M/s. Guru Kripa Agro Foods, Haryana V. ITO, Karnal

ITA 2188/DEL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7260 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 25-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Keywords: Capital asset; Opportunity of being heard; Principle of natural justice; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 2188/DEL /2013 ASSESSMENT YEAR: 2009-10 M/S GURU KRIPA AGRO FOODS VS. THE I.T.O SANDHIR ROAD, NILOKHERI WARD -3 KARNAL, HARYANA KARNAL PAN : AABFG 4916 C [APPELLANT] [RESPONDENT] DATE OF HEARING : 25.07.2016 DATE OF PRONOUNCEMENT : 29.08.2016 APPELLANT BY : SHRI GIRISH ANEJA , CA RESPONDENT BY : SHRI AMRIT LAL, SR. DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A), KARNAL, DATED 02/01/2013 FOR A .Y 2011-12 PASSED IN FIRST APPEAL NO. IT/91/KNL/CIT(A)/KNL/201 1-12. 2. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE REA D AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE LD. CIT(A) HAS ERRED IN LAW WHILE CONFIRMING THE ORDER OF THE LD. AO. THE LD. AO HAS COMPLETED THE ASSESSMENT PROCEED INGS WITHOUT PROVIDING PROPER OPPORTUNITY OF BEING HEARD TO THE 2 ITA NO. 2188/ DEL/2013 2 ASSESSEE, THE SAME IS AGAINST THE PRINCIPLE OF NATU RAL JUSTICE AND AS SUCH THE UPHOLDING OF ORDER OF LD. AO BY CIT (A) IS UNJUSTIFIED UNDER LAW AND MAY PLEASE BE SET ASIDE. 2. THAT THE LD CIT (A) HAS ERRED IN LAW WHILE IN UP HOLD THE CAPITAL GAIN ARISING FROM TRANSFER OF CAPITAL GAIN ASSETS ON DISTRIBUTION UNDER SECTION 45(4) OF THE INCOME TAX ACT, 1961 IN THE ASSESSMENT YEAR 2009-2010, WHEREAS THE FIRM WAS DISSOLVED ON 31.03.2008 AND CAPITAL GAIN ARISING ON SUCH TRAN SACTION IS CHARGEABLE TO TAX AS PER PROVISIONS OF SECTION 45(4 ) OF INCOME TAX ACT IN THE ASSESSMENT YEAR 2008-2009. THUS ENHA NCEMENT OF RS. 48,74,280/- MADE BY THE LD. AO IN THE ASSESSMEN T YEAR 2009- 2010 WHICH IS FURTHER CONFIRMED BY CIT (A) IS NOT C ORRECT UNDER LAW AND THUS THE SAME MAY PLEASE BE DELETED. 3. THE LD. CIT (A) HAS ERRED IN LAW WHILE CONFIRMIN G THE ACTION MADE BY LD. AO WITHOUT PROVIDE THE REASONS F OR REJECTING THE CIRCLE RATE OF LAND FURNISHED BY THE ASSESSEE B EFORE HIM AND ALSO THE RATE OF CONSTRUCTION HAS BEEN TAKEN BY HIM ONLY ON THE BASIS OF ORAL INQUIRY. THUS, THE ADDITION OF RS. 48 ,74,280/- IS NOT JUSTIFIED AND THE SAME MAY PLEASE BE DELETED. 4. THAT THE LD CIT(A) HAS ERRED IN LAW WHILE CONFIR MING THE ACTION OF THE LD. AO OF CALCULATING THE FULL VALUE OF CONSIDERATION IN RESPECT OF LAND AND BUILDING TRANSFERRED ON DISS OLUTION IN ARBITRARY MANNER WITHOUT REFERRING THE MATTER TO VA LUATION OFFICER U/S 55A R.W. SECTION 142A OF THE INCOME TAX ACT, AND AS SUCH THE ADDITION OF RS. 46,74,280/- ON ACCOUNT OF CAPITAL GAIN U/S 45(4) MADE BY THE LD AO AND CONFIRMED BY CIT(A) IS NOT ACCEPTABLE AND MAY PLEASE BE DELETED. 3 ITA NO. 2188/ DEL/2013 3 5. THAT THE LD CIT(A) HAS ERRED IN LAW WHILE CONFIR MING THE ADHOC ADDITION OF RS 2,00,000/- MADE BY THE LD AO U /S 45(4), IN RESPECT OF TRANSFER OF BUILDING CONSTRUCTED ON LAND BELONGING TO THIRD PARTY, IS UNJUSTIFIED AND MAY PLEASE BE DELET ED. GROUND NO. 1 3. APROPOS THIS GROUND, WE HAVE HEARD THE RIVAL SUB MISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON REC ORD OF THE TRIBUNAL INTER ALIA THE ASSESSMENT ORDER, IMPUGNED ORDER, WR ITTEN SUBMISSIONS OF THE APPELLANT AND PAPER BOOK FILED BY THE ASSESS EE SPREAD OVER 42 PAGES. THE LD. AR SUBMITTED THAT THE LD. CIT(A) H AS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER OF THE A.O AS TH E A.O DID NOT PROVIDE DUE OPPORTUNITY OF BEING HEARD TO THE ASSES SEE. THE LD. COUNSEL OF THE REVENUE CONTENDED THAT THE A.O HAS S HOWN HIS INTEREST ABOUT THE ISSUE BY ISSUING SHOW CAUSE NOTICE DATED 20.12.2011 AND ASSESSEE ALSO FILED HIS REPLY ON 23.12.2011 IN THIS REGARD AFTER CONSIDERING THE REPLY OF THE ASSESSEE AND ALLOWING OPPORTUNITY OF BEING HEARD THE A.O DECIDED THE ISSUE. THUS THERE WAS NO VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. 4. ON CAREFUL CONSIDERATION OF THE ABOVE, AT THE VE RY OUTSET, WE ARE OF THE VIEW THAT THE AO ISSUED NOTICE TO THE ASSESSEE AND THE SAME WAS REPLIED BY THE ASSESSEE AND AFTER CONS IDERING THE ENTIRE REPLY AND HEARING, THE LD. AR SHRI M.L. ANEJ A, ADVOCATE OF 4 ITA NO. 2188/ DEL/2013 4 THE ASSESSEE AND SHRI NATE SINGH, ACCOUNTANT OF THE ASSESSEE, THE AO PASSED THE IMPUGNED ASSESSMENT ORDER WHICH IS NO T VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE. 5. FROM THE ORDER OF THE LD. CIT(A), WE OBSERVE THAT THE FIRST APPELLATE AUTHORITY CONSIDERED THE SUBMISSIONS DATE D 20.6.2012 OF THE ASSESSEE AND CALLED FOR REMAND REPORT FROM THE AO AND ALSO PROVIDED OPPORTUNITY TO THE ASSESSEE TO SUBMIT REJO INDER ON 31.12.2012 TO THE SAID REMAND REPORT DATED 14.12.20 12. THE CIT(A) DREW HIS CONCLUSION AFTER PROVIDING DUE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. THUS WE ARE UNABLE TO AGREE WITH THE CONTENTIONS OF THE ASSESSEE THAT IT WAS NOT PRO VIDED DUE OPPORTUNITY OF BEING HEARD. CONSEQUENTLY, GROUND N O. 1 OF THE ASSESSEE BEING DEVOID OF MERIT IS DISMISSED. GROUND NOS. 2 TO 5 6. APROPOS THIS GROUND, WE HAVE HEARD THE RIVAL SUB MISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON REC ORD OF THE TRIBUNAL INTER ALIA THE ASSESSMENT ORDER, IMPUGNED ORDER, WR ITTEN SUBMISSIONS OF THE APPELLANT AND PAPER BOOK FILED BY THE ASSESS EE SPREAD OVER 42 PAGES AND THE DECISION OF THE HON'BLE KERALA HIGH C OURT IN THE CASE OF CIT VS. SOUTHERN TUBES REPORTED AT 306 ITR 216 [KER ] AS RELIED BY THE LD. AR. THE LD. AR REITERATED THE WRITTEN SUBMISSIO NS DATED 25.7.2016 5 ITA NO. 2188/ DEL/2013 5 AND SUBMITTED THAT THE DISSOLUTION DEED DATED 31.3. 2008 CLEARLY REVEALS THAT THE PROVISIONS OF SECTION 45(4) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHOR T] ARE ATTRACTED ON 31.3.2008 ONLY AND THEREFORE, THE CAPITAL GAINS ON THE ASSETS TRANSFERRED TO THE OUTGOING PARTNERS SHOULD BE TAXE D IN A.Y 2008-09 ONLY AND NOT IN A.Y 2009-10. DRAWING OUR ATTENTION TOWARDS THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE C ASE OF SOUTHERN TUBES [SUPRA], THE LD. AR POINTED OUT THAT THE A.O IN HIS REMAND REPORT PARA 2(VI) HAS PLACED HIS RELIANCE ON THE DE CISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. VIJAYALAK SHMI METAL INDUSTRIES REPORTED AT 256 ITR 540 [MDS] AND AFTER CONSIDERING THE RATIO OF THIS DECISION, THE HON'BLE HIGH COURT OF KERALA IN THE CASE OF SOUTHERN TUBES [SUPRA] OBSERVED HELD THAT DISSOLUTION DEED IS AN AGREEMENT AND IF THE PROVISIONS OF SUCH DEED PROVID E FOR RELINQUISHMENT OF RIGHT OF ONE PARTNER ON THE ASSET S, NAMELY, IMMOVABLE PROPERTY IN FAVOUR OF ANOTHER PARTNER, TH EN THE LATTER BECOMES ABSOLUTE OWNER OF THE PROPERTY. 7. THE LD. AR DREW OUR ATTENTION TOWARDS PARA 3, 4 AND 5 OF THE SAID ORDER, WHICH IS BEING REPRODUCED HEREIN BELOW FOR READY REFERENCE: 6 ITA NO. 2188/ DEL/2013 6 3. SINCE THE QUESTION RAISED PERTAINS TO INTERPRET ATION OF SECTION 2(47) AND SECTION 45(4) OF THE I.T. ACT, WE EXTRACT HEREUNDER THESE TWO PROVISIONS FOR EASY REFERENCE: 2(47) 'TRANSFER', IN RELATION TO A CAPITAL ASSET, I NCLUDES,- (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASS ET OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN; OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK-IN- TRADE OF A BUSINESS CA RRIED ON BY HIM, SUCH CONVERSION OR TREATMENT; OR, (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANC E OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882); OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIASTION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANG EMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFER RING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERTY. EXPLANATION.-- FOR THE PURPOSES OF SUB-CLAUSES (V) AND (VI), 'IMMOVABLE PROPERTY' SHALL HAVE THE SAME MEANING AS IN CLAUSE (D) OF SECTION 269UA . 45. CAPITAL GAINS. ......................... (4) THE PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET BY WAY OF DISTRIBUTION OF CAPITAL ASSETS ON THE DISSOLUTIO N OF A FIRM OR OTHER ASSOCIATION OF PERSONS OR BODY OF INDIVIDUALS (NOT BEING A COMPANY OR A CO- OPERATIVE SOCIETY) OR OTHERWISE, SHALL BE CHARGEABL E TO TAX AS THE INCOME OF 7 ITA NO. 2188/ DEL/2013 7 THE FIRM, ASSOCIATION OR BODY, OF THE PREVIOUS YE AR IN WHICH THE SAID TRANSFER TAKES PLACE AND, FOR THE PURPOSES OF SECTION 48 , THE FAIR MARKET VALUE OF THE ASSET ON THE DATE OF SUCH TRANSFER SHA LL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER. WHILE COUNSEL FOR THE REVENUE RELIED ON THE DECISIO NS OF THE ANDHRA PRADESH, BOMBAY AND KARNATAKA HIGH COURTS REPORTED IN 250 I.T.R. 581, 265 I.T.R. 346 AND 287 I.T.R. 404 RESPECTIVELY, COUNSEL APPEARING FOR THE ASSESSEES RELIED ON THE UNREPORTED DECISION OF THIS COURT IN I.T.R. 235 AND 236 OF 1997 DATED 29.2.2002 AND THAT OF THE MADRAS HIGH COURT IN CIT V. VIJAYALAKSHMI METAL INDUSTRIES , 243 I.T.R. 540. THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE D ECISION OF OTHER TRIBUNALS. THE TRIBUNAL HAS TAKEN THE VIEW THAT SECTION 2(47) DEFINING 'TRANSFER' DOES NOT TAKE IN THE CASE OF DISSOLUTION OF A FIRM AND SINCE SECTION 45(4) IS NOT A SELF-CONTAINED CODE FOR ASSESSMENT OF CAP ITAL GAINS ARISING FROM THE TRANSFER OF CAPITAL ASSETS B Y WAY OF DISTRIBUTION OF CAPITAL ASSETS ON THE DISSOLUTION OF THE FIRM, NO A SSESSMENT IS PERMISSIBLE IN THE CASE OF THE ASSESSEE. WE ARE UNABLE TO AGREE WI TH THE VIEW TAKEN BY THE TRIBUNAL THAT SECTION 2(47) DOES NOT COVER DISSOLUTION AND DISTRIBUTION OF ASSETS OF A FIRM BECAUSE SUB- CLAUSE (VI) OF SECTION 2(47) COVERS EVERY AGREEMENT OR ARRANGEMENT IN WHATEVER MANNER WHICH H AS THE EFFECT OF TRANSFERRING OR ENABLING ENJOYMENT OF ANY IMMOVABLE PROPERTY. IN FACT THE TRANSACTIONS REFERRED TO IN THE LATTER PART OF CLAU SE (VI) ARE EXHAUSTIVE AND IN OUR VIEW THE SCOPE OF THE SECTION IS SUCH THAT I F THE RESULT OF ARRANGEMENT OR AGREEMENT OF A TRANSACTION IS A TRAN SFER OF ASSETS OR ENABLING ENJOYMENT OF ANY IMMOVABLE PROPERTY, THEN THE TRANSACTION WHICH LED TO SUCH RESULT IS A TRANSFER. IN THIS CASE THE DISSOLUTION DEED PROVIDES THAT LAND AND FACTORY BUILDING ON DISSOLUTION WILL DEVOLVE UPON ONE OF THE PARTNERS WHO WANTED TO CONTINUE BUSINESS AS A PROPR IETOR. DISSOLUTION DEED IS AN AGREEMENT AND IF THE PROVISIONS OF SUCH DEED PROVIDE FOR RELINQUISHMENT OF RIGHT OF ONE PARTNER ON THE ASSET S, NAMELY, IMMOVABLE PROPERTY IN FAVOUR OF ANOTHER PARTNER, THEN THE LAT TER BECOMES ABSOLUTE OWNER OF THE PROPERTY. 8 ITA NO. 2188/ DEL/2013 8 4. IN THE CASE OF ASSESSEE IN I.T.A. NO. 219 OF 200 2 ALSO, EVEN THOUGH THERE IS SIMULTANEOUS RECONSTITUTION OF THE FIRM, IT IS C LEAR THAT RECONSTITUTION TOOK PLACE AFTER DISSOLUTION OF THE FIRM WHEREIN ON E PARTNER ASSIGNED HIS RIGHT IN THE ASSETS IN FAVOUR OF THE OTHER PARTNERS ON TAKING CONSIDERATION IN CASH. 5. IN SHORT, THE TRANSACTIONS IN BOTH THE CASES HAV E RESULTED IN DISSOLUTION OF THE FIRM AND PARTNER OR PARTNERS GETTING RIGHTS OVER THE IMMOVABLE PROPERTY. SUBSEQUENT RECONSTITUTION OF THE FIRM DOE S NOT AFFECT THE LIABILITY UNDER SECTION 45(4) WHICH IS A LIABILITY OF THE DISSOLVED FIRM TO BE ASSESSED FOR CAPITAL GAINS IN TERMS OF SECTION 45 (4). OF COURSE, DISSOLVED FIRM CAN BE ASSESSED FOR CAPITAL GAINS UNDER SECTION 45(4) BY VIRTUE OF PROVISIONS CONTAINED IN SECTION 189(1) OF THE I.T. ACT. DECISIONS OF VARIOUS HIGH COURTS REFERRED ABOVE ON THE SIDE OF COUNSEL A PPEARING FOR THE DEPARTMENT ARE IN SUPPORT OF THIS VIEW TAKEN BY US. THE UNREPORTED DECISION REFERRED TO BY COUNSEL FOR THE ASSESSEE PE RTAIN TO RETIREMENT OF A PARTNER, BUT RETENTION OF ASSETS OF THE FIRM. SIMIL ARLY, THE MADRAS HIGH COURT'S DECISION RELIED ON BY THE ASSESSEE PERTAINS TO DEATH OF A PARTNER WHICH DID NOT HAVE THE EFFECT OF CONFERRING EXCLUSI VE RIGHT ON THE PROPERTIES OF THE FIRM ON THE REMAINING PARTNERS. S INCE WE HOLD THAT THE TRANSACTION IN BOTH THE CASES IS TRANSFER WITHIN TH E MEANING OF SECTION 2(47)(VI) OF THE ACT, WE HAVE TO NECESSARILY INTERFERE WIT H THE ORDERS OF THE TRIBUNAL. CONSEQUENTLY, WE ALLOW THE APPEALS FI LED BY THE DEPARTMENT BY SETTING ASIDE THE ORDERS OF THE TRIBUNAL ON THIS ISSUE. HOWEVER, WE FIND THAT THE TRIBUNAL HAS NOT CONSIDERED OTHER ISSUES R AISED IN THE APPEALS WHICH PERTAIN TO VALUATION. WE DIRECT THE TRIBUNAL TO HEAR THE PARTIES ON THE REMAINING ISSUES AND DISPOSE OF THE APPEALS AT THE EARLIEST . 8. IN VIEW OF THE ABOVE, THE LD. AR SUBMITTED THAT CHARGEABILITY OF CAPITAL GAINS U/S 45(4) OF THE ACT WHICH HAS BEEN W RONGLY APPLIED IN A.Y 2009-10 MAY KINDLY BE DELETED AS SAME MAY BE CH ARGED IN A.Y 9 ITA NO. 2188/ DEL/2013 9 2008-09 ONLY, FOR WHICH THE ASSESSEE HAS NO OBJECTI ON IF THE SAME IS CALCULATED AS LEGALLY PERMISSIBLE. 9. REPLY TO THE ABOVE, THE LD. DR SUPPORTED THE ASS ESSMENT ORDER AS WELL AS THE FIRST APPELLATE ORDER AND TOOK US TH ROUGH THE SUBMISSION OF THE ASSESSEE BEFORE THE CIT(A) DATED 4.12.2012 A ND SUBMITTED THAT THE ASSESSEE ITSELF HAS NOT CALCULATED AND OFFERED TO TAX ANY CAPITAL GAINS ON THE ASSETS TRANSFERRED TO THE OUTGOING PAR TNERS DURING 2008- 08 AND ALL TRANSACTIONS AND TRANSFER OF ASSETS INCL UDING ACCOUNTING ENTRIES HAVE BEEN MADE DURING F.Y. 2008-09 I.E. ON OR AFTER 1.4.2008 PERTAINING TO A.Y 2009-10. THE LD. DR DREW OUR ATT ENTION TOWARDS LETTER OF THE ASSESSEE DATED 4.12.2012, AVAILABLE A T PAGES 37 & 38 OF THE ASSESSEES PAPER BOOK [APB FOR SHORT] AND VEHEM ENTLY CONTENDED THAT THE ASSESSEE FAIRLY ADMITTED THAT ITR FOR A.Y 2008-09 DOES NOT HAVE ANY INCLUSION OF CAPITAL GAIN IN THE COMPUTATI ON OF INCOME. THE LD. DR FURTHER CONTENDED THAT THE ASSESSEE NEITHER OFFERED CAPITAL GAIN FOR A.Y 2008-09 IN ITS RETURN OF INCOME NOR RE ADY TO INCLUDE CAPITAL GAINS IN A.Y 2009-10, THEN THE OBJECT OF VA RYING UPTO THE TRIBUNAL LEVEL IS VERY CLEAR THAT THE ASSESSEE IS N OT WILLING TO PAY ANY TAX ON THE CAPITAL GAIN ACCRUED TO IT ON TRANSFER O F ASSETS TO THE OUTGOING PARTNERS. THE LD. DR ALSO POINTED OUT THA T THE COPY OF DISSOLUTION DEED, AVAILABLE AT PAGES 3 TO 6 OF APB HAVE BEEN NOTARIZED ON 2.9.2008 SHOWING THE DATE OF DISSOLUTION AS31.3. 2008 AND THE 10 ITA NO. 2188/ DEL/2013 10 PURPOSE OF SHOWING THE DATE OF DISSOLUTION AS 31.3. 2008 IS NOT BONAFIDE AS ALL THE SUBSEQUENT ACTS INCLUDING TRANS FER OF THE FIRMS ASSETS TO THE OUTGOING PARTNERS HAVE BEEN MADE DURI NG F.Y. 2009-10 I.E. DURING THE FINANCIAL PERIOD COMMENCING 1.4.200 8 TO 31.3.2009. THEREFORE, THE CAPITAL GAINS ARISING TO THE ASSESSE E U/S 45(4) OF THE ACT IS LEVIABLE IN A.Y 2009-10 ONLY. THE LD. DR AL SO DREW OUR ATTENTION TOWARDS THE CONCLUSIVE PARA 5.2 OF THE FIRST APPELL ATE ORDER AND POINTED OUT THAT AS PER SECTION 2(47) OF THE ACT, T HE MEANING OF THE TERM TRANSFER HAS BEEN DEFINED AND WITH PREVAILIN G PRACTICES IN THE MARKET, THE SCOPE OF SECTION 2(47) OF THE ACT HAS B EEN SO WIDENED SO AS TO INCLUDE ALL KINDS OF ARRANGEMENTS WHICH CONFE R THE RIGHTS OF ENJOYMENT OF PROPERTY WITHOUT THERE BEING ANY NEED FOR REGISTRATION. THE LD. DR LASTLY POINTED OUT THAT THE ACCOUNTS OF THE ASSESSEE CLEARLY INDICATE TRANSFER OF THE ASSETS TO THE RETIRING PAR TNERS TOOK PLACE DURING F.Y. 2008-09 AND UNDER THE PROVISIONS OF THE STATUTE 45(4) R.W.S 24(7) OF THE ACT, SUCH A TRANSFER ATTRACTS CAPITAL GAINS OF THE PREVIOUS YEAR IN WHICH THE SAID TRANSFER TAKES PLACE MEANING THEREBY THAT PROFITS OR GAINS ARISING FROM CAPITAL ASSETS BY WAY OF DISTRIBUTION OF CAPITAL ASSETS ON DISSOLUTION OF FIRM, SHALL BE LEV IABLE TO TAX AS INCOME OF THE FIRM OF THE PREVIOUS YEAR IN WHICH THE TRANS FER TAKES PLACE. THE LD. DR FURTHER CONTENDED THAT IN THE PRESENT CA SE, TRANSFER OF CAPITAL ASSETS TOOK PLACE DURING A.Y 2009-10 AND ME RELY BECAUSE THE PARTNERS AGREED TO DISSOLVE THE FIRM RETROSPECTIVEL Y, W.E.F. 31.3.2008, 11 ITA NO. 2188/ DEL/2013 11 IT CANNOT BE PRESUMED THAT THE CAPITAL ASSETS WERE TRANSFERRED TO THE OUTGOING PARTNERS ON THE VERY SAME DATE WITHOUT ANY FURTHER STEPS, SUCH AS, ENTRIES IN THE RESPECTIVE CAPITAL ACCOUNTS OF THE OUTGOING PARTNERS AND TRANSFER OF CAPITAL ASSETS WHICH WAS I MMOVABLE IN THE NAME OF OUTGOING PARTNERS. THE LD. DR ALSO POINTED OUT THAT AS PER THE DISSOLUTION DEED PARA 5 RUNNING UPTO PAGE 2, TH E PARTIES OF THE SECOND, NAMELY, SHRI GIAN SAGAR AND PARTY OF THE TH IRD PART SMT RAJ RANI HAD TO PAY RS. 10,92,446/- AND RS. 24,90,856/- RESPECTIVELY TO FIRST PART ON ACCOUNT OF BALANCE PAYMENT PAYABLE BY THEM AFTER ADJUSTING THEIR CAPITAL ACCOUNT AGAINST PROPERTIES TO BE GIVEN/ASSIGNED TO THEM WITHIN A PERIOD OF FOUR MONTHS FROM THE DAT E OF DISSOLUTION AND THESE OBLIGATIONS AND ACCOUNTING ENTRIES AND TR ANSFER OF IMMOVABLE ASSETS TOOK PLACE DURING F.Y. 2008-09 STA RTING W.E.F 1.4.2008. THEREFORE, CAPITAL GAINS WERE RIGHTLY TR EATED AS INCOME OF THE FIRM FOR A.Y 2009-10. THEREFORE, THE APPEAL OF THE ASSESSEE BEING DEVOID OF MERITS MAY BE DISMISSED. 10. IN REJOINDER TO THE ABOVE SUBMISSIONS, THE LD. AR ALSO PLACED RELIANCE ON THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS. SOUTHERN TUBES [SUPRA] AND SUBMITTED THA T WHEN THE FIRM WAS DISSOLVES ON 31.3.2008 DURING THE F.Y. 2007-08 PERTAINING TO A.Y 2008-08, THEN THE CAPITAL GAINS CANNOT BE TAXED IN A.Y 2009-10. THE LD. AR VEHEMENTLY CONTENDED THAT AS PER THE DECISIO N OF THE HON'BLE 12 ITA NO. 2188/ DEL/2013 12 GUJARAT HIGH COURT IN THE CASE OF CIT VS. R.M. AM [ 1971] 82 ITR 194 WHEREIN IT WAS HELD THAT THE TRANSACTION, IN ORDER TO ATTRACT THE CHARGE OF TAX AS CAPITAL GAINS, MUST BE SUCH THAT C ONSIDERATION IS RECEIVED BY THE ASSESSEE OR ACCRUES TO THE ASSESSEE AS A RESULT OF THE EXTINGUISHMENT OF THE RIGHTS IN THE CAPITAL ASSET. IN THE PRESENT CASE, THE ASSESSEE FIRM EXTINGUISHED ITS RIGHTS FROM CAPI TAL ASSETS GIVEN TO THE OUTGOING PARTNER ON 31.3.2008 WHEN THE FIRM WAS DISSOLVED. THEREFORE, CAPITAL GAIN CANNOT BE TAXED IN A.Y 2009 -10. 11. ON CAREFUL CONSIDERATION OF THE ABOVE, FIRST OF ALL, FOR READY REFERENCE, WE FIND IT APPROPRIATE TO REPRODUCE THE PROVISIONS OF SECTION 45(4) AND 2(47) OF THE ACT AS FOLLOWS: (4) THE PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET BY WAY OF DISTRIBUTION OF CAPITAL ASSETS ON T HE DISSOLUTION OF A FIRM OR OTHER ASSOCIATION OF PERSONS OR BODY O F INDIVIDUALS (NOT BEING A COMPANY OR A CO-OPERATIVE SOCIETY) OR OTHERWISE, SHALL BE CHARGEABLE TO TAX AS THE INCOME OF THE FIR M, ASSOCIATION OR BODY, OF THE PREVIOUS YEAR IN WHICH THE SAID TRA NSFER TAKES PLACE AND, FOR THE PURPOSES OF SECTION 48 , THE FAIR MARKET VALUE OF THE ASSET ON THE DATE OF SUCH TRANSFER SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACC RUING AS A RESULT OF THE TRANSFER. 2(47) 'TRANSFER', IN RELATION TO A CAPITAL ASSET, INCLUDES, (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE A SSET ; OR 13 ITA NO. 2188/ DEL/2013 13 (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN ; OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW ; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK-IN-TRA DE OF A BUSINESS CARRIED ON BY HIM, SUCH CONVERSION OR TREA TMENT ; OR (IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON B OND; OR (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN P ART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 ( 4 OF 1882) ; OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AG REEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVE R) WHICH HAS THE EFFECT OF TRANSFERRING, OR ENABLING T HE ENJOYMENT OF, ANY IMMOVABLE PROPERTY. 12. ON A VIGILANT PERUSAL OF THE PROVISIONS OF SECT ION 45(4) OF THE ACT, IT IS VIVID THAT THE PROFITS OR GAINS ARIS ING FROM THE TRANSFER OF CAPITAL ASSETS BY WAY OF DISTRIBUTION O F CAPITAL ASSETS ON THE DISSOLUTION OF FIRM SHALL BE CHARGEABLE TO T AX AS THE INCOME OF THE FIRM OF THE PREVIOUS YEAR IN WHICH TH E SAID TRANSFER TAKES PLACE AND FOR THE PURPOSE OF SECTION 48, THE FAIR MARKET VALUE OF THE ASSET ON THE DATE OF SUCH TRANS FER SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RE CEIVED OR ACCRUING AS A RESULT OF THE TRANSFER. 13. THE MAIN THRUST OF THE ASSESSEE APPELLANT, IN T HE PRESENT CASE, IS THAT AS PER THE DISSOLUTION DEED, THE FIRM WAS DISSOLVED 14 ITA NO. 2188/ DEL/2013 14 ON 31.3.2008 WITHIN F.Y. 2007-08 PERTAINING TO A.Y 2008-09. THEREFORE, CAPITAL GAIN AROSE TO THE ASSESSEE FIRM ON TRANSFER OF ASSETS TO THE OUTGOING PARTNERS CANNOT BE TAXED IN A.Y 2009-10. FIRST OF ALL, WE MAY POINT OUT THAT AS PER THE ASSE SSEES REPLY TO THE CIT(A) DATED 4.12.2012, THE ASSESSEE, IN PARA 2 SUBMITTED AS FOLLOWS: IT IS FURTHER STATED THAT AT THE TIME OF FILING TH E ITR FOR THE AY 2008-09, THE APPLICABILITY OF SECTION 45(4) OF THE ACT WHEN THERE IS DISSOLUTION, RECONSTITUTION AND CONTINUITY IN BUSINESS AS A GOING CONCERN, WAS NOT CLEAR. IT WAS ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS U/ S 143)(3) OF THE ACT BEFORE THE A.O FOR THE AY 2009-1 0, AN EXTENSIVE STUDY OF THE CAPITAL GAIN PROVISIONS WAS UNDERTAKEN WHICH SUGGESTED THAT CAPITAL GAINS DO AC CRUE AT THE TIME WHEN DISSOLUTION TAKES PLACE ALTHOUGH T HE BUSINESS IS CONTINUED AS A GOING CONCERN. IN VIEW O F THE ABOVE FACTUAL POSITION, THE ITR FOR THE AY 2008-09 DOES NOT HAVE ANY INCLUSION OF CAPITAL GAINS IN THE COMP UTATION OF INCOME ALTHOUGH THE ASSESSEE REITERATES ITS COMMITMENT TO PAY THE DUE TAXES, IF ANY APPLICABLE FOR THE CORRECT AND RELEVANT ASSESSMENT YEARS AS STATUT ORILY LIABLE UNDER THE ACT. 14. IN VIEW OF THE ABOVE SUBMISSIONS AND FACTUAL PO SITION, IT IS AMPLY CLEAR THAT THE INCOME TAX RETURN FOR A.Y 2008 -09 DOES NOT HAVE ANY INCLUSION OF ANY CAPITAL GAINS IN THE COMP UTATION OF INCOME, ALTHOUGH THE ASSESSEE REITERATED ITS COMMIT MENT TO PAY THE DUE TAXES, IF ANY, APPLICABLE FOR THE CORRECT A ND RELEVANT A.YS AS STATUTORILY LIABLE UNDER THE ACT. THUS, WE MAY SAFELY 15 ITA NO. 2188/ DEL/2013 15 PRESUME THAT THE ASSESSEE DID NOT OFFER CAPITAL GAI NS ACCRUED TO IT ON TRANSFER OF CAPITAL GAINS TO THE OUTGOING PAR TNERS IN THE RETURN FOR A.Y 2008-09. FURTHER, FROM THE COPY OF DISSOLUTION DEED AVAILABLE AT PAGES 3 TO 6 OF THE APB, IT IS CL EAR THAT THE DEED MENTIONS DISSOLUTION OF FIRM ON 31.3.2008, BUT IT WAS NOTARIZED ONLY ON 2.9.2008 DURING A.Y 2009-10. FRO M THE COPIES OF THE CAPITAL ACCOUNTS OF THE ASSESSEE, RETIRING P ARTNERS AVAILABLE AT PAGES 29 30 APB, IT IS ALSO VIVID TH AT THE TRANSFER OF ASSETS WAS RECORDED IN THE BOOKS OF ACCOUNTS DUR ING F.Y. 2008- 09 PERTAINING TO A.Y 2009-10, WHICH ACTION SUPPORTS THE STAND OF THE A.O. 15. THE GIST OF THE CONTENTIONS OF THE APPELLANT-AS SESSEE IS THAT WHEN THE DISSOLUTION OF THE PARTNERSHIP FIRM HAS BE EN MADE ON 31.3.2008, THEN IT HAS TO BE PRESUMED THAT THE TRAN SFER OF ASSETS IN FAVOUR OF THE OUTGOING PARTNERS TOOK PLACE IMMED IATELY ON THE VERY SAME DATE WHEN THE PARTNERSHIP FIRM WAS DISSOL VED. TO SUPPORT THIS CONTENTION, THE LD. AR HAS MAINLY RELI ED ON THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CA SE OF CIT VS. SOUTHERN TUBES [SUPRA] AND DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF R.M. AM [SUPRA]. FROM A VIGIL ANT READING OF THE DECISION OF THE HON'BLE KERALA HIGH COURT IN TH E CASE OF SOUTHERN TUBES [SUPRA], WE OBSERVE THAT THEIR LORDS HIPS, 16 ITA NO. 2188/ DEL/2013 16 ALLOWING THE APPEAL OF THE REVENUE, CATEGORICALLY H ELD THAT SINCE THE TRANSACTION HAS RESULTED IN DISSOLUTION OF FIRM AND PARTNER GETTING RATES OF IMMOVABLE TRANSACTION WAS TRANSFER RED WITHIN THE MEANING OF SECTION 2(47)(VI) OF THE ACT AND THE ASSESSEE FIRM WAS LIABLE TO BE ASSESSED ON CAPITAL GAINS IN TERMS OF SECTION 45(4) OF THE ACT. IN THIS JUDGMENT, IN OUR HUMBLE U NDERSTANDING, THEIR LORDSHIPS HAVE ACCEPTED THE STAND OF THE REVE NUE BY OBSERVING THAT THE ASSESSEE FIRM, HAVING TWO PARTNE RS, WERE DISSOLVED UNDER THE DEED OF DISSOLUTION, ONE PARTNE R TOOK OVER THE LAND AND FACTORY BUILDING OF THE ASSESSEE AFTER DISSOLUTION OF FIRM WHILE THE SECOND PARTNER CONTINUED BUSINESS AS PROPRIETORSHIP, THEREFORE, THE TRANSACTION WHICH RE SULTED ON THE OCCASION OF DISSOLUTION OF THE PARTNERSHIP FIRM WAS TRANSFERRED WITHIN THE MEANING OF SECTION 2(47)(VI) OF THE ACT. WE RESPECTFULLY AGREE WITH THIS PROPOSITION AND IN THE PRESENT CASE, FROM THE FACTS EMERGING FROM THE DOCUMENTARY EVIDEN CE AND MATERIAL AVAILABLE ON RECORD, IT IS AMPLY CLEAR THA T THE TRANSFER OF CAPITAL ASSETS ON DISSOLUTION OF FIRM TOOK PLACE WITHIN F.Y. 2008-09 RELEVANT TO A.Y 2009-10. FROM A VIGILANT R EADING OF THE HON'BLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF R.M. AM [SUPRA] WE OBSERVE THAT IT IS A CASE OF LIQUIDATION OF A COMPANY AND THE RATIO OF THIS JUDGMENT CANNOT BE APPLIED TO THE CASE OF A PARTNERSHIP FIRM WHERE CAPITAL GAINS AROSE TO THE A SSESSEE FROM 17 ITA NO. 2188/ DEL/2013 17 TRANSFER OF ASSETS TO THE OUTGOING PARTNERS. IN VI EW OF THE ABOVE, WE ARE OF THE HUMBLE OPINION THAT IN THESE D ECISIONS, AS RELIED BY THE ASSESSEE, DOES NOT MANDATE THAT THE D ATE OF DISSOLUTION OF THE FIRM, BY WAY OF A DOCUMENT WHICH WAS NOTARISED AFTER A LAPSE OF FIVE MONTHS TOOK PLACE R ETROSPECTIVELY I.E. ON THE DATE ON WHICH THE PARTNERS AGREED TO EF FECT DISSOLUTION OF THE FIRM. IN THE PRESENT CASE, AS W E HAVE NOTED ABOVE, THAT THE TRANSFER OF CAPITAL ASSETS TO THE O UTGOING PARTNERS WAS MADE BY WAY OF BOOK ENTRIES TO THE RES PECTIVE ACCOUNTS OF THE OUTGOING PARTNERS AND OTHER FORMALI TIES AS REQUIRED UNDER THE REGISTRATION ACT WAS CARRIED ON FROM THE PERIOD STARTING FROM 1.4.2008 TO 31.3.2009 PERTAINI NG TO A.Y 2009-10. THEREFORE, CAPITAL GAIN ACCRUED TO THE FI RM ON TRANSFER OF ASSETS TO THE OUTGOING PARTNERS HAS TO BE TAXED U/S 43(4) OF THE ACT IN A.Y 2008-09 AND THUS WE CANNOT UPHOLD TH E ACTION OF THE AO AS WELL AS THE IMPUGNED ORDER. WE ARE THUS UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH THE ASSESSMENT O RDER WHEREIN IT HAS BEEN HELD THAT CAPITAL GAINS ACCRUED TO THE FIRM ON TRANSFER OF CAPITAL GAINS ASSETS TO THE OUTGOING PA RTNERS IS TAXABLE IN A.Y 2009-10. WE ARE, THEREFORE, INCLINE D TO HOLD THAT THE GROUNDS RAISED BY THE ASSESSEE ARE DEVOID OF ME RITS AND HENCE WE DISMISS THE SAME. ACCORDINGLY GROUND NOS. 2 TO 5 OF THE ASSESSEE ARE DISMISSED. 18 ITA NO. 2188/ DEL/2013 18 16. THE SECOND LIMB OF QUESTION POSED IN GROUND NOS . 4 AND 5 IS AS TO WHETHER THE CIT(A) HAS ERRED IN LAW WHILE CON FIRMING THE ACTION OF THE AO IN CALCULATING THE FULL VALUE OF C ONSIDERATION IN RESPECT OF LAND AND BUILDING TRANSFERRED ON DISSOLU TION IN AN ARBITRARY MANNER WITHOUT REFERRING THE MATTER TO TH E VALUATION OFFICER U/S 55A R.W.S 142A OF THE ACT. 17. THE LD. AR CONTENDED THAT THE CIT(A) HAS ERRED IN LAW WHILE CONFIRMING THE ADDITION OF RS. 2 LAKHS MADE BY THE AO U/S 45(4) OF THE ACT IN RESPECT OF TRANSFER OF BUILDING CONST RUCTED IN LAND BELONGING TO THIRD PARTY. 18. ON CAREFUL PERUSAL OF PARA 4 OF THE ASSESSMENT ORDER, WE OBSERVE THAT THE AO SHOWED HIS INTENTION TO BRING I NCOME ON CAPITAL GAIN TO TAX IN A.Y 2009-10 BY ISSUING SHOW CAUSE NOTICE DATED 20.12.2011 WHICH WAS REPLIED TO BY THE ASSESS EE ON 23.12.2011 WHEREIN THE ASSESSEE CONTENDED THAT BRIN GING MARKET RATES AS CERTIFIED BY THE COLLECTOR KARNAL @ RS. 26 ,500/- PER SQ. YD. FOR THE PERIOD ENDING 31 ST MARCH 2008 IS TO BE ADOPTED FOR CAPITAL GAINS TAX CALCULATIONS AFTER CONSIDERING IN DEXATION COST AND NO DISPUTE WAS RAISED BY THE ASSESSEE REGARDING APPLICATION OF PREVAILING MARKET RATES AS CERTIFIED BY THE COLL ECTOR KARNAL. WE MAY POINT OUT THAT IN THIS LETTER ALSO, THE ASSE SSEE DID NOT RAISE ANY OBJECTION TAXING CAPITAL GAINS IN A.Y 200 9-10. 19 ITA NO. 2188/ DEL/2013 19 HOWEVER, HE OBJECTED TO THE APPLICABILITY OF COLLEC TOR MARKET RATE PREVAILING UPTO 31.3.2009 AND REQUESTING TO AP PLY T MARKET RATE PREVAILING ON OR BEFORE 31..32008. THERE WAS NO REQUEST FROM THE ASSESSEE TO REFER THE MATTER TO THE VALUAT ION OFFICER U/S 55A OF THE ACT. THEREFORE, THE CONTENTION AND ALLE GATION CONTAINED IN GROUND NO. 4 OF THE ASSESSEE CANNOT BE HELD AS SUSTAINABLE AND ACCEPTED. 19. AT THIS JUNCTURE, WE MAY POINT OUT THAT THE AO, BY WAY OF ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE SHOWED HI S INTENTION TO CALCULATE CAPITAL GAINS FOR A.Y 2009-10 AND THE ASS ESSEE DID NOT OBJECT TO THE APPLICABILITY OF THE COLLECTOR RATE I N CALCULATION OF CAPITAL GAINS AND THE ASSESSEE ONLY STRESSED UPON T O TAKE COLLECTOR PREVAILING MARKET RATE ON OR BEFORE 31.3 .2008 WHICH COULD HAVE BEEN APPLIED TO THE CASE OF A.Y 2008-09 AND THIS ACTION OF THE AO WAS CORRECT AND AS PER PROVISIONS OF THE ACT. THERE WAS NO NEED TO REFER THE MATTER TO THE VALUAT ION OFFICER U/S 55A OF THE ASSESSEE ACT, AS SUCH. ACCORDINGLY, GROUND NO. 4 BEING DEVOID OF MERITS IS DISMISSED. 20. SO FAR AS GROUND NO. 5 IS CONCERNED, FROM THE A SSESSMENT ORDER, WE OBSERVE THAT THE AO ADDED BACK RS. 2 LAKH S AND TREATED THE SAME AS CAPITAL GAIN ON TRANSFER OF THE BUILDING AS PER PROVISIONS OF SECTION 45(4) OF THE ACT. HOWEVE R, FROM THE 20 ITA NO. 2188/ DEL/2013 20 RELEVANT OPERATIVE PARA 5 OF THE ASSESSMENT ORDER, WE NOTE THAT THE AO HAS MADE ADDITION BY ALLEGING THAT THE ASSES SEE SHOULD HAVE FURNISHED COMPLETE MEASUREMENT OF THE BUILDING AND MUST HAVE APPLIED APPROPRIATE RATES KEEPING IN VIEW THE CONDITION OF THE BUILDING. THE AO FURTHER ALLEGED THAT THE ASSE SSEE HAS FAILED TO FURNISH THE COMPLETE REQUIRED DETAILS REGARDING THE VALUE OF CONSTRUCTION. THEREFORE, HE MADE ESTIMATED DISALLO WANCE OF RS. 2 LAKHS AND TREATED THE SAME AS CAPITAL GAIN ON TRA NSFER OF BUILDING. 21. FROM THE RELEVANT OPERATIVE PARA 6.02 AND 6.03 OF THE FIRST APPELLATE ORDER, WE OBSERVE THAT THE CIT(A) UPHELD THE ADDITION MERELY BY OBSERVING THAT THE ASSESSEE HAD FAILED TO COOPERATE IN FURNISHING DETAILS AS CALLED BY THE AO, THEREFORE, ADDITION OF RS. 2 LAKHS AS CAPITAL GAIN ON THE SHELLAR BUILDING IS CONSIDERED REASONABLE. FROM THE ORDERS OF THE AUTHORITIES BELO W AND CONCLUSION DRAWN BY THEM, AS NOTED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THIS ESTIMATED ADHOC ADDITI ON HAS BEEN MADE ON THE NILOKHERI BUILDING FOR WHICH ADDITION O N ACCOUNT OF CAPITAL GAIN WAS ESTIMATED AT RS. 46,74,280/- AS PE R PARA 4 OF THE ASSESSMENT ORDER. FROM PARA 5, WE FURTHER NOTE THAT THE AO MADE ADDITION OF RS. 2 LAKHS BY ALLEGING THAT THE A SSESSEE SHOULD HAVE FURNISHED DETAILS OF MEASUREMENT OF THE BUILDI NG AND THE 21 ITA NO. 2188/ DEL/2013 21 ASSESSEE HAS FAILED TO DISCLOSE THE DETAILS OF VALU E OF CONSTRUCTION WHICH CANNOT BE BASIS FOR MAKING ADDIT ION OF RS. 2 LAKHS TREATING THE SAME AS CAPITAL GAIN ON TRANSFER OF BUILDING FOR WHICH CAPITAL GAIN HAS ALREADY BEEN ASSESSED IN PAR A 4 OF THE ASSESSMENT ORDER. THUS, GROUND NO. 5 OF THE ASSESS EE SUCCEEDS AND ADDITION MADE BY THE AO IS DIRECTED TO BE DELET ED. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29.08. 2016. SD/- SD/- (S.V. MEHROTRA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 TH AUGUST, 2016 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI