ITO (IT) 4(1)(1), MUMBAI V. MONISH KAAN TAHILRAMANI, MUMBAI

ITA 4715/MUM/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0013 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 19-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G N MAKWANA LD
• Assessee Lawyers: SANJAY R PARIKHLD
• Keywords: Capital asset; Cost of acquisition
• Section: 143(3); 54F

Judgement Text

ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI PAWAN SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO. 4715/MUM/2015 ( / ASSESSMENT YEAR: 2011-12) ITO(INTERNATIONAL TAXATION) - 4(1)(1) ROOM NO. 14, GROUND FLOOR SCINDIA HOUSE, BALLARD ESTATE MUMBAI-400 038. / VS. MONISH KAAN T AHILRAMANI 10, GANPAT NIKETAN 18 TH ROAD, KHAR MUMBAI-400 052. ./ ./PAN/GIR NO. AAAPT-3077-G ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI SANJAY R. PARIKH- LD. AR REVENUE BY : SHRI G.N. MAKWANA- LD.DR !' / DATE OF HEARING : 20/02/2019 !' / DATE OF PRONOUNCEMENT : 02/04/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2011-12 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-55 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-55/ITO(IT)-2(1)/IT-224/14-15 DATE D 13/03/2015 ON VARIOUS GROUNDS OF APPEAL. THE REVENUE HAS ALSO FILED AN ADDITIONAL GROUND OF APPEAL ON 06/09/2018 WHICH CON CERNS WITH MANNER ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 2 OF COMPUTATION OF CAPITAL GAINS. SINCE THE SAME DO NOT REQUIRE APPRECIATION OF NEW FACTS, THE SAME IS TAKEN ON REC ORD AS GROUND NO.5. FINALLY, THE GROUNDS OF APPEAL READ AS UNDER: - 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ID. CIT(A| ERRED IN HOLDING THAT CAPITAL GAIN EARNED BY ASSESSEE ON SALE OF FLAT IN JULY, 2010 WAS A LONG TERM CAPITAL GAIN, WHEN THE C OMMENCEMENT CERTIFICATE ITSELF FOR CONSTRUCTION OF FLAT SOLD WAS ISSUED BY MCGM TO BUILDER ONLY 08.04.2009 AND THE PURCHASE AGREEMENT WAS REGISTERE D IN DECEMBER 2009? THE CIT(A) FAILED TO APPRECIATE THAT IN ABSENCE OF CC AND OC FOR THE IMPUGNED FLAT, THE SAME COULD NOT BE SAID TO BE HEL D OR IN POSSESSION OF ASSESSEE AND HAS THUS ERRED IN TREATING ACQUISITION OF PROPERTY BY ASSESSEE FROM 2005 I.E. THE DATE OF FIRST ADVANCE MADE?. 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ID. CIT(A) ERRED IN NOT APPLYING THE RATIO OF THE DECIS ION OF THE HON'BLE BOMBAY HIGH COURT IN CASE OF CHATURBHUJ DWARKADAS KAPADIA 26O ITR 491(BOM) WHEREIN THE DATE OF TRANSFER IS THE DATE WHEN PART PERFORMANCE U/S 53A OF THE PROPERTY ACT IS MADE AND POSSESSION IS GIVEN. 3. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ID. CIT(A) ERRED IN HOLDING THE DATE OF MAKING PAYMENT OF SMALL AMOUNT OF ADVANCE(LESS THAN 6% OF TOTAL COST) AS DATE OF ACQU ISITION WITHOUT APPRECIATING THAT THE MERE BOOKING OF FIAT DOES NOT CONFER ANY R IGHT IN THE PROPERTY PER SE; RATHER IT ONLY GIVES A RIGHT TO PURCHASE THE PROPER TY IN FUTURE TO ASSESSEE ON AGREED TERMS AND CONDITIONS. 4. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ID. CIT(A) ERRED IN ACCEPTING THE PLEA OF THE ASSESSEE DENYING THE OBSERVATION MADE BY AO IN ASSTT ORDER THAT ASSESSEE HAD ACCEPTE D THE INCOME TO BE TAXED AS STCG VIDE ORDER SHEET DATED 24.01.2O14, WHEN THE ASSESSEE HAD MADE NO SUCH APPLICATION BEFORE THE AO TO CHALLENGE THIS OBSERVATION? THE ORDER OF THE CIT(A) IS PERVERSE AS HE ACCEPTED THE CONTENTIO N OF ASSESSEE WITHOUT GIVING OPPORTUNITY TO THE AO TO PROVIDE THE COPIES OF THE ORDER SHEET NOTING OR CALL FOR THE RECORDS, WHICH REVEALED THAT THE ASSES SEE DID ACCEPT BEFORE THE AO VIDE ORDER SHEET NOTING DATED 24/1/2014 FOR BEIN G TAXED FOR STCG.' 5. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, AND WITHOUT PREJUDICE TO THE OTHER GROUNDS OF APPEAL, T HE ID. CIT(A) ERRED IN ALLOWING THE INDEXATION OF COST OF ACQUISITION FROM F.Y.2004-05 WITHOUT APPRECIATING THE FACT THAT THE PAYMENTS WERE MADE O N VARIOUS DATES FROM 2005 TO 2010 IN CONTRARY TO THE DECISION OF HONBLE ITAT-DELHI IN THE CASE OF PRAVEEN GUPTA VS ACIT, RANGE-16, DELHI (ITA NO. 255 8/DEL/2010).' 2.1 FACTS IN BRIEF ARE THAT THE ASSESSEE BEING NON-RESIDENT INDIVIDUAL WAS ASSESSED IN SCRUTINY ASSESSMENT U/S 143(3) FOR IMPUGNED AY ON 30/01/2014 WHEREIN THE ASSESSEES INCOME WAS DETERM INED AT ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 3 RS.128.27 LACS AFTER CERTAIN ADJUSTMENTS AS AGAINST RETURNED INCOME OF RS.85.36 LACS FILED BY THE ASSESSEE ON 30/08/2011. THE SUBJECT MATTER OF PRESENT APPEAL IS TO DETERMINE THE NATURE OF CER TAIN CAPITAL GAINS EARNED BY THE ASSESSEE IN THE IMPUGNED AY. 2.2 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT THE ASSESSEE SOLD AN APARTMENT BEARING NO. 1601, 16 TH FLOOR, C-WING, TOWER-I IN ASHOK GARDENS, TOKERSEY JIWRAJ ROAD, SEWRI, MUMBAI -400 015 HAVING CARPET AREA OF 1291 SQUARE FEETS ALONG WITH EXCLUSIVE RIGHT TO USE TWO CAR PARKING SPACES AND OTHER AMENITIES VIDE DEED OF TRANSFER DATED 02/06/2010 FOR A LUMP SUM CONSIDERATION OF RS.227 L ACS. THE ASSESSEE SUBMITTED THAT THE SAID PROPERTY WAS BOOKED WITH TH E BUILDER IN THE 2005 FOR TOTAL COST CONSIDERATION OF RS.76.30 LACS WHICH WAS PAYABLE DURING THE YEAR 2005 TO 2010 BASED ON CONSTRUCTION SCHEDUL E STARTING FROM 16/03/2005. IT WAS ALSO SUBMITTED THAT ADDITIONAL G ARAGE WAS PURCHASED IN NOVEMBER, 2009 FOR A SUM OF RS.8 LACS. THE PURCH ASE AGREEMENT FOR THE STATED PROPERTY AND GARAGE WAS EXECUTED DURING DECEMBER, 2009 UPON PAYMENT OF STAMP DUTY / REGISTRATION CHARGES O F RS.11.48 LACS. AFTER INDEXING THE COST OF ACQUISITION AND TRANSFER CHARGES, THE RESULTANT CAPITAL GAINS WERE WORKED OUT AT RS.85.41 LACS. THE ASSESSEE PLEADED THAT SINCE THE FIRST INSTALLMENT OF RS.3.94 LACS TO WARDS ACQUISITION OF THE PROPERTY WAS PAID ON 16/03/2005 AND THE PROPERTY WA S SOLD DURING JULY, 2010, THE RESULTANT GAINS WERE LONG-TERM CAPITAL GAINS [LTCG] IN NATURE. HOWEVER, LD. AO OPINED THAT THE PERIOD OF H OLDING WAS TO BE RECKONED FROM DECEMBER. 2009 I.E. WHEN THE PURCHASE DOCUMENTS WERE REGISTERED IN ASSESSEES FAVOR AND THEREFORE, THE G AINS WERE TO BE TREATED AS SHORT-TERM CAPITAL GAINS [STCG] ONLY. THE PERUSAL OF ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 4 QUANTUM ASSESSMENT ORDER REVEAL THAT THE LD. AR IS STATED TO HAVE CONCEDED TO THE OPINION FORMED BY LD. AO. ACCORDING LY, THE GAINS WERE TREATED AS STCG AND THE INDEXATION BENEFIT WAS DENIED TO THE ASSES SEE. CONSEQUENTLY, THE SET-OFF OF EARLIER YEARS LONG TERM CAPITAL LOSSES FOR RS.6.18 LACS, AS CLAIMED BY THE ASSESSEE, WAS ALSO DENIED. FINALLY, THE GAINS WERE RE-WORKED AS RS.122.13 LACS AND THE SAME WERE TREATED AS STCG IN NATURE. 