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TMI Blog2016 (10) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... /- per acre as against Rs. 6,000/- per acre claimed by the assessee. 3. The brief facts of the case are that the assessee in his computation has taken the FMV of land as on 01.04.1981 as Rs. 6,000/- per acre on the basis of a valuation report obtained from a Chartered Engineer. During the course of assessment proceedings, the AO made a reference to the Sub-Registrar at Melur, Tuticorin. As per the information received from the sub registrar vide his letter dated 22.2.2013, the value of the property as on 01.04.1981 was Rs. 3,000/- per cent. The AO in view of the information received, substituted the FMV as on 01.04.1981 filed by the assessee at Rs. 6,000/- per acre, to Rs. 3,000/- per acre. Aggrieved with the order of AO, the assessee carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the AO had denied the claim of the assessee for deduction of Rs. 1,06,76905/- as deduction in the computation of long term capital gains. The AO has denied the claim of deduction by assessee on the ground of following reasons. a) The impugned capital asset was settled by the grandmother (Smt.Susila Ammal) of the assessee in his favour vide Settlement Deed dated 14.07.2004. In the Settlement Deed there was no narration of the pre-existing change/mortage in the capital asset. b) The loan liability was related to a partnership firm M/s.S.Albert & Co., taken for the business purposes of the aforesaid firm. The assessee's grandmother Smt.Susila Ammal was one of the partner's of the firm. This partnership firm was later on incorporated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquidate the loan as per the Memo of compromise. The Bankers had given a possession notice on 04.12.2005, following which the Company got its act together, and entered into the Memo of Compromise. It is seen from the schedule of payments furnished by the appellant that the first payment for liquidation loan was made in April, 2007, and the last on February 2010. (4) The appellant has failed to controvert the finding in the assessment order that the sales consideration was not utilized to clear the loan liability. (5) In any case, appellant's grandmother was just a guarantor. The primary responsibility for the loan stands on the borrower, i.e. the Company that had taken over the firm. The charge of the bank was on the company, and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der and neither the assessee nor the assessee's grandmother who settled the property in favour of the assessee, is borrower nor a party to the suit, the mortgage debt cannot be considered as a cost of acquisition of property so as to give deduction while computing the capital gains from the transfer of the property. If the consideration of sale of property apportioned towards the outstanding debt in bank, the assessee is having very well right to claim from the borrower of the bank whose debt was settled. In view of this we do not find any infirmity in the order of the Ld.CIT(A). The same is confirmed.
8. In the result, the appeal of the Assessee is dismissed.
Order pronounced on 26th October, 2016, at Chennai. X X X X Extracts X X X X X X X X Extracts X X X X
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