TMI Blog2016 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... . Cost inflation index has been duly applied by the AO on the initial cost of acquisition of capital assets. Since the initial cost of acquisition is available, in our view, the AO has rightly applied the appreciated compounded cost of appreciation @ 30.6% in accordance with provisions of law. In the light of above, the appeal of the assessee is dismissed and the order passed by the ld. CIT (A) is upheld. - Decided against assessee - ITA No.362/JP/2013 - - - Dated:- 22-1-2016 - SHRI T.R.MEENA, AM SHRI LALIET KUMAR, JM For The Assessee : Shri Fazlur Rahman (Advocate) For The Revenue : Shri Kailash Mangal (JCIT) ORDER PER SHRI LALIET KUMAR, J.M. This is an appeal filed by the assessee against the order or ld. CIT (A)-III, Jaipur dated 26th November, 2012 for the A.Y. 2007-08. The assessee has raised the following grounds :- (1) The impugned addition made in the order u/s 147/143(3) dated 20.08.2010 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted. (2) ₹ 1,31,894/- : The ld. CIT (A) erred in law as well as on the facts of the case in confirming the enhancement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be done on the basis of market rate of property as on 01.04.1981 instead of rate as on 01.04.1993. The assessee had true income from capital gain amounting to ₹ 33,87,989/- as against declared capital gain of ₹ 1,30,533/-. Thus the assessed had suppressed his income by ₹ 32,57,456/- (33,87,989- 1,30,533). The AO accordingly issued notice u/s 148 of the IT Act on 03.04.2009 after recording reasons for belief that income to the extent of ₹ 32,57,456/- had escaped assessment. In compliance, the assessee filed his return of income on 29.06.2009 declaring total income of ₹ 33,91,673/- including long term capital gain of ₹ 32,56,095/-. In the meanwhile matter was transferred to ACIT Sikar as the declared income was more than ₹ 5 lacs. 4.1. In compliance to notice u/s 148, the assessee while filing return of income had adopted the value of sale consideration at ₹ 37,40,561/- in accordance with the provisions of section 50C of the Act. However, indexed cost of acquisition was adopted by the asssessee at ₹ 4,84,466/- by adopting market rate as on 01.04.1981 t ₹ 5500/- per bigha. As mentioned in the reasons recorded by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified by CBDT. Indexation was allowed only to neutralize the general inflation. It does not reflect the increase in the cost of property. AO has allowed compound appreciation of 30.6% which is more than reasonable. Hence, the cost of property as on 01.04.1981 adopted by the AO is upheld. The ground raised by the assessee is dismissed. 6. Now the assessee is before us. 6.1. The ld. A/R for the assessee furnished detailed written submission as under :- 1.1 The only dispute appears to be between the parties is what should be the Fair Market Value (FMV) on 01.04.1981 viz. @ ₹ 5500 per bigha as claimed by the appellant or ₹ 4002/65 per bigha as adopted by the ld. AO. Determination of the FMV is nothing but an estimation which has to be based on some material. The material could be in the shape of an expert opinion or comparable case/s brought by any of the party in support of their respective contentions however, such material in absence of the other logical way to make fair estimation based on comparable cases. 1.2 The ld. AO in his wisdom considered the property purchased by his father on 27.09.1965 @ ₹ 55/88 per bigha and on that basis he computed FMV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CII being published by the CBDT every year, to work out the cost of acquisition while computing LTCG, hence there appears no justifiable reason at all to reject such CII while computing LTCG even for the purposes of computing FMV as on 01.04.1981. Such a basis having the legislation sanction and notified by CBDT, is thus the best material/basis for estimation as on 1.4.1981. 2.2. The other facts are not under dispute. Thus, there appears no convincing reason from the CIT(A) to reject the basis of estimation adopted by the assessee. However, at the same time while affirming the action of the AO though he found his basis of estimation to be more than reasonable but at the same time absolutely without any basis as to what made him to found it reasonable. It is not the case of the lower authorities that this compound appreciation rate of 30.6% has got anything to do directly with the increase or decrease of the FMV of the property/real estate. Hence, the impugned addition kindly be deleted. 6.2. On the other hand, the ld. D/R for the Revenue supported the orders of the authorities below and requested that the order of ld. CIT (A) be confirmed. 6.3. We have heard rival ..... X X X X Extracts X X X X X X X X Extracts X X X X
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