PYARIBAI K JAIN, MUMBAI V. ADDL CIT 17(1), MUMBAI

ITA 2387/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8067 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 05-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKEYAN
• Assessee Lawyers: J C LALA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Benefit of exemption; Revised return
• Section: 50C; 45(5); 142(1); 133(6)

Judgement Text

1 ITA 2387/MUM/2017 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI G MANJUNATHA (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO 2387/MUM/2017 (ASSESSMENT YEAR 2007-08) PYARIBAI K JAIN 73, AHMED BLDG GUN POWDER ROAD MAZAGAON, MUMBAI-10 PAN : ACMPJ6562C VS ADDL.CIT-17(1), MUMBAI APPELLANT RESPONDEDNT APPELLANT BY SHRI J.C. LALA RESPONDENT BY SHRI ABI RAMA KARTIKEYAN DATE OF HEARING 08-10-2018 DATE OF PRONOUNCEMENT 21-12-2018 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A)-32, MUMBAI DATED 25-01-2017 AND IT PERTAINS TO AY 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW WITHOUT PREJUDICE TO GROUND 5 ABOVE, THE LEARNED CIT(A) APP EAL ERRED IN NOT HOLDING THAT THE ENTIRE CONSIDERATION RECEIVED OF R S.9,70,37,5007- IS NOT TAXABLE BEING ENHANCED CONSIDERATION RECEIVED ON CO MPULSORY ACQUISITION OF AGRICULTURAL LAND. 2 ITA 2387/MUM/2017 2. IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE AGRICULTURAL LAND REFERRED TO IN [2011) 11 TAXMANN.COM 92 (MUMBAI) WAS ALSO NOT A CAPITAL A SSET AS DEFINED IN SEC,2(14) IN 1970. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE EXPLANATION TO SEC.45(5). 4. IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE ASSESSMENT IS BAD IN LAW AS THE NOTICE UNDER SEC. 1 43(2) WAS SERVED ON THE APPELLANT ON THE 1 ST DAY OF AUGUST 2006 I.E. BEYOND THE STATUTORY PERIOD. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HER RETURN OF INCOME FOR AY 2007-08 ON 30-07-2007 DECLARING TO TAL INCOME OF RS.3,40,29,760, CONSISTING OF INCOME FROM LONG TERM CAPITAL GAIN FROM SALE OF PROPERTY AT RS.3,34,83,700 AND INCOME FROM OTHER SOURCES. THE ASSESSEE IS A DAUGHTER OF LATE SHRI ANOOPCHAND DUNG AJI. LATE SHRI ANOOPCHAND DUNGAJI OWNED CERTAIN AGRICULTURAL LAND AT SHIRWANE. THE LAND OWNED BY LATE SHRI ANOOPCHAND DUNGAJI WAS COMP ULSORILY ACQUIRED BY GOVERNMENT OF MAHARASHTRA UNDER THE LAND ACQUISI TION ACT ON 28-12- 1965 FOR PURPOSE OF DEVELOPING NEW MUMBAI FOR WHICH COMPENSATION HAS BEEN PAID. LATE SHRI ANOOPCHAND DUNGAJI DIED ON 12 -02-1972. GOVERNMENT OF MAHARASHTRA HAS PASSED A RESOLUTION O N 28-12-1994 TO GRANT PLOT EQUIVALENT TO 12.5% OF THE LAND COMPULSO RILY ACQUIRED BY THE GOVERNMENT TO ALL PROJECT AFFECTED PERSONS IN NEW M UMBAI CITY UNDER DEVELOPMENT AS ADDITIONAL COMPENSATION. THE ASSESS EE HAS GOT ALLOTMENT OF LEASEHOLD RIGHTS OF A PLOT ADMEASURING 6,349.47 SQ.MTS ON 18-10-2006. 3 ITA 2387/MUM/2017 THE ASSESSEE HAS SOLD HER LEASEHOLD RIGHTS IN THE S AID PLOT TO M/S METRO DEVELOPERS, AFTER OBTAINING NECESSARY PERMISSION FR OM CIDCO ON 03-11- 2006 FOR A CONSIDERATION OF RS.4,60,37,500. THE AS SESSEE HAS COMPUTED LONG TERM CAPITAL GAIN FROM TRANSFER OF PROPERTY BY ADOPTING INDEXED COST OF ACQUISITION BY TAKING INTO ACCOUNT FAIR MARKET V ALUE OF THE PROPERTY AS ON 01-04-1981, SINCE SHE HAD ACQUIRED RIGHT OVER TH E PROPERTY BY INHERITANCE AND COMPUTED LONG TERM CAPITAL GAIN AT RS.3,84,83,700. THE ASSESSEE ALSO HAS TAKEN THE BENEFIT OF EXEMPTION PR OVIDED U/S 54EC BY PURCHASING REC BONDS FOR RS.50 LAKHS AND DECLARED N ET TAXABLE CAPITAL GAIN OF RS.3,34,83,700. 3. THE CASE HAS BEEN SELECTED FOR SCRUTINY AND NOTI CES U/S 143(2) AND 142(1) OF THE ACT, WERE ISSUED. IN RESPONSE TO NOT ICES, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED V ARIOUS DETAILS, AS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLED UPON THE ASSESSEE TO FILE COMPLETE DETAILS OF SALE OF LAND I NCLUDING COPY OF SALE DEED IN ORDER TO ASCERTAIN CORRECTNESS OF LONG TERM CAPI TAL GAIN COMPUTED BY THE ASSESSEE. INSPITE OF REPEATED NOTICES, THE ASS ESSEE DID NOT FILE COPIES OF REGISTERED SALE DEED. THEREFORE, THE AO HAS ISS UED NOTICES US 133(6) TO THE JURISDICTIONAL SUB REGISTRAR TO ASCERTAIN AND O BTAIN COPY OF REGISTERED DEED. THE AO FURTHER OBSERVED THAT THE TRIPARTITE AGREEMENT BETWEEN THE 4 ITA 2387/MUM/2017 PARTIES DATED 03-11-2006 DOES NOT SPECIFY THE VALUE OF THE LAND; HOWEVER, FOR THE PURPOSE OF PAYMENT OF STAMP DUTY, THE VALUE HAS BEEN FIXED AT RS.9,14,40,000. SINCE THERE WAS A DIFFERENCE IN CO NSIDERATION SHOWN BY THE ASSESSEE FOR TRANSFER OF LAND AND VALUE OF LAND FIXED FOR PAYMENT OF STAMP DUTY, THE AO ISSUED A SHOW CAUSE NOTICE AND A SKED THE ASSESSEE AS TO WHY PROVISIONS OF SECTION 50C SHALL NOT BE APPLI ED TO ADOPT DIFFERENCE IN AMOUNT AS PER SALE DEED AND STAMP DUTY VALUE TO FULL VALUE OF CONSIDERATION. 4. IN RESPONSE, THE ASSESSEE, VIDE LETTER DATED 19- 11-2009 FILED DETAILS ALONG WITH A MEMORANDUM OF UNDERSTANDING DATED 20-1 0-2006 BETWEEN THE ASSESSEE AND M/S PERFECT ASSOCIATES, AS PER WHI CH, TOTAL SALE CONSIDERATION FOR SALE OF LAND HAS BEEN FIXED AT RS .9,70,37,500 AND OUT OF WHICH A SUM OF RS.4,60,37,500 WAS PAID TO THE ASSES SEE AND BALANCE AMOUNT OF RS.5.10 CRORES HAS BEEN PAID TO M/S PERFE CT ASSOCIATES. THE ASSESSEE HAS OPPOSED APPLICATION OF PROVISIONS OF S ECTION 50C OF THE I.T. ACT, 1961 TO ARGUE THAT WHAT WAS TRANSFERRED IS A L EASEHOLD RIGHT IN THE PROPERTY BUT NOT A LAND AND BUILDING, THEREFORE, TH E PROVISIONS OF SECTION 50C HAS NO APPLICATION. THE ASSESSEE ALSO HAS TAKE N AN ALTERNATIVE ARGUMENT TO THE EFFECT THAT WHAT WAS RECEIVED FROM CIDCO IS AN ADDITIONAL COMPENSATION FOR COMPULSORY ACQUISITION OF LAND AND WHEN THE 5 ITA 2387/MUM/2017 LAND WAS ORIGINALLY ACQUIRED, IT WAS AN AGRICULTURA L LAND CONSEQUENTLY, ADDITIONAL COMPENSATION AWARDED BY CIDCO IS ALSO AN ACQUISITION OF AGRICULTURAL LAND WHICH IS NOT TAXABLE, THEREFORE, THE RETURN OF INCOME FILED BY THE ASSESSEE BY MISTAKENLY ADMITTING LONG TERM C APITAL GAIN ON TRANSFER OF PROPERTY MAY BE SUBSTITUTED BY NIL INCOME FROM T RANSFER OF PROPERTY. THE ASSESSEE ALSO HAS TAKEN ANOTHER ARGUMENT INASMU CH AS THAT ON TRANSFER OF LEASEHOLD RIGHTS TO M/S METRO DEVELOPER S, M/S PERFECT ASSOCIATES IS ONE OF THE PARTIES TO THE TRANSACTION S AND DIFFERENTIAL AMOUNT OF RS.5.10 CRORES HAS BEEN PAID TO THE CONFI RMING PARTY, M/S PERFECT ASSOCIATES FOR RENDERING CERTAIN SERVICES I N CONNECTION WITH ALLOTMENT AND TRANSFER OF PROPERTY, THEREFORE, THE SAID AMOUNT HAS TO BE CONSIDERED AS EXPENSES ON TRANSFER. 5. THE AO, AFTER CONSIDERING SUBMISSIONS OF THE ASS ESSEE AND ALSO ON ANALYSIS OF THE COPIES OF AGREEMENT BETWEEN THE PAR TIES, CAME TO THE CONCLUSION THAT WHAT THE ASSESSEE HAS GOT THROUGH I NHERITANCE WAS NOT AGRICULTURAL LAND, ONLY A RIGHT TO RECEIVE THE ENHA NCED COMPENSATION. SO, WHEN THE ASSESSEE GOT ENHANCED COMPENSATION, IT WAS NOT AGAINST THE AGRICULTURAL LAND, BUT ONLY A RIGHT. THE RIGHT OF THE ASSESSEE WAS EXTINGUISHED BY RECEIVING LEASEHOLD RIGHT ON 18-10- 2006 FROM CIDCO AND IT AMOUNTED TO TRANSFER WITHIN THE MEANING OF SECTI ON 2(47)(II). 6 ITA 2387/MUM/2017 ACCORDINGLY, HE COMPUTED LONG TERM CAPITAL GAIN BY APPLYING THE PROVISIONS OF SECTION 50C BY TAKING INTO ACCOUNT FU LL VALUE OF CONSIDERATION OF RS.9,14,40,000. THE AO FURTHER OBSERVED THAT IN SPITE OF REPEATED REQUESTS, THE ASSESSEE FAILED TO FILE NECESSARY DET AILS IN RESPEC6T OF EXPENSES OF TRANSFER AND ALSO INDEXED COST OF ACQUI SITION. HENCE, REJECTED EXPENSES OF TRANSFER AND INDEXED COST OF ACQUISITIO N CLAIMED BY THE ASSESSEE. THE AO FURTHER OBSERVED THAT THE ASSESSE E HAS TRANSFERRED HER LEASEHOLD RIGHTS IN THE PROPERTY TO M/S METRO DEVEL OPERS ON 03-11-2006. SINCE THE HOLDING PERIOD OF THE LEASEHOLD RIGHTS IS LESS THAN 36 MONTHS, THE AO HAS COMPUTED SHORT TERM CAPITAL GAIN BY TAKING I NTO ACCOUNT FULL VALUE OF CONSIDERATION AS PER MOU DATED 20-10-2006 AND FR OM THAT ALLOWED COST OF ACQUISITION AS PER STAMP DUTY VALUE FIXED U /S 50C OF THE ACT FOR RS.9,14,40,000 AND COMPUTED SHORT TERM CAPITAL GAIN OF RS.55,97,500. 6. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE HAS REITERATED HER SUBMISSIONS MADE BEFORE THE AO TO ARGUE THAT THERE IS NO CAPITAL GAIN ON ADDITIONAL COMPENSATION RECEIVED FROM CIDCO FOR RE- ALLOTMENT OF LAND UNDER 12.5% SCHEME BECAUSE AT THE TIME OF ACQUISITI ON OF LAND IN THE YEAR 1965, THE LAND IN QUESTION WAS AGRICULTURAL LAND AN D EXEMPT FROM TAX. CONSEQUENTLY, THE ADDITIONAL COMPENSATION RECEIVED IS ALSO ON ACCOUNT OF 7 ITA 2387/MUM/2017 ACQUISITION OF AGRICULTURAL LAND, THEREFORE, NOT LI ABLE TO TAX. THE ASSESSEE ALSO RAISED OTHER ARGUMENTS TAKEN BEFORE THE AO TO ARGUE THT IF AT ALL CAPITAL GAIN IS CHARGEABLE, THEN THE AMOUNT PAID TO M/S PERFECT ASSOCIATES FOR RENDERING SERVICES IN CONNECTION WITH RE-ALLOTM ENT AND TRANSFER OF LEASEHOLD RIGHTS SHALL BE ALLOWED AS DEDUCTION. TH E LD.CIT(A)-29, RELYING UPON THE CASE OF AR DAHIYA VS ACIT (2004) 269 ITR 5 42 (P&H) HELD THAT THE QUESTION WHETHER AN ASSET IS A CAPITAL ASSET OR NOT HAS TO BE DETERMINED IN THE YEAR IN WHICH THE ASSET IS ACQUIRED OR ANY COMP ENSATION OR PART THEREOF IS FIRST RECEIVED. SINCE THE LAND IN QUEST ION WHEN ACQUIRED BY THE GOVERNMENT IS AN AGRICULTURAL LAND, AND IT WAS NOT A CAPITAL ASSET, THE ADDITIONAL COMPENSATION RELATES BACK TO THE ORIGINA L ASSET, WILL ALSO NOT BE TAXABLE. HOWEVER, IT WAS FURTHER HELD THAT SINCE T HE ASSESSEE HAS ALREADY OFFERED THE CAPITAL GAIN FOR TAX AS PER RETURN OF I NCOME RELYING UPON THE CASE OF GOETZE INDIA LTD 284 ITR 323 (SC) HELD THAT IN ABSENCE OF ANY REVISED RETURN FILED BY THE ASSESSEE, ASSESSEES IN COME CANNOT GO BELOW TAXABLE INCOME. AGAINST THE ORDER OF THE LD.CIT(A) , THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE THE ITAT. THE ITA T, ON CONSIDERATION OF THE LEGAL GROUND TAKEN BY THE ASSESSEE IN THE LIGHT OF HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD (SUPRA) HAS S ET ASIDE THE ISSUE TO THE 8 ITA 2387/MUM/2017 FILE OF THE CIT(A) TO PASS A FRESH ORDER ON MERIT, CONSIDERING THE LEGAL GROUND TAKEN BY THE ASSESSEE. 7. DURING SECOND ROUND OF PROCEEDINGS BEFORE THE CI T(A), THE LD.CIT(A), AFTER CONSIDERING RELEVANT FACTS OF THE CASE AND ALSO BY CONSIDERING THE DECISION OF ITAT, MUMBAI IN THE CAS E OF ATUL G PURANIK REPORTED IN (2011) 11 TAXMANN.COM.92 HELD THAT IT WAS A RIGHT IN PLOT AGAINST WHICH THE ASSESSEE WAS ALLOTTED LEASEHOLD P LOT WHICH COULD NOT BE CONSIDERED AS AGRICULTURAL LAND TRANSFERRED DURING THE YEAR. THIS IS EXACTLY, THE CONTENTION OF THE REVENUE IN PRESENT APPEAL. A S REGARDS RELIANCE ON THE CASE OF A.R. DAHIYA (SUPRA), THE LD.CIT(A) OBSE RVED THAT THE CASE LAW RELIED UPON BY THE ASSESSEE IS DISTINGUISHABLE ON F ACTS AS IN THAT CASE, IT WAS HELD THAT ONCE THE NATURE OF LAND TRANSFERRED W AS ACCEPTED AS AGRICULTURAL LAND IN THE YEAR OF RECEIPT OF ORIGINA L COMPENSATION, THE NATURE OF SUCH LAND AGAIN CANNOT BE QUESTIONED IN T HE YEAR OF ENHANCED COMPENSATION. THEREFORE, SHE OPINED THAT WHAT WAS TRANSFERRED BY THE ASSESSEE IS A LEASEHOLD RIGHT RECEIVED IN LIEU OF R IGHT INHERITED FROM HER FATHER, THEREFORE, CONSIDERATION RECEIVED ON ACCOUN T OF TRANSFER OF LAND IS ASSESSABLE TO TAX UNDER THE HEAD CAPITAL GAIN AND ACCORDINGLY RE- COMPUTED LONG TERM CAPITAL GAIN BY ADOPTING THE VAL UE FIXED FOR THE PURPOSE OF STAMP DUTY UNDER THE PROVISIONS OF SECTI ON 50C OF THE ACT AT 9 ITA 2387/MUM/2017 RS.9,14,40,000 AND AFTER ALLOWING COST OF ACQUISITI ON OF RS.79,375, DETERMINED LONG TERM CAPITAL GAIN OF RS.9,13,60,625 . THE RELEVANT OBSERVATIONS OF THE LD.CIT(A) ARE EXTRACTED BELOW:- 4.2 I HAVE GONE THROUGH THE DECISION OF HONB LE ITAT. MUMBAI 'A' BENCH IN THE CASE OF ATUL G PURANIK (SUPRA) REPORTE D IN [2011] 11 TAXMANN.COM 92 (MUMBAI) AS RELIED UPON BY THE ASSES SEE, AND FIND THAT THE FACTS OF SAID CASE WAS ALMOST IDENTICAL TO THE CASE OF ASSESSEE. HOWEVER, I FIND THAT THE SAID CASE ACTUALLY GOES AG AINST THE ASSESSEE IN PRESENT CASE. IN THE SAID CASE , THE ASSESSEE'S FATHER WAS OWNER OF CERTAIN AGRICULTURAL LANDS WHICH WERE ACQUIRED BY THE GOVT. OF MAHARASHTRA IN 1973 AGAINST CERTAIN COMPENSATION GRANTED. THEREFOR E, THE ASSESSEE WAS ALLOTTED ON 16-8-2004 UNDER '12.5% SCHEME' OF THE G OVERNMENT ON LEASE BASIS FOR SIXTV YEARS. THE ASSESSEE SOLD THE SAID PLOT TO P FOR A CONSIDERATION OF RS. 2.50 CRORES ON 25-8-2005. LN THE_RETURN FILED, THE ASSESSEE DID NOT OFFER ANY INCOME UNDER THE HEAD ' CAPITAL GAIN' ON ACCOUNT OF SUCH TRANSFER OF THE LEASEHOLD PLOT TO P'. THE ASSESSEE'S CASE WAS THAT THE ORIGINAL AGRICULTURAL LAND_WAS NOT A C APITAL ASSET U/S 2(14)(III), AND HENCE THE SAID PLOT FROM CIDCO ALSO DID NOT BECOME CAPITAL ASSET U/S 2(14)(III) AND HENCE THE SECTION 45 DID NOT APPLY TO ASSIGNMENT OF SAID LEASEHOLD PLOT. IT WAS HELD BY HON'BLE TRIBUNAL IN SAID CASE THAT THE LEASEHOLD LAND TRANSFERRED WAS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14), AND THE COST OF ACQUISITI ON OF SAID CAPITAL ASSET IS TO BE TAKEN AT THE MARKET VALUE OF LEASEHOLD RIG HTS IN THE PLOT FOR SIXTY YEARS AT THE TIME OF THE FIRST TRANSACTION WHICH WA S COMPLETED ON 16-8- 2004. HOWEVER, REGARDING TAXABILITY OF CAPITAL GAIN OF THE MARKET VALUE OF PLOT ALLOTTED ON 16-8-2004, THE HON'BLE TRIBUNAL IN PARA 9.4 OF SAID ORDER HELD AS UNDER:- '9.4 ADVERTING TO THE FACTS OF THE INSTANT COSE, ON CE THE ASSESSEE ACQUIRED RIGHTS IN THE PLOT, WHICH IN ITSELF IS ADM ITTEDLY NOT AN AGRICULTURAL LAND, THERE IS NO QUESTION OF CONSIDER ING IT TO BE AN AGRICULTURAL LAND ON THE PREMISE THAT IT WAS ALLOTT ED TO THE ASSESSEE AGAINST ACQUISITION OF AGRICULTURAL LAND. FURTHER T HE QUESTION WHETHER THE LANDS ACQUIRED BY THE GOVT. IN THE YEARS 1970/7 2 WERE AGRICULTURAL LAND OR NOT IS BEYOND OUR PURVIEW AS WE ARE CONCERN ED ONLY WITH THE SECOND TRANSACTION OF TRANSFER OF RIGHTS IN THE ) P LOT. WHICH EVENT TOOK PLACE IN THE YEAR UNDER CONSIDERATION. WE, THEREFOR E, HOLD THAT THE ASSESSEE'S CONTENTION THAT THE RIGHTS IN THE PL OT SHOULD ALSO BE CONSIDERED AS AGRICULTUAL LAND TRANSFERRED DURING T HE YEAR IS BEREFT OF ANY FORCE AND IS JETTISONED. AS SUCH, WE ADVANCE FURTHER TO DETERMINE THE AMOUNT OF CAPITAL GAIN ARISING TO THE ASSESSEE IN THE YEAR IN QUESTION ON THE TRANSFER OF RIGHTS IN THE PLOT. ' 10 ITA 2387/MUM/2017 4.3 THE HIGHLIGHTED PORTION OF ABOVE DECISION INDIC ATES THAT IT WAS A 'RIGHT IN PLOT' AGAINST WHICH THE ABOVE ASSESSEE WA S ALLOTTED THE LEASEHOLD PLOT, WHICH COULD NOT BE CONSIDERED AS AG RICULTURE LAND TRANSFERRED DURING THE YEAR. THIS IS EXACTLY THE CO NTENTION OF REVENUE IN PRESENT APPEAL. THE DECISION OF JURISDICTIONAL TRI BUNAL ON IDENTICAL FACTS BEING BINDING IN NATURE, THERE REMAINS HARDLY ANY G ROUND NOT TO FOLLOW THE SAME. 4.4 AS REGARDS ASSESSEE'S RELIANCE ON THE CASE OF A .R. DAHIYA (SUPRA), I FIND THE SAID CASE DISTINGUISHABLE. IN SAID CASE, I T WAS HELD THAT ONCE THE NATURE OF LAND TRANSFERRED WAS ACCEPTED AS AGRICULT URAL LAND IN THE YEAR OF RECEIPT OF ORIGINAL COMPENSATION, THE NATURE OF SUC H LAND AGAIN CANNOT BE QUESTIONED IN THE YEAR OF ENHANCED COMPENSATION. IN PRESENT CASE OF ASSESSEE, THE NATURE OF ASSET TRANSFERRED IN YEAR O F ORIGINAL COMPENSATION I.E, 1964 AS AGRICULTURAL LAND IS NOT BEING QUESTIONED. WHAT IS BEING QUESTIONED IS THAT THE LAND ALLOTTED BY CIDCO DURING THE YEAR IS NOT AGAINST THE SAID AGRIC ULTURE LAND PER SE, BUT AGAINST THE RIGHT IN SAID LAND. THE GOVERNMENT HAS NOT GIVEN ANY DIRECT ENHANCED COMPENSATION FOR THE VERY AGRICULTURAL LAN D ACQUIRED, BUT GRANTED CERTAIN CONCESSION IN THE NEW LAND ALLOTTED UNDER A FRESH SCHEME FRAMED I.E. 12.5% SCHEME TO THE THEN HOLDERS OF AGRICULTURAL LA ND. SUCH PROJECT AFFECTED PERSONS CAN ONLY BE SAID TO HOLD RIGHT TO GET ALLOTTED THE LAND AT CONCESSIONAL RATE IN LIEU OF AGRICULTURAL LAND ALRE ADY TRANSFERRED BY THEM. 4.5 AS REGARD ASSESSEE'S CONTENTION THAT EXPLANATIO N (III) OF SECTION 45(5) TAKES CARE OF AO'S ARGUMENT THAT WHAT THE APPELLANT INHERITED WAS A RIGHT TO RECEIVE COMPENSATION, IT IS PERTINENT TO NOTE THE O PENING PARA OF SAID SECTION WHICH READS AS 'NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTION (I), WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A CAPITAL ASSET, BEING A TRANSFER BY WAY OF COMPULSORY ACQUISITION OF LAND, ....'. THE SAID SUB-SECTION APPLIES ONLY WHERE THERE IS A TRANSFER OF CAPITAL A SSET ORIGINALLY (BY WAY OF COMPULSORY ACQUISITION). IN PRESENT CASE, THE ORIGI NAL TRANSFER IN YEAR 1964 WAS ADMITTEDLY NOT OF A CAPITAL ASSET (BEING AGRICU LTURAL LAND), HENCE THE PROVISIONS OF SAID SECTION HAS NO IMPLICATIONS IN P RESENT CASE. 4.6 IN VIEW OF ABOVE, IT IS HELD THAT THE MARKET VA LUE OF LAND ALLOTTED BY CIDCO IS TO BE CONSIDERED AS FULL VALUE OF CONSIDER ATION FOR THE PURPOSE OF COMPUTING CAPITAL GAIN ON TRANSFER OF RIGHT INHERIT ED BY ASSESSEE FROM HIS FATHER, WHICH IS AT RS. 9,14,40,000/-. THE AO HAS T AXED THE ENTIRE AMOUNT OF RS. 9,14,40.000/- AS LONG TERM CAPITAL GAIN. I HOWE VER NOTICE THAT THE ASSESSEE HAS SPENT AN AMOUNT OF RS. 79.37S/- TOWARD S LEASE PREMIUM PAID ON GETTING THE SAID LAND ALLOTTED TO IT, WHICH SHOULD BE ALLOWED TOWARDS COST OF ACQUISITION. HENCE, THE ASSESSEE IS CHARGEABLE TO L ONG TERM CAPITAL GAIN ON RS. 9,14.40,000- 79.375 - RS. 9.13,60,6257-. THE APPEAL IS DECIDED ACCORDINGLY. 8. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE LD .CIT(A) WAS ERRED IN COMING TO THE CONCLUSION THAT WHAT WAS TRANSFERR ED BY THE ASSESSEE IS A 11 ITA 2387/MUM/2017 LEASEHOLD RIGHT ACQUIRED IN PURSUANCE TO A RIGHT IN A LAND INHERITED FROM HER FATHER WHICH IS NOT AGRICULTURAL LAND CONSEQUEN TLY, CONSIDERATION RECEIVED ON TRANSFER OF LEASEHOLD RIGHTS IS ASSESSA BLE TO TAX UNDER THE HEAD CAPITAL GAINS, IGNORING THE FACT THAT IN THE FIRST ROUND OF LITIGATION, THE LD.CIT(A) HAS ACCEPTED THE FACT THAT ADDITIONAL COMPENSATION RECEIVED ON ACCOUNT OF COMPULSORY ACQUISITION OF LAND IS TO BE TREATED ON PAR WITH THE NATURE OF LAND WHEN IT WAS ACQUIRED. IN THIS C ASE, THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE LAND IN QUESTION W HEN IT WAS ACQUIRED IN 1965 WAS AGRICULTURAL LAND AND ADDITIONAL COMPENSAT ION RECEIVED ON ACCOUNT OF COMPULSORY ACQUISITION OF LAND WILL ALSO BE TREATED AS AGRICULTURAL INCOME; CONSEQUENTLY, THE SAID COMPENS ATION IS EXEMPT FROM TAX. THE LD.AR FURTHER SUBMITTED THAT THE LD.CIT(A ) WAS ERRED IN NOT APPRECIATING EXPLANATION TO SECTION 45(5) WHERE IT IS STATED THAT WHERE BY ANY REASON OF THE DEATH OF THE PERSON, WHO MADE THE TRANSFER, THE ENHANCED COMPENSATION RECEIVED BY ANOTHER PERSON, T HE AMOUNT REFERRED TO IN CLAUSE (B) SHALL BE DEEMED TO BE THE INCOME C HARGEABLE TO TAX UNDER THE HEAD CAPITAL GAINS OF SUCH OTHER PERSON. THE LD.CIT(A) CONVENIENTLY IGNORED THE OWNERSHIP MEANS A BUNDLE OF RIGHTS AND IF THE OWNERSHIP IS ACQUIRED BY THE GOVERNMENT, NO OTHER RIGHT REMAINED WITH THE OWNER. THE OWNER IS INHERITED TO ONLY COMPENSATION / ADDI TIONAL COMPENSATION. 12 ITA 2387/MUM/2017 THE LD.AR FURTHER SUBMITTED THAT THIS ASPECT HAS BE EN EXAMINED BY THE ITAT, MUMBAI IN THE CASE OF ATUL G PURANIK (SUPRA) WHERE IT WAS HELD THAT THE COST OF PLOT ALLOTTED HAS TO BE TAKEN AT THE MA RKET VALUE AS ON THE DATE OF RECEIPT OF LEASEHOLD RIGHTS. THE LD.AR FURTHER SUBMITTED THAT IN CASE THE ADDITIONAL COMPENSATION RECEIVED HELD TO BE A C APITAL ASSET LIABLE FOR TAX, THEN ON SUBSEQUENT SALE, THE AMOUNT RECEIVED F ROM SALE OF LEASEHOLD RIGHTS, THE COST INCURRED BY THE ASSESSEE INCLUDING AMOUNT PAID TO M/S PERFECT ASSOCIATES NEEDS TO BE DEDUCTED AS EXPENSES OF TRANSFER. 9. THE LD.DR, ON THE OTHER HAND, STRONGLY SUPPORTIN G THE ORDER OF THE LD.CIT(A) SUBMITTED THAT THE ASSESSEE HIMSELF HAD A DMITTED IN HER RETURN OF INCOME THAT SHE IS LIABLE TO PAY CAPITAL GAIN TA X ON TRANSFER OF LEASEHOLD RIGHTS OF A LAND AND ACCORDINGLY DECLARED LONG TERM CAPITAL GAIN BY ADOPTING COST OF ACQUISITION OF THE PLOT AS ON 01-0 4-1981, THEREFORE, TAKING A PLEA THAT ADDITIONAL COMPENSATION RECEIVED FOR COMPULSORY ACQUISITION OF AGRICULTURAL LAND IN THE YEAR 1965 I S NOT TAXABLE, IS NOT IN ACCORDANCE WITH LAW. THE LD.DR FURTHER SUBMITTED T HAT THE ISSUE BEFORE THE AO WAS THE FULL VALUE OF CONSIDERATION RECEIVED AS A RESULT OF TRANSFER, BUT NOT THE ISSUE OF TAXABILITY OF COMPENSATION REC EIVED ON COMPULSORY ACQUISITION OF LAND. WHEN THE AO HAS POINTED OUT T HE DIFFERENCE IN MARKET VALUE OF LAND AND CONSIDERATION SHOWN IN SAL E DEED, THE ASSESSEE 13 ITA 2387/MUM/2017 HAS COME OUT WITH AN INNOVATIVE ARGUMENT TO ESCAPE FROM THE TAXABILITY OF CAPITAL GAIN, THEREFORE, THE LD.CIT(A) HAS RIGHT LY APPRISED THE FACTS TO RECOMPUTE LONG TERM CAPITAL GAIN BY ADOPTING MARKET VALUE OF THE LAND. 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. THIS IS THE SECOND ROUND OF LITIGATION. IN THE FIRST ROUND OF LITIGATION, THE ITAT HAS SET ASIDE THE ISSUE TO THE FILE OF CIT(A) WITH A DIRECT ION TO ADMIT LEGAL GROUND TAKEN BY THE ASSESSEE IN THE LIGHT OF DECISION OF H ONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD VS CIT (SUPRA). OTHER THAN THIS, THERE IS NO DIFFERENCE IN FACTS AT THE TIME OF FIRST ROUND OF L ITIGATION BEFORE THE LD.CIT(A). IN THE FIRST ROUND OF LITIGATION, THE L D.CIT(A) HAS ACCEPTED THE FACT THAT ADDITIONAL COMPENSATION RECEIVED FROM CID CO UNDER 12.5% SCHEME ON ACCOUNT OF COMPULSORY ACQUISITION OF AGRI CULTURAL LAND IN THE YEAR 1965 IS TO BE TREATED AS ADDITIONAL COMPENSATI ON RECEIVED ON ACCOUNT OF ACQUISITION OF AGRICULTURAL LAND AND COU LD NOT BE TAXED. HOWEVER, HE FURTHER OPINED THAT SINCE THE ASSESSEE HERSELF HAS ADMITTED CAPITAL GAIN IN HER RETURN OF INCOME AND HENCE, HEL D THAT THE ASSESSEES INCOME COULD NOT GO BELOW THE RETURNED INCOME, DIRE CTED THE AO TO RECONSIDER THE ASSESSMENT OF INCOME TO THE EXTENT O F INCOME DECLARED BY THE ASSESSEE IN HER RETURN OF INCOME. 14 ITA 2387/MUM/2017 10. THE ASSESSEE HAS TRANSFERRED LEASEHOLD RIGHT IN LAND ALLOTTED BY CIDCO IN PURSUANCE OF COMPULSORY ACQUISITION OF LAN D IN THE YEAR1965. THE ASSESSEE HAS TRANSFERRED SAID LEASEHOLD RIGHTS TO M/S METRO BUILDERS ON 03-11-2006 FOR A CONSIDERATION OF RS.4,60,37,500 . THE ASSESSEE HAS COMPUTED LONG TERM CAPITAL GAIN ON TRANSFER OF LAND BY ADOPTING FULL VALUE OF CONSIDERATION AS PER SALE DEED BY REDUCING INDEX ED COST OF ACQUISITION BY TAKING INTO ACCOUNT FAIR MARKET VALUE OF THE LAN D AS ON 01-04-1981. THESE ARE UNDISPUTED FACTS. NEITHER THE ASSESSEE N OR THE REVENUE ARE DISPUTING THESE FACTS. THE ASSESSEE HAS TAKEN AN A LTERNATIVE PLEA DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO THE EFFECT THAT SHE HAD ADMITTED CAPITAL GAIN ON TRANSFER OF LAND BY MISTAKEN FACTS, BUT HER ADMISSION CANNOT BE TAKEN AS SACROSANCT IN VIEW OF THE FACT T HAT ADDITIONAL COMPENSATION RECEIVED ON ACCOUNT OF COMPULSORY ACQU ISITION OF AGRICULTURAL LAND SHOULD BE TREATED ON PAR WITH THE COMPENSATION RECEIVED AT THE TIME OF ACQUISITION OF AGRICULTURAL LAND EVE N THOUGH SUCH COMPENSATION HAS BEEN RECEIVED SUBSEQUENTLY FOR THE PURPOSE OF TAXATION. IF THE ORIGINAL COMPENSATION IS EXEMPT F ROM TAX BECAUSE OF THE NATURE OF THE LAND, THEN ADDITIONAL COMPENSATION RE CEIVED IN SUBSEQUENT YEAR SHALL ALSO NEEDS TO BE EXEMPT FROM TAX. WE FI ND THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF A.R. DA HIYA VS ACIT (SUPRA) 15 ITA 2387/MUM/2017 HAS HELD THAT AT THE TIME OF TRANSFER OF THE ASSET, IF THE SAID ASSET DOES NOT FALL WITHIN THE DEFINITION OF CAPITAL ASSET, THEN T HERE IS NO OCCASION TO TREAT THE ENHANCED COMPENSATION IN A SUBSEQUENT YEAR AS C APITAL GAIN CHARGEABLE TO TAX U/S 45(5) OF THE INCOME-TAX ACT, 1961. THE ADDITIONAL COMPENSATION RECEIVED CONSEQUENT TO ACQUISITION OF ORIGINAL ASSET RELATE BACK TO THE NATURE OF ASSET AND ACCORDINGLY, ADDITI ONAL COMPENSATION RECEIVED IN SUBSEQUENT YEARS WILL ALSO NEED TO BE E XEMPT IF ORIGINAL COMPENSATION RECEIVED BY THE ASSESSEE IS EXEMPT FRO M TAX. THERE IS NO DISPUTE WITH REGARD TO THE RATIO LAID DOWN BY THE H ONBLE PUNJAB & HARYANA HIGH COURT. WHEN AN ORIGINAL ASSET ACQUIRE D IS AN AGRICULTURAL LAND AND CONSEQUENT COMPENSATION IS EXEMPT FROM TAX , OBVIOUSLY, ENHANCED COMPENSATION RECEIVED IN SUBSEQUENT YEAR I S ALSO EXEMPT FROM TAX. BUT THE ISSUE BEFORE THE LOWER AUTHORITIES IS NOT THE QUESTION OF TAXABILITY OF ADDITIONAL COMPENSATION RECEIVED BY T HE ASSESSEE. THE ISSUE BEFORE THE AO IS WITH REGARD TO THE DETERMINATION O F FULL VALUE OF CONSIDERATION IN RESPECT OF TRANSFER OF A CAPITAL A SSET. THE ASSESSEE HAS TRANSFERRED HER CAPITAL ASSET FOR A CONSIDERATION O F RS.4,60,37,500. WHEN THE AO HAS INVOKED THE PROVISIONS OF SECTION 50C IN ORDER TO FIND OUT THE MARKET VALUE OF THE PROPERTY, THEN THE ASSESSEE CAM E OUT WITH AN ALTERNATIVE ARGUMENT INASMUCH AS THE ENHANCED COMPE NSATION RECEIVED 16 ITA 2387/MUM/2017 ON ACCOUNT OF COMPULSORY ACQUISITION OF AGRICULTURA L LAND IN THE YEAR 1965 WILL ALSO NEEDS TO BE EXEMPT UNDER THE ACT. BUT, T HE ASSESSEE HAS NOT DISPUTED THE FACT THAT SHE HAS TRANSFERRED HER LEAS EHOLD RIGHT IN THE LAND ALLOTTED BY CIDCO TO M/S METRO DEVELOPERS FOR A CON SIDERATION STATED IN THE SALE DEED. WHAT WAS TRANSFERRED BY THE ASSESSE E IS A CAPITAL ASSET. THERE IS NO DISPUTE WITH REGARD TO THE NATURE OF TH E ASSET, BECAUSE THE ASSESSEE HAS HERSELF ADMITTED THIS FACT AND COMPUTE D LONG TERM CAPITAL GAIN. ONCE, A PARTICULAR ASSET IS A CAPITAL ASSET LIABLE TO CAPITAL GAIN ON TRANSFER, THEN THE NEXT QUESTION FOR DETERMINATION IS WHAT IS THE FULL VALUE OF CONSIDERATION. IN THIS CASE, AS PER THE AGREEME NT ENTERED INTO BETWEEN THE PARTIES, THE SALE VALUE HAS BEEN FIXED AT RS.4, 60,37,500, BUT MARKET VALUE OF THE LAND FOR PURPOSE OF PAYMENT OF STAMP D UTY WAS FIXED AT RS.9,14,40,000. THE AO HAS APPLIED PROVISIONS OF S ECTION 50C TO REPLACE FULL VALUE OF CONSIDERATION CLAIMED BY THE ASSESSEE IN HER RETURN OF INCOME WITH GUIDANCE VALUE FIXED BY THE STAMP DUTY AUTHORI TY FOR PAYMENT OF STAMP DUTY. WHEN THE AO HAS REPLACED FULL VALUE OF CONSIDERATION, THE ASSESSEE CLAIMED TO HAVE PAID A SUM OF RS.5.1 CRORE S TO M/S PERFECT ASSOCIATES FOR RENDERING SERVICES IN CONNECTION WIT H RE-ALLOTMENT OF TRANSFER OF LEASEHOLD RIGHTS IN THE LAND AND SOUGHT FOR DEDUCTION FROM FULL VALUE OF CONSIDERATION BEING EXPENSES OF TRANSFER. THE AO HAS DOUBTED 17 ITA 2387/MUM/2017 THE TESTIMONY OF DOCUMENTS FURNISHED BY THE ASSESSE E AND REJECTED THE CLAIM OF DEDUCTION OF EXPENSES AND RE-COMPUTED LONG TERM CAPITAL GAIN OF RS.9,14,40,000 FOR ADDITIONAL COMPENSATION RECEIVED BY THE ASSESSEE FROM CIDCO BY REJECTING EXPENSES OF TRANSFER AND COST OF ACQUISITION. THE AO FURTHER COMPUTED SHORT TERM CAPITAL GAIN ON TRANSFE R OF LEASEHOLD RIGHTS TO M/S METRO DEVELOPERS AND ARRIVED AT SHORT TERM CAPI TAL GAIN OF RS.55,97,500 BY ALLOWING COST OF ACQUISITION OF RS. 9,14,40,000. THE LD.CIT(A) HAS MODIFIED THE COMPUTATION OF CAPITAL G AIN BY HOLDING THAT WHAT WAS TRANSFERRED BY THE ASSESSEE IS A CAPITAL A SSET AND ACCORDINGLY, THE FULL VALUE OF CONSIDERATION RECEIVED AS A RESUL T OF TRANSFER SHALL BE ADOPTED AS PER THE VALUE FIXED BY THE STAMP DUTY AU THORITIES FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. 11. HAVING CONSIDERED ARGUMENTS OF BOTH COUNSELS, W E FIND THAT NOW THERE ARE TWO ISSUES TO BE RESOLVED FROM THE FINDIN GS OF THE LOWER AUTHORITIES. THE FIRST ISSUE IS WHETHER ADDITIONAL COMPENSATION RECEIVED FROM CIDCO IN FORM OF RE-ALLOTMENT OF LAND UNDER 1 2.5% SCHEME IS TAXABLE UNDER THE HEAD CAPITAL GAIN. WE HAVE ALR EADY MADE IT CLEAR THAT ONCE THE ORIGINAL ASSET WHEN IT WAS ACQUIRED IS NOT A CAPITAL ASSET, THEN ADDITIONAL COMPENSATION RECEIVED IN SUBSEQUENT YEAR S WILL ALSO NOT BE CHARGEABLE TO TAX UNDER THE HEAD, CAPITAL GAIN IN THE LIGHT OF DECISION OF 18 ITA 2387/MUM/2017 HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF A.R. DAHIYA VS ACIT (SUPRA). THE SECOND QUESTION NEEDS TO BE RESOLVED IS COMPUTATION OF LONG TERM CAPITAL GAIN FROM TRANSFER OF LEASEHOLD RIGHTS . THE ASSESSEE HAS TRANSFERRED LEASEHOLD RIGHTS FOR A CONSIDERATION OF RS.4,60,37,600. THE MARKET VALUE OF THE LAND AS ON THE DATE OF TRANSFER IS AT RS.14,40,000. SINCE THE PROVISIONS OF SECTION 50C HAS COME INTO O PERATIONS FOR THE YEAR UNDER CONSIDERATION, THE DIFFERENCE BETWEEN SALE CO NSIDERATION AND MARKET VALUE OF THE LAND SHALL BE ADDED TO THE FULL VALUE OF CONSIDERATION. THEREFORE, WE FIND THAT THERE IS NO ERROR IN THE FI NDINGS OF THE LD.CIT(A) IN ADOPTING THE FULL VALUE OF CONSIDERATION OF RS.9,14 ,40,000 AS A RESULT OF TRANSFER OF ASSET. 12. HAVING SAID SO, WHAT IS THE COST OF ACQUISITION FOR THE ASSESSEE. THE ASSESSEE, IN HER RETURN OF INCOME ADOPTED COST OF A CQUISITION OF RS.12,10,000 AS FAIR MARKET VALUE AS ON 01-04-1981, THEN APPLIED THE BENEFIT OF INDEXATION TO ARRIVE AT COST OF ACQUISIT ION OF RS.65,91,300. THE ASSESSEE NOW CLAIMS THAT THE COST OF ACQUISITION OF LAND HAS TO BE DETERMINED AS ON THE DATE OF RE-ALLOTMENT OF LAND B Y CIDCO. IN SUPPORT OF HER ARGUMENT, THE ASSESSEE HAS RELIED UPON THE DECI SION OF ITAT, MUMBAI BENCH IN THE CASE OF ATUL G PURANIK (SUPRA). WE FI ND THAT IN THE CASE, THE CO-ORDINATE BENCH HELD THAT COST OF PLOT ALLOTTED W AS TO BE TAKEN AT THE 19 ITA 2387/MUM/2017 MARKET VALUE AS ON DATE OF RECEIPT OF LEASEHOLD RIG HTS. FURTHER, WHEN ADDITIONAL COMPENSATION RECEIVED BY THE ASSESSEE IS TREATED AS NOT TAXABLE BECAUSE OF NATURE OF LAND ACQUIRED IN THE Y EAR OF ACQUISITION, AND ALSO FACT THAT THE SAID ADDITIONAL COMPENSATION PAR TAKES THE NATURE OF AGRICULTURAL INCOME, THE COST OF LAND WHEN IT WAS S UBSEQUENTLY TRANSFERRED SHALL BE DETERMINED AS ON THE DATE OF RECEIPT OF AD DITIONAL COMPENSATION. IN THIS CASE, THE STAMP DUTY AUTHORITIES HAVE FIXED THE MARKET VALUE AS ON THE DATE OF RE-ALLOTMENT OF LAND TO THE ASSESSEE IS AT RS.9,14,40,000. SINCE THE AUTHORITIES FIXED THE COST OF LAND AS ON THE DA TE OF ALLOTMENT IS RS.9,14,40,000, OBVIOUSLY COST OF ACQUISITION FOR T HE ASSESSEE, WHEN THE LAND HAS BEEN SUBSEQUENTLY SOLD, WILL HAVE TO BE TA KEN AT RS.9,14,40,000. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE A O IS INCORRECT IN NOT ALLOWING THE COST OF ACQUISITION TO THE ASSESSEE WH ILE COMPUTING LONG TERM CAPITAL GAIN ON TRANSFER OF LEASEHOLD RIGHTS IN LAN D. ACCORDINGLY, WE DIRECT THE AO TO RE-COMPUTE LONG TERM CAPITAL GAIN. HOWEV ER, SUCH LONG TERM CAPITAL GAIN COMPUTED BY THE AO SHALL NOT GO BELOW LONG TERM CAPITAL GAIN COMPUTED BY THE ASSESSEE IN HER RETURN OF INCOME, B ECAUSE THE ASSESSED INCOME CANNOT GO BELOW THE RETURNED INCOME. 13. INSOFAR AS THE ISSUE OF PAYMENT OF CONSIDERATIO N TO M/S PERFECT ASSOCIATES, IT IS IRRELEVANT FOR THE PURPOSE OF COM PUTATION OF LONG TERM 20 ITA 2387/MUM/2017 CAPITAL GAIN, BECAUSE THE ASSESSEE HAS FAILED TO PR OVE THE TESTIMONY OF THE DOCUMENTS INCLUDING AGREEMENTS ENTERED INTO BETWEEN M/S PERFECT ASSOCIATES SO AS TO SHOW THAT IT IS GENUINE DOCUMEN T AND ALSO THE SAID CONSIDERATION HAD BEEN PAID FOR RENDERING SERVICES IN CONNECTION WITH TRANSFER OF PROPERTY. FURTHER, WHEN TOTAL ENHANCED COMPENSATION IS EXEMPT, RELATED EXPENSES NEED TO BE IGNORED FOR COM PUTATION. ACCORDINGLY, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR THE PURPOSE OF RE-COMPUTATION OF LONG TERM CAPITAL GAIN IN TERMS O F OUR DISCUSSIONS GIVEN IN THE PRECEDING PARAGRAPHS HEREINABOVE. 14. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 21 -12-2018 . SD/- SD/- (RAVISH SOOD) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 21 ST DECEMBER, 2018 PK/-