Rajan Madhukar Patil, Pune V. Income-tax Officer,

ITA 117/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88831 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: PRAKASH J APTE
• Keywords: Opportunity of being heard; Additional evidence; Cost of acquisition; Valuation report; Benefit of exemption; Ignorance of law
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 117/PN/2014 (ASSESSMENT YEAR : 2008-09) RAJAN MADHUKAR PATIL, KRUPA BUNGALOW, 28, NAV RAJASTHAN SOCIETY, SENAPATI BAPAT ROAD, PUNE 411006 PAN NO. AARPP6107C .. APPELLANT VS. ITO, WARD-7(4), PUNE .. RESPONDENT ASSESSEE BY : SHRI PRAKASH J. APTE REVENUE BY : SHRI RAJESH DAMOR DATE OF HEARING : 12-01-2015 DATE OF PRONOUNCEMENT : 29-01-2015 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 12-11-2013 OF THE CIT(A)-III, PUNE RELATING T O ASSESSMENT YEAR 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND EMPLOYED WITH TIBCO SOFTWARE INDIA PVT. LTD. H E FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.16,70 ,317/-. THE INCOME OF THE ASSESSEE CONSISTS OF SALARY, INCOME F ROM HOUSE PROPERTY AND NIL CAPITAL GAIN. DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE AO OBSERVED FROM THE DETAILS FURNIS HED BY THE ASSESSEE FROM TIME TO TIME THAT THE ASSESSEE HAS SO LD THE HOUSE 2 PROPERTY AT 6 MOTI SAGAR, 377, KELSUSKAR ROAD, SOUT H SHIVAJI PARK, DADAR, WEST MUMBA-48. THE SAID PROPERTY WAS SOLD ON 14-08-2007 FOR A CONSIDERATION OF RS.1,24,00,000/-. IT WAS CL AIMED THAT THE HOUSE PROPERTY WAS PURCHASED FOR A CONSIDERATION OF RS.45,000/- IN THE YEAR 1978. AFTER DEDUCTING THE INDEXED COST OF ACQUISITION AT RS.2,47,950/-, THE TOTAL CAPITAL GAIN WAS DETERMINE D AT RS.1,21,52,050/-. THE ASSESSEE IN THE COMPUTATION OF STATEMENT CLAIMED THE ABOVE CAPITAL GAIN AS EXEMPT ON ACCOUNT OF INVESTMENT IN 3 RESIDENTIAL FLATS IN PUNE, THE DETAILS OF WHICH A RE AS UNDER : ADDRESS AGREEMENT VALUE (RS.) STAMP DUTY (RS.) REGISTRATION CHARGES (RS.) CAR PARKING (RS.) TOTAL (RS.) A. FLAT NO. 304, 3 RD FLOOR WING A BEVERLY HILL, BANER 30,03,025/- 1,32,780/- 30,000/- 1,50,000/- 33,15,805/- B. FLAT NO. 1012 10 TH FLOOR WING B GOLD COAST, PASHAN, PUNE 45,23,950/- 2,08,800/- 30,000/- -- 47,62,750/- C. FLAT NO. 1006 10 TH FLOOR WING B GOLD COAST, PASHAN, PUNE 40,46, 100/- 1,84,930/- 30.000/- 1, 50,000/- 44,11,030/- TOTAL 1,24,89,585/ - 3. THE ASSESSEE SUBMITTED THE RECEIPT FROM THE GOLD COAST COOPERATIVE HOUSING SOCIETY IN RESPECT OF MAINTENAN CE CHARGES FOR BOTH THE FLATS, I.E. 1006 AND 1012 AS WELL AS THE P HOTOGRAPHS OF THE ENTRANCE DOOR TO THE FLATS FOR THE PROPOSITION THAT BOTH THE FLATS ARE ONE UNIT OR A SINGLE APARTMENT HAVING ONLY ONE ENTR ANCE. HOWEVER, THE AO REJECTED THE CONTENTION OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE HAS MADE INVESTMENT IN 3 FLATS WHICH ARE D ULY SUPPORTED BY 3 PURCHASE DEEDS ON 17-07-2007 AND THE ASSESSEE WAS PAYING MUNICIPAL TAX, WATER TAX AND ELECTRICITY CHARGES SE PARATELY FOR EACH OF 3 THE FLATS. RELYING ON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF SUSHILA M. JHAVERI REPORTED IN 107 ITD 327 THE AO HELD THAT ASSESSEE IS ENTITLED TO DEDUCTION U/S.54 IN RESPECT OF ONLY 1 FLAT. SINCE IN THE INSTANT CASE FLAT NO.101 2 IN GOLD COAST SOCIETY, PASHAN, PUNE IS BENEFICIAL TO THE ASSESSEE , THE AO ALLOWED DEDUCTION U/S.54 IN RESPECT OF THE SAID FLAT AND BR OUGHT TO TAX THE LONG TERM CAPITAL GAIN OF RS.73,89,300/- BEING DIFFERENC E BETWEEN RS.1,21,52,050/- AND RS.47,62,750/-. 4. BEFORE CIT(A) IT WAS SUBMITTED THAT ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S.54 IN RESPECT OF 3 FLATS. IT W AS ARGUED THAT WORDS A RESIDENTIAL HOUSE USED IN SECTION 54 DOES MEAN ONE HOUSE BUT BEING AN INDEFINITE ARTICLE SHOULD MEAN ANY RESIDE NTIAL HOUSE. REFERRING TO THE DECISION OF THE HONBLE BOMBAY HIG H COURT IN THE CASE OF MAHOMEDALLY TAJBHOY VS. COMMISSIONER OF EXC ESS PROFIT TAX REPORTED IN 20 ITR 274, IT WAS ARGUED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT THE EXPRES SION A DECISION IN SECTION 10A(3) OF THE EXCESS PROFIT TAX ACT WAS HELD TO MEAN ANY DECISION WHICH IN TURN COULD MEAN MORE THAN O NE DECISION. IT WAS ARGUED THAT HAD THE LEGISLATURE INTENDED TO RES TRICT AN INVESTMENT IN ONE HOUSE IT COULD HAVE DONE SO BY USING THE EXP RESSION ONE RESIDENTIAL HOUSE. IT WAS ARGUED THAT THE LEGISLAT URE HAS USED THE WORDS ONE TO RESTRICT DEDUCTION TO A SINGLE UNIT WITHIN THE PROVISION OF SECTION 5(1)(IV) OF THE WEALTH TAX ACT WHEREIN T HE EXPRESSION USED IS ONE RESIDENTIAL HOUSE. RELYING ON THE DE CISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. D. ANANDA BASAPPA REPORTED IN 309 ITR 329, IT WAS ARGUED THAT THE HONBLE 4 HIGH COURT IN THE SAID DECISION HAS HELD THAT THE E XPRESSION A RESIDENTIAL HOUSE SHOULD BE UNDERSTOOD IN THE SENS E THAT THE BUILDING SHOULD BE RESIDENTIAL IN NATURE AND THE EXPRESSION A SHOULD NOT BE UNDERSTOOD TO INDICATE A SINGULAR NUMBER. IT WAS A RGUED THAT THE SLP FILED BY THE DEPARTMENT AGAINST THE DECISION HAS BE EN DISMISSED BY THE HONBLE SUPREME COURT. IT WAS ACCORDINGLY ARGU ED THAT FOLLOWING THE JUDICIAL PRECEDENTS NARRATED ABOVE, D EDUCTION U/S.54 MAY BE GRANTED IN RESPECT OF MORE THAN ONE HOUSE AN D THE CLAIM OF DEDUCTION U/S.54 SHOULD BE ALLOWED TO ALL THE 3 RES IDENTIAL HOUSES PURCHASED BY THE ASSESSEE. 