Tribunal allows appeal, grants relief on interest, upholds jurisdiction for additional claims, dismisses appeal on capital gain computation.

The Tribunal partially allowed the appeal for statistical purposes, permitting the deduction on account of indexed cost of acquisition and directing the Assessing Officer to decide on the matter's merit. The issues concerning the levy of interest under sections 234B & 234C were addressed, with relief directed to the assessee. The Tribunal upheld the jurisdiction of appellate authorities to consider additional claims and dismissed the appeal on the computation of long term capital gain based on fair market value.

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Issues Involved:
1. Computation of long term capital gain based on fair market value.
2. Denial of deduction on account of indexed cost of acquisition.
3. Validity of additional claim for deduction without filing a revised return.
4. Jurisdiction of appellate authorities to consider additional claims.
5. Levy of interest under sections 234B and 234C of the Income Tax Act.

Analysis:

Issue 1: Computation of long term capital gain based on fair market value
The appeal was against the order of the Assessing Officer (AO) computing the long term capital gain at a higher value than declared by the assessee. The AO relied on the valuation report by the Departmental Valuation Officer (DVO), which assessed the fair market value of the property at a higher amount than the sale consideration declared by the assessee. The Commissioner of Income Tax (Appeals) upheld the AO's decision, citing section 50-C of the Income Tax Act as mandatory for determining the sale consideration. The Tribunal dismissed the appeal regarding this issue.

Issue 2: Denial of deduction on account of indexed cost of acquisition
The assessee claimed a deduction on account of indexed cost of acquisition based on the fair market value of the property as on 1-4-1981. However, this claim was not entertained by the AO as it was not made through a revised return. The CIT(A) upheld this decision, referring to a Supreme Court judgment. The Tribunal, after hearing arguments, decided to entertain the claim and directed the AO to decide the matter on merit after giving the assessee an opportunity to be heard.

Issue 3: Validity of additional claim for deduction without filing a revised return
The assessee raised the issue of the claim for deduction not being entertained due to not filing a revised return. The Tribunal referred to a Bombay High Court judgment, stating that appellate authorities have the jurisdiction to consider additional claims made for the first time before them. The Tribunal entertained the claim for deduction on account of indexed cost of acquisition based on fair market value as on 1-4-1981.

Issue 4: Jurisdiction of appellate authorities to consider additional claims
The Tribunal affirmed the jurisdiction of appellate authorities to consider additional claims, as established by the Bombay High Court judgment. The Tribunal entertained the claim for deduction on account of indexed cost of acquisition based on the fair market value as on 1-4-1981.

Issue 5: Levy of interest under sections 234B and 234C of the Income Tax Act
The issues raised in ground No. 7 & 8 regarding the levy of interest under sections 234B & 234C of the Income Tax Act were deemed consequential. The AO was directed to allow consequential relief to the assessee.

In conclusion, the Tribunal partially allowed the appeal for statistical purposes, entertaining the claim for deduction on account of indexed cost of acquisition and directing the AO to decide the matter on merit. The issues regarding the levy of interest under sections 234B & 234C were addressed, and relief was directed to be provided to the assessee.

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