Capital gains computation follows the statutory valuation date under the Income-tax Act, not later asset notification.

For capital gains computation, the cost of acquisition was to be determined under the statutory scheme in Sections 45, 48 and 55(2)(b) of the Income-tax Act, so the relevant base date was 1.4.1981 and not 6.1.1994, when the asset was later notified as a capital asset; the assessee's contrary contention was rejected. The Tribunal also did not err in rejecting the expert valuation report, as no reference for such valuation had been sought before the lower authorities and the objection was raised only at the appellate stage. No substantial question of law arose, and the appeal failed.

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Issues: (i) Whether, for computation of capital gains, the cost of acquisition/fair market value of the property had to be taken as on 6.1.1994, the date on which the asset was notified as a capital asset, or as on 1.4.1981 under Section 55(2)(b) of the Income-tax Act, 1961; (ii) Whether the Tribunal erred in rejecting the valuation report of the expert.

Issue (i): Whether, for computation of capital gains, the cost of acquisition/fair market value of the property had to be taken as on 6.1.1994, the date on which the asset was notified as a capital asset, or as on 1.4.1981 under Section 55(2)(b) of the Income-tax Act, 1961.

Analysis: The charging provision under Section 45 of the Income-tax Act, 1961 operates with the computation mechanism in Sections 48 and 55(2). The statutory scheme fixes the relevant base for determining cost of acquisition in the manner prescribed by Section 55(2)(b), and the fact that the property was notified as a capital asset only on 6.1.1994 did not alter that computation. The property had been held long prior to 1.4.1981, and the contention that valuation should be pegged to the date of notification was rejected as contrary to the statutory language and binding precedent.

Conclusion: The relevant date for computation was 1.4.1981, not 6.1.1994, and the assessee's contention was rejected.

Issue (ii): Whether the Tribunal erred in rejecting the valuation report of the expert.

Analysis: No reference for such valuation was sought either before the first appellate authority or before the Tribunal, and the objection was raised only at the appellate stage. The Tribunal considered the contention and rejected it.

Conclusion: The Tribunal committed no error in rejecting the expert valuation report.

Final Conclusion: No substantial question of law arose for consideration, and the appeal failed.

Ratio Decidendi: For capital gains computation, the cost of acquisition is determined under the statutory computation provisions and is not fixed by the date on which the asset is later notified as a capital asset; a belated challenge to valuation that was not pursued before the lower authorities does not give rise to a substantial question of law.

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