Assistant Commissioner of Income-tax, V. Krishi Utpanna Bazar Samittee, Jalgaon

ITA 2166/PUN/2012

• Counselvise Citation: 216624514 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 02-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value
• Section: 143(3); 50C; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.2043/PN/2012 (ASSESSMENT YEAR : 2008-09) KRISHI UTPANNA BAZAR SAMITTEE, (APMC) BHADGAON ROAD, PACHORA 424 201. PAN : AAAAK4068R . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, JALGAON. . RESPONDENT ITA NO.2166/PN/2012 (ASSESSMENT YEAR : 2008-09) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2, JALGAON. . APPELLANT VS. KRISHI UTPANNA BAZAR SAMITTEE, (APMC) BHADGAON ROAD, PACHORA, DIST. JALGAON 425 001. PAN : AAAAK4068R . RESPONDENT ASSESSEE BY : MR. SUNIL GANOO DEPARTMENT BY : MR. P. L. PATHADE DATE OF HEARING : 06-03-2014 DATE OF PRONOUNCEMENT : 20-03-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED CROSS-APPEALS, EACH BY THE ASSESSEE A ND THE REVENUE, PERTAINING TO THE ASSESSMENT YEAR 2008-09, WERE HEA RD TOGETHER AND ARE BEING DISPOSED-OFF BY WAY OF A CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE AND BREVITY. THE CAPTIONED CROSS-APPEALS ARE DIREC TED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 13.09.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 01.12.2011 PAS SED BY THE ASSESSING ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 OFFICER U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) FOR ASSESSMENT YEAR 2008-09. 2. IN BOTH THE APPEALS, THE SOLITARY DISPUTE RELATE S TO THE MANNER OF COMPUTATION OF LONG TERM CAPITAL GAIN ACCRUING TO T HE ASSESSEE ON SALE OF PROPERTIES. IN THE APPEAL OF THE ASSESSEE THE DISP UTE REVOLVES AROUND THE ACTION OF THE INCOME-TAX AUTHORITIES OF INVOKING SE CTION 50C OF THE ACT FOR SUBSTITUTING THE VALUE ADOPTED BY THE STAMP VALUATI ON AUTHORITY FOR THE PURPOSE OF THE PAYMENT OF STAMP DUTY AS FULL VALUE OF CONSIDERATION AS AGAINST THE ACTUALLY RECEIVED CONSIDERATION CONSIDERED BY T HE ASSESSEE IN ORDER TO COMPUTE THE CAPITAL GAIN. 3. IN BRIEF, THE RELEVANT FACTS IN ORDER TO DETERMI NE THE CONTROVERSY IN THE APPEAL OF THE ASSESSEE CAN BE UNDERSTOOD AS FOLLOWS . THE ASSESSEE BEFORE US IS A STATUTORY BODY INCORPORATED UNDER THE MAHAR ASHTRA AGRICULTURAL PRODUCE MARKETING (REGULATION) ACT, 1963. DURING T HE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR CONSIDERATION, ASSESSEE WAS FOUND TO HAVE SOLD TWO PROPERTIES THROUGH PUBLIC AUCTION. IN RELATION TO PROPERTY BEARING SURVEY NO.231 ADMEASURING 1H 34R, IT WAS SOLD FOR RS.91,00 ,000/- WHEREAS ANOTHER PROPERTY BEARING SURVEY NO.477/2 & 477/3 WAS SOLD F OR A CONSIDERATION OF RS.15,51,000/-. BOTH THE PROPERTIES WERE SOLD IN P UBLIC AUCTION AFTER OBTAINING THE NECESSARY PERMISSIONS FROM THE STATE GOVERNMENT OF MAHARASHTRA. IN TERMS OF THE CONDITIONS OF AUCTION, THE PURCHASER O F THE PROPERTIES WAS LIABLE TO BEAR ALL THE EXPENSES OF REGISTRATION FEE, STAMP DU TY AND OTHER MISCELLANEOUS EXPENDITURES. THE ASSESSEE DULY EXECUTED THE SALE- DEEDS AND ASSESSEE COMPUTED THE CAPITAL GAIN ACCRUING ON THE SALE OF A FORESAID PROPERTIES BY CONSIDERING THE FULL VALUE OF CONSIDERATION EQUIVAL ENT TO THE ACTUAL SALE CONSIDERATION RECEIVED AMOUNTING TO RS.91,00,000/- AND 15,51,000/- RESPECTIVELY. AS PER THE STAND OF THE REVENUE, THE SAID FULL VALUE OF CONSIDERATION WAS LIABLE TO BE SUBSTITUTED FOR THE VALUE ADOPTED BY THE ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 AUTHORITY OF THE STATE GOVERNMENT FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN TERMS OF SECTION 50C OF THE ACT. THE REVENUE HA S SOUGHT TO JUSTIFY ITS STAND ON THE BASIS THAT THE VALUE ADOPTED BY THE STAMP VA LUATION AUTHORITY FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN RESPECT OF THE AFORESAID TWO TRANSFERS WAS RS.1,15,50,000/- AND RS.26,14,000/- IN RELATION TO THE PROPERTY BEARING SURVEY NO. 231 AND SURVEY NO.477/2 & 477/3 RESPECTI VELY. AS PER THE REVENUE, VALUE SO DETERMINED FOR THE PURPOSES OF PA YMENT OF STAMP DUTY, BEING HIGHER THAN THE ACTUAL SALE CONSIDERATION REC EIVED, THE PROVISIONS OF SECTION 50C OF THE ACT COME INTO PLAY THEREBY REQUI RING ADOPTION OF RS.1,15,50,000/- AND 26,14,000/- AS THE FULL VALUE OF CONSIDERATION IN ORDER TO COMPUTE LONG TERM CAPITAL GAIN ON SALE OF THE PROPE RTIES AT SURVEY NO.231 AND SURVEY NO.477/2 &477/3 RESPECTIVELY. 4. NOTABLY, WITH RESPECT TO THE PROPERTY AT SURVEY NO.231, SECTION 50C OF THE ACT WAS INVOKED BY THE ASSESSING OFFICER WHEREA S THE CIT(A) HAS NOT ONLY AFFIRMED IT BUT HAS ALSO ENHANCED THE ASSESSMENT BY INVOKING SECTION 50C OF THE ACT EVEN IN RELATION TO THE OTHER PROPERTY SOLD I.E. SURVEY NO. 477/2 & 477/3. IN THIS MANNER, THE DISPUTE BEFORE US IS IN RELATION TO INVOKING OF SECTION 50C OF THE ACT FOR BOTH THE SALE TRANSACTIONS. 5. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE H AS POINTED OUT THAT INVOKING OF SECTION 50C OF THE ACT IN ORDER TO ADOP T THE VALUE CONSIDERED BY THE STAMP VALUATION AUTHORITY AS FULL VALUE OF CONS IDERATION IS NOT JUSTIFIED BECAUSE THE ASSESSEE WAS A STATUTORY BODY AND THE I MPUGNED SALES HAVE BEEN EFFECTED THROUGH THE ROUTE OF PUBLIC AUCTION. IT HAS BEEN CONTENDED THAT IN CASES WHERE THE PROPERTIES ARE SOLD BY ENTITIES SUCH LIKE THE ASSESSEE, THROUGH PUBLIC AUCTION THE STAMP VALUATION AUTHORIT Y IS DUTY BOUND TO CONSIDER THE HIGHEST PRICE OBTAINED IN PUBLIC AUCTION AS THE FAIR MARKET VALUE FOR THE PURPOSES OF STAMP DUTY. THEREFORE, FOR THE PURPOSE S OF PAYMENT OF STAMP DUTY ALSO THE PRICE AT WHICH THE PROPERTIES HAVE BE EN SOLD BY THE ASSESSEE IS ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 TO BE CONSIDERED AS THE FAIR MARKET VALUE AND IN SU PPORT REFERENCE HAS BEEN MADE TO A CIRCULAR ISSUED BY THE INSPECTOR GENERAL OF REGISTRATION AND CONTROLLER OF STAMPS, GOVERNMENT OF MAHARASHTRA DAT ED 30.06.2005, A COPY OF WHICH HAS BEEN PLACED ON RECORD. IN THIS CONTEX T, REFERENCE WAS ALSO MADE TO THE PROVISO TO RULE 4(6) OF THE BOMBAY STAMP (DE TERMINATION OF TRUE MARKET VALUE OF PROPERTY) RULES, 1995, WHICH READS AS UNDE R :- PROVIDED THAT WHENEVER A CERTIFICATE ABOUT MARKET VALUE OF A PARTICULAR PROPERTY IS ISSUED BY AN APPROPRIATE AUTHORITY UNDE R PROVISIONS OF INCOME TAX ACT, OR IF A PROPERTY IS SOLD OR ALLOTTED BY GOVERN MENT OR SEMI-GOVERNMENT BODY OR A GOVT. UNDERTAKING OR A LOCAL AUTHORITY ON THE BASIS OF PREDETERMINED PRICE, THEN VALUE STATED IN SUCH CERT IFICATE ISSUED BY AN APPROPRIATE AUTHORITY OR DETERMINED BY THE BODIES R EFERRED TO ABOVE SHALL BE TRUE MARKET VALUE OF THE SUBJECT MATTER PROPERTY. 6. ON THE AFORESAID BASIS, IT IS SOUGHT TO BE CANV ASSED THAT THE LOWER AUTHORITIES HAVE ERRED IN INVOKING SECTION 50C OF T HE ACT IN ORDER TO CONSIDER THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AS THE FULL VALUE OF CONSIDERATION. PERTINENTLY, IT HAS ALSO BEEN EXPLA INED THAT THE BUYERS OF THE PROPERTIES HAVE PAID STAMP DUTY AT THE VALUES DETER MINED BY THE STAMP VALUATION AUTHORITY WHICH IS OBVIOUSLY WRONG IN VIE W OF THE INSTRUCTIONS OF THE GOVERNMENT OF MAHARASHTRA REFERRED ABOVE. THE LEAR NED COUNSEL POINTED OUT THAT AS PER THE TERMS AND CONDITIONS OF THE PUBLIC AUCTION, THE BUYER OF THE PROPERTY WAS RESPONSIBLE TO BEAR THE EXPENSES OF RE GISTRATION FEE, STAMP DUTY AND OTHER MISCELLANEOUS EXPENDITURES AND THEREFORE SINCE IT DID NOT INVOLVE ANY OUTFLOW FROM THE ASSESSEE, THE ANOMALY ON THE P ART OF THE BUYER OF THE PROPERTIES TO PAY HIGHER STAMP DUTY CANNOT BE DETRI MENTAL TO THE ASSESSEE QUA THE INVOKING OF SECTION 50C OF THE ACT. IN THIS MA NNER, THE ACTION OF THE LOWER AUTHORITIES IS SOUGHT TO BE ASSAILED. 7. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE HAS NOT CONTESTED THE FACTUAL MATRI X BROUGHT OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE BUT HAS JUSTIFIED THE ACTION OF THE LOWER AUTHORITIES IN INVOKING SECTION 50C OF THE ACT AND ADOPTING THE VALUE ASSESSED ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 BY STAMP VALUATION AUTHORITY FOR THE PURPOSES OF CO MPUTING CAPITAL GAINS. ACCORDING TO THE LEARNED DEPARTMENTAL REPRESENTATIV E, THE CIT(A) HAS DISCUSSED THE ISSUE IN PARA 10 OF THE ORDER WHEREIN IT IS NOTED THAT THE BARE PROVISIONS OF SECTION 50C OF THE ACT DO NOT CONTAIN ANY EXCEPTIONS IN THE CASE OF SALE BY PUBLIC AUCTION AND THEREFORE THE CIT(A) WAS JUSTIFIED IN AFFIRMING THE ACTION OF THE ASSESSING OFFICER TO INVOKE SECTION 5 0C OF THE ACT. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. SECTION 50C OF THE ACT IS A SPECIAL PROVISION WHICH PROVIDES A DEEMING FICTION. IN TERMS OF SECTION 50C OF THE ACT IN CASES WHERE THE CONSIDERATION REC EIVED OR ACCRUING AS RESULT OF THE TRANSFER OF A CAPITAL ASSET BEING LAND OR BU ILDING OR BOTH, IS LOWER THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF S TATE OF GOVERNMENT FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN RESPECT OF SUC H TRANSFER, THEN THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FU LL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER FOR THE PURPOSES OF COMPUTING CAPITAL GAIN IN TERMS OF SECTION 48 OF THE ACT. IN THE PRESENT CASE, THE REVENUE HAS SOUGHT TO JUSTIFY INVOKING OF SECTION 50C OF THE ACT PRIMARILY ON THE GROUND THAT THE VALUE ADOPTED BY T HE STAMP VALUATION AUTHORITY FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN RESPECT OF TRANSFER OF THE TWO PROPERTIES IN QUESTION IS HIGHER THAN THE A CTUAL CONSIDERATION ACCRUING TO THE ASSESSEE AS A RESULT OF THEIR SALE. THE DEF ENCE OF THE ASSESSEE IS THAT THE SALE CONSIDERATION STATED IN THE SALE-DEED IS L IABLE TO BE TAKEN AS THE FAIR MARKET VALUE EVEN FOR THE PURPOSES OF PAYMENT OF ST AMP DUTY IN THE PRESENT CASE BECAUSE THE SALE/TRANSFER IN THE PRESENT CASE IS BY WAY OF A PUBLIC AUCTION CONDUCTED BY A STATUTORY BODY. PERTINENTLY , THE ASSESSEE IS A STATUTORY BODY INCORPORATED UNDER THE PROVISIONS OF THE MAHAR ASHTRA AGRICULTURAL PRODUCE MARKETING (REGULATION) ACT, 1963 AND IS INT ER-ALIA, ENGAGED IN THE ACTIVITY OF MARKETING OF AGRICULTURAL PRODUCE AS A PUBLIC UTILITY. THE MOOT QUESTION IS AS TO WHETHER THE AFORESAID PROPOSITION OF THE ASSESSEE IS IN ACCORDANCE WITH LAW OR NOT. ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 9. AS NOTED EARLIER, THE OBJECTIVE OF SECTION 50C O F THE ACT IS TO SUBSTITUTE THE VALUE ADOPTED BY A STAMP VALUATION AUTHORITY AS THE FULL VALUE OF CONSIDERATION IN CASES WHERE THE ACTUAL CONSIDERATI ON RECEIVED OR ACCRUING TO AN ASSESSEE IS LOWER THAN THE VALUE ASSESSED BY STA MP VALUATION AUTHORITY. IN OTHER WORDS, IN SUCH SITUATIONS, THE VALUE DETER MINED BY THE STAMP VALUATION AUTHORITY IS TO BE TAKEN AS THE FULL VALU E OF CONSIDERATION IN ORDER TO COMPUTE THE CAPITAL GAINS. IN THIS CONTEXT, ASSESS EE HAS REFERRED TO THE PROVISIONS OF RULE 4(6) OF THE BOMBAY STAMP (DETERM INATION OF TRUE MARKET VALUE OF PROPERTY) RULES, 1995, ESPECIALLY THE PROV ISO WHICH WE HAVE REPRODUCED IN THE EARLIER PART OF THIS ORDER. IN T ERMS OF THE SAID PROVISO, THE GOVERNMENT OF MAHARASHTRA HAS ISSUED A CIRCULAR DAT ED 30.06.2005 (SUPRA) DEALING WITH THE CASES WHERE SALE IS CONDUCTED BY D EBT RECOVERY TRIBUNAL AND OTHER GOVERNMENT OR NON-GOVERNMENT ORGANIZATION S BY PUBLIC AUCTION. CONSIDERING THE PROVISIONS OF RULE 4(6) OF THE BOMB AY STAMP (DETERMINATION OF TRUE MARKET VALUE OF PROPERTY) RULES, 1995, THE SAI D CIRCULAR PRESCRIBES THAT IN AFORESAID CASES THE HIGHEST PRICE AS CERTIFIED S HALL BE CONSIDERED AS THE FAIR MARKET VALUE FOR THE PURPOSES OF PAYMENT OF STAMP D UTY. THE RELEVANT PORTION OF THE CIRCULAR, A COPY OF WHICH HAS BEEN PLACED ON RECORD, READS AS UNDER :- 1. WHILE REGISTERING THE DOCUMENTS IN RESPECT OF SALE CONDUCTED BY DEBT RECOVERY TRIBUNAL AND OTHER GOVT ./ NON GOVT. ORGANIZATIONS OR THEIR COMPETENT AUTHORITIE S BY PUBLIC AUCTION ON AS IS WHERE IS BASIS AND ALONG W ITH THE ENCUMBRANCES AND AS PER TERMS AND CONDITIONS OF THE AUCT ION SALE, THE HIGHEST PRICE AS CERTIFIED IN THE SALE CERTIFICATE OR OTHER ORDER ISSUED BY SUCH AUTHORITY SHOULD BE CONSIDERED AS FA IR MARKET VALUE FOR THE PURPOSES OF STAMP DUTY AND IN SUCH CASES THE P RICE AS PER READY RECKNOER SHOULD NOT BE CONSIDERED. 2. THE REGISTERING AUTHORITY SHOULD ASSESS THE STAM P DUTY ON THE VALUE MENTIONED IN THE SALE CERTIFICATE AND THE SAI D SALE CERTIFICATE AND EXTRACT OF PROPERTY CARD SHOULD BE MADE ANNEXURE OF THE DOCUMENT TO BE REGISTERED. 3. THE MARKET VALUE AS DEFINED IN SECTION 2 [NA] OF THE BOMBAY STAMP ACT, 1958 IN RESPECT OF SUCH PROPERTY SHOULD BE RESTRICTED TO THE VALUE DECLARED IN SALE CERTIFICATE ONLY FOR REGISTRATION OF SUCH DOCUMENT. THEREFORE IF SUCH PROPERTY IS / SUBSEQUEN TLY SOLD, THE VALUE AS PER READY RECKNOER SHOULD BE TAKEN FOR THAT TRAN SACTION. ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 10. IN THE PRESENT CASE, ASSESSEE BEFORE US IS A ST ATUTORY BODY AND THE SALE OF PROPERTIES IN QUESTION HAS BEEN MADE THROUG H THE ROUTE OF PUBLIC AUCTION, WHICH IS NOT IN DISPUTE. THE CIT(A) HAS A LSO REPRODUCED THE SUBMISSIONS OF THE ASSESSEE BEFORE HIM WHICH INTER- ALIA CONTAIN AVERMENTS THAT THE SALE OF THE PROPERTIES WAS CONDUCTED IN PU BLIC AUCTION, AFTER SEEKING NECESSARY PERMISSIONS FROM THE DIRECTOR OF PANAN OF MAHARASHTRA STATE. FACTUALLY SPEAKING, IN OUR CONSIDERED OPINION, THE IMPUGNED TRANSFERS EFFECTED BY THE ASSESSEE BY WAY OF PUBLIC AUCTION FALL WITHI N THE PURVIEW OF THE CIRCULAR ISSUED BY GOVERNMENT OF MAHARASHTRA DATED 30.06.200 5 (SUPRA) FOR THE PURPOSES OF PAYMENT OF STAMP DUTY. IN TERMS OF THE SAID CIRCULAR, THE HIGHEST PRICE IN THE SALE AUCTION IS CONSIDERED TO BE THE F AIR MARKET VALUE FOR THE PURPOSES OF PAYMENT OF STAMP DUTY. THIS WOULD MEAN THAT THE CONSIDERATION STATED IN THE SALE-DEED IS TO BE ACCEPTED AS THE FA IR MARKET VALUE FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN THE PRESENT CA SE AND NOT THE PRICES WORKED OUT AS PER THE READY RECKNOER. OSTENSIBLY, IN SUCH A SITUATION THE INVOKING SECTION 50C OF THE ACT FOR THE PURPOSES OF SUBSTITUTING THE FULL VALUE OF CONSIDERATION IN ORDER TO COMPUTE THE CAPITAL GAIN WOULD FAIL SINCE THERE WOULD NOT BE ANY DIFFERENTIAL BETWEEN THE STATED CONSIDER ATION AND THE VALUE TO BE CONSIDERED BY THE STAMP VALUATION AUTHORITY OF THE STATE GOVERNMENT FOR THE PAYMENT OF STAMP DUTY. HOWEVER, IT HAS BEEN POINTE D OUT BY THE REVENUE THAT THE BUYERS OF THE PROPERTIES HAVE PAID STAMP DUTY A T THE VALUE DETERMINED ON THE BASIS OF RATES PRESCRIBED IN THE READY RECKENOR , WHICH ARE HIGHER THAN STATED CONSIDERATION. IN OUR CONSIDERED OPINION, T HE AFORESAID FACTUM WOULD NOT MAKE ANY DIFFERENCE TO THE RATIONALE OF INVOKIN G SECTION 50C OF THE ACT, WHICH HAS TO BE DECIDED ON THE BASIS OF THE PREVAIL ING LEGAL POSITION, AND NOT ON THE BASIS OF THE POSITION TAKEN BY A PARTY. PER TINENTLY, THE PURCHASER OF THE PROPERTIES ARE LIABLE TO BEAR EXPENSES OF STAMP DUT Y AND IT WAS NOT WITHIN THE DOMAIN OF THE ASSESSEE AND THEREFORE ASSESSEE CANNO T BE PUT TO A JEOPARDY OF INVOKING OF SECTION 50C OF THE ACT MERELY BECAUS E OF THE FAULT OF THE BUYERS OF THE PROPERTIES. ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 11. IN VIEW OF THE AFORESAID DISCUSSION AND HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, IN OUR VIEW, THE CIT(A) ERRED IN AFFIRMING THE INVOKING OF SECTION 50C OF THE ACT IN RELATION TO THE TWO PROPERTIES SOLD BY THE ASSESSEE THROUGH PUBLIC AUCTION. ACCORDINGLY, WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLO W APPROPRIATE RELIEF TO THE ASSESSEE AS PER LAW. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.2043/PN/2012 IS ALLOWED. 13. NOW, WE MAY TAKE-UP THE APPEAL OF THE REVENUE W HEREIN THE SOLITARY DISPUTE RELATES TO THE ACTION OF THE CIT(A) IN ALLO WING THE DEDUCTION OF RS.25 LACS REPRESENTING ENHANCED COMPENSATION PAID TO THE OWNER OF LAND AS A PART OF COST OF ACQUISITION FOR THE PURPOSES OF COMPUTAT ION OF CAPITAL GAINS. 14. THE ASSESSEE POINTED OUT BEFORE THE CIT(A) THAT WHILE COMPUTING THE CAPITAL GAIN IN RELATION TO THE PROPERTY BEARING SU RVEY NO.231 IT HAD INADVERTENTLY NOT TAKEN INTO CONSIDERATION A SUM OF RS.25 LACS PAID AS ENHANCED COMPENSATION TO THE OWNERS OF LAND. BY WA Y OF AN ADDITIONAL GROUND OF APPEAL, IT WAS SUBMITTED TO THE CIT(A) TH AT SUCH PAYMENT WAS PART AND PARCEL OF COST OF ACQUISITION OF LAND AND THERE FORE ITS INDEXED VALUE IS TO BE ALLOWED AS A DEDUCTION WHILE COMPUTING CAPITAL GAIN S IN TERMS OF SECTION 48 OF THE ACT. IN SUPPORT, ASSESSEE ALSO FURNISHED A COP Y OF THE ORDER OF THE COURT OF CIVIL & DISTRICT JUDGE, JALGAON DATED 18.08.2009 WHEREBY ASSESSEE WAS REQUIRED TO PAY RS.25 LACS TO THE ORIGINAL LAND OWN ERS. THE CIT(A) ACCEPTED THE AFORESAID ADDITIONAL PLEA AFTER SEEKING A REMAN D REPORT FROM THE ASSESSING OFFICER, WHO OBJECTED TO THE ADMISSION OF SUCH ADDI TIONAL EVIDENCE. THE CIT(A) HAS HELD THAT THE AMOUNT PAID AS ADDITIONAL COMPENSATION WAS LIABLE TO ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 BE CONSIDERED AS A PART OF COST OF ACQUISITION FOR THE PURPOSES OF COMPUTING CAPITAL GAINS. AGAINST THE AFORESAID DECISION, REV ENUE IS IN APPEAL BEFORE US. 15. THOUGH, THE REVENUE HAS ASSAILED THE ACTION OF THE CIT(A), HOWEVER, WE DO NOT FIND ANY CREDIBLE OR COGENT JUSTIFICATION FOR THE SAME. THE ONLY PLEA OF THE REVENUE IS THAT THE SAID CLAIM WAS NEITHER M ADE IN THE RETURN OF INCOME AND NOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THAT THEREFORE THE CIT(A) ERRED IN ADMITTING SUCH A CLAIM. 16. IN OUR CONSIDERED OPINION, IT CANNOT BE DOUBTED THAT THE CLAIM OF THE ASSESSEE IN QUESTION HAS A BEARING ON THE ULTIMATE DETERMINATION OF TAX LIABILITY. ADMITTEDLY, AN APPELLATE AUTHORITY HAS WIDE POWERS TO ADMIT A FRESH CLAIM WHICH WAS NOT BEFORE THE ASSESSING OFFICER. THE LEGAL POSITION IN THIS REGARD IS QUITE WELL-SETTLED AND WE MAY REFER TO TH E JUDGEMENTS OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT, 229 ITR 383 AND JUTE CORPORATION OF INDIA LTD. VS. CIT, 187 ITR 688 (SC) IN THIS REGARD. IN THE PRESENT CASE, THE ADDITIONAL GROUND ENTERTAINED BY THE CIT(A) INVOLVED A POINT OF LAW AND IT RELATED TO ASSESSABI LITY OF CAPITAL GAIN, WHICH WAS SUBJECT-MATTER OF CONSIDERATION BEFORE HIM. IT IS ALSO EVIDENT THAT THE CLAIM WAS BASED ON AN ORDER OF A JUDICIAL BODY, NAMELY, D ISTRICT JUDGE, JALGAON RENDERED WITH REFERENCE TO SECTION 18 OF THE LAND A CQUISITION OF ACT, 1894. THE CLAIM OF THE ASSESSEE IS ARISING FROM OPERATION OF LAW AND THEREFORE, IN OUR VIEW, THE CIT(A) MADE NO MISTAKE IN ADMITTING SUCH A CLAIM FOR THE PURPOSES OF COMPUTING ASSESSEES CORRECT TAX LIABILITY. ACC ORDINGLY, WE HEREBY AFFIRM THE ACTION OF THE CIT(A) IN THIS REGARD AND THE REVENUE HAS TO FAIL. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 2166/PN/2012 IS DISMISSED. ITA NO.2043/PN/2012 ITA NO.2166/PN/2012 18. RESULTANTLY, WHEREAS THE APPEAL OF THE ASSESSEE IS ALLOWED, THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 20 TH MARCH, 2014 SUJEET/GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, NASHIK; 4) THE CIT-II, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE