TMI Blog2014 (6) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... n the plea that value of the asset in respect of which capital gain is to be charged was incapable of being ascertained –section 55(3) provides for a situation where value of the asset acquired could not be ascertained - If market value can be ascertained, it has to be taken to be equal thereto and if the value cannot be ascertained, it has to be equal to market value on a specified date at the option of the assessee - It is not the case of the assessee that land had no market value at all on the date of its acquisition - even where the cost of acquisition of capital asset cannot be ascertained but the asset has a market value, capital gain will be attracted by taking the cost of acquisition to be fair market value as on January 1, 1954, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d measuring 146 kanals 19 marlas was situated within the municipal limits of Barnala which was acquired by the Improvement Trust, Barnala. Compensation of Rs. 2,77,51,294/- was awarded as per award dated 28.11.2005. Since the land was gifted to the appellant by the Maharaja of Patiala, the cost of acquisition of the land was the same as to the Maharaja of Patiala. Since the Maharaja did not incur any cost, the same was not chargeable to tax under section 45 of the Act. The Assessing Officer rejected the said plea of the appellant vide order dated 24.12.2008, Annexure A.1 by holding that as per the provisions of section 55(3) of the Act, even in cases where the cost of acquisition to the previous owner could not be ascertained, the same had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, 3 and 4 of this sub section. It was further argued that the previous owner under the Act is a person who has acquired the asset by payment of money i.e. the cost incurred for acquisition of the asset. In case the previous owner has not incurred any cost neither the provisions of Section 55(2) (b) nor the provisions of Section 55 (3) of the Act would apply. Support was drawn from judgment of the Apex Court in CIT, Bangalore v. B.C.Srinivasa Setty, (1981) 128 ITR 294 and judgment of Gujarat High Court in CIT v. Manoharsinhji P.Jadeja, (2006) 281 ITR 19. 5. We are not impressed with the submissions of learned counsel for the appellant. The matter is no longer res integra. The Full Bench of this Court in Raja Malwinder Singh's case ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtained. However, he failed to exercise the option of going either by the date of market value on the date of acquisition or by the cost of the previous owner in which case only option available to the Assessing Officer was to proceed to compute capital gain by taking the cost of the asset to be fair market value on the specified date i.e. 1.1.1954 as per applicable provision for assessment year 1977-78 and as on 1.1.1964 for assessment year 1978-79. Even in a case where cost of acquisition cannot be ascertained, section 55(3) statutorily prescribes the cost to be equal to the market value on the date of acquisition. This being the position, capital gain is not excluded even on the plea that value of the asset in respect of which capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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