captioned appeals are preferred by Revenue and cross- objections by respective assessees arising out of common order of CIT(A) dt. 9th March, 2007 pertaining to asst. yr. 1997-98. three assessees in question are co-oweners of land situated at Village Giaspura (Ludhiana). dispute in present appeals relates to manner of computation of capital gain accruing as result of sale of said land by three co-owners in year under consideration. We find it expedient to pass consolidated order since issue involved is common. Since facts and circumstances in all appeals are common, we may refer to facts in relation to case of Smt. Baljinder Kaur, ITA No. 545/Chd/2007. Briefly stated facts are that assessee sold her share of impugned land at total consideration of Rs. 71,67,000 during year under consideration. land owned by assessee was 2.16 acres. assessee declared loss of Rs. 4,69,200 on account of said sale. In computing said capital loss assessee adopted cost of acquisition of land @ Rs. 11,50,000 per acre. AO, however adopted cost of acquisition at Rs. 90,000 per acre. dispute between assessee and Revenue essentially pertains to adoption of cost of acquisition of property in order to compute capital gain/loss accruing as result of transfer of property in question. Normally capital gain is to be computed after deducting cost of acquisition of asset transferred out of net sale consideration therefor. So however, sub-cls. (i) and (ii) of s. 55(2)(b) of IT Act, 1961 (in short Act ) provide for exception to this normal rule. It is laid down that where capital asset became property of assessee or previous owner, as case may be, before 1st April, 1981, assessee has option to adopt fair market value of property as on 1st April, 1981 as cost of acquisition. In this case assessee opted for considering fair market value of land in question as on 1st April, 1981 to be cost of acquisition of property for purposes of computing capital gain. assessee adopted fair market value of land as on 1st April, 1981 @ Rs. 11.50 lacs per acre against which AO has considered rate of Rs. 90,000 per acre. Accordingly as against capital loss of Rs. 4,69,200 returned by assessee, AO computed capital gain at Rs. 63,06,756. assessee carried matter in appeal before CIT(A) and thereafter to Tribunal. Tribunal vide its order in ITA Nos. 408, 410/Chd/2000 dt. 8th Oct., 2004 restored matter to file of AO with directions. impugned order has been passed by AO in compliance to order of Tribunal. In this order AO has worked out capital gain at same amount by adopting fair market value of land as on 1st April, 1981 at Rs. 90,000 per acre. CIT(A) has since held that AO was not justified in rejecting fair market value of land @ Rs. 11.50 lacs per acre considered by assessee for computing capital gain. Against said decision Revenue is in appeal. assessee has preferred cross-objections primarily in support of order of CIT(A). In above background learned Departmental Representative submitted that AO was justified in adopting rate of Rs. 90,000 per acre as fair market value of land as on 1st April, 1981 for purposes of computing capital gain on transfer of land made during year under consideration. learned Departmental Representative has primarily placed reliance on order of AO in support of stand of Revenue. On other hand learned counsel for respondent assessee has extensively referred to paper book filed on behalf of assessee wherein are placed copies of communications to lower authorities, copy of valuation report in support of fair market value of land assessment order in case of another assessee wherein similar property has been valued at rate adopted by assessee, copy of registered sale deed in comparable instance etc. In course of hearing learned counsel has submitted that fair market value adopted @ Rs. 11.50 lacs per acre was justified on basis of material on record, for instance (1) valuation report of registered valuer dt. 5th July, 2005 copy of which has been placed in paper book at pp. 17 to 25; (2) agreement to sell dt. 6th Feb., 1981 with Shri Zora Singh whereby portion of impugned land was agreed to be sold at similar rate but ultimately was not executed; rate adopted in said agreement was Rs. 11.50 lacs per acres; and (3) assessment order in case of one Shri Kapoor Singh passed by same AO wherein similarly situated land was considered for which fair market value as on 1st April, 1981 was adopted on same basis as canvassed by assessee. On basis of aforesaid, learned counsel submitted that fair market value adopted by assessee stood supported by evidence. learned counsel explained that agreement to sell dt. 6th Feb., 1981 with Shri Zora Singh has been found to be reliable piece of evidence by Tribunal in its order dt. 8th Oct., 2004 (supra). That therefore, AO was not justified in ignoring same. learned counsel explained that rate of land adopted by registered valuer in its report was Rs. 11,80,000 per acre on basis of sale registration deed of property No. 586 dt. 24th April, 1981. That such instance has also been considered by Departmental Valuation Officer (in short DVO) while valuing property in vicinity of assesse s land in case of Shri Kapoor Singh. That valuation made by DVO in case of Shri Kapoor Singh formed basis for AO to make assessment in case of Shri Kapoor Singh copy of which has been placed i n paper book at p. 32. It was further argued that evidences on record clearly establish that fair market value of land returned by assessee as on 1st April, 1981 was justified. Explaining further learned counsel has referred to order of Tribunal dt. 8th Oct., 2004 (supra) to point out that in present