M/s Pure Drink Ltd., New Delhi V. ACIT,Circle, Patiala

ITA 254/CHANDI/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4223 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Opportunity of being heard; Principle of natural justice; Period of limitation; Additional evidence; Cost of acquisition; Fair market value; Valuation report; Set aside; Capital Gains
• Section: 147; 143(3); 142(1); 55A; 48

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH ी एन.के .सैनी, उपा य! एवं ी स ु धांश ु ीवा&तव, या(यक सद&य BEFORE: SHRI. N.K.SAINI, VP & SHRI. SUDHANSHU SRIVASTAVA, JM आयकर अपील सं./ ITA NO. 254/Chd/2020 नधा रण वष / Assessment Year : 2008-09 M/s Pure Drink Ltd. S. Mohan Singh Building Connaught Lane, New Delhi-110001 बनाम Asst. CIT Circle, Patiala थायी लेखा सं./PAN NO: AAACP8579J अपीलाथ$/Appellant %&यथ$/Respondent नधा 'रती क) ओर से/Assessee by : Shri Tarandeep Singh, Advocate राज व क) ओर से/ Revenue by : Shri Sarabjeet Singh, CIT DR स ु नवाई क) तार.ख/Date of Hearing : 07/04/2022 उदघोषणा क) तार.ख/Date of Pronouncement : 21.04.2022 आदेश/Order PER N.K. SAINI, VICE PRESIDENT This is an appeal by the Assessee against the order dt. 09/09/2019 of Ld. CIT(A)-, Patiala. 2. The Registry has pointed out that the appeal by the assessee is barred by limitation by 42 days. The assessee vide letter dt. 16/07/2020 stated that the delay occurred owing to COVID-19 Pandemic, an application dt. 16/07/2020 has been furnished requesting to condone the delay which read as under: Subject:- Show cause Notice dated 3.06.2020 in (M/s Pure Drink Ltd. vs. ACIT) -ITA No. 254/ Chandi/ 2020- AY 2008-09 Dear Sir, We're in receipt of the captioned Show Cause Notice issued by your good self. In response to the same, your good attention is invited to the following facts : - 2 (i) Certified Copy of the impugned order was served upon the appellant on 27 th January, 2020 and therefore the last date for filling of appeal before Hon'ble Chandigarh ITAT was 27 th March 2020. (ii) It is submitted that management of appellant company is based is Delhi. Owing to Covid-19 Pandemic nationwide lock down was enforced by the Government from 22 nd March 2020 and therefore the appellant was unable to physically file the appeal documents before Hon'ble ITAT. (iii) The appeal documents were therefore sent via Registered Post on 23 rd March, 2020 i.e within the period of limitation. However, it seems that the postal department was able to deliver the documents with Court Registry only on 8 th May, 2020 i.e. 42 days beyond the period of limitation as prescribed under the Income Tax Act, 1961. The delay in delivery of documents by India Post would again have been owing to National Lockdown. From facts stated above, it is apparent that there is no delay in filling of appeal as the delay in receiving of appeal documents by Court Registry is only on account of the intervening circumstances / delay by the postal department owing to Lockdown. The proof of Registered Post Acknowledgment dated 23.03.2020 is attached for your kind reference (as Annexure A). Without prejudice, your kind is also invited to : (a) Order Dated 23 rd March 2020 (copy enclosed as Annexure B ) , passed by the Hon'ble Supreme Court of India in S u o M o t o W r i t ( C i v i l ) N o . 3 o f 2 0 2 0 , I n R e : C o g n i z a n c e f o r e x t e n s i o n o f L i m i t a t i o n , wherein taking cognizance of situation arising out of Covid-19, the Hon'ble Apex Court directed that the limitation period for filing petitions/ applications/ suits/ appeals before various Courts/ Tribunals across the country, shall stand extended w.e.f 15 th March, 2020 till further orders. (b) As the lock down was extended by the Central Government, the aforesaid directions were further extended by the Hon'ble Court vide Order dated 6th May, 2020 (copy enclosed as Annexure C) till further orders. Therefore, in view of the aforesaid, it is respectfully submitted that the present Appeal has been filed within the period of Limitation as prescribed under Income Tax Act, 1961 and is not time barred. It is requested that this reply may kindly be put up before Hon'ble Bench. Should your good self require any further clarification, the undersigned shall be greatly obliged to provide the same. Thanking you, Sd/- (Tarandeep Singh)) 3 Advocate Date: 16 th July 2020 3. The Ld. DR could not controvert the contents of the aforesaid application, we therefore by keeping in view the situation arising out of Covid-19 which was beyond the control of the assessee and the judgement of the Hon'ble Apex Court in Writ (Civil) No.3 of 2020, condone the delay and the appeal is admitted. 4. Following grounds has been raised in this appeal: 1. That on facts and in law order passed by CIT(A)dated 09 th September 2019(to the extent it is prejudicial to the interest of appellant)is bad in law and void ab initio. 2. That on facts and in law the CIT(A) has erred in not providing adequate opportunity of being heard and thereby violating principle of natural justice. 2.1 That on facts and in law the CIT(A) has erred in not granting opportunity to rebut arguments raised by AO vide remand report dated 06 th August 2019. 3. That on facts and in law the order of assessment dated 30 th March 2016 passed by AO u/s 147 r.w.s. 143(3) is bad in law and void ab initio. 4. That on facts and in law the assumption of jurisdiction u/s 147 by the AO is bad in law and void ab initio. 5. That on facts and in law the AO / CIT(A) have erred in holding / upholding that Capital Gains accrued from "transfer" of property situated at 9BG Kher Marg Worli Naka, Mumbai {hereinafter refereed to as "Mumbai Property"}. 5.1 That on facts and in law the AO / CIT(A) have erred in not appreciating that there was no "transfer" of "Mumbai Property" as per provisions of section 2(47) of the Act. 5.2 That on facts and in law the AO/CIT(A) have erred in holding that possession of "Mumbai Property" was given to M/s Krishna Developers Ltd. 6. Without Prejudice, on facts and in law while computing income from Long Term Capital Gain the CIT(A) has erred in directing the AO to adopt Fair Market Value of Land in"Mumbai Property" as on 01 st April 1981 at Rs 3,40,52,365/- as against a value of Rs 6,02,43,000/- estimated by the appellant. 6.1 That on facts and in law the CIT(A) has erred in not accepting the Fair Market Value of "Mumbai Property" as on 01 st April 1981 as estimated by the Registered Valuer in Valuation report dated 25 th June 2018. 6.2 That on facts and in law CIT(A) has erred in taking FSI of the Mumbai Property" at 1.33. That the appellant craves leave to add, alter, amend and/ or modify any of the grounds of appeal before or at the time of hearing of the appeal. 4 5. Vide Ground No. 2 & 3 the main grievance of the assessee relates to the adequate opportunity of being heard not provided by the Ld. CIT(A). 6. The facts related to this issue in brief are that the AO issued notice under section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’) to the assessee on the basis of the information that the assessee had sold its property situated at 9BG Kher Marg, Worli Naka, Worli, Mumbai for Rs. 45.50 Crores against market value of Rs. 150 Crores. The execution of sale deed and receipt of consideration gave rise to income in the form of capital gain in the hands of the assessee and as per the office record of the assessee had not filed its return of income. In response the assessee filed the return of income on 27/04/2015 declaring NIL income, thereafter the AO during the course of assessment proceedings asked the assessee vide Questionniare dt. 18/03/2016 as under: 2) Addition on account of Long Term Capital Gain: During the assessment proceedings, the assessee was asked vide questionnaire dated 18/03/2016 that "As per your reply dated 08/06/2015, you have entered into an agreement for development with M/s Krishna Developers Private' Limited, Mumbai for consideration of Rs.45.55 C r ores in respect of property located at Acharya Atrai Chowk, 9, B.G. Khair, Worli, Mumbai. But you have not shown any income in this regard as per the return of income filed by you. Please show-cause why the same may not be treated as your income under the head 'Long Term Capital Gain'. 6.1 In response the assessee submitted as under: “Income under the head Long term Capital Gain: As stated in reply to your question no. 1, under the head Long term capital gain does not arise " 6.2 According to the AO, the assessee vide reply dt. 26/08/2015 contested that property had not been sold, and it had only entered into an agreement for development with M/s Krishna Developers Private Limited on 11/06/2007. However, the AO did not find merit in the submissions of the assessee and made 5 the addition of Rs. 45.55 lakhs by observing in the assessment order dt. 30/03/2016 as under: Moreover, as per the agreement dated 11/06/2007 Para 'd)' on page 3 of the agreement, is clearly stated that "By diverse Agreements executed by Vendors with Mohammed Yusuf Khan & Anr. (Developers) & others the total area reserved for residential user admeasuring to be extent about 13049.45 sq. meters equivalent to 1.82.473 sq. feet AT 1.33 F S I as mentioned in Second Schedule and mentioned below was agreed to be sold and assigned to the said Developers, on the terms, conditions and for the consideration as mentioned therein...." Therefore, as per the agreement, the development rights were transferred with the intention to transfer the ownership of property. Further, assessee has also .contested that, the possession of property was not transferred which is contrary to Para 1 Point No. (vii) on page 15 and Para 6 on page 18 of assignment-cum- development agreement which are reproduced below as: "Page 15 Para 1 Point No. (vii): It is hereby agreed by and between the parties hereto that on the purchasers depositing with M/S DEEPAK CHITNIS CHPARIKAR & CO THE SUM OF Rs.30,00,00,000/ AS MENTIONED IN PARA I above the vendors shall not be entitled to terminate revoke and cancel this presents whatsoever and their only remedy will be to seek specific performance of this agreement. Page 18 Para 6: The Vendors hereby agree, declare and confirm that simultaneously upon execution of these presents the Vendors shall immediately sign and execute a letter of possession in favour of the Purchasers thereby authorizing the Purchasers to depute their security guards and watchmen for safeguarding the said property and also display their name board on the said property so as to enable the Purchasers to protect their rights in the said property described in the Schedule hereunder written...." Hence as above mentioned terms and conditions of agreement, the possession of property was given to M/s Krishna Developers Private Limited, Mumbai. Moreover, as per possession letter dated 11/06/2007 the possession of above said property was transferred to M/s Krishna Developers Private Limited, Mumbai after receiving the sum of Rs. 30 Crores. Therefore, as per the provision of section 2(47) of the Act, the assessee has relinquished its right on the above said property and transfer of capital was completed. Hence, assessee has earned Long Term Capital Gain on the above said property. To determine the market value of the property, reference has been made to The District Valuation Officer-11 (DVO-II), Mumbai on 16/12/2015 under the provisions of section 55A of the Act. This office has also issued the reminders, but no valuation report has been received by this office till date from DVO-II, Mumbai in this regard. Therefore, the sale consideration of the above said property is considered Rs.45.55 Crores as per the assignment-cum-development dated 11/06/2007 which subject to rectification on the receipt of awaited valuation report by DVO-II as discussed above. 6 Hence in the light of the above discussion, the long term capital gain earned by the assessee is determined to the amount of Rs.45.55 Crores as no cost of acquisition of property has been given by the assessee. 7. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and furnished the following evidences: i. Valuation report dated 21 st April, 2016 made by District Valuation Officer to IT Department, Mumbai certifying the value of the property at Rs.45,20,65,000/- (copy enclosed), and ii. Valuation report dated 25.06.2018 made by Shri Ramesh Chander Puniani certifying the fair market value of the property as on 1 st Aprii, 1981 at Rs.6,41,00,000. 7.1 The assessee also furnished the written submissions before the Ld. CIT(A) which read as under: "1. . Captioned appeal is fixed for hearing before your good-self today i.e., if 1 July, 2018. It is respectfully submitted that the sole issue in dispute in this appeal is as to whether Capital Gain Tax is attracted on execution of Agreement for Assignment cum Development dated 11 th June, 2007 executed by the appellant in favour of M/s Krishna Developers Ltd. As per this agreement a consideration stated in Rs 45.50 crores and the property i.e subject matter Is situated at 9 B G Kher Marg, Worii Naka, Worli, Mumbai. In the impugned order of assessment the AO has subjected to tax the entire consideration of Rs.45.55 crores to Long Term Capital Gain Tax by alleging as under:- "Hence as above mentioned terms and conditions of agreement, the possession of property was given to M/s Krishna Developers Private Limited, Mumbai. Moreover, as per possession letter dated 11/06/2007 the possession of above said property was transferred to m/s Krishna Developers Private Limited, Mumbai after receiving the sum of Rs.30 Crores. Therefore, as per the provision of section 2(47) of the Act, the assessee has relinquished its right on the above said property and transfer of capital was completed. Hence, assessee has earned Long Term Capital gain on the above said property. To determine the market value of the property, reference has been made to The District Valuation Officer-II (DVO-II) Mumbai on 16/12/2015 under the provision of section 55A of the Act. This office has also issued the reminders, but no valuation report has been received by this office till date from DVO-II, Mumbai in this regard. Therefore, the sale consideration of the above said property is considered Rs.45.55 crores as per the assignment-cum-development dated 11/06/2007 which subject to rectification on the receipt of awaited valuation report by DVO-II as discussed above 7 Hence in the light of the above discussion, the long term capital gain earned by the assessee is determined to the amount of Rs.45.55 crores as no cost of acquisition of property has been given by the assessee," 3. In this regard it is submitted that during the course of assessment it was claimed by the appellant that there is no "transfer" of property as envisaged u/s 2(47) of the Act and as such capital gains charging provisions of section 45 are not attracted {kindly refer submissions dated 26 th August, 2015 filed before AO, copy enclosed at pages 1-12 of PB}. The AO however was unimpressed and as stated above, he has subjected to tax the entire consideration of Rs.45.55 crores as Income from Long Term Capital Gain. In the impugned order it is noted by the AO that; 4. (a) valuation report ofDVO pursuant to reference made by him on 16 th December, 2015 is awaited, and (b) cost of acquisition of property has not been given b y the assessee. 3. Without prejudice, to our primary claim that there is no "transfer" of property as envisaged u/s 2(47) of the Act, an argument and claim which will also be tested b y your goodselfthe appellant is now furnishing also before your goodseif following additional evidences which are "relevant" to the Computation of alleged income on account of Long Term Capital Gain as per provisions of section 48 of the Act:- Additional Evidence A - Valuation report dated 21 st April, 2016 made b y District Valuation Officer to IT Department, Mumbai certifying the value of the property at Rs.45,20,65,000/- (copy enclosed), and Additional Evidence B -Valuation report dated 25.06.2018 made b y Shri Shri Ramesh Chander Puniani certifying the fair market value of the property as on 1 st A p r i l , 1981 at Rs.6,41,00,000. 4. It is submitted that the additional evidences stated above may kindly be admitted and taken into consideration while adjudication of the captioned appeal. Additional Evidence A is a departmental valuation report issued b y DVO pursuant to reference made to him b y the AO u/s 55A of the Act. Whereas, Additional Evidence B is a valuation report issued b y a registered valuer valuing the FMV of the property as on 01 st April 1981. This report is crucial for computation of Long Term Capital Gain as per provisions of section 48 of the Act. It is submitted that as per provisions of section 55 r.w section 48 where a property is acquired prior to Of April 1981 then the appellant has an option to choose the cost of acquisition of the property as FMV as on 01 st April 1981. It is submitted that both die above valuation reports have been received b y the appellant post passing of the impugned order of assessment and as such the same could not have been submitted before the AO during the course of assessment. Moreover, during the course of assessment the primary claim of the 8 appellant was that there is no income chargeable to tax under the head "Capital Gains". "Relevancy" of these evidences is beyond doubt as they are crucial for a proper computation of Long Term Capital Gains Tax as per provisions of section 48. 4. Provisions of Rule 46A are reproduced below for sake of easy referencing: "(1) The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether oral or documentary, other than the evidence produced b y him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely : (a) where the Assessing Officer has refused to admit evidence which ought to have been admitted; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer; or (c) where the appellant was prevented b y sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal; or (d) where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal." Facts of the case narrated above clearly evidence satisfaction of conditions stipulated in sub-rules (c) and (d) of Rule 46A(1) in the instant case. Moreover, the additional evidences now being produced are also crucial for an effective computation of Long Term Capital Gains Tax.lt is therefore prayed that the present application under rule 46A may kindly be allowed b y admitting the enclosed additional evidences and the same may kindly be taken into consideration while disposal of the appeal. Appellant reserves right to furnish a separate submission advancing arguments on the grounds of appeal raised before your goodself. 7.2 The Ld. CIT(A) asked the remand report from the AO on the submissions of the asessee. In response the AO submitted as under: "It is submitted before your goodself that adequate opportunity has already been given to the assessee to explain his stand on this issue during assessment proceedings. The same can be seen from question no. 3 in notice u/s 142(1) dated 18.03.2016, In the submission before Hon'ble CU(A) the assessee has claimed that there is no "Transfer" of property as envisaged u/s 2(47) of the Act. The issue has already been considered b y AO while passing assessment order. The A.O. held in assessment order, Para 3 on page 3, as under-"assessee's contention is groundless as the assesssee has transferred the development rights as well as ownership to M/s Krishna Developers Private Limited for the amount of Rs. 45.55 crores and the stamp duty was also paid on the same which is applicable only when the ownership of property is transferred. Hence, the 9 assignment-sum-development agreement as signed b y the assessee company which is equivalent to the transfer of property. Further, the AO held in assessmet order, Para 4 on page 4, as under:- "hence as above mentioned terms and conditions of agreements, the possession of property was given to M/s Krishan Developers Private Limited, Mumbai, Morevoer, as per possession letter dated 11.06.2007 the possession of above said property was transferred to M/s Krishan Developers Private Limited, Mumbai after receiving the sum o f R s . 3 0 crores. Therefore, as per the provision of section 2(47) of the Act, the assessee has relinquished its right on the above said property and transfer of capital was completed,"' Without prejudice to the above, the comments of undersigned on additional evidence are as under:- Additional Evidence A In the instant case, assessment order u/s 147 r.w.s 143(3) was passed on dated 30.03.2016. In the said assessment order, the sale consideration with respect to the said property as determined b y A.O at Rs. 45,55,00,000/- subject to the valuation report of DVO-II Mumbal-12 which was awaited at that time. The said valuation report, dated 21.04.2016 was received b y Assessing officer on 26.04.2016. as per the finding of valuation report, the fair market value of the property was determined at Rs. 45,20,65,000/- however, till date, no effect has been given to the findings of valuation report in the form of rectification etc. Now, the said valuation report has been admitted before Hon'ble CIT(A) as additional evidence A. Your good self Is hereby requested to consider giving effect the said valuation report if deemed fit. Additional Evidence B As additional evidence B, the assessee has submitted the valuation report of the property as prepared b y Sh. Ramesh Chan'der Punlani, registered valuer. The said valuation report determines the fair market value of property as on date 01.04.1981 at Rs. 6,41,00,000/-. The registered valuer has resorted to the composite rate method in which he has valued the land and building as a whole. Valuation of land and valuation of building has not been specified separately. Therefore, it is not possible to determine FMV of'land as on 01.04.1981. from the said valuation report. In the valuation report submitted b y DVO-II, Mumbai-12 it has been clairifed that the sales consideration has been received in lieu of land only. In para 3.02 pertaining to "Built up area", the DVO clearly mentions that- "the subject property may be considered of havi ng no built-up area as the structure of factory is very old with no doors and windows any fittings or fixtures and totally In a dilapidated condition since long. The land for which the assessee has entered into Development agreement is 4858.15sqm." 10 Since sales consideration is only in lieu of land and not in lieu of building, it is not relevant ot consider the value of building as on 01.04.1981. the only component which could have been considered for determination of capital gains is the cost of acquisition of land or fair market value of land as on 0104.1981, as m e n t i o n e d u /s 55(2)(b)(i). The cost of acquisition of the land is nil because the land was obtained on lease. The market value of property as determined b y the stamp valuation authority is Nil. The same can be ascertained from:- I. Communication dated 28.01.2016 between DVO-II Mumbai-12 and M/s Pure Drinks Ltd, a copy of which was market to undersigned. Copy enclosed. II. Communication dated 28.01.2016 between DVO-II Mumbai-12 and the collector of stamp, Mumbai City. Copy enclosed. iii. Communication dated 10.03.2015 between the Sub-Registrar, Mumbai No.3 and DDTT Unit 4(4), Mumbai, Copy enclosed. Hence, it is clear that the assessee did not pay any sum towards cost of acquisition of the said land while taking it on lease. The plot of land was let for industrial user b y a resolution passed b y Urban development and Public Health Department on 31.12.1980. the assessee has not claimed any expenses incurred for the acquisition of said land. The assessee has been given adequate opportunity b y the undersigned to submit lease deed for the said plot of land and evidence, if any, of any payment made towards obtaining the said piece of land. In this regard letter dated 29.08.2018 of the office of undersigned was duly served on the address of assessee I.e. "M/s Pure Drinks Ltd., Regd. Officer 60 Yadvindra Colony, the Mall, Patilaa"through which the assessee was asked to furnish document b y 03.09.2018. However, till date no response of assessee has been received. Comments Additional evidence B has been submitted b y assessee in the form of valuation report of property (land 8t Building) prepared b y Sh. Ramesh Chander Puniani, registered valuer. The valuation of land has not been specified separately in the report. Moreover, the market value of the land as determined b y stamp valuation authority is Nil. The same also holds true for market value of land as on 01.04.1981.” 7.3 The assessee also submitted a detailed rejoinder to the remand report of the assessee which has been incorporated in para 4.6 of the impugned order. The Ld. CIT(A) again asked the comments of the AO on the said rejoinder. Iin response, the A.O. furnished the report on 06/08/2019 which has been reproduced in para 4.8 of the impugned order, for the cost of repetition the same is not reproduced herein. 11 7.4 The Ld. CIT(A) admitted the additional evidences and allowed part relief to the assessee by observing in para 6 & 7 of the impugned order as under: 06. Determination on Grounds of Appeal 3, 3.1 and 3.2 I have examined all the submissions and rejoinders as well as the detailed paper book submitted by the Ld. AR and the findings and counter comments of the Ld. AO and. contextualized these to the facts of the case and the case laws cited. First in adjudicating whether the instant case is covered as a transfer within the rubric of part performance; given that the appellant has not disputed that the advance of Rs. 30,00,00,000/- received was non-refundable and that of Agreement for Assignment cum Development dated ll^June, 2007 executed by the appellant in favour of M/s Krishna Developers Ltd and that the same was irrevocable and the appellant could only have the relief of specific performance; I see no reason to interfere with the finding that the possession of property was given to the developers M/s Krishna Developers Private Limited, after receiving the sum of Rs.30 Crores of the total Rs. 45.50 crores and per the provision of section 2(47) of the Act, the appellant has relinquished its right on the property and transfer of capital was completed as per part performance was completed. Therefore, in my considered view the appellant fails on these grounds of appeal; it is ordered accordingly. 07. Determination on Grounds of Appeal 4& 5 : In the instant case, that the bundle of rights comprising the capital asset in dispute was teased by the appellant prior to 1 st April 1981 is a matter of record and not in dispute. Further as per the lease deed a certain consideration was fixed for the lease of the entire property is a matter of record and not in dispute. I find merit in the appellant's submission that the consideration was for the land and the buildings thereon. These were determined as a premium for the promises demised and for change of appellant has paid Rs. 3,03,084/- and fourteen annas by way of premium for the promises demised and Rs. 50,000/-for the change of user. The Ld. AO finding that that the lease deed mentions that the sums of money are also a consideration of moneys which have been expended in the erection of the building and the rennet and that nowhere is it mentioned in the lease deed that the said consideration is for the purpose of acquisition of land is in my opinion without much merit. It is my considered view that part of the consideration for the land and the premium as well as and the change of user are mere means to calculate the consideration and that the lease of land and buildings was not without any consideration. The appellant has in my considered view rightly claimed benefit of section 55(2)(b) that provides an option to the appellant to substitute actual cost of acquisition with the Fair Market Value as on 01 st April 1981. With regards to Calculating the cost of the land as on 01.04.1981; I find merit in the Ld AO's finding that the FSI of 2.0 taken by the approved valuer as on 01.041981 is without basis as the FSI on the date of agreement is 1.33. therefore, the fair market value of Rs. 6,02,43,000/- may be on the higher side. In view of the entire factual matrix discussed supra the Ld AO is directed to re-determine the Long term Capital Gains with the fair Market Value as on 01.04.1981 taken as Rs. 3,40,52,365 12 (6,02,43,000 *5492.14/9716.30) and the Full Value of Consideration at Rs. 45,20,65,000/- as determined by the DVO (instead of Rs. 45,55,00,000 taken by the Ld. AO.). It is ordered accordingly. The appellant partly succeeds on these grounds of Appeal. 8. Now the assessee is in appeal. 9. The Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that neither the AO nor the Ld. CIT(A) appreciated the facts in right perspective. It was submitted that the assessee was holding the land on the basis of lease and the said lease was terminated by the Additional Municipal Commissioner, Mohali vide order dt. 16/08/2018 (copy of which is placed at page no. 162 to 215 of the assessee’s paper book) and thereafter, the party with whom the assessee entered into agreement i.e; M/s Krishna Developers Private Limited filed a writ in the Hon'ble jurisdictional High Court i.e; Hon’ble Bombay High Court which is still pending. He requested to restore the issue back to the file of the AO. 10. In his rival submissions the Ld. CIT DR, reiterated the observations made by the authorities below and submitted that since the assessee had received the amount in lieu of transfer of property, therefore, the capital gain was earned by the assessee at the time of receiving the amount and subsequent events have no bearing. It was further submitted that there was an agreement between the assessee and M/s Krishna Developers Private Limited, transfer of property was there vide an agreement which was non revocable. Therefore, the Ld. CIT(A) was justified in sustaining the addition made by the AO. 11. We have considered the submissions of both the parties and perused the material available on the record. In the present case it appears that the termination of lease deed vide order of the Additional Municipal Commissioner, Mohali dt. 16/08/2018 was either not brought to the knowledge of the authorities below or they have not considered it. Moreover, the outcome of the writ filed 13 by M/s Krishna Developers Private Limited, before the Hon’ble Bombay High Court is not known at this stage. We therefore considering the totality of the facts deem it appropriate to set aside this case back to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. 12. In the result, appeal of the assessee is allowed for statistical purposes. (Order pronounced in the open Court on 21/04/2022. ) Sd/- Sd/- स ु धांश ु ीवा&तव एन.के .सैनी, (SUDHANSHU SRIVASTAVA) ( N.K. SAINI) या(यक सद&य/ JUDICIAL MEMBER उपा य! / VICE PRESIDENT AG Date: आदेश क) % त4ल5प अ6े5षत/ Copy of the order forwarded to : 1. अपीलाथ$/ The Appellant 2. %&यथ$/ The Respondent 3. आयकर आय ु 7त/ CIT 4. आयकर आय ु 7त (अपील)/ The CIT(A) 5. 5वभागीय % त न<ध, आयकर अपील.य आ<धकरण, च?डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar 14