4.1 ALTERNATIVELY, IT WAS ARGUED THAT THE AO MAY BE DIRECTED TO ALLOW DEDUCTION U/S.54 IN RESPECT OF THE 2 ADJACENT FLATS IN GOLD COAST SOCIETY, PASHAN, PUNE TOTALING TO RS.80,78,55 5/-. IT WAS FURTHER ARGUED THAT IN CASE DEDUCTION IS RESTRICTED TO RS.80,78,555/- THEN THE AO MAY BE DIRECTED TO ADOPT THE COST OF TH E FLATS SOLD AT BAVERLY HILLS DERIVED BY THE APPROVED VALUER AT RS. 2,64,750/- AS ON 01-04-1981 AND BENEFIT OF THE INDEXED COST MAY BE G IVEN AT RS.14,58,773/-. THE ASSESSEE ALSO TRIED TO FILE CE RTAIN ADDITIONAL EVIDENCES. HOWEVER, THE LD.CIT(A) DID NOT ADMIT TH E SAME ON THE GROUND THAT ENOUGH EVIDENCES HAVE BEEN FILED BEFORE THE AO TO PROVE THAT THE 2 FLATS PURCHASED AT BANER ARE ADJAC ENT TO EACH OTHER. 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE AND RELYING ON VARIOUS DECISIONS THE LD.CIT(A) ALLOWED THE CLAI M OF DEDUCTION U/S.54 IN RESPECT OF 2 ADJACENT FLATS BEING FLAT NO S. 1012 AND 1006 AT 10 TH FLOOR WING-B, GOLD COAST SOCIETY, PASHAN, PUNE TOT ALING TO 5 RS.80,78,555/-. SO FAR AS THE CLAIM OF THE ASSESSE E THAT HE IS ENTITLED TO DEDUCTION U/S.54 FOR THE 3 RD FLAT ALSO SHE REJECTED THE SAME BY OBSERVING AS UNDER : 4. ON THE OTHER HAND, THE APPELLANT HAS ALSO CLAIMED DEDUCTION IN RESPECT OF THIRD FLAT PURCHASED AT BANER, PUNE FOR A CONSIDERATION OF RS.41,11,030/-. ON THIS ISSUE, THE SPECIAL BENCH MUMBAI ITAT IN SUSHILA JHAVERI CASE (SUPRA) HELD THAT THE LEGISLATURE HAD USED THE WORDS 'A' AND 'ANY' TO MEAN ONE SINGLE RESIDENTIAL HOU SE AND MORE THAN ONE ASSET RESPECTIVELY. THEREFORE, WHILE HOLDING THAT THE INTENTION OF THE LEGISLATURE WAS TO ALLOW EXEMPTION U /S 54 AND 54F IN RESPECT OF INVESTMENT IN ONE SINGLE RESIDENTIAL HOUSE, I T WAS HELD THAT THE SAME COULD BE ALLOWED IN RESPECT TO TWO ADJACENT AND CONTIGUOUS UNITS CONVERTED INTO ONE RESIDENTIAL HOUSE BY HAVING C OMMON PASSAGE/STAIR CASE, COMMON KITCHEN ETC. ON THE OTHER HA ND, IF THE INVESTMENT IS MADE IN TWO INDEPENDENT RESIDENTIAL HOUSE S, EVEN LOCATED IN THE SAME COMPLEX, THAN EXEMPTION CANNOT B E ALLOWED, BUT THE CHOICE WOULD BE LEFT TO THE ASSESSEE TO AVAIL EXEMP TION IN RESPECT OF ANY ONE HOUSE AS HELD BY THE HON'BLE BOMBAY HIGH C OURT IN K.C. KAUSHIK VS P.B. RANE REPORTED IN 185 ITR 499. APPLYIN G THE RATIO OF THIS CASE TO THE FACTS OF THE APPELLANT'S CASE, IT IS HE LD THAT THE INVESTMENT IN RESPECT OF THIRD FLAT PURCHASED AT BANER , PUNE FOR A CONSIDERATION OF RS.41,11,030/- IS NOT ENTITLED FOR DE DUCTION U/S 54, SINCE THE APPELLANT HAS ALREADY EXERCISED THE OPTION, AS PER SECOND GROUND OF APPEAL, IN CLAIMING THE BENEFIT OF SEC. 5 4 ON THE TWO ADJACENT FLATS AT GOLD COAST. GROUND NO. 1 THUS FAILS. 5.1 SO FAR AS THE ARGUMENT OF THE ASSESSEE THAT IND EXED COST OF ACQUISITION AS ON 01-04-1981 SHOULD BE SUBSTITUTED AS THE COST OF ACQUISITION OF THE FLAT SOLD BY THE ASSESSEE, THE L D.CIT(A) REJECTED THE GROUND HOLDING THAT THE ASSESSEE HIMSELF HAD SH OWED THE COST OF ACQUISITION AT RS.45,000/- AND AFTER APPLYING THE I NDEXED COST HAS WORKED OUT THE COST OF ACQUISITION AT RS.2,47,950/- IN THE COMPUTATION OF CAPITAL GAIN FILED WITH THE RETURN O F INCOME. NO SUCH CONTENTION WAS RAISED BEFORE THE AO FOR SUBSTITUTIO N OF THE COST OF ACQUISITION AS ON 01-04-1981. ONLY DURING THE COUR SE OF APPELLATE PROCEEDINGS THE ASSESSEE, IN SHAPE OF ADDITIONAL EV IDENCE, HAD FILED A VALUATION REPORT FROM THE REGISTERED VALUER MR. S.L . THITE. THE ADDITIONAL EVIDENCE IS NOT ACCOMPANIED BY ANY REASO NS AS TO WHY THE 6 SAME COULD NOT BE FILED DURING THE COURSE OF APPELL ATE PROCEEDINGS. THE ASSESSEE ALSO COULD NOT DEMONSTRATE AS TO HOW T HE PROVISIONS OF RULE 46A ARE MET. SHE THEREFORE REJECTED THE ADDIT IONAL EVIDENCE FILED BEFORE HER AND CONSEQUENTLY DISMISSED THE GRO UND RAISED BEFORE HER. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LD.CIT(A) ERRED IN LAW IN NOT ALLOWING DEDU CTION U/S.54 OF THE I.T. ACT, 1961 TOWARDS PURCHASE OF THE THIRD F LAT IN BEVERLY HILLS, BANER, PUNE FOR RS.44,11,030/- (WRONGLY STATED BY THE LD.ITO AS WELL AS THE LD.CIT(A) AS RS.33,15,805/- AGAINST THE L ONG TERM CAPITAL GAIN ARISING ON SALE OF THE MUMBAI FLAT. THE DEDUCTION OUGHT TO BE ALLOWED. 2. THE LD.CIT(A) ERRED IN LAW IN REJECTING THE ADDI TIONAL EVIDENCE, IN THE FORM OF A VALUATION CERTIFICATE GI VEN BY A REGISTERED VALUER, MR. S.L. THITE, VALUING THE FLAT AT MUMBAI AS ON IST APRIL 1981 AT RS.2,64,750/- SUBMITTED BY THE ASSESSEE TO SUBSTITUTE TH E MARKET VALUE AGAINST THE COST OF RS.45,000/- OF THE MUMBAI FL AT TO WORK OUT THE LONG TERM CAPITAL GAIN U/S.48 OF THE I.T. ACT, 1 961. THE ADDITIONAL EVIDENCE BE ALLOWED TO BE ADMITTED AND T HE LONG TERM CAPITAL GAIN COMPUTED ACCORDINGLY. 7. THE FIST GROUND OF APPEAL FILED BY THE ASSESSEE RELATES TO DENIAL OF DEDUCTION U/S.54 IN RESPECT OF 3 FLATS IN BAVERL Y HILLS, BANER, PUNE FOR RS.44,11,030/- IT WAS WRONGLY MENTIONED BY THE AO AS WELL THE CIT(A) AT RS.33,15,805/-. 8. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO TH E PROVISIONS OF SECTION 54 SUBMITTED THAT THE WORDS CONSTRUCTED, ONE RESIDENTIAL HOUSE IN INDIA HAS BEEN SUBSTITUTED FOR CONSTRUCT ED A RESIDENTIAL HOUSE BY THE FINANCE (NO.2) ACT, 2014 W.E.F. 01-04 -2015. SINCE IT IS NOT CLARIFICATORY, THEREFORE, AT THE RELEVANT PE RIOD OF TIME THERE WAS NO SUCH PROVISION AND THE ASSESSEE IS ENTITLED TO C LAIM DEDUCTION U/S.54 FOR ALL THE PROPERTIES PURCHASED. 7 8.1 AS REGARDS THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF SUSHILA M. JHAVERI (SUPRA) RELIED ON BY THE AO IS CONCERNED, HE SUBMITTED THAT THE DECISION TALKS OF A PARTICULAR CASE AND IT CANNOT BE APPLIED GLOBALLY. HE ALSO RELIED ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT AND ANOTHER VS. D. ANANDA BASAPPA (SUPRA). 