R ROSALIN VASANTHI,SALEM vs. ITO,, SALEM

We heard the rival submissions and gone through the relevant material. The impugned property was an ancestral property of Shri. S.A.

Thomas Caminus through a registered will during 1979. On 29.01.1995, Mr. Thomas Caminus executed a will in favour of his three brothers. The property consisted of land measuring 9234 sq.ft. and a building thereon which was received by the assessee (Mrs. A. Sundaramma), her daughter (Mrs. R. Rosalin Vasanthi) and assessee’s son having 30% share in 1/3th share of land and building at Pollachi through a will dated 14.07.2001 executed by her husband Shri. A. Royappan. This property was sold on 13.10.2004 for Rs. 1,05,00,000/- and hence the respective assessees’ admitted their share as capital gains. While computing the capital gains, the assessees’ have adopted Rs. 231.50 per sq.ft. as the value of the property as on 01.04.1981 and worked out the indexed cost of acquisition. When the AO proposed to assessee the value of the land adopting the value shown by the registration authority and adopt the :-5-: & 3242/Chny/2018 value of the super structure as per the valuation officer’s report, the assessee submitted that the impugned property was given on rent for Rs. 4,000/- per month with a rental advance of Rs. 2,00,000/- and therefore, it is proper to adopt the value on rent capitalisation method as per the provisions of the Wealth Tax Act. However, the AO did not agree with assessees’ plea and proceeded to compute the capital gains based on the value shown by the stamp authorities and the valuation officer. Before us, the assessee pleads that the guideline value does not reflect the market value and by the time the valuation officer went for inspection, the property was already demolished and hence the valuation made by him cannot be considered as a scientific one. On these facts and circumstances of the case, wefind merit in the submissions of the assessee. The existence of rental agreement, the receipt of rent and rental advance is not disputed. Therefore, we are of the view that the value of the land and building should be determined on the basis of rent capitalisation method. The assessee has quantified the value at Rs. 8,28,750/-, which may be rounded off to Rs. 10 lakhs. Therefore, we direct the AO to adopt Rs. 10 lakhs towards the cost of acquisition for the land and building as on 01.04.1981 and proceed to determine the cost of indexation accordingly, for the determination of capital gains in the respective assessee’s hand. Corresponding grounds of the above assessee’s are allowed to the above extent.

In the result, each of the assessee’ s appeal is treated as partly allowed.