Long Term Capital gain

Land was sold in july 2007 It was inherited in 1952 from his father. Fair Market Value as on 1/1/81 per acre was taken as Rs 2 Lacs and accordingly paid taxes. Assessing officer calculated at Rs5000 per acre as FMV on1/4/81 based on a letter obtained from State Government which gives only FMV as on 1/4/85 stating that earlier records are not available.AO decided the FMV on 1/4/81 on reversal method ie if as on 1/4/85 is so much hence on 1/4/81 was this much.

The assessee adopted the FMV based on a letter issued by Village Officer.

The assessee sold the land for Rs15 lacs per acre for which sale document is readily available. Why not AO Adopt FMV as on 1/4/81 based this document Value.

Is there any case laws. Please cite the same.

Anandan

dear all,

Dear all,

As per your information-

As per income tax act. 1961- & section 48, income charge under the capital gain total concideration received less cost of acquisition, improvement.

under section 49 if capital assets became the property of the assessee by succession, inheritance or devolution then value of property or capital assets, the cost of acquisition of the assets shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets owner of the property incurred or borne by the previous owner or the assessee, as the case may be.

Under section 50C, special provision for full value of consideration , where the consideration received by an assessee of a capital assets, being land or building or both is less than the value adopted or assessable by any authority of the state government ( stamp value) for the purpose of stamp duty payment than the assessee taken that value for computing the capital gain.