Mrs. Tehmi Jimmy Cooper, Pune V. ITO, Ward 2(2), Pune, Pune

ITA 357/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9740 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 28-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y K BHASKAR
• Keywords: Capital asset; Gift; Cost of acquisition; Fair market value; Capital receipt; Revised return; Ignorance of law

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 357/PN/2011 (ASSTT.YEAR : 2006-07) TEHMI JIMMY COOPER, FLAT NO.8, HERMES HEAVEN MANGALDAS ROAD, PUNE 411001. .. APPELLANT PAN NO.ACIPC 2041F VS. ITO WARD 2(2), PMT COMMERCIAL COMPLEX, SWARGATE, PUNE .. RESPON DENT ASSESSEE BY : SRI SUNIL GANOO RESPONDENT BY : SRI Y.K. BHASKAR DATE OF HEARING : 06-08-2012 DATE OF PRONOUNCEMENT : 14-09-2012 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 24-01- 2011 OF THE CIT(A)-II, PUNE RELATING TO ASSESSMENT YEAR 2006-07. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED THE RETURN OF INCOME ON 29-07-2006 SHOWING TOTAL INCOME AT RS. 9,47,265/-. A REVISED RETURN WAS FILED ON 26-12-2006 IN WHICH THE TOTAL I NCOME WAS SHOWN AT RS.1,25,745/-. THE ASSESSEE HAD SHOWN THE CAPITAL GAIN FROM SALE OF PROPERTY AT NEW DELHI IN THE ORIGINAL RETURN AT RS. 10,06,515/- ; WHEREAS IN THE REVISED RETURN IT WAS SHOWN AT NIL. THE DETAILS ARE AS FOLLOWS : SALE PRICE OF PROPERTY AS PER SALE DEED DATED 09-03 -2006 RS. 56,00,000 LESS: LEGAL EXPENSES & ADVOCATE FEES RS. 5,00, 000 LESS : INDEXED PRICE RS. 14,93,485 LESS : AMOUNT INVESTED IN NABARD BONDS U/S. 54EC R S. 26,00,000 LONG TERM CAPITAL GAIN TAXABLE RS. 10,06,515 2 HOWEVER, IN THE REVISED RETURN THE WORKING OF LONG TERM CAPITAL GAIN WAS SHOWN AS UNDER: SALE PRICE OF PROPERTY AS PER SALE DEED DATED 09-03 -2006 RS. 56,00,000 ADD : DAMAGE GIVEN BY COURT RS. 12,00,000 LESS : LEGAL EXPENSES & ADVOCATE FEES RS. 5,00,000 LESS : INDEXED PRICE RS. 59,19,270 LESS : AMOUNT INVESTED IN NABARD BONDS U/S. 54EC R S.26,00,000 LONG TERM CAPITAL GAIN TAXABLE NIL 2.1 THE ASSESSEES BROTHER SHRI H.K. MODY WAS THE O RIGINAL OWNER OF THE PROPERTY WHICH WAS SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. SHRI H.K. MODY DIED IN DECEMBER 1982. VIDE FOLLOWING RE LEASE DEEDS, THE OTHER BROTHER, SISTERS AND WIFE OF SHRI H.K. MODY RELINQU ISHED THEIR RIGHTS IN THE SAID PROPERTY IN FAVOUR OF THE ASSESSEE. NAME DATE OF RELEASE DEED 1. MS. J.F. IRANI (SISTER OF ASSESSEE) 27-04-19 95 2. MR. C.K. MODY (BROTHER OF ASSESSEE) 09-05-199 5 3. MS. NARGIS J. PARAKH (SISTER OF ASSESSEE) 15- 05-1995 4. MRS. MANI H. MODY (WIFE OF ASSESSEES BROTHER) 04-09-1997 MOREOVER, SHRI H.K. MODY WAS ALSO ENTITLED TO A COM PENSATION OF RS. 12.00 LAKHS AWARDED BY HONBLE DELHI HIGH COURT FOR THE UNAUTHO RISED OCCUPATION OF THE PROPERTY BY ONE SHRI K.D. SHARMA, WITH WHOM, INITIA LLY AN AGREEMENT FOR SALE OF PROPERTY WAS MADE. THE SALE DID NOT MATERIALISE BU T SHRI K.D. SHARMA HAD TAKEN THE POSSESSION OF THE PROPERTY ON PRETEXT OF SOME W ORK, AND LATER ON UNAUTHORISEDLY KEPT POSSESSION OF THE PROPERTY. THE HIGH COURT WH ILE RESTORING THE PROPERTY BACK TO SHRI H.K. MODY HAS AWARDED THE COMPENSATION. 2.2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE INDEXED COST OF ACQUISITION S HOULD NOT BE COMPUTED WITH REFERENCE TO THE DATE WHEN OTHER SUCCESSORS OF THE PROPERTY RELINQUISHED THEIR RIGHTS IN FAVOUR OF THE ASSESSEE. IT WAS EXPLAINED THAT T HE PROVISION OF EXPLANATION TO SECTION 48(III) WERE NOT APPLICABLE IN CASE OF PROP ERTY RECEIVED BY SUCCESSION AND IT IS GUIDED BY SECTION 49, WHICH DEALS WITH THE COST OF TRANSFER BY CERTAIN MODES OF 3 ACQUISITION, IN WHICH THE QUESTION OF BECOMING OWNE R FOR THE FIRST TIME IS NOT RELEVANT. THE DATE OF DEATH OF THE PERSON TO WHOM THE PROPERTY BELONGED IS THE DATE OF BECOMING OWNER FOR THE FIRST TIME IN CASE O F THE SUCCESSOR. VARIOUS DECISIONS WERE RELIED UPON FOR THE ABOVE PROPOSITIO N. HOWEVER THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSE E AND HELD THAT THE VARIOUS DECISIONS RELIED UPON ARE DISTINGUISHABLE AND NOT A PPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. THE AO RELIED ON THE PROVISIONS O F SECTION 48(III) AS WELL AS SECTION 49(1) AND HELD THAT THE INDEXED COST OF AC QUISITION HAS TO BE TAKEN FROM THE DATE WHEN THE ASSESSEE BECAME THE OWNER OF THE PROP ERTY FOR THE FIRST TIME. FOR THIS PROPOSITION HE RELIED ON THE DECISION IN THE C ASE OF DCIT VS. KISHOR KANUNGO REPORTED IN 104 TTJ 560 (MUM). THE AO ACCORDINGLY CALCULATED THE CAPITAL GAIN AS UNDER : PARTICULARS AMOUNT (RS.) REMARKS 1. COST OF PURCHASE (FOR LATE MR. H.K. MODY 11,91,0 00 AS ON 01-04-1981 2. SALE CONSIDERATION INCLUDING COMPENSATION 68,00, 000 -- 3. PROPORTIONATE COST OF ACQUISITION OF ASSESSEES PART AFTER THE DEATH OF HER BROTHER MR. H.K. MODY) BEING 20% OF COST OF ACQUISITION) 2,38,200 AS ON 01-04-1981 4. INDEXED COST OF ACQUISITION TO THE EXTENT ASSESSEES PART OF 20% (1/5) [(2,38,200 X 497)/109 = 10,86,105] 10,86,105 C11 OF 1982-83 IS 109 5. COST OF ACQUISITION ON RELINQUISHMENT OF RIGHTS BY ONE BROTHER & 2 SISTERS [3 X 2,38,200 X 497/281 = 12,63,901] 12,63,901 C11 OF 1995-96 IS 281 6. COST OF ACQUISITION ON RELINQUISHMENT OF RIGHTS BY BROTHERS WIFE (2,38,200 X 497)/331 = 3,57,660 3,57,660 C11 OF 1997-98 IS 331 7. TOTAL INDEXED COST OF ACQUISITION 27,07,666 8. INVESTMENTS IN NHB CAPITAL GAIN BONDS U/S. 54EC OF I.T. ACT, 1961 260 BONDS-OF RS. 10,000/- @ 5.5% INTEREST NHB. 26,00,000 9. LEGAL EXPENSES & ADVOCATE FEES 8,00,000 NET LONG TERM CAPITAL GAIN [2-(4-5-6-8-9)] 9,92,334 3. BEFORE THE CIT(A) THE ASSESSEE FILED DETAILED WR ITTEN SUBMISSIONS. RELYING ON A COUPLE OF DECISIONS IT WAS SUBMITTED THAT SINC E THERE IS NO COST OF ACQUISITION, THEREFORE, THERE WILL NOT BE ANY CAPITAL GAIN. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS FILED THE RETURN TAKING THE INDEXATION AS ON 01 -04-1981 FOR THE ENTIRE 4 CONSIDERATION ON THE GROUND THAT COST AS ON 01-04-8 1 PERTAINING TO SRI H.K. MODY, THE ORIGINAL OWNER HAS TO BE TAKEN INTO ACCOUNT ON THE BASIS OF THE PROVISIONS OF SECTION 49(1)(III) OF THE INCOME TAX ACT READ WITH EXPLANATION 1(B) TO SECTION 2(42A) OF THE INCOME TAX ACT. FOR THIS PROPOSITION THE ASSESSEE RELIED ON VARIOUS DECISIONS INCLUDING THE DECISION OF THE SPECIAL BEN CH OF THE TRIBUNAL IN THE CASE OF CIT VS. MANJULA J. SAHA REPORTED IN 318 ITR (AT) 41 7. THE ASSESSEE ALSO CHALLENGED THE ORDER OF THE AO IN BRINGING TO TAX T HE COMPENSATION OF RS. 12 LAKHS RECEIVED BY THE ASSESSEE AS A REVENUE RECEIPT AS AG AINST CAPITAL RECEIPT TREATED BY THE ASSESSEE. FURTHER IT WAS SUBMITTED THAT THE EA RNEST MONEY OF RS. 40,000/- RECEIVED BY LATE MR. H.K. MODY, THE BROTHER OF THE ASSESSEE IS NOT HIT BY THE PROVISIONS OF SECTION 51 OF THE INCOME TAX ACT. 4. HOWEVER, THE LEARNED CIT(A) WAS NOT CONVINCED WI TH THE EXPLANATION GIVEN BY THE ASSESSEE. HE HELD THAT THE ASSET HAS BEEN ACQUIRED BY THE ASSESSEE BY WAY OF RELEASE DEED BY 4 DIFFERENT PERSONS. HE NOTED T HAT SECTION 49(1) IS APPLICABLE ONLY TO THE CAPITAL ASSET BECOMING THE PROPERTY UND ER A GIFT OR A WILL OR BY SUCCESSION AND INHERITANCE OR DEVOLUTION OR DISTRIB UTION OR ON THE DISSOLUTION OF A FIRM ETC. PROVIDED UNDER THIS SECTION. HOWEVER, NO NE OF THESE IS APPLIED TO RELINQUISHING OF RIGHTS BY A RELEASE DEED. HE OBS ERVED THAT THE ASSESSEE IN HER SUBMISSION DATED 12-07-2010 HAS STATED THAT THE REL EASE OF RIGHTS IN PROPERTY DOES NOT AMOUNT TO A GIFT. HE THEREFORE HELD THAT THE B ENEFIT OF DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MANJULA J. SAH A IS NOT APPLICABLE TO THE FACTS OF THE CASE. HE ALSO REJECTED THE CLAIM OF THE ASS ESSEE THAT RS. 12 LAKHS RECEIVED AS COMPENSATION BE EXCLUDED ON THE GROUND THAT THE SAM E WAS FILED THROUGH THE ADDITIONAL GROUND AND THEREFORE CANNOT BE ENTERTAIN ED AT THIS JUNCTURE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F GOETZ INDIA LTD. 5 5. SO FAR AS THE CLAIM OF THE ASSESSEE THAT RS.40,0 00/- RECEIVED AS ADVANCE MONEY FROM TIME TO TIME AGAINST AGREEMENT TO SALE B E NOT EXCLUDED FROM THE COST OF THE ASSET HE HELD THAT THE ABOVE AMOUNT IS LIABL E TO BE REDUCED FROM THE COST OF ACQUISITION OF THE ASSET FOR THE PURPOSE OF COMPUTA TION OF CAPITAL GAIN. ACCORDINGLY HE ENHANCED THE INCOME BY RS.1,34,500/- UNDER SECTION 251(1) OF THE INCOME TAX ACT. 5.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IT MAY PLEASE BE HELD THAT LONG TERM CAPITAL GAINS ARISING ON SALE OF PROPERTY AT K-21, HAUZ KHAS ENCLAVE NEW DELHI, BY THE ASSESSEE DURING THE YEAR WORK OUT TO NIL AND THAT THE WORKING MADE BY THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED CI T(A) IN THE MATTER BE VACATED/REJECTED. 2. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT REL EASE DEEDS EXECUTED BY CO- OWNERS OF THE PROPERTY IN FAVOUR OF THE ASSESSEE AR E NOT COVERED WITHIN THE MEANING AND DEFINITION OF DEVOLUTION AS PROVIDED UNDER THE PROV ISIONS OF SECTION 29(1)(III)(A) OF THE I.T. ACT, 1961. IT MAY PLEASE BE HELD THAT THE REL EASE DEEDS EXECUTED IN FAVOUR OF THE ASSESSEE BY CO-OWNERS ON VARIOUS DATES ARE COVERED WITHIN THE MEANING AND PROVISION OF SECTION 49(1)(III)(A) OF THE I.T. ACT 1961 AND ALL THE CONSEQUENTIAL RELIEFS BE GRANTED TO THE ASSESSEE WHILE COMPUTING THE CAPITAL GAINS. 3. WITHOUT PREJUDICE TO GROUND NO. 2 ABOVE AND BY W AY OF AN ALTERNATE SUBMISSION THE ASSESSEE SUBMITS THAT THE RELEASE DEEDS EXECUTE D BY CO-OWNERS OF THE PROPERTY IN FAVOUR OF THE ASSESSEE AMOUNT TO GIFT WITHIN THE ME ANING AND PROVISIONS OF SECTION 47(III) OF THE I.T. ACT 1961 AND ALL THE CONSEQUENTIAL RELI EFS BE GRANTED TO THE ASSESSEE WHILE COMPUTING THE CAPITAL GAINS. 4. IT MAY PLEASE BE HELD THAT WHILE COMPUTING THE L ONG TERM CAPITAL GAINS ON SALE OF PROPERTY AT K-21, HAUZ KHAS ENCLAVE NEW DELHI, T HE INDEXED COST OF ACQUISITION OF THE PROPERTY BE CALCULATED BY TAKING THE VALUE OF THE P ROPERTY AS ON 01-04-1981. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, IT MAY PLEASE BE HELD THAT ALLEGED EARNEST MONEY OF RS. 40,000/- RECEIVED BY L ATE MR. H.K. MODY, THE BROTHER OF THE ASSESSEE UNDER THE AGREEMENT OF SALE OF PROPERTY AT K-21, HAUZ KHAS ENCLAVE NEW DELHI, EXECUTED IN OCT 1971 IS NOT HIT BY THE PROVISIONS O F SECTION 51 OF THE I.T. ACT 1961 AND ALL THE CONSEQUENTIAL RELIEFS BE GRANTED TO THE ASSESSE E WHILE COMPUTING THE CAPITAL GAINS. 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN ENHANCING THE INCOME FROM CAPITAL GAINS BY AN AMOUN T OF RS. 1,34,500/- BY HOLDING THAT THE SAID AMOUNT WAS RECEIVED AS AN EARNEST MONEY BY LATE MR. H.K. MODY, THE BROTHER OF THE ASSESSEE UNDER THE AGREEMENT OF SALE OF PROPERT Y AT K-21, HAUZ KHAS ENCLAVE NEW DELHI, EXECUTED IN OCT 1971 AND THE SAME WAS HIT BY THE PROVISIONS OF SECTION 51 OF THE I.T. ACT 1961. THE SAID FINDING/CONCLUSION (INCLUD ING THE ENHANCEMENT) DRAWN BY THE LEARNED CIT(A) BEING ARBITRARY, PATENTLY ILLEGAL, P ERVERSE, DEVOID OF MERITS AND BEING UNSUSTAINABLE THE SAME MAY PLEASE BE VACATED. 7. THE LEARNED CIT(A) HAS ERRED IN NOT ADMITTING TH E ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE THAT THE COMPENSATION OF RS. 12,00,000/- RECEIVED BY THE ASSESSEE FROM MR. SHARMA FOR UNAUTHORISED AND ILLEGAL OCCUPA TION OF PROPERTY AT K-21, HAUZ KHAS ENCLAVE NEW DELHI WAS A CAPITAL RECEIPT NOT LI ABLE TO BE TAXED. 6 8. IT MAY PLEASE BE HELD THAT THE COMPENSATION OF R S. 12,00,000/- RECEIVED BY THE ASSESSEE FROM MR. SHARMA, FOR UNAUTHORISED AND ILLE GAL OCCUPATION OF PROPERTY AT K-21, HAUZ KHAS ENCLAVE NEW DELHI IS A CAPITAL RECEIPT NO T LIABLE TO BE TAXED. 9. THE ASSESSEE BE AWARDED COST OF THE PRESENT APPE AL U/S. 254 (2B) OF THE I.T. ACT, 1961. 10. THE ASSESSEE CRAVES THE PERMISSION TO ADD, AMEN D, MODIFY, ALTER, REVISE, SUBSTITUTE DELETE ANY OR ALL GROUNDS OF APPEAL, IF DEEMED NECE SSARY AT THE TIME OF HEARING OF THE APPEAL. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ISSUE RELATES TO COMPUTATION OF LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF A BUNGALOW AT NEW DELHI WHICH WAS PURCHASED BY THE BROTHER OF THE ASS ESSEE SRI H.K. MODY ON 26- 06-1965. HE SUBMITTED THAT SRI H.K. MODY WAS A PAR SI AND HIS WIFE WAS ALIVE WHEN HE DIED. HE SUBMITTED THAT VIDE TWO SALE DEED S DATED 09-03-2006 THE PROPERTY WAS SOLD FOR A CONSIDERATION RS. 56 LAKHS. REFERRING TO PAGE 31 OF THE PAPER BOOK THE LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT AFTER THE DEATH OF SRI H.K. MODY ON 29-12-1982 AND THE DEATH OF HIS FA THER AND MOTHER ON 15-05- 1983 AND 12-06-1984 RESPECTIVELY THE FOLLOWING PERS ONS WERE LEGAL HEIRS : 1. MRS. T.J. COOPER (ASSESSEE) 2. MR. C.K. MODY( BROTHER OF ASSESSEE) 3. MRS. NERGISH J. PARAKH (SISTER OF ASSESSEE) 4. DR. MRS. J.F. IRANI (SISTER OF ASSESSEE) 5. MRS. MANI H. MODY (WIFE OF ASSESSEES BROTHER) HE SUBMITTED THAT VIDE RELEASE DEED DATED 27-04-199 5 DR. MRS. J.F. IRANI RELINQUISHED HER RIGHTS IN THE PROPERTY IN FAVOUR O F MRS. T.J. COOPER. SIMILARLY VIDE RELEASE DEED DATED 09-09-95 SRI C.K. MODY RELI NQUISHED HIS RIGHTS IN FAVOUR OF MRS. T.J. COOPER. VIDE RELEASE DEED DATED 15-05 -95 MR. NERGISH J. PARAKH RELINQUISHED HER EIGHTS IN FAVOUR OF MRS. T.J. COOP ER. VIDE RELEASE DEED DATED 04- 09-97 MRS. M.H. MODY RELINQUISHED HER RIGHTS IN THE PROPERTY IN FAVOUR OF MRS. T.J. COOPER. 7. REFERRING TO THE BOOK CONVEYANCING AND OTHER IN STRUMENTS BY DSOUZA (12 TH ECONOMY EDITION) THE LEARNED COUNSEL FOR THE SUBMI TTED THAT RELEASE IS AN 7 INSTRUMENT WHEREBY A PERSON RENOUNCES A CLAIM UPON ANOTHER OR AGAINST ANY SPECIFIED PROPERTY WHICH HE HAS OR MAY BE ENTITLED TO ENFORCE. IT MAY BE A DEED POLL OR AN INDENTURE. IT CANNOT, HOWEVER, BE A SUB STITUTE FOR ASSIGNMENT OF A CLAIM OR TRANSFER OF ANY PROPERTY. REFERRING TO THE BOO K PRACTICAL GUIDE TO DEEDS AND DOCUMENTS BY G.M. DIVEKAR HE SUBMITTED THAT RELEA SE IS ALSO A SPECIE OF TRANSFER OF PROPERTY. A RELEASE IN FACT MAY AMOUNT TO A CO NVEYANCE OR A GIFT OR AN EXCHANGE. IF A PERSON RELEASES HIS VESTED RIGHT OR INTEREST IN A PROPERTY FOR A CONSIDERATION, IT IS NOTHING BUT A CONVEYANCE OR SA LE. IF HE RELEASES HIS VESTED INTEREST WITHOUT CONSIDERATION BUT ONLY FOR NATURAL LOVE AND AFFECTION IT WILL AMOUNT TO A GIFT. REFERRING TO THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF KUPPUSWAMY CHETTIAR VS. ASPA ARMUGAM CHETTIAR AND A NOTHER REPORTED IN 1967- (001)-SCR-0275-SC HE SUBMITTED THAT THE HONBLE SUP REME COURT IN THE SAID DECISION HAS HELD THAT TRANSFER OF A PROPERTY BY A RELEASE DEED WITHOUT ANY CONSIDERATION IS A GIFT. REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MANJUALA J. SAHA (SUPRA) HE SUB MITTED THAT WHILE COMPUTING THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSESSEE UNDER A GIFT, THE INDEXED COST OF ACQUISITION HAS T O BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE ASSET. HE SUB MITTED THAT SINCE MR H.K. MODY HAD HELD THE PROPERTY SINCE 1965 AND SINCE AF TER HIS DEATH THE OTHER CO- OWNERS VIDE RESPECTIVE RELEASE DEEDS HAD RELINQUISH ED THEIR RIGHTS IN THE PROPERTY TO THE ASSESSEE, WHICH AMOUNTS TO GIFT, THEREFORE, IN VIEW OF THE DECISION CITED ABOVE THE FAIR MARKET VALUE OF THE PROPERTY SHOULD BE TAK EN AS ON 01-04-1981 AND INDEXATION BENEFIT SHOULD BE GRANTED TO THE ASSESSE E. HE SUBMITTED THAT THE CASE OF THE ASSESSEE FALLS U/S.49(1)(II). HE SUBMITTED THA T BECAUSE OF IGNORANCE OF LAW THE ASSESSEE HAD TAKEN A CONTRARY STAND BEFORE THE CIT( A) FOR WHICH HE HAD HELD THAT THERE IS INCONSISTENCY IN THE STAND OF THE ASSESSEE . HOWEVER, FOR THE PURPOSE OF 8 TAXATION CORRECT LAW HAS TO BE APPLIED AND THEREFOR E INDEXATION BENEFIT SHOULD BE GIVEN TO THE ASSESSEE W.E.F., 01-04-1981. 8. SO FAR AS THE TAXING OF COMPENSATION OF RS. 12 L AKHS IS CONCERNED HE SUBMITTED THAT IT WAS AN ERRONEOUS CALCULATION BY T HE AO. REFERRING TO PAGE NOS. 79 TO 92 OF THE PAPER BOOK HE SUBMITTED THAT SRI H. K. MODY HAD FILED A SUIT AGAINST SRI K.D. SHARMA FOR RECOVERY OF COMPENSATION AGAINS T PROPERTY NO.K-22, HAUZ KHAS ENCLAVE, NEW DELHI WHICH IS IN THE NATURE OF MESNE PROFIT. THE MATTER TRAVELLED UPTO HONBLE SUPREME COURT AND THE HONBL E SUPREME COURT VIDE CIVIL APPEAL NO.5469/1999 ORDER DATED 10-02-2005 UPHELD T HE INTERIM ORDER PASSED BY THE SINGLE JUDGE TRYING THE SUIT ON THE ORIGINAL SI DE ACCORDING TO WHICH THE HONBLE COURT VIDE ITS ORDER DATED 08-01-1998 HAD FIXED THE MESNE PROFITS @ RS. 10,000/- PER MONTH W.E.F. 16-12-1993. REFERRING TO THE DECI SION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF NARANG OVERSEAS (P) LTD. VS . ACIT REPORTED IN 111 ITD 1 (SB) HE SUBMITTED THAT THE HONBLE SPECIAL BENCH HA S HELD THAT MESNE PROFITS AWARDED UNDER DECREE BY WAY OF COMPENSATION FOR WRO NGFUL POSSESSION OF PROPERTY AFTER TERMINATION OF LEAVE AND LICENCE AGREEMENT IS CAPITAL RECEIPT NOT CHARGEABLE TO TAX. 9. SO FAR AS THE ISSUE RELATING TO TAX ON EARNEST M ONEY IS CONCERNED, THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF HANUMAN COTTON MILLS AND OTHERS VS. TAT A AIR CRAFT LTD. REPORTED IN 1970-(003)-AIR-1986-SC AND DREW THE ATTENTION OF TH E BENCH TO PARA 21 OF THE SAID ORDER AND SUBMITTED THAT THE SAME IS NOT TAXAB LE. 10. SO FAR AS GROUND OF APPEAL NO.9 IS CONCERNED RE GARDING AWARD OF COST HE SUBMITTED THAT THE ASSESSEE BEING AN OLD LADY BE SU ITABLY COMPENSATED BY WAY OF COST SINCE SHE WAS HARASSED MENTALLY DUE TO THE PRO LONGED LITIGATION BY THE REVENUE. 9 11. THE LEARNED DR ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE AO AND CIT(A). SO FAR AS THE CALCULATION OF CAPITAL GAIN BY INDEXATION ON THE BASIS OF THE DATES OF RELEASE DEED HE SUBMITTED THAT THE SAME IS JUST AND PROPER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. AS REGARDS THE COM PENSATION OF RS.12 LAKHS IS CONCERNED HE SUBMITTED THAT THE ASSESSEE HERSELF HA D OFFERED TO TAX AND ACCEPTED THE SAME. THERE WAS NO GROUND BEFORE THE LEARNED C IT(A) ON THIS ISSUE. THEREFORE, THE ASSESSEE NOW CANNOT RAISE THIS GROUN D BEFORE THE TRIBUNAL. AS REGARDS TAXING OF THE EARNEST MONEY IS CONCERNED, HE SUBMITTED THAT THE LEARNED CIT(A) WAS JUSTIFIED IN REDUCING THE EARNEST MONEY FROM THE COST OF THE ASSET. 12. WE HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECI SIONS CITED BEFORE US. SO FAR AS THE FIRST GROUND IS CONCERNED THE SAME BEING GENER AL IN NATURE IS DISMISSED. BEFORE GOING TO GROUND OF APPEAL NO. 2 WE WOULD LIK E TO DECIDE THE GROUNDS OF APPEAL NO. 3 AND 4 FIRST, ACCORDING TO WHICH THE RE LEASE DEEDS EXECUTED BY CO- OWNERS OF THE PROPERTY IN FAVOUR OF THE ASSESSEE AM OUNTS TO GIFT AND THEREFORE THE INDEXED COST OF ACQUISITION OF THE PROPERTY SHO ULD BE CALCULATED BY TAKING THE VALUE OF THE ENTIRE PROPERTY AS ON 01-04-1981. FRO M THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE IN THE PAPER BOOK WE FIND SRI H.K. MODY, BROTHER OF THE ASSESSEE HAD PURCHASED THE PROPERTY ON 26-05-1965. SRI H.K. MODY WAS A PARSI AND DIED ON 29-12-1982 LEAVING HIS WIFE. FATHER OF SRI H.K. MODY DIED ON 15-05-1983 AND MOTHER SMT. M.K. MODY DIED ON 12-06-1984. AFTER TH E DEATH OF SRI H.K MODY AS PER PARSI ACT THE FOLLOWING PERSONS WERE THE LEGAL HEIRS : 1. MRS. T.J. COOPER 2. MR. C.K. MODY 3. MRS. NERGISH J. PARAKH 4. DR. MRS. J.F. IRANI 5. MRS. MANI H. MODY 10 13. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSES SEE WE FIND THE PERSONS MENTIONED AT SL.NO. 2 TO 5 VIDE RELEASE DEEDS OF S EPARATE DATES RELINQUISHED THE RIGHTS IN THE UNDIVIDED SHARE OF THE PROPERTY, I.E. PROPERTY SITUATED AT HAUZ KHAS ENCLAVE, NEW DELHI IN FAVOUR OF MRS. T.J. COOPER DU E TO LOVE AND AFFECTION. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE S UCH RELINQUISHMENT OF RIGHT BY RELEASE DEEDS ON ACCOUNT OF LOVE AND AFFECTION AMOU NTS TO GIFT. WE FIND THE HONBLE SUPREME COURT IN THE CASE OF KUPPUSWAMY SHE TTIAR VS. A.S.P.A. ARUMUGAM CHETTIAR AND ANOTHER REPORTED IN 1967-(001 )-SCR-0275-SC HAS HELD AS UNDER : COUNSEL NEXT SUBMITTED THAT EX.B-1 BEING A RELEASE DEED COULD NOT OPERATE AS A CONVEYANCE. EXHIBIT B-1 WAS STYLED A DEED OF RELEA SE. THE PAPER BOOK DOES NOT SHOW WHETHER IT WAS STAMPED AS A RELEASE OR AS A CONVEYA NCE. AFTER RECITING THAT KANNAMMAL WAS THE OWNER OF THE PROPERTIES AND SHE DIED LEAVIN G THE APPELLANT AS HER HEIR, THE OPERATIVE PART OF THE DEED STATED : I HEREBY EXECUTE A RELEASE DEED IN YOUR FAVOUR TO THE EFFECT THAT I DO NOT CLAIM ANY HUQ OR RIGHT WHATEVER IN THE IMMOVABLE PROPERTI ES MENTIONED HEREUNDER VALUED AT ABOUT RS.12,000/- AND IN THE OUTSTANDINGS TO THE TUNE OF RS.8,000/- DUE BY OTHERS IN ALL RS.20,000/- (TWENTY THOUSAND) AND ALL THE RIGHTS THAT HAVE BEEN ACCRUED TO ME UNDER THE HINDU LAW. YOU YOURSELF SH ALL HOLD AND ENJOY UNDISPUTEDLY WITH ABSOLUTE RIGHTS UNDER THE HUQ REL EASE DEED EXECUTED BY ME THE ENTIRE MOVABLE AND IMMOVABLE PROPERTIES BELONGING T O THE AFORESAID KANNAMMAL AND ALL THE OUTSTANDING DUE TO HER FROM OUTSIDERS. I HAVE NOT RECEIVED ANY CONSIDERATION WHATEVER FOR THE SAID RELEASE DEED. THE QUESTION IS WHETHER EX.B-1 ON ITS TRUE CONSTRUC TION CONVEYED PROPERTIES TO THE RESPONDENTS. IN T. MAMMO V. K. RAMUNNI (A.I.R. 196 6 S.C. 337, 340): THIS COURT HELD : A REGISTERED INSTRUMENT STYLED A RELEASE DEED REL EASING THE RIGHT, TITLE AND INTEREST OF THE EXECUTANTS IN ANY PROPERTY IN FAVOU R OF THE RELEASEE FOR VALUABLE CONSIDERATION MAY OPERATE AS A CONVEYANCE, IF THE D OCUMENT CLEARLY DISCLOSES AN INTENTION TO EFFECT A TRANSFER. IN THE PRESENT CASE, THE RELEASE WAS WITHOUT ANY CO NSIDERATION. BUT PROPERTY MAY BE TRANSFERRED WITHOUT CONSIDERATION. SUCH A TRANSFER IS A GIFT. UNDER S.123 OF THE TRANSFER OF PROPERTY ACT, 1882, A GIFT MAY BE EFFECTED BY A REGISTERED INSTRUMENT SIGNED BY OR ON BEHALF OF THE DONOR AND ATTESTED BY AT LEAST TWO WI TNESSES. CONSEQUENTLY, A REGISTERED INSTRUMENT RELEASING THE RIGHT, TITLE AND INTEREST OF THE RELEASOR WITHOUT CONSIDERATION MAY OPERATE AS A TRANSFER BY WAY OF A GIFT, IF THE DOCU MENT CLEARLY SHOWS AN INTENTION TO EFFECT THE TRANSFER AND IS SIGNED BY OR ON BEHALF OF THE R ELEASOR AND ATTESTED BY AT LEAST TWO WITNESSES. EXHIBIT B-1 STATED THAT THE RELEASOR WA S THE OWNER OF THE PROPERTIES. IT SHOWED AN INTENTION TO TRANSFER HIS TITLE AND ITS O PERATIVE WORDS SUFFICIENTLY CONVEYED THE TITLE. THE INSTRUMENT, ON ITS TRUE CONSTRUCTION, T OOK EFFECT AS A GIFT. THE GIFT WAS EFFECTIVELY MADE BY A REGISTERED INSTRUMENT SIGNED BY THE DONOR AND ATTESTED BY MORE THAN TWO WITNESSES. 11 14. IN VIEW OF THE ABOVE DECISION OF THE HONBLE S UPREME COURT CITED (SUPRA) IT HAS TO BE HELD THAT THE TRANSFER OF THE PROPERTY BY THE RESPECTIVE CO-OWNERS IN FAVOUR OF THE ASSESSEE THROUGH THE RELEASE DEEDS IN PURSUANCE OF LOVE AND AFFECTION WHICH WERE DULY ATTESTED BY A NOTARY IN PRESENCE OF WITNESSES BEFORE HIM AMOUNTS TO TRANSFER OF THE PROPERTY THROUGH GIFT. 15. WE FIND AS PER THE PROVISIONS OF SECTION 49 WHE RE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE UNDER A GIFT OR BY SUC CESSION, INHERITANCE OR DEVOLUTION, THE COST OF ACQUISITION OF THE ASSET SH ALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIOUS OWNER OF THE PROPERTY ACQUIRED IT, AS INCREASED BY THE COST OF ANY IMPROVEMENT OF THE ASSET INCURRED OR BORNE BY THE PREVIOUS OWNER OR THE ASSESSEE AS THE CASE MAY BE. THEREFORE, ONCE THE T RANSFER OF THE PROPERTY THROUGH RELEASE DEEDS ARE HELD AS TRANSFER OF THE PROPERTY BY THE RESPECTIVE CO-OWNERS THROUGH GIFT THEN THE COST OF ACQUISITION OF THE AS SET SHALL BE DEEMED TO BE THE COST TO THE ORIGINAL CO-OWNERS. 16. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CI T VS. MANJULA SAHA REPORTED IN (2011) 16 TAXMANN.COM 42 (BOMBAY) AT PA RA 20 TO 24 OF THE ORDER HAS HELD AS UNDER : 20. TO ACCEPT THE CONTENTION OF THE REVENUE THAT T HE WORDS USED IN CLAUSE (III) OF THE EXPLANATION TO SECTION 48 OF THE ACT HAS TO BE READ BY IGNORING THE PROVISIONS CONTAINED IN SECTION 2 OF THE ACT RUNS COUNTER TO THE ENTIRE SCHEME OF THE ACT. SECTION 2 OF THE ACT EXPRESSLY PROVIDES THAT UNLESS THE CONTEXT OTHERWIS E REQUIRES, THE PROVISIONS OF THE ACT HAVE TO BE CONSTRUED AS PROVIDED UNDER SECTION 2 OF THE ACT. IN SECTION 48 OF THE ACT, THE EXPRESSION ASSET HELD BY THE ASSESSEE IS NOT DEFI NED AND, THEREFORE, IN THE ABSENCE OF ANY INTENTION TO THE CONTRARY THE EXPRESSION ASSET HEL D BY THE ASSESSEE IN CLAUSE (III) OF THE EXPLANATION TO SECTION 48 OF THE ACT HAS TO BE CONS TRUED IN CONSONANCE WITH THE MEANING GIVEN IN SECTION 2(42A) OF THE ACT. IF THE MEANING GIVEN IN SECTION 2(42A) IS NOT ADOPTED IN CONSTRUING THE WORDS USED IN SECTION 48 OF THE A CT, THEN THE GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED UNDER A GIFT OR WILL BY OU TSIDE THE PURVIEW OF THE CAPITAL GAINS TAX WHICH IS NOT INTENDED BY A LEGISLATURE. THEREF ORE, THE ARGUMENT OF THE REVENUE WHICH RUNS COUNTER TO THE LEGISLATIVE INTENT CANNOT BE AC CEPTED. 21. APART FROM THE ABOVE, SECTION 55(1)(B)(2)(II) O F THE ACT PROVIDES THAT WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE B Y ANY OF THE MODES SPECIFIED UNDER SECTION 49(1) OF THE ACT, NOT ONLY THE COST OF IMPR OVEMENT INCURRED BY THE ASSESSEE BUT ALSO THE COST OF IMPROVEMENT INCURRED BY THE PREVIO US OWNER SHALL BE DEDUCTED FROM THE TOTAL CONSIDERATION RECEIVED BY THE ASSESSEE WHILE COMPUTING THE CAPITAL GAINS UNDER SECTION 48 OF THE ACT. THE QUESTION OF DEDUCTING T HE COST OF IMPROVEMENT INCURRED BY THE PREVIOUS OWNER IS INCLUDED IN DETERMINING THE PERIO D FOR WHICH THE ASSET WAS HELD BY THE 12 ASSESSEE. THEREFORE, IT IS REASONABLE TO HOLD THAT IN THE CASE OF AN ASSESSEE COVERED UNDER SECTION 49(1) OF THE ACT, THE CAPITAL GAINS L IABILITY HAS TO BE COMPUTED BY CONSIDERING THAT THE ASSESSEE HELD THE SAID ASSET F ROM THE DATE IT WAS HELD BY THE PREVIOUS OWNER AND THE SAME ANALOGY HAS ALSO TO BE APPLIED I N DETERMINING THE INDEXED COST OF ACQUISITION. 22. THE OBJECT OF GIVING RELIEF TO AN ASSESSEE BY A LLOWING INDEXATION IS WITHIN A VIEW TO OFFSET THE EFFECT OF INFLATION. AS PER THE CBDT CIRCULAR NO. 636 DATED 31/8/1992 [SEE 198 ITR 1 (ST) A FAIR METHOD OF ALLOWING RELIEF BY WAY OF INDEXATION IS TO LINK IT TO THE PERIOD OF HOLDING THE ASSET. THE SAID CIRCULAR FUR THER PROVIDES THAT THE COST OF ACQUISITION AND THE COST OF IMPROVEMENT HAVE TO BE INFLATED TO ARRIVE AT THE INDEXED COST OF ACQUISITION AND THE INDEXED COST OF IMPROVEMENT AND THEN DEDUCT THE SAME FROM THE SALE CONSIDERATION TO ARRIVE AT THE LONG TERM CAPITAL GA INS. IF INDEXATION IS LINKED TO THE PERIOD OF HOLDING THE ASSET AND IN THE CASE OF AN A SSESSEE COVERED UNDER SECTION 49(1) OF THE ACT, THE PERIOD OF HOLDING THE ASSET HAS TO BE DETERMINED BY INCLUDING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER , THEN OBVIOUSLY IN ARRIVING AT THE INDEXATION, THE FIRST YEAR IN WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER WOULD BE THE FIRST YEAR FOR WHICH THE SAID ASSET WAS HELD BY THE ASSESSEE. 23. SINCE THE ASSESSEE IN THE PRESENT CASE IS HELD LIABLE FOR LONG TERM CAPITAL GAINS TAX BY TREATING THE PERIOD FOR WHICH THE CAPITAL ASSET IN QUESTION WAS HELD BY THE PREVIOUS OWNER AS THE PERIOD FOR WHICH THE SAID ASSET WAS HE LD BY THE ASSESSEE, THE INDEXED COST OF ACQUISITION HAS ALSO TO BE DETERMINED ON THE VERY S AME BASIS. 24. IN THE RESULT, WE HOLD THAT THE ITAT WAS JUSTIF IED IN HOLDING THAT WHILE COMPUTING THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSESSEE UNDER A GIFT, THE INDEXED COST OF ACQUISITION HAS TO BE COM PUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND N OT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE FIRST. 17. SINCE MR. MODY HAD HELD THE PROPERTY SINCE 1968 AND SINCE THE CO-OWNERS BY RELEASE DEEDS IN PURSUANCE OF LOVE AND AFFECTION TO THE ASSESSEE HAD RELINQUISHED THEIR RIGHT IN THE PROPERTY IN FAVOUR OF THE ASSESS EE WHICH HAS ALREADY BEEN HELD AS GIFT, THEREFORE, IN VIEW OF THE DECISION OF THE HON BLE BOMBAY HIGH COURT CITED (SUPRA) WE FIND MERIT IN THE SUBMISSION OF THE LEAR NED COUNSEL FOR THE ASSESSEE THAT THE COST OF ACQUISITION OF THE PROPERTY SHOULD BE CALCULATED BY TAKING THE VALUE OF THE PROPERTY AS ON 01-04-1981. GROUND OF APPEAL N OS. 3 AND 4 BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. SINCE THE ASSESSEE SUCCEEDS I N GROUND OF APPEAL NOS. 3 AND 4, THE GROUND OF APPEAL NO. 2 IN THIS APPEAL BECOME S INFRUCTUOUS AND THEREFORE THE SAME IS NOT BEING DECIDED. 18. SO FAR AS THE GROUND OF APPEAL NOS. 5 AND 6 REL ATING TO DEDUCTION OF EARNEST MONEY FROM COST OF THE CAPITAL ASSET ARE CONCERNED WE FIND THE PROVISION OF SECTION 51 READS AS UNDER : 13 WHERE ANY CAPITAL ASSET WAS ON ANY PREVIOUS OCCASI ON THE SUBJECT OF NEGOTIATIONS FOR ITS TRANSFER, ANY ADVANCE OR OTHER MONEY RECEIVED AND R ETAINED BY THE ASSESSEE IN RESPECT OF SUCH NEGOTIATIONS SHALL BE DEDUCTED FROM THE COST F OR WHICH THE ASSET WAS ACQUIRED OR THE WRITTEN DOWN VALUE OR THE FAIR MARKET VALUE, AS THE CASE MAY BE, IN COMPUTING THE COST OF ACQUISITION. SINCE LATE SRI H.K.MODY HAD RECEIVED AN AMOUNT OF RS. 40,000/- AS EARNEST MONEY, THEREFORE, IN VIEW OF THE CLEAR CUT PROVISIO NS OF SECTION 51 THE EARNEST MONEY OF RS. 40,000/- HAS TO BE DEDUCTED FROM THE C OST OF THE ASSET WHILE CALCULATING THE CAPITAL GAIN. THE DECISION IN THE CASE OF HANUMAN COTTON MILLS AND OTHERS VS. TATA AIR CRAFT LTD. CITED (SUPRA) BY THE LEARNED COUNSEL FOR THE ASSESSEE WILL NOT BE OF ANY USE TO HER BECAUSE THE SAME WAS ON DIFFERENT SETS OF FACTS AND FOR DIFFERENT PROPOSITION AND DOES NOT RELATE TO COMPUT ATION OF CAPITAL GAIN WHEN ADVANCE MONEY IS RECEIVED ON ACCOUNT OF ANY CAPITAL ASSET WHICH HAS BEEN TRANSFERRED. GROUND OF APPEAL NOS. 5 AND 6 ARE AC CORDINGLY DISMISSED. 19. SO FAR AS GROUND OF APPEAL NOS. 7 AND 8 RELATIN G TO THE COMPENSATION OF RS.12 LAKHS ARE CONCERNED WE FIND THE SAME WAS RECE IVED BY THE ASSESSEE FROM MR. SHARMA FOR UNAUTHORISED AND ILLEGAL OCCUPATION OF T HE PROPERTY AT HAUZ KHAS ENCLAVE, NEW DELHI AS PER DIRECTION OF THE COURT. WE FIND THE ISSUE HAS TO BE DECIDED IN FAVOUR OF THE ASSESSEE IN VIEW OF THE DE CISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF NARANG OVERSEAS PVT. LT D., (SUPRA) WHEREIN IT HAS BEEN HELD THAT MESNE PROFITS AWARDED UNDER DECREE BY WA Y OF COMPENSATION FOR WRONGFUL POSSESSION OF PROPERTY AFTER TERMINATION O F LEAVE AND LICENCE AGREEMENT IS CAPITAL RECEIPT NOT CHARGEABLE TO TAX. GROUND OF APPEAL NOS. 7 AND 8 ARE ACCORDINGLY ALLOWED IN FAVOUR OF THE ASSESSEE. 20. SO FAR AS THE GROUND RELATING TO AWARD OF COSTS WE DO NOT FIND ANY MERIT IN THE ABOVE GROUND RAISED BY THE ASSESSEE. ACCORDING LY, THE SAME IS DISMISSED. 14 21. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF SEPTEMBER 2012 SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 14 TH SEPTEMBER 2012 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CCIT, PUNE 4. CIT(A)- II PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE