2013 (7) TMI 689

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....e valuation officer and other supporting evidences." 2. The facts of the case, in brief, are that the assessee had shown Long Term Capital Gain of Rs.15,02,650/- on sale of land at Shastri Nagar, Jodhpur. The said land was purchased before 01/04/1981, therefore, the assessee opted the valuation as on 01/04/1981 on the basis of report of Shri O. P. Srimali, Approved Valuer, who valued the land as on 01/04/1981 @228/- per sq. ft. The Assessing Officer referred the matter to the DVO who determined the value @Rs.36.42 per sq. ft. The Assessing Officer adopted the said value and determined the Long Term Capital Gain at Rs.75,27,253/-. 3. The assessee carried the matter to the learned CIT(A) who deleted the addition by following the decision of....

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....FMV of the building consisting of basement, ground floor and first floor, has arrived at a depreciated cost of the Building as on 1.4.1981 of Rs.20,04,207/-, which has also been accepted by the AO. Thus, the then cost of construction has been accepted, as given by the Registered Valuer at Rs.34,63,809/-. From this figure only the Registered Valuer (RV) has arrived at the cost of Rs.20,04,207/- as on 1.4.81 and this has been accepted since the building had been demolished by the purchaser by the time the DVO reached the spot. Thus, as per RV the cost of the land comes to Rs.3,66,36,191/-, at the time of its sale. The registered valuer has adopted the decrease in land rate @7 ½% per annum per square foot and has arrived at its FMV as o....

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....4% of the total value. The value of land as on 1.4.1981 has been claimed by the assessee at Rs.20,04,207/- but the value of the land has been taken at Rs.1,20,000/- as against claimed at Rs.44,25,600/- by the assessee. Admittedly, as per the DVO's report no DLC rate was available as on 1.4.1981. The report of the RV is supported by the backward indexation computed on the basis of cost inflation index. This method of 'Cost-Inflation Index' was introduced for the computation of the capital gains liable to tax. For this purpose reference can be made to CBDT's circular No. 636 dated 31.08.1992. As a measure to offset the effect of inflation, all appreciation in value of capital assets before 1.4.1974 were excluded from tax. The cut-off date was....

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....f applied backward, will result in maximum amount of capital gains liable to tax at 25% of the full scale consideration. In other words, one can calculate the taxable capital gains on the basis of above statutory formula as under :- Sale consideration Rs. 4,01,00,000/- Less: 25% which is deducted while Preparing notified cost inflation index Rs. 1,00,25,000/- Amount equivalent to 582 of cost index Rs. 3,00,75,000/- If 582 of CII is = Rs. 3,00,75,000/- Then for 100 it will be Rs. 3,00,75,000 x 100 = 51,67,525/- 582 This figure is equivalent to cost index figure of 100 as on 1.4.1981. The fair market value as on 1.4.1981 will have to be further increased by 25% as below:- 51,67,525 x 125 = 64,59,407/- 100 Thus, Rs. 64,59,407/- is....