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TMI Blog2014 (1) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... f the impugned property at Rs.3 lakhs in the place of Rs.32,44,425/- claimed by the assessee and allowed cost indexation on the aforesaid value of Rs.3 lakhs only. 2.1 The property consisting of the land and ground plus two floors building situated at Setalvad Road of Napeansea Road Mumbai, was originally taken on lease by executing a lease deed between Namunarayan Kothari as the Lessor and Mr. Hormushji Ardeshiv Wadia as lessee in the year 1906. Thereafter, different agreements were entered between 1906 to 1972. Finally in the year 1979, vide the indenture of assignment dt. 6.8.1979 entered between Mr. Hormuzi Rana & Mr. Homi Mistry and the appellant Mr. Jamshed E. Bapasola, lease rights were created in favour of the assessee termed as sub lessor. The assessee has in turn entered into agreement with one M/s. Vivek Builders on 22.9.1979 by which the sub lease for 98 years was created in favour of M/s. Vivek Builders. Pursuant to the rights created vide the above lease deed dt.22.9.1979, M/s. Vivek Builders has re-developed the property by constructing 8 additional floors over the existing building. Vide a separate agreement dt. 15th October, 1979 the assessee has entered into an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lus the consideration of Rs.3 lakhs paid as above would constitute the cost of acquisition of the impugned property, viz. flat No. 301. However, considering the fact that the impugned property was handed over to the assessee in the year 1986, the assessee got the property valued as on 1.4.1986 by a Registered Valuer. As per the report furnished by assessee, the impugned property was valued at Rs.33 lakhs as on 1.4.1986. That apart, the assessee also considered the amount of Rs.3 lakhs paid by him to M/s. Vivek Builders vide the agreement dt. 22.10.1979. In this background the assessee claimed indexed cost for Rs.3 lakhs w.e.f. 1.4.1981 and for Rs.33 lakhs w.e.f. 1.4.1986. Thus the assessee arrived at the indexed cost of acquisition at Rs.1,27,54,000/- and after claiming certain incidental expenditure, the long term capital gain was arrived at Rs.2,37,97,500/-. The assessee failed to produce the relevant agreements dt.22.9.1979 and 15.10.1979 and the evidence that the property was handed over to him in the year 1986 before the AO. In view of the above, the AO held that the assessee's claim was not verifiable and therefore allowed the indexed cost of acquisition only on an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing provision of 50C, order of CIT(A) has to be upheld. As per the provisions of section 50C(ii) the valuation adopted by stamp value authorities at Rs.4,14,30,597/- has to be adopted. However, as assessee objected, the valuation was referred to DVO under the provision of Section 50C (2) and the DVO adopted a fair valuation at Rs.3,87,60,443/-. This value was decided to be adopted as against Rs.4,14,30,597/-, which in our opinion is correct and fair according to the provisions of law. Therefore, ground No.1 raised on this issue is rejected. 5. As regards cost of acquisition of property, the Ld.CIT(A) has given the findings as under:- "As regards the cost of acquisition claimed by the appellant, I have gone through the copies of agreements dt.22.09.1979 and 15.10.79 placed on record. At the outset vide agreement dt.22.9.1979, the land along with the building consisting of ground and two floors was given on sub lease to M/s. Vivek Builders for a period of 98 years on receiving a monthly rent of Rs.4000/- payable in advance without any deduction whatsoever on the fifth day of each and every English Calendar Month. The aforesaid agreement reads that "in pursuance of the said agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Vivek Builders. At the cost of repetition I would like to state that the consideration for creating the lease rights in favour of M/s. Vivek Builders is a monthly rent of Rs.4000/- for a period of 98 years and the consideration for purchasing the flat No. 301 is Rs.3 lakhs, which are mutually exclusive. In view of the above, I am of the considered opinion that the appellant is entitled to claim the indexed cost of acquisition only an amount of Rs.3 lakhs and not otherwise. The valuation report of the impugned property as on 1.4.1986 furnished by the Registered valuer and produced before the AO is of no avail. Accordingly, I uphold the assessing officer's action in allowing the indexed cost of acquisition at Rs.14,40,000/- only. The appellant fails on this ground. In summary, the AO is directed to consider the FMV of the impugned property as on the date of sale at Rs.3,87,60,443/- as reported by the valuation officer, as full value of consideration for the purpose of computing capital gains. The appellant is entitled for relief only to this extent. The appellant fails on the ground relating to allowing additional indexed cost of acquisition." 5.1 After considering the rival cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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