation officer. Before us, the assessee pleads that the guideline value does not reflect the market value and by the time the valuation officer went for inspection, the property was already demolished and hence the valuation made by him cannot be considered as a scientific one - we find merit in the submissions of the assessee. Existence of rental agreement, the receipt of rent and rental advance is not disputed. Therefore, we are of the view that the value of the land and building should be determined on the basis of rent capitalisation method. The assessee has quantified the value at ₹ 8,28,750/-, which may be rounded off to ₹ 10 lakhs. Therefore, we direct the AO to adopt ₹ 10 lakhs towards the cost of acquisition for the land and building as on 01.04.1981 and proceed to determine the cost of indexation accordingly, for the determination of capital gains in the respective assessee’s hand. Assessee’ s appeal is treated as partly allowed
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