Binoy John, Thrissur V. ACIT, Trichur

ITA 205/COCH/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7469 (ITAT-COCHIN)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 18-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: JAI SHANKAR
• Keywords: Capital asset; Cost of acquisition; Fair market value

Judgement Text

1 ITAS NO.204 & 205/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHI BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI SANJAY AROR A (AM) I.T.A. NO.204/COCH/2011 (ASSESSMENT YEAR 2007-08) DR. BIJOY CHIRAYATH VSASSIST.COMMISSIONER OF INCO ME-TAX CHEREATH HOUSE CIR.2(1), S.T. NAGAR, THRISSUR T.B. ROAD, IMA LANE THRISSUR 680 001 PAN : ANBPB4089J (APPELLANT) (RESPONDENT) I.T.A. NO.205/COCH/2011 (ASSESSMENT YEAR 2007-08) DR. BINOY JOHN VSASSIST.COMMISSIONER OF INCOME-TA X CHEREATH HOUSE CIR.2(1), S.T. NAGAR, THRISSUR T.B. ROAD, IMA LANE THRISSUR 680 001 PAN : AACPB9233F (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI JAI SHANKAR, SR ADVOCATE RESPONDENT BY : MS VIJAYAPRABHA DATE OF HEARING : 30-11-2011 DATE OF PRONOUNCEMENT: 25-01-2012 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE ASSESSEES ARE DIRECTED AGA INST TWO INDEPENDENT ORDERS OF THE COMMISSIONER OF INCOME-TAX (A) AND RELATE TO TWO INDEPENDENT ASSESSES. SINCE COMMON ISSUES ARIS E FOR CONSIDERATION IN BOTH THE APPEALS, THE SAME ARE DISPOSED OF BY THIS COMMON ORDER. 2 ITAS NO.204 & 205/COCH/2011 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS COMP UTATION OF CAPITAL GAIN WITH REGARD TO SHARES OF THE ASSESSEES IN RESPECT O F THE PROPERTY INHERITED FROM THEIR FATHER. 3. SHRI JAI SHANKAR, THE LD.SENIOR COUNSEL FOR THE A SSESSEES SUBMITTED THAT BOTH THE ASSESSES ARE CHILDREN OF DR. JOHN CHE REATH. DR JOHN CHEREATH DIED ON 01-08-1998 WITHOUT EXECUTING ANY WIL L. DR JOHN CHEREATH BEING A CHRISTIAN, INDIAN SUCCESSION ACT W ILL GOVERN THE DEVOLUTION OF PROPERTY ON THE LEGAL HEIRS. ACCORDI NG TO THE LD.SENIOR COUNSEL, THE DECEASEDS WIFE WILL GET 1/3 RD OF THE ESTATE OF THE DECEASED, THE REMAINING 2/3 WILL GO TO THE CHILDREN. ACCORDI NG TO THE LD.SENIOR COUNSEL, THE LEGAL HEIRS OF DR JOHN CHEREATH EXECUT ED A FAMILY ARRANGEMENT ON 10-05-2003, A COPY OF WHICH IS AVAILAB LE ON PAGE 37 OF THE PAPER BOOK. AS PER THIS FAMILY ARRANGEMENT, THEY HA VE DECIDED TO PARTITION THE PROPERTY. AFTER THE PARTITION, ONE O F THE PROPERTIES AT SURVEY NO.560/1 OF MARADU VILLAGE, ERANAKULAM DISTRICT, ADM EASURING 78.3 CENTS OF LAND WAS SOLD BY THE LEGAL HEIRS. WHILE COMPUTI NG THE CAPITAL GAIN, THE ASSESSEES CLAIMED THAT AS PER THE FAMILY ARRANGEMEN T 1/6 TH OF THE ABOVE SAID PROPERTY WAS ALLOWED TO THEIR SHARES; THEREFOR E, THE CAPITAL GAIN HAS TO BE COMPUTED AFTER TAKING INTO CONSIDERATION THE S ALE PROCEEDS IN RESPECT OF 1/6 TH SHARES OF THE AFORESAID PROPERTY. HOWEVER, THE AS SESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEES ON THE GROUND THAT UNDER THE INDIAN SUCCESSION ACT, THE ASSESSEES ARE ENTITL ED FOR 2/3 RD OF THE PROPERTY. ACCORDING TO THE LD.SENIOR COUNSEL, NO D OUBT, THE ASSESSEES ARE ENTITLED FOR 2/3 RD OF THE TOTAL ESTATE OF THE DECEASED. HOWEVER, THE ASSESSING OFFICER RESTRICTED THE ENTITLEMENT UNDER THE INDIAN SUCCESSION ACT ONLY IN RESPECT OF ONE PROPERTY. THE LD.SENIOR COUNSEL FURTHER POINTED 3 ITAS NO.204 & 205/COCH/2011 OUT THAT THE RATIO OF THE INDIAN SUCCESSION ACT MUS T BE APPLIED IN RESPECT OF THE ENTIRE ESTATE OF THE DECEASED. THE LD.SENIO R COUNSEL FURTHER POINTED OUT THAT APPLYING THE RATIO IN RESPECT OF EACH ITEM OF PROPERTY IS CONTRARY TO THE SCHEME OF THE INDIAN SUCCESSION ACT. THE LD .SENIOR COUNSEL FURTHER SUBMITTED THAT BY A FAMILY ARRANGEMENT AS EARLY AS IN 2003, THE ESTATE OF THE DECEASED WAS PARTITIONED IN THE RATIO OF 1/3 RD FOR THE WIFE AND 2/3 RD TO ALL THE CHILDREN TO BE SHARED EQUALLY, AS PRESCRIBE D UNDER THE INDIAN SUCCESSION ACT. THE LD.SENIOR COUNSEL FURTHER POIN TED OUT THAT THE INCOME GAINED / DERIVED BY THE ASSESSEES, THROUGH THE SALE OF A SINGLE ITEM OF PROPERTY IS TO BE CONSIDERED ON THE BASIS OF THE FA MILY ARRANGEMENT. THE RATIO OF THE INDIAN SUCCESSION ACT HAS TO BE APPLIE D TO THE ENTIRE PROPERTY OF THE DECEASED AND NOT TO THE SINGLE ITEM. 4. WHEN THE FAMILY ARRANGEMENT WAS BROUGHT TO THE N OTICE OF THE ASSESSING OFFICER, THE ASSESSING OFFICER REJECTED T HE SAME ON THE GROUND THAT THE FAMILY ARRANGEMENT WOULD HAVE THE EFFECT O F APPLICATION OF INCOME. ACCORDING TO THE LD.SENIOR COUNSEL, THE AS SESSING OFFICER IS NOT LEGALLY CORRECT IN SAYING THAT THE FAMILY ARRANGEME NT AMOUNTS TO APPLICATION OF INCOME AFTER ACCRUAL. THE LD.SENIOR COUNSEL FURTHER SUBMITTED THAT THE DEVOLUTION OF PROPERTY ON THE LE GAL HEIRS OF LATE DR JOHN CHEREATH HAS TO BE CONSIDERED IN A HOLISTIC MANNER. ACCORDING TO THE LD.SENIOR COUNSEL, THE RATIO OF INHERITANCE PRESCRI BED UNDER THE INDIAN SUCCESSION ACT CANNOT AND NEED NOT BE APPLIED TO EA CH ITEM OF PROPERTY SEPARATELY. THEREFORE, ACCORDING TO THE LD.SENIOR COUNSEL, THE ASSESSING OFFICER IS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEES. REFERRING TO THE ASSESSMENT ORDER, THE LD.SENIOR COUNSEL FURTHER POINTED OUT THAT THE LOWER AUTHORITIES ARE NOT CORRECT IN SAYING THAT TH E FAMILY ARRANGEMENTS NEEDS TO BE REGISTERED UNDER THE INDIAN REGISTRATIO N ACT. REFERRING TO THE 4 ITAS NO.204 & 205/COCH/2011 JUDGMENT OF THE APEX COURT REPORTED IN 1966 (2) SCJ 290 = AIR 1966 SC 292 THE LD.SENIOR COUNSEL SUBMITTED THAT THE FAMILY ARR ANGEMENT WHICH DID NOT HAVE THE EFFECT OF CONVEYING TITLE FROM ONE PARTY T O ANOTHER, BUT MERELY REDUCED TO WRITING THE UNDERSTANDING ARRIVED AT BET WEEN THE MEMBERS OF FAMILY, WHO ALREADY HAVE SOME TITLE IN THE PROPERTY IN QUESTION NEED NOT TO BE REGISTERED U/ 17 OF THE REGISTRATION ACT. TH EREFORE, ACCORDING TO THE LD.SENIOR COUNSEL, THE CLAIM OF THE LOWER AUTHORITI ES THAT THE FAMILY SETTLEMENT HAS TO BE REGISTERED IS ALSO NOT LEGALLY JUSTIFIED. 5. ON THE CONTRARY, MS. VIJAYAPRABHA, THE LD.DR SUB MITTED THAT FAMILY ARRANGEMENTS SAID TO BE ENTERED INTO AMONGST THE LE GAL HEIRS OF DR. JOHN CHEREATH IS NOT BINDING ON THE ASSESSING OFFICER. ACCORDING TO THE LD.REPRESENTATIVE, THE SUCCESSION OF THE DECEASEDS PROPERTY HAS TO BE ON THE LEGAL HEIRS AS PER SECTION 33(A) OF THE INDIAN SUCCESSION ACT. REFERRING TO THE ORDER OF COMMISSIONER OF INCOME-TAX(A), MORE PARTICULARLY, PAGE 7, THE LD.DR SUBMITTED THAT THE FAMILY PARTITION CAN B E ENTERED INTO TO SETTLE A FAMILY DISPUTE AND PRESERVE THE FAMILY PROPERTY. IN THIS CASE, ADMITTEDLY, THERE IS NO FAMILY DISPUTE. THEREFORE, THE SO-CALLE D FAMILY ARRANGEMENT CANNOT BE A BASIS FOR DIVERTING INCOME IN FAVOUR OF THE ASSESSEES MOTHER. THE LD.DR FURTHER SUBMITTED THAT UNDER THE INCOME-TA X ACT, THE SALE PROCEEDS OF THE SHARE OF THE LEGAL HEIR AS PER THE INDIAN SUCCESSION ACT HAS TO BE CONSIDERED FOR THE PURPOSE OF COMPUTING THE C APITAL GAIN. SINCE THE FAMILY SETTLEMENT IS NOT ONE OF THE MODES RECOGNISE D UNDER THE INCOME- TAX ACT FOR TRANSFER OF IMMOVABLE PROPERTY, ACCORDI NG TO THE LD.SENIOR COUNSEL , EVEN THOUGH 2/3 RD OF THE SHARES IN THE SUBJECT MATTER OF THE PROPERTY IN QUESTION UNDER APPEAL WAS GIVEN TO ASSE SSEES MOTHER BY WAY OF THE SO-CALLED FAMILY ARRANGEMENT, THE ASSESSEES, ARE ENTITLED FOR 2/3 RD OF 5 ITAS NO.204 & 205/COCH/2011 THE PROPERTY IN EQUAL SHARE. ACCORDING TO THE LD.DR , THE EXCESS SHARE OVER AND ABOVE 1/3 RD OF IT IN THE PROPERTY WHICH IS UNDER APPEAL WAS PA SSED ON TO THE MOTHER OF THE ASSESSEE BY WAY OF APPLICATION OF INCOME. THEREFORE, THE CLAIM OF THE ASSESSES THAT THEIR RESPECTIVE SHA RE WAS ONLY 1/6 TH OF THE PROPERTY BY WAY OF FAMILY SETTLEMENT IS NOT CORRECT . ACCORDING TO THE LD.DR, IT IS ONLY AN APPLICATION OF INCOME, HENCE T HE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT DR JOHN CHEREATH DIED INTESTATE ON 01-08-1998 LEAVING BEHIND HIS WIFE AND THREE CHILDREN. UNDER THE INDIAN SUCCESSION ACT, THE WIF E OF THE DECEASED IS ENTITLED FOR 1/3 RD OF THE ENTIRE ESTATE OF THE DECEASED AND THE REMAI NING 2/3 RD HAS TO BE SHARED EQUALLY BY THE CHILDREN. IN THIS CASE, THERE WAS A FAMILY ARRANGEMENT TO AMICABLY SETTLE THE ISSUE OF PARTITION. THIS FAMILY ARRANGEMENT WAS REJECTED BY THE LOWER AUTHORITIES O N THE GROUND THAT IT WAS NOT A REGISTERED DOCUMENT. AS RIGHTLY POINTED OUT BY THE LD.SENIOR COUNSEL FOR THE ASSESSEES THAT THE FAMILY ARRANGEME NT WHICH DID NOT HAVE THE EFFECT OF CONVEYING TITLE ONE PARTY TO ANOTHER, BUT MERELY REDUCED TO WRITING THE UNDERSTANDING ARRIVED AT BETWEEN THE ME MBERS OF FAMILY, WHO ALREADY HAVE SOME TITLE IN THE PROPERTY IN QUESTION NEED NOT BE REGISTERED U/S 17(2) OF THE REGISTRATION ACT. THIS CONTENTION OF THE LD.SENIOR COUNSEL IS VERY MUCH SUPPORTED BY THE JUDGMENT OF THE APEX COURT IN 1966 (2) SCJ 290 = AIR 1966 SC 292. 7. WE HAVE CAREFULLY GONE THROUGH THE COPY OF THE F AMILY ARRANGEMENT WHICH IS AVAILABLE AT PAGE 37 OF THE PAPER BOOK. AS PER THIS FAMILY 6 ITAS NO.204 & 205/COCH/2011 ARRANGEMENT, THE 3/6 TH SHARE IN THE SUBJECT MATTER OF THE PROPERTY WAS ALLOTTED TO ASSESSEES MOTHER ALONG WITH OTHER PROP ERTIES AS MENTIONED AT ITEM NO.1 OF THE SCHEDULE TO THE FAMILY ARRANGEMENT . AS PER SCHEDULE B 1/6 TH OF THE SHARE OF THE SUBJECT MATTER OF THE LAND WAS ALLOTTED TO DR BIJOY CHIRAYATH, ASSESSEE IN ITA NO.204/COCH/2009 ALONG WITH OTHER PROPERTY. SCHEDULE C WAS ALLOWED TO ANOTHER CHILD OF DR JOHN CHEREATH, SMT. BABITHA JOHN. SMT. BABITHA JOHN WAS ALLOTTED 1/6 TH OF THE LANDED PROPERTY WHICH IS SUBJECT MATTER OF THE APPEAL BEFORE THIS TRIBUNAL. SCHEDULE D OF THE FAMILY ARRANGEMENT SHOWS THE PROPERTY ALLOTTED TO DR BINOY JOHN, ASSESSEE IN ITA NO.205/COCH/2011. 1/6 TH OF THE PROPERTY WAS ALLOWED TO DR BINOY JOHN IN RESPECT OF THE LAND WHICH IS SUBJECT MATTER OF APPE AL BEFORE THIS TRIBUNAL ALONG WITH OTHER PROPERTIES. THEREFORE, IT IS OBVI OUS THAT THE FAMILY ARRANGEMENT WAS MADE IN RESPECT OF THE ENTIRE ESTAT E OF THE DECEASED, DR. JOHN CHEREATH. WHEN THE LEGAL HEIRS PARTITIONED TH E PROPERTY INHERITED FROM DECEASED FATHER, IT IS OPEN TO THE LEGAL HEIRS TO TAKE THE RESPECTIVE SHARES AFTER CONSIDERING THE ENTIRE ESTATE OF THE D ECEASED. AS RIGHTLY CONTENDED BY THE LD.SENIOR COUNSEL, THE LOWER AUTHO RITIES ARE NOT JUSTIFIED IN RESTRICTING THE RIGHT OF THE RESPECTIVE LEGAL HE IR UNDER THE INDIAN SUCCESSION ACT IN RESPECT OF A PARTICULAR PROPERTY. THE RIGHT OF THE LEGAL HEIRS UNDER THE INDIAN SUCCESSION ACT HAS TO BE NEC ESSARILY CONSIDERED IN RESPECT OF THE ENTIRE ESTATE OF THE DECEASED. WHEN 3/6 TH SHARE OF THE SUBJECT MATTER OF THE LANDED PROPERTY WAS GIVEN TO THE ASSESSEES MOTHER AND TO COMPENSATE THE EXCESS SHARE GIVEN TO THE ASS ESSEES MOTHER IN RESPECT OF THE IMPUGNED LANDED PROPERTY, INCREASED SHARE IN OTHER PROPERTIES WERE ALLOTTED TO THE ASSESSES AS PER THE FAMILY ARRANGEMENT. THEREFORE, THIS TRIBUNAL IS OF THE OPINION THAT THE ASSESSING OFFICER HAS TO TAKE THE ENTIRE ESTATE OF LATE DR JOHN CHEREATH IN T OTO FOR THE PURPOSE OF 7 ITAS NO.204 & 205/COCH/2011 SUCCESSION AND NOT A PARTICULAR PROPERTY. IN OTHER WORDS, THE ENTIRE PROPERTY HAS TO BE CONSIDERED UNDER THE INDIAN SUCC ESSION ACT AND IT CANNOT BE RESTRICTED TO A PARTICULAR PROPERTY. THE REFORE, THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN COMING TO THE CONC LUSION THAT THERE WAS A TRANSFER OF PROPERTY OR APPLICATION OF INCOME OVER AND ABOVE THE SHARE OF THE ASSESSEES MOTHER. IN OUR OPINION, WHEN THE FA MILY ARRANGEMENT WAS MADE AFTER CONSIDERING THE ENTIRE ESTATE OF THE DEC EASED, THE ASSESSING OFFICER HAS TO TAKE THE RESPECTIVE SHARE ALLOTTED TO THE INDIVIDUALS IN THE FAMILY ARRANGEMENT. 8. THE ASSESSING OFFICER HAS ALSO REJECTED THE FAMI LY ARRANGEMENT ON THE GROUND THAT IT IS NOT A REGISTERED ONE. AFTER GOING THROUGH THE FAMILY ARRANGEMENT, WE FIND THAT EVEN THOUGH THERE WAS ALL OCATION OF SHARES IN RESPECT OF THE RESPECTIVE LEGAL HEIRS, THE PROPERTY WAS FINALLY NOT DIVIDED BY MEETS AND BOUNDS. THE LEGAL HEIRS, AFTER THE FA MILY ARRANGEMENT CONTINUED TO ENJOY THE PROPERTY JOINTLY. THEREFORE , THE SO-CALLED FAMILY ARRANGEMENT DOES NOT CONFER ANY TITLE TO ANY PARTIC ULAR LEGAL HEIRS IN RESPECT OF THEIR SHARES IN THE PROPERTY. THE ARRAN GEMENT ONLY SPECIFIES THE EXTENT OF INTEREST IN THE PROPERTIES LEFT BY THE DE CEASED. THEREFORE, THIS TRIBUNAL IS OF THE OPINION THAT THE FAMILY ARRANGEM ENT WHICH DOES NOT DIVIDE THE PROPERTY BY MEETS AND BOUNDS IS NOT REQU IRED TO BE REGISTERED COMPULSORILY U/S 17 OF THE INDIAN REGISTRATION ACT. THIS VIEW OF OURS IS FORTIFIED BY THE JUDGMENT OF THE APEX COURT IN ROSH AN SINGH VS ZILA SINGH AIR 1988 SC 881. 9. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL I S OF THE OPINION THAT THE ASSESSEES HAVE RIGHTLY RETURNED THEIR RESPECTIV E SHARE OF SALE PROCEEDS 8 ITAS NO.204 & 205/COCH/2011 OF THE PROPERTY FOR THE PURPOSE OF COMPUTING THE CA PITAL GAIN. THE ASSESSING OFFICER IS NOT JUSTIFIED IN RECOMPUTING T HE RESPECTIVE SHARE OF THE SALE PROCEEDS. 10. THE ASSESSEES HAVE TAKEN ONE MORE GROUND OF APPE AL WITH REGARD TO INDEXATION. 11. SHRI JAY SHANKAR, THE LD.SENIOR COUNSEL FOR THE ASSESSEES SUBMITTED THAT SECTIONS 48, 49 & 55 OF THE INCOME-TAX ACT PRO VIDES FOR COMPUTATION OF CAPITAL GAIN WHEN THE CAPITAL ASSET WAS ACQUIRED THROUGH INHERITANCE. ACCORDING TO THE LD.SENIOR COUNSEL WHEN THE PROPERT Y WAS INHERITED BY SUCCESSION, THE COST OF ACQUISITION OF THE ASSET SH OULD BE THE COST OF ACQUISITION OF THE PREVIOUS OWNER. THIS PRINCIPLE IS ENUNCIATED IN SECTIONS 49 & 55 OF THE INCOME-TAX ACT. REFERRING TO SECTION 48 OF THE INCOME-TAX ACT, THE LD.SENIOR COUNSEL SUBMITTED THAT SECTION 4 8 PROVIDES THAT WHERE THE LONG TERM CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG TERM CAPITAL ASSET, THE COST OF ACQUISITION WOULD BE THE INDEXED COST OF ASSET AND FROM THE FULL VALUE OF CONSIDERATION, THE INDEXED COST O F ACQUISITION SHALL BE REDUCED. REFERRING TO THE ASSESSMENT ORDER, THE LD .SENIOR COUNSEL POINTED OUT THAT THE ASSESSING OFFICER COMPUTED THE COST OF ACQUISITION WITH EFFECT FROM ASSESSMENT YEAR 1998-99 WHEN THE FATHER OF THE ASSESSEES EXPIRED. ACCORDING TO THE LD.SENIOR COUNSEL, THE FAIR MARKET VALUE AS ON 01-04-1981 SHALL BE THE BASIS FOR COMPUTING THE INDEXED COST O F ACQUISITION. 12. ON THE CONTRARY, MS. VIJAYAPRABHA, THE LD.DR SU BMITTED THAT NO DOUBT SECTIONS 48, 49, 55 PROVIDE METHODS FOR COMPU TATION OF CAPITAL GAIN. REFERRING TO SECTION 55(2)(B)(II), THE LD.DR SUBMIT TED THAT THE ASSESSEES ARE 9 ITAS NO.204 & 205/COCH/2011 ENTITLED TO ADOPT THE FAIR MARKET VALUE AS ON 01-04-19 81. HOWEVER, THE ASSESSEES HAS NOT FURNISHED ANY EVIDENCE REGARDING THE FAIR MARKET VALUE ADOPTED FOR THE ASSET. IN THE ABSENCE OF ANY MATER IAL, THE COST OF ACQUISITION HAS TO BE INDEXED FROM THE ASSESSMENT Y EAR 1998-99. REFERRING TO EXPLANATION (III) OF SECTION 48 THE LD .DR SUBMITTED THAT INDEXATION HAS TO BE MADE FROM THE YEAR IN WHICH TH E ASSET WAS HELD BY THE ASSESSEES. IN THIS CASE, ADMITTEDLY, THE ASSET WAS HELD BY THE ASSESSEES FROM ASSESSMENT YEAR 1998-99, AFTER THE DE ATH OF THEIR FATHER. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY MADE T HE INDEXATION FROM THE YEAR 1998-99. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT THE FAIR MARKET VALUE AS ON 01-04-1981 SHALL BE THE BASIS FOR C OMPUTING THE INDEXED COST OF ACQUISITION. THE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE HAS NOT FILED ANY MATERIAL TO SUPPORT THE FAIR MARKET VALUE AS ON 01-04-1981. THEREFORE, THE COST OF ACQUISITION FROM ASSESSMENT YEAR 1998-99 HAS TO BE ADOPTED. THE FAIR MARKET VALUE AS ON 01-04-1981 SHALL BE THE BASIS FOR COMPUTING CAPITAL GAIN ON THE INDE XED COST OF ACQUISITION. THEREFORE, THE ASSESSING OFFICER SHALL COMPUTE THE INDEXED COST OF ACQUISITION AFTER CALLING FOR THE MATERIAL FROM THE CONCERNED AUTHORITIES AND THE ASSESSEE. ACCORDINGLY, THE ORDERS OF THE L OWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSUE IS REMANDED BACK TO THE F ILE OF THE ASSESSEE. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AF RESH IN THE LIGHT OF THE ORDERS OF THIS TRIBUNAL AND THEREAFTER COMPUTE THE CAPITAL GAIN IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPOR TUNITY TO THE ASSESSEE. 10 ITAS NO.204 & 205/COCH/2011 14. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2012. SD/- SD/- (SANJAY ARORA) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER ERNAKULAM, DT : 25 TH JANUARY, 2012 PK/ COPY FORWARDED TO: 1. DR BIJOY CHIRAYATH / DR BINOYJOHN, CHEREATH HOUSE, T.B. ROAD, IMA LANE, THRISSUR 2. THE ASSIST.COMMISSIONER OF INCOME-TAX, CIR.2(1), T HRISSUR 3. THE COMMISSIONER OF INCOME-TAX(A)-V, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, TRICHUR 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN