2026 (8) TMI 1652

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssment Year 2016-17. 2. The assessee has raised following grounds of appeal:- "I. ALLEGED EXCESS ALLOWANCE OF COST OF ACQUSITION Rs. 5,42,537/- 1. The Ld. CIT (A) has erred in law and on facts in confirming the disallowance of Rs. 5,42,537/- merely on surmises and conjectures by making an observation that in the present case, it is an undisputed fact that out of the total land measuring 8,919 sq. meters, only 5,351 sq. meters were transferred during the year. 2. The Ld. CIT(A) and Ld. AO failed to appreciate that the appellant, along with two other co-owners (each holding a 1/3rd share), jointly purchased agricultural land at Kathwada, admeasuring 8,919 sq. meters, on 05.07.2010 for a consideration of Rs. 26,76....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 64,48,840/-. Subsequently, the Assessing Officer issued a notice u/s 154 of the Act dated 16.03.2021 on the ground that there was a mistake apparent from the record in the computation of long-term capital gains. According to the Assessing Officer, while completing the assessment under section 143(3), indexed cost of acquisition had been allowed at Rs. 13,56,191/- instead of Rs. 8,13,653/-. The Assessing Officer observed that although the assessee had originally purchased land admeasuring 8,919 sq. metres, only 5,351 sq. metres had been transferred during the relevant previous year and, therefore, indexed cost of acquisition was allowable only proportionately. Accordingly, by passing an order under section 154 dated 24.03.2021, the Assessin....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....year out of the total land originally purchased measuring 8,919 sq. metres. According to the Ld. CIT(A), the Assessing Officer had correctly restricted the indexed cost of acquisition proportionately to the land transferred and accordingly confirmed the rectification made under section 154 of the Act. 6. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 7. Before us, the Ld. AR submitted that the authorities below have failed to appreciate the factual background relating to conversion of agricultural land into non-agricultural land. The Ld. AR reiterated the submissions made before the lower authorities and submitted that the surrender of land to AUDA was a statutory consequence of conversion....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....er has proceeded on the assumption that only a portion of the original land had been transferred and, therefore, indexed cost of acquisition was allowable only proportionately. Therefore, in our considered opinion, the aforesaid controversy cannot be characterised as a mistake apparent from the record. The issue necessarily requires examination of the conversion order issued by AUDA, the legal consequences flowing from compulsory surrender of land under the development regulations, and the correct principles governing computation of cost of acquisition under the provisions of the Act. 9.1 We also find force in the contention of the assessee that the Assessing Officer proceeded on the premise that the assessee continued to hold the balanc....