TMI Blog2020 (2) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion of the expert, and contrary to this nothing has been collected by the Revenue. There is no justification to reject this study merely under the reasoning that a single instance which is little closure to the date of transaction is to be taken into consideration. To our mind, this approach is not justifiable hence we set aside the finding of the Revenue authorities on this issue, and direct the AO to compute capital gain by adopting the land rate of ₹ 150 per sq.meter as on 1.4.1981. He would thereafter give benefit of indexation on the alleged value of ₹ 8,24,000/-. Enhancment of the acquisition cost - Addition of ₹ 20 lakhs as assessee has given this piece of land on rent to PPP - AO has not justified in rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 10-1-2020 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER Assessee by: Shri Karan Shah, AR Revenue by: Shri Deelip Kumar, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER : Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-6, Ahmedabad dated 20.4.2017 passed for the Asstt.Year 2011-12. 2. Revenue has taken four grounds of appeal which are not in consonance with the Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1963 - they are descriptive and argumentative in nature. However, prayer clause at the end of appeal exhibiting grievance of the assessee, reads as under: 1. The addition on account of reducing the cost of acquisition FMV as on 01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstructed a shed on the said land, and in order to get vacant possession, the assessee had to pay a sum of ₹ 20 lakhs to PPP . The ld.AO while considering the above details observed that nearest date in the sale instances was 17.10.1980. In other words, this sale instance was of ₹ 95 per sq.meter and closure to 1.4.1981. Thus, ignoring the report of registered valuer, the ld.AO adopted the purchase value of the land as on 1.4.1981 at ₹ 95/- per sq. meter. He calculated the fair market value at ₹ 5,21,835/-, and after giving indexation benefit worked out value at ₹ 37,10,246/- as against ₹ 58,58,640/-. In other words, FMV prior to indexation was worked out by the assessee at ₹ 8,24,000/- (₹ 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or more. It has very good development potential. Frontage on road is more compared to its depth. It is leveled plot. Amenities such as water supply, electrical connection already exists. Such a large plot is not easily available in the vicinity. Whole plot abuts road on its North and East side. Hence it is possible to have separate exit and entry points for material and product handling which is very crucial for a industrial unit. Also separate entrance can be possible for workers and visitors to maintain secrecy of the product/process. Also plot can be sub divided if required and most of sub divisions can have direct entry from road. LAYOUT PLAN SHOWING PROPERTY AND PROPERTY OF COMPARATIVE SALE I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and direct the AO to compute capital gain by adopting the land rate of ₹ 150 per sq.meter as on 1.4.1981. He would thereafter give benefit of indexation on the alleged value of ₹ 8,24,000/-. 6. As far as addition of ₹ 20 lakhs is concerned, it is pertinent to observe that section 48 of the Income Tax Act contemplates that income chargeable under the head capital gain shall be computed by deducting from the value of consideration received or accruing as a result of the transfer, the amounts, viz. (i) expenditure incurred wholly and exclusively in connection with such transfer, and (ii) the cost of acquisition asset and the cost of any improvement thereto. The assessee has given this piece of land on rent to PPP . The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manipulation of this small amount, when such huge sale consideration is available. Modus operandi at the end of the assessee could be construed, had there been a bigger allocation made by the assessee for reducing the tax liability. All these factors are to be weighed while appreciating the stand of the assessee vis- -vis reasoning given by the AO. He has not given any concrete reasons, rather simply disbelieved the version of the assessee. Therefore, we do not find force in the reasoning of the AO. We direct the AO to delete the addition of alleged ₹ 20 lakhs, and consider this amount as improvement cost of the capital asset whose sale has given rise to the capital gain. 8. In the result, appeal of the assessee is allowed. Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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