Tribunal allows appeals, rejects valuation method, directs Fair Market Value. Reexamination of deduction claim ordered.

The Tribunal condoned the delay in filing appeals due to personal inconveniences. Regarding the computation of capital gains on the sale of a plot, the Tribunal disagreed with the AO's valuation method based on DLC rates and directed the adoption of Fair Market Value determined by a registered valuer. The Tribunal also allowed one assessee's appeal for statistical purposes and directed the AO to reexamine the deduction claim under section 54 of the Act for the other assessee based on supporting evidence provided.

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Issues:
1. Delay in filing appeals before the Tribunal.
2. Adoption of market value as on 01-04-1981 for computing capital gains on the sale of a plot.
3. Claim for deduction under section 54 of the Act.

Analysis:
1. Delay in Filing Appeals:
Both appeals were initially barred by a 93-day limitation, but the delay was condoned by the Tribunal upon the assessee's explanation citing personal inconveniences, leading to the admission of the appeals.

2. Adoption of Market Value for Capital Gains:
The key issue in both appeals revolved around the adoption of market value as on 01-04-1981 for computing capital gains on the sale of a residential plot co-owned by the assessees. The Assessing Officer (AO) determined the sale consideration based on the DLC value, leading to a dispute regarding the Fair Market Value (FMV) as on the specified date. The AO's estimation of FMV was contested by the assessees, who argued for a value determined by a registered valuer.

The Commissioner of Income Tax (Appeals) upheld the AO's decision, considering the increase in DLC rates from 1983 to 1987 to determine the FMV as on 01-04-1981. However, the Tribunal disagreed with this approach, stating that the increase in plot value is usually higher due to development activities, and preferred the discounting factor used by the registered valuer to arrive at the FMV. Consequently, the Tribunal directed the AO to recompute the Long Term Capital Gain (LTCG) by adopting the FMV as on 01-04-1981 at Rs.42 per sq. Ft, setting aside the CIT(A)'s orders.

3. Claim for Deduction under Section 54:
In the case of one of the assessees, a ground was raised regarding the claim for deduction under section 54 of the Act. The claim was not initially made in the return of income but was raised before the CIT(A) without supporting documentary evidence. The CIT(A) dismissed the claim due to lack of evidence. The Tribunal allowed the assessee an opportunity to produce necessary documents to support the claim, directing the AO to reexamine the claim based on the evidence provided.

In conclusion, the appeal of one assessee was allowed for statistical purposes, and the other assessee's appeal was allowed, with specific directions regarding the deduction claim under section 54 of the Act.

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