case land of assessee was in advantageous position and fetched higher rate in comparison to other properties for reason that same was adjacent to factory of M/s Avon Cycles (P) Ltd., well-known concern. That ultimately said land was sold to M/s Avon Cycles (P) Ltd. since said buyer was in need of land for its expansion purposes. That therefore, in view of aforesaid evidence, fair market value of land as returned by assessee was fair and proper. We have considered rival submissions carefully. As noted earlier, in present case dispute essentially pertains to ascertainment of fair market value of land in question as on 1st April, 1981 so as to arrive at cost of acquisition for purposes of computing capital gain accruing as result of transfer of such land. Sec. 55(2)(b) allows option to assessee to adopt transfer of such land. Sec. 55(2)(b) allows option to assessee to adopt fair market value of land as on 1st April, 1981 as cost of acquisition wherein such asset became property of assessee or of previous owner before 1st day of April, 1981. There is no dispute that in principle assessee is entitled to seek option as provided in s. 55(2)(b) of Act. dispute only relates to implication of expression fair market value as appearing in said provision. said expression postulates price which capital asset would ordinarily fetch if sold in open market on relevant date. It is well settled that concept of fair market value envisages existence of hypothetical seller and hypothetical buyer in hypothetical market. Therefore, intrinsically speaking determination of fair market value of capital asset as on 1st April, 1981 would involve element of estimation based on relevant factors. In present case assessee has adopted fair market value of land on basis of two primary evidence. First is agreement to sell dt. 6th Feb., 1981 with one Shri Zora Singh. In terms of said agreement to sell , assessee had agreed to sell portion of impugned land at rate of Rs. 11.50 lacs per acre. said agreement did not materialize ultimately but was pressed into service by assessee to establish and support fair market value adopted in return of income. We find that said agreement was subject-matter of consideration of Tribunal in appeal case of assessee in order dt. 8th Oct., 2004 (supra). Tribunal has found that evidentiary value of said agreement cannot be ignored. second primary evidence is report of registered valuer dt. 5th July, 2005, copy placed at pp. 17 to 25 of paper book wherein value of land has been adopted at Rs. 11.50 lacs per acre. assessee has justified report of registered valuer by demonstrating that rate adopted is on basis of sale deed No. 586 dt. 24th April, 1981 of comparable property located at Village Dhandari Kalan in vicinity of assessee s land. It is further pointed out that comparable instance considered by registered valuer was also considered by DVO to evaluate property at Village Dhandari Kalan in case of one Shri Kapoor Singh copy of which has been placed at pp. 34 to 40 of paper book. It is further submitted that valuation of DVO dt. 17th Jan., 2005 in this regard valuing property as on 1st Jan., 1981 has since been accepted by AO in case of Shri Kapoor Singh, copy of assessment order submitted at p. 32. We find that AO in case of Shri Kapoor Singh and assessee is same. Apart from aforesaid primary evidence we also find that assessee has been successful in demonstrating that its land enjoyed advantageous position because of its location. All these evidences, which have been placed in paper book were also before lower authorities. We find that evidence l e d by assessee has not been challenged to be lacking in bona fides. Moreover, veracity of rate adopted by registered valuer cannot be doubted inasmuch as similar basis has also been adopted by DVO to value t h e similarly situated property. evidence on record in our view, clearly supports rate adopted by assessee as fair market value of land as on 1st April, 1981. In contrast, we find that stand of AO is devoid of any factual support. In fact aforesaid material and evidence has been merely disregarded by AO without pin-pointing any deficiency or their irrelevance in matter. only point made out by AO in support of value adopted by him of Rs. 90,000 per acre is instance of sale of property between 5th June, 1980 to 8th June, 1981 as ascertained from State Revenue Department. In this connection we find that in face of evidence led by assessee it was imperative for AO to make put case as to why he preferred rate stated in instances collected from revenue Department. No such discussion is discernible from order of AO. In any case when fair market value of similarly situated land in case of Shri Kapoor Singh has been accepted by AO with reference to same basis as adopted by registered valuer in this case, there was no justification for AO to reject fair market value of land at Rs. 11.50 lacs per acre returned by assessee which is considered by registered valuer. In view of aforesaid discussion, we find no error in order of CIT(A) whereby capital gain has been directed to be computed on basis of cost of acquisition based on fair market value of land @ Rs. 11.50 lacs per acre as on 1st April, 1981. As consequence, appeal of Revenue is dismissed. Since issue is common in other two appeals of Revenue, same are also dismissed. three cross-objections being merely in support of order of CIT(A) which we have upheld in earlier paras, same are hereby dismissed as infructuous. In result, three appeals of Revenue and respective cross- objections of assessee stand dismissed. *** DEPUTY COMMISSIONER OF INCOME TAX v. SMT. BALJINDER KAUR