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBM ITTED THAT THE PROVISIONS OF SECTION 54 ARE VERY CLEAR. THE LD.CI T(A) HAS ALREADY GRANTED RELIEF TO THE ASSESSEE IN RESPECT OF 2 ADJO INING FLATS AT GOLD COAST SOCIETY, PASHAN, PUNE FOR WHICH THE REVENUE I S NOT IN APPEAL. THEREFORE, THE ASSESSEE IS NOT ENTITLED TO GET THE BENEFIT OF DEDUCTION U/S.54 FOR THE HOUSE PROPERTY AT BAVERLY HILLS, BAN ER. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. IN OUR OPINION, THE ASSESSEE IS ENTITLED TO GET THE BENEFIT OF DEDUCTIO N U/S.54 IN RESPECT OF THE INVESTMENT IN ONE RESIDENTIAL HOUSE PROPERTY. THIS ONE RESIDENTIAL PROPERTY IN OUR OPINION WILL INCLUDE T HE ADJOINING FLAT OR FLATS. HOWEVER, IT CANNOT BE STRETCHED TO A FLAT S ITUATED AT A DIFFERENT LOCALITY. SINCE IN THE INSTANT CASE THE FLAT AT BA VERLY BILLS, BANER, PUNE IS SITUATED AT A DISTANCE PLACE AND NOT ADJACE NT TO THE 2 ADJOINING FLATS AT GOLD COAST, PASHAN, PUNE, THEREF ORE, WE DO NOT FIND ANY MERIT IN THE ARGUMENT OF THE LD. COUNSEL FOR TH E ASSESSEE THAT THE 8 ASSESSEE IS ENTITLED TO DEDUCTION U/S.54 IN RESPECT OF THE 3 RD UNIT. THE ORDER OF LD.CIT(A) ON THIS ISSUE IS ACCORDINGLY UPH ELD. 10.1 AS REGARDS THE RELIANCE ON THE DECISION OF HON BLE KARNATAKA HIGH COURT IN THE CASE OF D. ANANDA BASAPPA (SUPRA) IS CONCERNED, EVEN IN THAT CASE ALSO, THE ISSUE WAS PURCHASE OF 2 ADJOINING FLATS WHICH WAS CONSTRUCTED TO MAKE A SINGLE RESIDENTIAL UNIT. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT READ S AS UNDER : WHEN A HINDU UNDIVIDED FAMILY'S RESIDENTIAL HOUSE IS SO LD, THE CAPITAL GAIN SHOULD BE INVESTED FOR THE PURCHASE OF O NLY ONE RESIDENTIAL HOUSE IS AN INCORRECT PROPOSITION. AFTER ALL, THE HINDU UNDIVIDED FAMILY PROPERTY IS HELD BY THE MEMBERS AS JOINT TENANTS. THE MEMBERS KEEPING IN VIEW THE FUTURE NEEDS IN EVENT OF SEPARATION, PURCHASE MORE THAN ONE RESIDENTIAL BUILDING, IT CANNOT BE SAID THAT THE BENEFIT OF EXEMPTION IS TO BE DENIED U NDER SECTION 54(1) OF THE INCOME-TAX ACT. ON FACTS, IT IS SHOWN BY THE ASSESSEE THAT THE APARTMENTS ARE SITUATED SIDE BY SIDE. THE BUILDER HAS ALSO STATED THAT HE HAS EFFECTED MODIFICATION OF THE FLATS TO MAKE IT AS ONE UNIT BY OPENING THE DOOR IN BETWEEN TWO APARTMENTS. THE FACT THAT AT THE TIME WHE N THE INSPECTOR INSPECTED THE PREMISES, THE FLATS WERE OCCUPIED B Y TWO DIFFERENT TENANTS IS NOT THE GROUND TO HOLD THAT THE APARTM ENT IS NOT A ONE RESIDENTIAL UNIT. THE FACT THAT THE ASSESSEE COULD HA VE PURCHASED BOTH THE FLATS IN ONE SINGLE SALE DEED OR COULD HAVE NARRATED THE PURCHASE OF TWO PREMISES AS ONE UNIT IN THE SALE DEED IS NOT THE GROUND TO HOLD THAT THE ASSESSEE HAD NO INTENT ION TO PURCHASE THE TWO FLATS AS ONE UNIT. FOR THE REASONS AND DISCUSSION MADE ABOVE, THE SUBSTA NTIAL QUESTIONS OF LAW ARE ANSWERED IN FAVOUR OF THE ASSESS EE. THE APPEAL IS DISMISSED. 10.2 FROM THE ABOVE, IT IS CLEAR THAT THERE WERE 2 ADJOINING FLATS FOR WHICH THE DEDUCTION WAS CLAIMED AND WHICH WAS DENIE D BY THE ITO AND CONFIRMED BY THE CIT(A). THE TRIBUNAL HELD THA T PURCHASE OF THE 2 FLATS MADE BY THE ASSESSEE HAS TO BE TREATED AS ONE RESIDENTIAL UNIT AND THE ASSESSEE IS ENTITLED TO FULL EXEMPTIO N. THEREFORE, THE DECISION RELIED ON BY THE LD. COUNSEL FOR THE ASSES SEE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. SINCE THE ORDER OF THE 9 LD.CIT(A) IS IN CONSONANCE WITH THE VARIOUS DECISIO NS RELIED ON BY HER AS PER PARA 3.4 OF HER ORDER, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE SAME. ACCORDINGLY, SAME IS UPHELD AND GROUND RAISED BY THE ASSESSEE IS DISMISSED. 11. GROUND OF APPEAL NO.2 BY THE ASSESSEE RELATES T O SUBSTITUTION OF THE MARKET VALUE AS THE COST OF ACQUISITION AS O N 01-04-1981 WHICH WAS DENIED BY THE LD.CIT(A). 12. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSES SEE, WHILE COMPUTING THE CAPITAL GAIN, HAS TAKEN THE COST OF P URCHASE OF THE PROPERTY AT RS.45,000/-. IT IS AN ADMITTED FACT TH AT THE ASSESSEE HAS NOT PRODUCED THE PURCHASE DEED OF THE BOMBAY PROPER TY BEFORE THE AO WHICH WAS SOLD. HOWEVER, THE ASSESSEE HAD SUBMI TTED THE PURCHASE AGREEMENT DATED 27-09-1978 OF THE SAID PRO PERTY BEFORE THE AO. 12.1 AS PER THE PROVISIONS OF SECTION 48, WHERE AN ASSET HAS BEEN ACQUIRED BY THE ASSESSEE PRIOR TO 01-04-1981, THE A SSESSEE CAN, AT HIS OPTION, CHOOSE THE COST OF ACQUISITION OR THE MARKE T VALUE AS ON 01- 04-1981 FOR THE PURPOSE OF CALCULATION OF COST INFL ATION INDEX. ALTHOUGH THE ASSESSEE IN THE INSTANT CASE HAS ERRON EOUSLY TOOK THE PURCHASE PRICE FOR THE PURPOSE OF INDEXATION, HOWEV ER, BEFORE THE LD.CIT(A) THE ASSESSEE HAS TAKEN THE GROUND FOR SUB STITUTING THE MARKET VALUE AS ON 01-04-1981 WHICH IS BENEFICIAL T O THE ASSESSEE. IN OUR OPINION THE REVENUE AUTHORITIES SHOULD NOT T AKE ADVANTAGE OF THE IGNORANCE OF LAW BY THE ASSESSEE. THE ASSESSEE , IN OUR OPINION SHOULD BE GIVEN THE BENEFIT WHICH HE IS LEGALLY ENT ITLED TO. SINCE THE 10 MARKET VALUE AS ON 01-04-1981 WAS NOT CONSIDERED BY ANY OF THE LOWER AUTHORITIES, THEREFORE, WE IN THE INTEREST OF JUSTICE, DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE AO W ITH A DIRECTION TO VERIFY THE DETAILS AND DECIDE THE ISSUE AS PER LAW AND FACT AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. ACCORDINGLY, GROUND OF APPEAL NO.2 BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 29-01-2015. SD/- SD/- (SUSHMA CHOWLA) (R .K. PANDA) JUDICIAL MEMBER ACCOUNTANT ME MBER PUNE DATED: 29 TH JANUARY, 2015 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-III, PUNE 4. THE CIT-III, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE