LATE SH. SATINDER SINGH THROUGH LEGAL HEIR SMT. SURINDER KAUR,MOHALI vs. ITO, WARD-3(5), CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.115/CHANDI/2023 (िनधा�रण वष� / Assessment Year: 2012-13) Late Sh. Satinder Singh through ITO Ward – 3 (5) Legal Heir Smt. Surinder Kaur Aaykar Bhawan बनाम/ Vs. VPO – Gazipur Jattan, Dhakoli Sector – 17E Zirakpur, Distt. Mohali Chandigarh Punjab – 140603 �ायीलेखासं./जीआइआरसं./PAN/GIR No. DJBPS-7274-H (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Jaspal Sharma (Advocate) – Ld. AR ��थ�कीओरसे/Respondent by : Sh. Ranjit Kaur (Addl. CIT) - Ld. Sr. DR (Virtual) सुनवाईकीतारीख/Date of Hearing : 20-05-2026 घोषणाकीतारीख /Date of Pronouncement : 02-06-2026 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A) dated 19.01.2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) r.w.s. 147 of the Act on 10.12.2019. In this appeal, the sole grievance of the

assessee is assessment of Long-Term Capital Gain (LTCG) for Rs.194.09 Lacs. 2. The Ld. AR advanced arguments on cost of acquisition and pleaded for fair estimation of the same considering the facts of the case. The Ld. Sr. DR supported the orders of lower authorities. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. The deceased assessee is represented by his legal heir Smt. Surinder Kaur in whose name assessment has been framed by Ld. AO. 3. The case of deceased assessee was reopened and a notice u/s 148 was issued on 25.03.2019 to explain the cash deposits in the bank account and to verify the payment of Rs.150 Lacs as made to one Shri Vishnu Goyal. In response to notice u/s 148, the legal heir filed return of income declaring income of Rs.4.35 Lacs and agricultural income of Rs.5 Lacs. It transpired that the assessee sold parcel of land, which was situated at Ghazipur, Tehsil Dear Bassi for consideration of Rs.347.65 Lacs. The assessee computed indexed cost of Rs.251.10 Lacs besides cost of improvement for Rs.8.36 Lacs. The LTCG was computed at Rs.88.17 Lacs against which the assessee claimed full exemption u/s 54B. While computing cost, the assessee adopted base value as on 01.04.1981 @Rs.11.50 Lacs per acre or Rs.2,41,200/- per Bigha. The same was on the basis of a certificate issued by revenue authority i.e., Patwari. The cost of improvement was claimed for fencing levelling etc. The Ld. AO questioned the cost of acquisition so adopted and proposed a rate of Rs.37,500/- per Bigha. The same was on the

basis of report of Joint Sub-Registrar called for by Ld. AO u/s 133(6) wherein the average rate of land sold during the period 01.04.1981 to 31.03.1982 was mentioned as Rs.5,040/- per Bigha. The assessee opposed the same on the ground that while acquiring the agricultural land in the same district, Punjab Government paid compensation @Rs.37.68 Lacs per Bigha in the year 2007-08 which was much more than the rate as claimed by the assessee. However, Ld. AO rejected the same on the ground that the land was acquired in 2007-08 and the same could not be a benchmark to determine the land cost in the year 1981-82. Finally, Ld. AO adopted rate of Rs.37,500/- per Bigha and recomputed the indexed cost at Rs.39.04 Lacs which yielded LTCG of Rs.308.60 Lacs. The cost of improvement was denied to the assessee for want of evidences. The assessee made investment of Rs.114.51 Lacs towards purchase of land on 23.04.2013, the deduction of which was allowed in full u/s 54B. Finally, the LTCG was worked out at Rs.194.09 Lacs and added to the income of the assessee. 4. During first appeal, the assessee, inter-alia, contended that the rate of Rs.37,500/- per Bigha was superficial estimation without there being any basis. The claim was rejected by Ld. AO merely on the ground that the cost and improvement charges were found to be abnormally high. The assessee relied on Patwari Certificate and contended that he was a revenue authority duly recognized by the revenue department who had issued certificate after satisfying himself about the value of the land. The said report could not be denied without any adverse findings. The report of sub-registrar was on the basis of

stamp duty value only without considering other criteria affecting fair market rate i.e., the situation of land, its fertility rate, water availability, connectivity to the road, approach road etc. However, Ld. CIT(A) endorsed the findings of Ld. AO against which the assessee is in further appeal before us. 5. From the facts, it clearly emerges that the assessee’s cost is based on certification of revenue authority whereas AO’s cost is based on average rates as intimated by Sub-Registrar. We find that as per statutory provisions governing cost of acquisition, the whole emphasis is on fair market value (FMV) as on 01.04.1981 which may be more or less than the stamp duty value. Moreover, the FMV of particular piece of land would depend on variety of factors such as location, water availability, approach rate, fertility rate of the land etc. which are certainly to be factored in while determining the fair market value of land. In our considered opinion, adoption of average rate as intimated by Sub-registrar was not correct approach. On the other hand, the assessee has also not furnished any valuation nor substantiated the correct FMV of the land but merely relied on certificate of Patwari. On these facts, with a view to put an end to litigation, we have no option but to estimate the FMV as on 01.04.1981. Considering the facts and circumstances of the case as well as keeping in mind the compensation rate awarded by the State Government in 2007-08, we direct Ld. AO to recalculate LTCG after accepting 80% of indexed cost as worked out by the assessee in its computation. In other words, indexed cost of acquisition has to be adopted to the extent of 80% of

Rs.2,59,47,069/- which comes to Rs.2,07,57,655/-. The cost of improvement has rightly been denied for want of cogent evidences from the assessee. On the remaining LTCG of Rs.1,40,07,345/-, deduction u/s 54B would be available to the assessee. The Ld. AR has contended that the actual amount of investment as made by the assessee is Rs.1,41,90,198/- which is tabulated on Page No.27 of the paper-book. The Ld. AO is directed to verify the same and grant correct deduction u/s 54B. No other ground has been urged by Ld. AR before us. 6. The appeal stands partly allowed. Order pronounced on 02nd June, 2026.

-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 02-06-2026 AS आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

ASSISTANT REGISTRAR

ITAT CHANDIGARH