Historical valuation and date of transfer determine capital gains, while an additional exemption claim proceeds for factual verification.

Fair market value as at 1 April 1981 is addressed for long-term capital gains computation, with valuation requiring reconciliation of inconsistent District Valuation Officer figures, comparable sales and property characteristics; a moderated value of Rs. 350 per sq. ft. is proposed. The notes treat the registered conveyance date, rather than the earlier agreement, as determining the assessment year because possession in part performance and related statutory conditions were not established; the gains therefore fall in A.Y. 2013-14. An additional exemption claim under Section 54F may be entertained at the appellate stage, but foundational facts require examination; the matter is accordingly remitted for fresh verification.

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Issues: (i) determination of the fair market value of the land as on 01.04.1981 for computing long-term capital gains; (ii) whether capital gains on one parcel of land were taxable in A.Y. 2013-14 or in the earlier assessment year based on the date of transfer; (iii) whether the claim for exemption under Section 54F could be entertained and required fresh examination.

Issue (i): determination of the fair market value of the land as on 01.04.1981 for computing long-term capital gains.

Analysis: The valuation adopted by the revenue authorities showed a material inconsistency, with the District Valuation Officer determining markedly different figures at different stages. The comparable sale instances relied upon in the valuation exercise themselves reflected a higher range than the final figure accepted by the appellate authority. In the absence of reconciliation of that inconsistency, and considering the location and characteristics of the property, the accepted valuation could not be sustained as such. At the same time, the assessee's claimed value was also found to require moderation for want of complete supporting material. On a balanced appraisal of the comparable instances and surrounding circumstances, an estimated fair market value was fixed.

Conclusion: The fair market value as on 01.04.1981 was fixed at Rs. 350 per sq. ft.; this issue was decided partly in favour of the assessee.

Issue (ii): whether capital gains on one parcel of land were taxable in A.Y. 2013-14 or in the earlier assessment year based on the date of transfer.

Analysis: The document executed on 31.12.2011 was treated only as an agreement, whereas registration took place on 30.04.2012. No material was produced to establish handing over of possession in part performance or satisfaction of the conditions necessary to attract the statutory concept of transfer prior to registration. In that evidentiary background, the registered conveyance date governed the year of taxability.

Conclusion: The capital gains were taxable in A.Y. 2013-14; this issue was decided against the assessee.

Issue (iii): whether the claim for exemption under Section 54F could be entertained and required fresh examination.

Analysis: The appellate forum accepted the legal position that an additional claim can be entertained at the appellate stage even if not allowed in the original assessment, subject to verification of the foundational facts. Since the factual requirements for the Section 54F claim had not been examined by the Assessing Officer, adjudication on merits was not possible at that stage.

Conclusion: The claim under Section 54F was permitted to be examined and the matter was restored to the Assessing Officer for fresh verification in accordance with law; this issue was decided partly in favour of the assessee.

Final Conclusion: The valuation dispute was partly resolved by substituting a higher historical cost base, the challenge to the year of taxability failed, and the exemption claim was reopened for factual verification by remand.

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