2016 (9) TMI 1289

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....Departmental Representative, submitted that the only issue arises for consideration is determination fair market value as on 01.04.1981. According to the Ld. D.R., the assessee purchased a house property at Door No.47, Sarangapani Street, T. Nagar, Chennai, for a total consideration of Rs. 1,67,000/- on 23.01.1976. While computing the capital gain, the assessee computed the index cost of acquisition at Rs. 1,20,03,750/- by adopting the fair market value of the land and building as on 01.04.1981 at Rs. 20,62,500/-. According to the Ld. D.R., the assessee was placing reliance on the construction agreement said to be entered into with Shri Gopal Achari on 23.02.1983. The Assessing Officer found that the guideline value of the property as on 01....

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....the market value will be very limited as compared to the value adopted by the assessee. According to the Ld. D.R., the Assessing Officer has also found that the assessee has not valued the building separately. The assessee also did not accept the value of land and building. However, according to the Ld. D.R., the assessee adopted the market value at Rs. 7,50,000/- per ground as on 01.04.1981. The CIT(Appeals), however, found that the remains of the building when demolished would have fetched Rs. 15 lakhs in the year 1982 and the assessee has adopted only 46% of Rs. 15 lakhs and this was reasonable. Therefore, according to the Ld. D.R., the CIT(Appeals) accepted the fair market value adopted by the assessee as on 01.04.1981. According to the....

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....d have fetched Rs. 15 lakhs in the year 1982. When the remains of the building would have fetched Rs. 15 lakhs, the Assessing Officer, should take entire Rs. 15 lakhs as market value. In fact, according to the Ld. counsel, the assessee is claiming 46% of Rs. 15 lakhs, which was found to be reasonable. The value of the building has to be determined on the basis of market value and not after reducing the depreciation. According to the Ld. counsel, what is required to determine is market value as on 01.04.1981 and not the book value. 7. We have considered the rival submissions on either side and perused the relevant material available on record. The only issue arises for consideration is estimation of fair market value as on 01.04.1981. For t....