Difference upto 10% in the stamp duty value and sales consideration is allowable :-Hon’ble ITAT Jaipur

12 Feb Difference upto 10% in the stamp duty value and sales consideration is allowable :-Hon’ble ITAT Jaipur

SITA BAI KHETAN VERSUS INCOME-TAX OFFICER No.- I. T. A. No. 826/JP/2013

Computation of capital gain – Adoption of value – Held that:- In the instant case, the difference between the valuation adopted by the Stamp Valuation Authority and declared by the assessee is less than 10 per cent. Therefore, we hereby direct the Assessing Officer to adopt the value as declared by the assessee. This ground of the assessee is allowed.

Disallowance of indexation on the amount paid for acquiring possession of strip of land for computing the long-term capital gain – Held that:- The assessee is claiming to be the owner of the land even prior to the allotment made by the concerned authority, thus the assessee is claiming indexation since April 1, 1981. On a pointed query, the assessee could not produce any material suggesting that the ownership of the land in question was transferred to the assessee prior to the date when the land was allotted to the assessee. Even in respect of the Theory of Adverse Possession, the assessee has not placed any material on record that the assessee was declared owner by virtue of theory of adverse possession. In our considered view, for claiming to be the owner of the land, the assessee was required to produce necessary evidences. In the absence of evidence, when contrary evidences are on record, we do not see any reason to interfere with the orders of the authorities below – Decided against assessee

Not taking the fair market value of the asset as on April 1, 1981 as cost of acquisition under section 55(2) – Held that:- The Assessing Officer has adopted the value at indexed cost of acquisition as on April 1, 1981 at ₹ 4,31,940 and in respect of the strip of land, adopted the indexation cost of acquisition at ₹ 13,97,120. So far as the indexed cost of acquisition with regard to the strip of land is concerned, in ground No. 3, we have already decided the matter against the assessee. Therefore, we are not inclined to interfere with the finding of the learned Commissioner of Income-tax (Appeals) on this issue. The submission of the assessee is rejected.

Fair market value ought to have adopted at ₹ 110 per sq. yard for other portions of land – Held that:- We find force in the contention of the learned counsel for the assessee that fair market value of the property is to be adopted on the basis of comparable sale instances. Therefore, we hereby direct the Assessing Officer to re-compute the cost of acquisition on the basis after ascertaining the fair market value of the property with reference to April 1, 1981 excluding the strip of land which was purchased in the year 2008. This ground of the appeal of the assessee is allowed for statistical purposes.