JAMSHED E BAPASOLA, MUMBAI V. ASST CIT 16(2), MUMBAI

ITA 260/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4247 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 04-03-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 11-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T D SINGH
• Assessee Lawyers: SA TYENDRA PANDEY
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 50C; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND DT. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO.260/MUM/ 2012 ASSESSMENT YEAR : 2005-06 JAMSHED E. BAPASOLA F-10, RAMESH NIWAS 51-C, BHULABHAI DESAI ROAD MUMBAI-400 026. PAN NO. AAAPB 7671 A VS. ACIT-16(2) MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. GOPAL AND SHRI SATYENDRA PANDEY REVENUE BY : SHRI T.D. SINGH DATE OF HEARING : 12.06.2013 DATE OF PRONOUNCEMENT : 10.07.2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS IS AN ASSESSEE APPEAL AGAINST THE ORDER OF THE CIT(A)-27, MUMBAI, DATED 25.10.2011.THE ASSESSEE RAISED GROUND S ON TWO ISSUES. (A) ADOPTION OF FULL VALUE OF CONSIDERATION INVOKI NG OF SECTION 50C (B) ALTERING THE COST OF ACQUISITION. WE HAVE HEARD THE LD. COUNSEL AND LD. DR IN DETAIL. 2. BRIEFLY STATED, ASSESSEE IS A INDIVIDUAL SENIOR CITIZEN HAVING INCOME FROM HOUSE PROPERTY AND CAPITAL GAINS ON SAL E OF IMMOVABLE PROPERTY. DURING THE YEAR UNDER CONSIDERATION THE A SSESSEE SOLD THE ITA NO.260/M/12 A.Y.05-06 J AMSHED E. BAPASOLA 2 PROPERTY LOCATED AT FLAT NO. 301, JAHANGIR TOWER, N APEANSEA ROAD FOR RS.3.72 CRORES, WHICH WAS VALUED FOR THE PURPOSE OF STAMP DUTY AT RS.4,14,30,597/- THE AO IN HIS ASSESSMENT ORDER U/S .143(3) OF THE ACT, ADOPTED THE AFORESAID STAMP DUTY VALUE AS THE FULL CONSIDERATION RECEIVED. THAT APART, THE AO CONSIDERED THE COST OF ACQUISITION OF THE IMPUGNED PROPERTY AT RS.3 LAKHS IN THE PLACE OF RS. 32,44,425/- CLAIMED BY THE ASSESSEE AND ALLOWED COST INDEXATION ON THE AFORESAID VALUE OF RS.3 LAKHS ONLY. 2.1 THE PROPERTY CONSISTING OF THE LAND AND GROUND PLUS TWO FLOORS BUILDING SITUATED AT SETALVAD ROAD OF NAPEANSEA ROA D MUMBAI, WAS ORIGINALLY TAKEN ON LEASE BY EXECUTING A LEASE DEE D BETWEEN NAMUNARAYAN KOTHARI AS THE LESSOR AND MR. HORMUSHJI ARDESHIV WADIA AS LESSEE IN THE YEAR 1906. THEREAFTER, DIFFE RENT AGREEMENTS WERE ENTERED BETWEEN 1906 TO 1972. FINALLY IN THE Y EAR 1979, VIDE THE INDENTURE OF ASSIGNMENT DT. 6.8.1979 ENTERED BETWEE N MR. HORMUZI RANA & MR. HOMI MISTRY AND THE APPELLANT MR. JAMSHE D E. BAPASOLA, LEASE RIGHTS WERE CREATED IN FAVOUR OF THE ASSESSEE TERMED AS SUB LESSOR. THE ASSESSEE HAS IN TURN ENTERED INTO AGREE MENT WITH ONE M/S. VIVEK BUILDERS ON 22.9.1979 BY WHICH THE SUB LEASE FOR 98 YEARS WAS CREATED IN FAVOUR OF M/S. VIVEK BUILDERS. PURSUANT TO THE RIGHTS CREATED VIDE THE ABOVE LEASE DEED DT.22.9.1979, M/S . VIVEK BUILDERS HAS RE-DEVELOPED THE PROPERTY BY CONSTRUCTING 8 ADD ITIONAL FLOORS OVER THE EXISTING BUILDING. VIDE A SEPARATE AGREEMENT DT . 15 TH OCTOBER, 1979 THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WIT H M/S. VIVEK BUILDERS FOR PURCHASE OF FLAT NO. 301 CONSISTING OF THE ENTIRE 3 RD FLOOR TO BE CONSTRUCTED BY THE BUILDERS WITH A CARPET ARE A 1575 SQ.FT FOR A CONSIDERATION OF RS.3 LAKHS. THE CONSTRUCTION WAS C OMPLETED IN THE YEAR 1986 AND THE AFORESAID FLAT NO. 301 WAS ACCORD INGLY HANDED OVER TO THE ASSESSEE IN 1986. 2.2 THE ASSESSEE IN TURN SOLD THE SAID FLAT NO. 301 ON 26.03.2005 FOR A CONSIDERATION OF RS.3,72,50,000/-. THE PROPER TY WAS VALUED FOR ITA NO.260/M/12 A.Y.05-06 J AMSHED E. BAPASOLA 3 THE PURPOSE OF STAMP DUTY AT RS.4,14,30,597/-. BEFO RE THE AO, THE ASSESSEE CLAIMED THAT THE STAMP DUTY VALUATION IS O N HIGHER SIDE AND TO SUPPORT HIS CASE THE ASSESSEE FILED A COPY OF TH E VALUATION REPORT FURNISHED BY THE APPROVED VALUER THAT ITS VALUE WAS AT RS.3,25,00,000/- ONLY AS ON 1 ST JANUARY, 2005. THE AO REFERRED THE MATTER TO THE DISTRICT VALUATION OFFICER VIDE HIS L ETTER DT. 5 TH AUGUST, 2009. SINCE THE VALUATION REPORT WAS NOT RECEIVED A S ON THE DATE OF COMPLETION OF THE ASSESSMENT, AO HAS ADOPTED THE ST AMP DUTY VALUE AS FULL CONSIDERATION RECEIVED FOR THE PURPOSE OF C OMPUTING CAPITAL GAINS AS REQUIRED U/S 50C OF THE ACT. THE ASSESSEE DISPUTED THE AOS ACTION IN THIS REGARD. THE VALUATION REPORT WAS REC EIVED AT A LATER DATE I.E. ON 13.2.2011, A COPY OF WHICH WAS FORWARDED TO THE ASSESSEE ALSO. IN THE VALUATION REPORT, THE DISTRICT VALUATION OFF ICER ESTIMATED THE FMV OF THE PROPERTY AS ON 31.3.2005 AT RS.3,87,60,4 43/- FOR THE PURPOSE OF SECTION 50C OF THE ACT. THE ASSESSEES A R DURING THE PROCEEDINGS BEFORE THE CIT(A) SUBMITTED THAT THE DI FFERENCE BETWEEN THE VALUE ESTIMATED BY THE VALUATION OFFICER AND TH E ACTUAL CONSIDERATION RECEIVED WAS LESS THAN 10%. IN VIEW O F THE ABOVE, IT WAS SUBMITTED THAT SUCH DIFFERENCE MAY BE IGNORED AND T HE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE MAY BE ACCEP TED FOR COMPUTING THE CAPITAL GAINS. 3. AS REGARDS THE COST OF ACQUISITION OF THE AFORES AID PROPERTY THE ASSESSEE CLAIMED THAT THE FLAT NO. 301 WAS GIVEN TO THE ASSESSEE IN LIEU OF CREATING LEASE RIGHTS IN FAVOUR OF M/S. VIV EK BUILDERS BY THE AGREEMENT DT. 22.9.1979 AND BY PAYING AN ADDITIONAL PURCHASE CONSIDERATION OF RS.3 LAKHS AS REQUIRED BY THE AGRE EMENT DT. 15.10.1979. THE ASSESSEE ARGUED THAT AT THE FIRST I NSTANCE THE PROPERTY VIZ., THE LEASE RIGHTS WERE AVAILABLE TO T HE ASSESSEE PRIOR TO 1981 AND SUCH LEASE RIGHTS WERE TRANSFERRED TO M/S. VIVEK BUILDERS. THEREFORE, THE VALUE OF THE LEASE RIGHTS PLUS THE C ONSIDERATION OF RS.3 LAKHS PAID AS ABOVE WOULD CONSTITUTE THE COST OF AC QUISITION OF THE IMPUGNED PROPERTY, VIZ. FLAT NO. 301. HOWEVER, CONS IDERING THE FACT ITA NO.260/M/12 A.Y.05-06 J AMSHED E. BAPASOLA 4 THAT THE IMPUGNED PROPERTY WAS HANDED OVER TO THE A SSESSEE IN THE YEAR 1986, THE ASSESSEE GOT THE PROPERTY VALUED AS ON 1.4.1986 BY A REGISTERED VALUER. AS PER THE REPORT FURNISHED BY A SSESSEE, THE IMPUGNED PROPERTY WAS VALUED AT RS.33 LAKHS AS ON 1 .4.1986. THAT APART, THE ASSESSEE ALSO CONSIDERED THE AMOUNT OF R S.3 LAKHS PAID BY HIM TO M/S. VIVEK BUILDERS VIDE THE AGREEMENT DT. 2 2.10.1979. IN THIS BACKGROUND THE ASSESSEE CLAIMED INDEXED COST FOR RS .3 LAKHS W.E.F. 1.4.1981 AND FOR RS.33 LAKHS W.E.F. 1.4.1986. THUS THE ASSESSEE ARRIVED AT THE INDEXED COST OF ACQUISITION AT RS.1, 27,54,000/- AND AFTER CLAIMING CERTAIN INCIDENTAL EXPENDITURE, THE LONG TERM CAPITAL GAIN WAS ARRIVED AT RS.2,37,97,500/-. THE ASSESSEE FAILED TO PRODUCE THE RELEVANT AGREEMENTS DT.22.9.1979 AND 15.10.1979 AND THE EVIDENCE THAT THE PROPERTY WAS HANDED OVER TO HIM I N THE YEAR 1986 BEFORE THE AO. IN VIEW OF THE ABOVE, THE AO HELD TH AT THE ASSESSEES CLAIM WAS NOT VERIFIABLE AND THEREFORE ALLOWED THE INDEXED COST OF ACQUISITION ONLY ON AN AMOUNT OF RS.3.00 LAKHS. THU S, THE INDEXED COST OF ACQUISITION WAS ADOPTED AT RS.14,40,000/- I N THE PLACE OF RS.1,27,54,000/- CLAIMED BY THE ASSESSEE . THE AO R ECOMPUTED THE CAPITAL GAINS ACCORDINGLY. 4. WITH REFERENCE TO ADOPTION FULL VALUE OF CONSIDE RATION, AFTER CONSIDERING THE DETAILED SUBMISSIONS OF ASSESSEE LD . CIT(A) CONFIRMED THE VALUATION AS GIVEN BY THE DVO STATING AS UNDER : AS REGARDS THE PROVISIONS OF SECTION 50C, THE VALU E DETERMINED BY THE VALUATION OFFICER ON REFERENCE MADE TO HIM U NDER SECTION 50C(2) OF THE ACT IS BINDING ON THE AO. THE APPELLA NT CANNOT TAKE A PLEA THAT REFERENCE MADE U/S 55A OF THE ACT WHERE THE PERCENTAGE OF DIFFERENCE HAS TO BE MORE THAN 15% AP PLIES TO SECTION 50C ALSO. THE AFORESAID DIFFERENCE OF 15% I S A PRE- CONDITION FOR REFERRING THE PROPERTY TO VALUATION O FFICER U/S 55A OF THE ACT, WHEREAS NO SUCH PRE-CONDITION IS PROVIDED U/S 50C. ALL THAT THE AO REQUIRES TO REFER THE MATTER TO THE VAL UATION OFFICER U/S. 50C(2) OF THE ACT IS THAT THE APPELLANT HAS NO T DISPUTED THE STAMP DUTY VALUE IN ANY APPEAL OR REVISION BEFORE A NY OTHER AUTHORITY, COURT OR HIGH COURT AND HAS MADE A CLAIM BEFORE THE AO THAT IT EXCEEDS THE FMV OF THE PROPERTY AS ON THE D ATE OF TRANSFER. ITA NO.260/M/12 A.Y.05-06 J AMSHED E. BAPASOLA 5 THUS THE PROVISIONS OF SECTION 50C AND SECTION 55A ARE ON A DIFFERENT FOOTING. SIMILARLY, THE WEALTH TAX PROVIS IONS ARE ALSO APPLICABLE ONLY TO THE EXTENT THEY ARE ENVISAGED IN SECTION 50C. IN OTHER WORDS, THE PROVISIONS OF SECTION 50C HAVING B EEN A FICTION OF LAW CREATED FOR A SPECIFIC PURPOSE, THEY CANNOT BE COMPARED WITH ANY OTHER PROVISIONS OF THE ACT. THEREFORE, I AM OF THE CONSIDERED OPINION THAT THE VALUE GIVEN BY THE VALUATION OFFIC ER IS FINAL AND BINDING ON THE AO. ACCORDINGLY, THE AO IS DIRECTED TO ADOPT THE AMOUNT OF RS.3,87,60,443/- AS FULL CONSIDERATION RE CEIVED IN THE IMPUGNED TRANSACTION IN THE PLACE OF RS.3,72,50,000 /- REPORTED BY THE APPELLANT AND THAT OF RS.4,14,30,597/- ADOPT ED BY THE AO IN HIS ASSESSMENT ORDER BEING THE STAMP DUTY VALUE. APPELLANT SUCCEEDS PARTLY ON THIS GROUND. 4.1 AFTER CONSIDERING THE RIVAL CONTENTIONS, WE ARE OF THE OPINION THAT THE ORDER OF CIT(A) REQUIRES NO INTERFERENCE. EVEN THOUGH LD. COUNSEL CONTENDED THAT THE DIFFERENCE IN VALUATION WAS LESS THAN 15% AND RELIED ON THE DECISION OF ITAT PUNE BENCH IN TH E CASE OF RAHUL CONSTRUCTIONS VS. DCIT (2010)(38 DTR (PUNE) ( TRIB. ) 19, WE ARE OF THE OPINION THAT IN VIEW OF SPECIFIC DEEMING PROVISION OF 50C, ORDER OF CIT(A) HAS TO BE UPHELD. AS PER THE PROVISIONS OF S ECTION 50C(II) THE VALUATION ADOPTED BY STAMP VALUE AUTHORITIES AT RS. 4,14,30,597/- HAS TO BE ADOPTED. HOWEVER, AS ASSESSEE OBJECTED, THE V ALUATION WAS REFERRED TO DVO UNDER THE PROVISION OF SECTION 50C (2) AND THE DVO ADOPTED A FAIR VALUATION AT RS.3,87,60,443/-. THIS VALUE WAS DECIDED TO BE ADOPTED AS AGAINST RS.4,14,30,597/-, WHICH IN OUR OPINION IS CORRECT AND FAIR ACCORDING TO THE PROVISIONS OF LAW . THEREFORE, GROUND NO.1 RAISED ON THIS ISSUE IS REJECTED. 5. AS REGARDS COST OF ACQUISITION OF PROPERTY, THE LD.CIT(A) HAS GIVEN THE FINDINGS AS UNDER: AS REGARDS THE COST OF ACQUISITION CLAIMED BY THE APPELLANT, I HAVE GONE THROUGH THE COPIES OF AGREEM ENTS DT.22.09.1979 AND 15.10.79 PLACED ON RECORD. AT THE OUTSET VIDE AGREEMENT DT.22.9.1979, THE LAND ALONG WITH THE BUI LDING CONSISTING OF GROUND AND TWO FLOORS WAS GIVEN ON SU B LEASE TO M/S. VIVEK BUILDERS FOR A PERIOD OF 98 YEARS ON REC EIVING A MONTHLY RENT OF RS.4000/- PAYABLE IN ADVANCE WITHOU T ANY DEDUCTION WHATSOEVER ON THE FIFTH DAY OF EACH AND E VERY ENGLISH ITA NO.260/M/12 A.Y.05-06 J AMSHED E. BAPASOLA 6 CALENDAR MONTH. THE AFORESAID AGREEMENT READS THAT IN PURSUANCE OF THE SAID AGREEMENT AND IN CONSIDERATIO N OF THE PREMISES AND OF THE RENT AND OF THE COVENANTS, COND ITIONS AND PROVISIONS HEREIN AFTER CONTAINED AND ON THE PART O F THE SUB LESSEE TO BE OBSERVED AND PERFORMED, THE SUB LESSOR DOTH HEREBY SUB DOMISE AND TO THE SUB LESSEES ALL THAT PIECE OR PARCEL OF LAND OR GROUND TOGETHER WITH THE BUILDING, OUT HOUSES AN D OTHER STRUCTURES AND ERECTIONS THEREON AND ALSO TOGETHER WITH ANY OTHER BUILDING OR ADDITIONAL FLOORS WHICH MAY HEREAFTER B E ERECTED THEREON IN OTHER WORDS, ALL THE LEASEHOLD RIGHTS IN THE AFORESAID PROPERTY WERE TRANSFERRED TO M/S. VIVEK B UILDERS AGAINST A CONSIDERATION OF A MONTHLY RENT OF RS.400 0/- FOR A PERIOD OF 98 YEARS. NOW, COMING TO THE AGREEMENT DT . 15 TH OCTOBER, 1979, THE SAID AGREEMENT CLEARLY ACKNOWLED GES THE FACT THAT THE LEASE RIGHTS WERE ALREADY TRANSFERRED IN F AVOUR OF M/S. VIVEK BUILDERS BY WAY OF INDENTURE OF SUB LEASE DT. 22.9.1979 AND IN PURSUANCE OF THE LEASE RIGHTS SO CREATED, TH E BUILDERS WERE DESIROUS OF CONSTRUCTING 8 ADDITIONAL FLOORS OVER T HE EXISTING BUILDING. IN THE AFORESAID AGREEMENT IT IS ALSO STA TED THAT THE BUILDERS ARE DESIROUS OF SELLING THE RESIDENTIAL FL ATS ON THE ADDITIONAL FLOORS TO BE CONSTRUCTED BY THEM TO VARI OUS PERSONS ON WHAT IS KNOWN AS OWNERSHIP BASIS AND AT THE REQUE ST OF THE APPELLANT THE BUILDERS HAVE AGREED TO SELL AND TRAN SFER A FLAT CONSISTING OF THE ENTIRE THIRD FLOOR TO BE CONSTRUC TED, COVERING A CARPET AREA OF 1575 SQ.FT T THE APPELLANT. CLAUSE 2 OF THE AGREEMENT CLEARLY STATES THAT THE SAID JAMSHED (I. E. THE APPELLANT) DOTH HEREBY AGREE TO PAY TO THE BUILDERS THE PURCHASE PRICE OF RS.3 LAKHS IN RESPECT OF THE SAID FLAT AGR EED TO BE PURCHASED BY HIM ON OWNERSHIP BASIS. THE AFORESAID AGREEMENT NOWHERE STATES THAT THE VALUE OF THE LEASE RIGHTS S HALL GO FORM PART OF PURCHASE PRICE/CONSIDERATION OF THE FLAT PR OPOSED TO BE PURCHASED BY THE APPELLANT. AS STATED EARLIER, THE AGREEMENT ONLY REFERS TO THE LEASE RIGHTS ALREADY AVAILABLE T O THE BUILDERS IN PURSUANCE OF WHICH THE BUILDERS PROPOSE TO CONSTRUC T THE ADDITIONAL FLOORS. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE CONSIDERED OPINION THAT THE AGREEMENTS DT.22.9.1979 AND 15.10.1979 ARE TWO SEPARATE LEGAL DOCUMENTS CREATIN G MUTUALLY EXCLUSIVE RIGHTS AND ARE SEPARATELY ENFORCEABLE. TH ERE IS NOTHING TO SHOW THAT THE APPELLANT HAS PURCHASED THE FLAT N O. 301 IN LIEU OF TRANSFERRING THE LEASE RIGHTS TO THE DEVELOPERS, M/S. VIVEK BUILDERS. AT THE COST OF REPETITION I WOULD LIKE TO STATE THAT THE CONSIDERATION FOR CREATING THE LEASE RIGHTS IN FAVO UR OF M/S. VIVEK BUILDERS IS A MONTHLY RENT OF RS.4000/- FOR A PERIO D OF 98 YEARS AND THE CONSIDERATION FOR PURCHASING THE FLAT NO. 3 01 IS RS.3 LAKHS, WHICH ARE MUTUALLY EXCLUSIVE. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT IS ENTITL ED TO CLAIM THE INDEXED COST OF ACQUISITION ONLY AN AMOUNT OF RS.3 LAKHS AND NOT OTHERWISE. THE VALUATION REPORT OF THE IMPUGNED PRO PERTY AS ON 1.4.1986 FURNISHED BY THE REGISTERED VALUER AND PRO DUCED BEFORE ITA NO.260/M/12 A.Y.05-06 J AMSHED E. BAPASOLA 7 THE AO IS OF NO AVAIL. ACCORDINGLY, I UPHOLD THE AS SESSING OFFICERS ACTION IN ALLOWING THE INDEXED COST OF ACQUISITION AT RS.14,40,000/- ONLY. THE APPELLANT FAILS ON THIS GR OUND. IN SUMMARY, THE AO IS DIRECTED TO CONSIDER THE FMV OF THE IMPUGNED PROPERTY AS ON THE DATE OF SALE AT RS.3,87 ,60,443/- AS REPORTED BY THE VALUATION OFFICER, AS FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTING CAPITAL GAINS. THE APPELLA NT IS ENTITLED FOR RELIEF ONLY TO THIS EXTENT. THE APPELLANT FAILS ON THE GROUND RELATING TO ALLOWING ADDITIONAL INDEXED COST OF ACQ UISITION. 5.1 AFTER CONSIDERING THE RIVAL CONTENTIONS, WE AGR EE WITH THE ORDER OF CIT(A) TO THE EXTENT OF DIFFERENTIATING THE AGRE EMENTS FOR THE PURPOSE OF ARRIVING AT THE COST OF ACQUISITION. WE AGREE WITH HIS FINDING THAT ASSIGNING LEASE RIGHTS TO BUILDER FOR A MONTHLY LEASE WAS DIFFERENT TRANSACTION AND SO THE COST OF LEASE RIGH T CAN NOT BE CONSIDERED. HOWEVER THIS CONTENTION BECOMES ACADEMI C AS ASSESSEE TOOK POSSESSION ON IN 1986 AND PROPERTY VALUE WAS C LAIMED ON THE BASIS OF VALUATION REPORT. AS SEEN FROM THE RECORD, THE ASSESSEE CLAIMED THE ACTUAL COST OF RS.3 LAKHS AND THE VALUE AS ESTIMATED BY REGISTERED VALUE AS ON 01.04.1986, THE DATE ON WHIC H THE ASSESSEE TOOK POSSESSION OF PROPERTY. THUS THERE WAS A DOUB LE CLAIM. LATER, WHEN AO ENQUIRED, ASSESSEE FILED ANOTHER REPORT TA KING THE VALUE AS ON 01.04.1981 AGAIN CONSIDERING THE ORIGINAL COST O F RS.3 LAKHS AND VALUATION AS ON 01.04.1981. AO WITHOUT GIVING ANY FINDING ON DATE OF ACQUISITION, ADOPTED ONLY RS.3 LAKHS AS COST AND AL LOWED INDEXATION. LD.CIT(A) ANALYSED THE AGREEMENTS AND DETERMINED TH E ORIGINAL COST AT RS.3 LAKHS AND CONFIRMED THE ORDER. WHAT THE LD. CI T(A) MISSED WAS THAT THE VALUE OF RS.3 LAKHS PAID BY ASSESSEE WAS C OST AS ON 22.10.1979. AS PER THE PROVISIONS OF THE ACT, THE A SSESSEE IS ENTITLED FOR VALUATION AS ON 01.04.1981. THIS ASPECT WAS NOT CONSIDERED BY THE AO AND CIT(A). 5.2 HOWEVER, ASSESSEE VALUED PROPERTY AS ON 01.04.1 981 AND CLAIMED INDEXATION ACCORDINGLY. AS PER THE ASSESSEE , THE PROPERTY WAS UNDER CONSTRUCTION AND HE GOT IT ONLY IN 1986. THUS THE COST OF ACQUISITION HAS TO BE ADOPTED ONLY AS ON 01.04.1986 . THERE IS A ITA NO.260/M/12 A.Y.05-06 J AMSHED E. BAPASOLA 8 REGISTERED VALUATION REPORT ACCORDING TO WHICH THE VALUE AS ON THAT DATE WAS AT 33 LAKHS AND INDEXED COST AT 480/140 WA S AT RS.1,13,14,285/-. THEREFORE, WE ARE OF THE OPINION THAT ASSESSEE IS ENTITLED TO CLAIM COST AS ON 01.04.1986 AND INDEX ED COST AS STATED ABOVE. ASSESSEE IS NOT ENTITLED TO ADD ORIGINAL COS T OR LEASE RIGHTS IF ANY, AS THE PROPERTY VALUE WAS ARRIVED AS ON 01.04. 1986 ON THE BASIS OF VALUATION REPORT FILED BY ASSESSEE. THE AO IS DI RECTED TO MODIFY THE COMPUTATION ACCORDINGLY AND ALSO ALLOW THE BENEFIT UNDER SECTION 54 AS CLAIMED. 6. IN THE RESULT, ASSESSEE APPEAL IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 10.07.2013. SD/- SD/- (DR. S.T.M. PAVALAN ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 10/07/2013. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.