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2020 (8) TMI 725 - AT - Income TaxExemption u/s 54F - assessee was denied the benefit of deduction u/s 54F was that the assessee owned more than two residential houses, other than the new asset on the date of transfer of the original asset - HELD THAT:- From the order of assessment passed u/s 147 for assessment year 2011-12 it is clear that the Dhobi Ghat, Thalgatpura and Nagadevanahalli properties were in fact not residential houses owned by the assessee and that the assessee had only given the lease of vacant land and obtained rent for land and not for any building - assessee did not own more than one residential house, other than the new asset on the date of transfer of the original asset. Therefore, deduction u/s 54F of the Act should be allowed to the assessee. We hold and direct accordingly. Capital gain computation - FMV as on 01.04.1981 - plea of the assessee that fair market value and guideline value are two different values and generally, the fair market value is higher than the guideline value - assessee had adopted the value as on 01.04.1981 at ₹ 150/- per sq.ft. on the basis of a report of a registered valuer - HELD THAT:- Our attention was drawn to a decision in the case of Late Smt. Krishna Bajaj Vs ACIT [2013 (12) TMI 544 - KARNATAKA HIGH COURT] wherein it was laid down that in the context of fair market value for the purpose of computing capital gain, that market value of property is generally far more than higher than the guideline value. The claim of the assessee for FMV as on 01.04.1981 is supported by a report of the registered valuer and facts of the present case, we are of the view that the claim of the assessee for adopting FMV as on 01.04.1981 at ₹ 150/- per sq.ft. is reasonable and the same is directed to be accepted. Benefit of indexation to the assessee - HELD THAT:- Property was acquired by M. Gunasheela on 10.09.1979 and that on his death on 30.11.2004, wife of Gunasheela released her 1/3rd share in favour of her two daughters and thereby, the assessee and his sister got half share each of the property. This deed of release was dated 30.09.2009. Provisions of section 55(2)(b)(ii) of the Act are relevant and the same provides that if the capital asset becomes property of the assessee by way of succession, the cost of acquisition of the capital asset would be the cost of the capital asset to the previous owner or the FMV as on 01.04.1981 at the option of the assessee, if the capital asset was acquired by the previous owner prior to 01.04.1981. In the present case, neither the assessee nor her mother acquired the property. They acquired the property only by way of inheritance. The share released by mother of the Assessee in her favour also had not cost to her and therefore the cost to the previous owner has to be adopted. The property was acquired by Gunasheela prior to 01.04.1981 and the assessee in the computation of capital gain has opted to adopt the FMV as on 01.04.1981 for computing capital gain. Assessee would be entitled to the benefit of indexation from 01.04.1981 in respect of her half share in the property on sale of which, the assessee derived capital gain. - Appeal by the assessee is partly allowed.
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