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2023 (6) TMI 127 - AT - Income TaxComputation of capital gain on transfer of Plot - Adoption of certain amount as Cost of Acquisition - HELD THAT:- On an overview, it can be seen that there are basically two transfer transactions of the assessee, first, the transfer by compulsory acquisition of land by the Government of Maharashtra and the, second, of the transfer of plots to M/s. Shriram Builders & Developers, which were allotted to the assessee in lieu of the compulsory acquisition. In a nutshell, the assessee was allotted the two plots as quid pro quo for the compulsory acquisition of his land after paying back Rs. Y. In that view of the matter, the fair market value of these two plots minus Rs. Y will constitute full value of consideration in the first transaction of transfer of agricultural land by compulsorily acquisition. AO, has observed that the first transaction of transfer by compulsory acquisition will not attract capital gain because it was a transfer of agricultural land - the date of allotment of the plots was 26-08-2011. Had the compulsory acquisition been of some non-agricultural land, the capital gain chargeable to tax would have resulted by taking the fair market value of the two plots minus Rs. Y as full value of consideration. Second transaction of the transfer of Plot Nos.20 & 20A taking place during the year, which happened on 12-09-2011, namely, around 15 days from the date of allotment of plots - Neither the original receipt of compensation in seclusion can be construed as the fair market value of the property in the first transaction of transfer nor its subsequent refund to CIDCO with certain addition in isolation as the cost of acquisition in the second transfer transaction. Cost of acquisition of the two plots in the second transaction of transfer is their fair market value on the date of their allotment to the assessee, which constituted the basis for the full value of consideration in the first transfer transaction. Thus capital gain in the second transaction needs to be computed by taking the assessee’s share in Rs.10.75 crore as full value of consideration to be reduced by his proportionate share in the value of plot Nos. 20 & 20A, Sector-22, at Ulwe, Tal. Panvel, Dist. Raigad on 26-08-2011 allotted by CIDCO. Since the necessary figure of the fair market value of the two plots on 26.8.2011, being, the cost of acquisition in the second transaction is not available, we set-aside the impugned order and remit the matter to the file of the AO for determining it afresh. Appeal is allowed for statistical purposes.
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