3.1 HOWEVER, LATER ON THE ASSESSEE AGITATED THE STA ND OF LD. AO BEFORE FIRST APPELLATE AUTHORITY WITH SUCCESS BEFORE LD. C IT(A) VIDE IMPUGNED ORDER DATED 13/03/2015. THE ASSESSEE SUBMITTED THAT THE RIGHT IN THE STATED PROPERTY WAS ACQUIRED UPON BOOKING OF THE SA ME IN THE YEAR 2005 AND THE SAME RIGHT WAS SOLD DURING IMPUGNED AY WHIC H GAVE RISE TO CAPITAL GAINS IN THE HANDS OF THE ASSESSEE AND THER EFORE, THE RESULTANT GAINS WERE LTCG IN NATURE. THE ATTENTION WAS DRAWN TO THE FACT THA T THE PROPERTY WAS IDENTIFIED AT THE TIME OF BOOKING ONLY . RELIANCE WAS PLACED, INTER-ALIA, ON THE DECISION OF THIS TRIBUNAL RENDERED IN VIKAS P.BAJAJ VS ACIT. 3.2 THE LD. CIT(A), AFTER DUE CONSIDERATION OF FACT UAL MATRIX AND ASSESSEES SUBMISSIONS, CONCURRED WITH THE STAND OF THE ASSESSEE BY OBSERVING AS UNDER: - 9. I HAVE CONSIDERED THE AOS ORDER AS WELL AS APPE LLANT ARS SUBMISSION EXTRACTED AS ABOVE. I HAVE ALSO TAKEN NOTE OF THE S UBMISSIONS, DOCUMENTS FILED BY THE APPELLANT IN SUPPORT OF HIS CONTENTIONS. HAVING TAKEN NOTE TO THE SAME AND ALSO TO THE FACTS OF THE APPELLANTS CASE, IT IS EVIDENT THAT THE APPELLANT HAS MADE BOOKING OF THE SAID PROPERTY AS ON 16.03.2005 WHICH WAS ACQ UIRED BY THE APPELLANT SUBSEQUENTLY BY MAKING PAYMENT AS AND WHEN THE DEMA ND WAS MADE BY THE BUILDER / DEVELOPER AS DETAILED IN PARA 4 OF THE AS SESSMENT ORDER. THE SAID PROPERTY WAS SUBSEQUENTLY SOLD BY THE APPELLANT ON JUNE 2010 FOR A SALE CONSIDERATION OF RS.2,27,00,000/- AS DETAILED IN THE DEED OF TRANSFE R DATED 02.06.2010. HAVING TAKEN NOTE TO THE SAME AND ALSO TO THE HONBLE BOMBAY HIG H COURTS DECISION CITED IN THE ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 5 CASE OF CIT VS. TATA TELESERVICES LTD. 122 ITR 594 AND HONBLE JURISDICTIONAL MUMBAI ITAT IN THE CASE OF VANDANA RANA ROY VS CIT( A) (ITA NO. 6173/M/2011) AND CHARANBIR SINGH JOLLY VS ITO (2006) 5 SOT 89 (M UM), I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE APPELLANTS REQUEST IS JUSTIFIED FOR MAKING CLAIM OF LONG TERM CAPITAL HAIN. THUS, AFTER TAKING NOTE OF THE V ARIOUS JUDICIAL PRONOUNCEMENTS, I DIRECT THE AO TO WORK OUT THE LONG-TERM CAPITAL GAI N IN THE HANDS OF THE APPELLANT TAKING THE DATE OF ACQUISITION AS ON 16.03.2005 AS CLAIMED BY THE APPELLANT INSTEAD OF SHORT TERM CAPITAL GAIN. WITH THIS OBSERVATION, THE APPELLANTS THIS GROUND OF APPEAL IS ALLOWED SUBJECT TO AFORESAID ACTION ON TH E PART OF AO AND THE APPELLANT IS DIRECTED TO PROVIDE ALL NECESSARY DOCUMENTS AS REQU IRED BY THE AO. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE [DR], DRAWIN G OUR ATTENTION TO THE FACTUAL MATRIX SUBMITTED THAT THE ASSESSEE A CQUIRED THE STATED PROPERTY ONLY UPON EXECUTION OF PURCHASE DOCUMENTS IN ITS FAVOR WHEN THE RIGHT TO ACQUIRE THE PROPERTY WAS CONVERTED INT O A CAPITAL ASSET I.E. THE PROPERTY UNDER QUESTION AND SAID CAPITAL ASSET CAME INTO EXISTENCE ONLY UPON EXECUTION OF PURCHASE DOCUMENTS IN ASSESS EES FAVOR. OUR ATTENTION IS DRAWN TO THE FACT THAT THE ASSESSEE AC QUIESCED TO THIS FACT EVEN DURING ASSESSMENT PROCEEDINGS. IN THE ALTERNAT IVE, IT HAS BEEN SUBMITTED THAT THE BENEFIT OF INDEXATION WAS TO BE GRANTED WHEN THE PAYMENTS WERE ACTUALLY MADE BY THE ASSESSEE. PER CONTRA, LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [AR], SHRI SANJAY PARIKH, SUBMITTED THAT THE POSSESSION WAS NEVER GIVEN TO TH E ASSESSEE AND THE ASSESSEE HAS ONLY SOLD THE RIGHT TO ACQUIRE THE STA TED PROPERTY. IT HAS BEEN SUBMITTED THAT THERE IS NO ESTOPPEL AGAINST TH E LAW AND THE REVENUE WAS OBLIGED TO COMPUTE THE ASSESSEES CORRECT INCOM E WITHIN STATUTORY FRAMEWORK. 5.1 WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS A ND PERUSED RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THE RE COULD BE NO QUARREL ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 6 ON THE POINT THAT ASSESSEES CORRECT INCOME AS PER LAW WAS TO BE COMPUTED AND THE REVENUE COULD NOT DERIVE BENEFIT O UT OF ASSESSEES IGNORANCE / SUBMISSIONS AND COULD NOT OUST THE ASSE SSEE TO RAISE A LEGALLY VALID CLAIM BEFORE THE APPELLATE AUTHORITIE S SINCE THERE COULD BE NO ESTOPPEL AGAINST THE LAW. 5.2 PROCEEDING FURTHER, UPON PERUSAL, THE UNDISPUTE D FACTS THAT EMERGES ARE THAT THE ASSESSEE HAS ACQUIRED THE RIGH TS IN THE STATED PROPERTY VIDE RESERVATION OF APARTMENT LETTER DATED 16/03/2005 ISSUED BY SWAN MILLS LIMITED UPON PAYMENT OF RS.3.94 LACS WHICH IS STATED TO BE 5% OF THE COST OF THE PROPERTY. THE ASSESSEE WAS REQUIRED TO MAKE CONSTRUCTION-LINKED PAYMENT IN VARIOUS INSTALLMENT, THE DETAILS OF WHICH HAVE ALREADY BEEN GIVEN IN THE SAID LETTER AS PLACE D ON PAGE NO. 56 OF THE PAPER-BOOK. THE PERUSAL OF THE SAME REVEAL THAT ASSESSEE HAS ACQUIRED RIGHTS IN A SPECIFIC PROPERTY AND THE PROP ERTY IS CLEARLY IDENTIFIED IN THE SAID LETTER AND THE SAID RIGHT WAS NOT CONDI TIONAL OR UNCERTAIN. THE RELEVANT AGREEMENT FOR SALE HAS BEEN EXECUTED IN ASSESSEES FAVOR BY THE BUILDER VIDE AGREEMENT TO SALE DATED 31/12/2009 , A COPY OF WHICH HAS BEEN PLACED ON PAGE NOS. 8 TO 54 OF THE PAPER-BOOK. THE ASSESSEE HAS SOLD THE SAME VIDE DEED OF TRANSFER DATED 02/06/2010, THE COPY OF WHICH HAS ALSO BEEN PLACED ON PAGE NOS. 74 TO 97 OF THE PAPER-BOOK. THE RECITAL E OF THIS AGREEMENT CLEARLY STATES THAT THE SAID TOWER WAS STILL INCOMPLETE ON THE DATE OF EXECUTION OF THE DE ED OF TRANSFER WHICH LEND CREDENCE TO THE ARGUMENT OF LD. AR THAT POSSES SION WAS NEVER OBTAINED BY THE ASSESSEE. THIS IS MORE-CLEAR FROM RECITAL F OF THE SAME DEED WHEREIN THE TRANSFEROR HAS AGREED TO TRANSFER AND THE TRANSFEREE HAS AGREED TO ACQUIRE ALL THE RIGHTS, TITLE AND INT EREST OF THE TRANSFEROR IN ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 7 THE SAID APARTMENT. THEREFORE, WHATEVER RIGHTS WERE OBTAINED BY THE ASSESSEE VIDE RESERVATION OF ALLOTMENT LETTER DATED 16/03/2005, THE SAME RIGHTS HAVE BEEN TRANSFERRED DURING THE IMPUGNED AY AS AGAINST THE ARGUMENT OF REVENUE THAT THE RIGHTS FIRST GOT CONVE RTED INTO NEW ASSET UPON EXECUTION OF AGREEMENT BETWEEN THE ASSESSEE AN D THE BUILDER WHICH HAS BEEN SOLD SUBSEQUENTLY. IN OUR OPINION, T HE EXECUTION OF STATED AGREEMENT IN ASSESSEES FAVOR WAS NOTHING BU T MERE IMPROVEMENTS IN THE ASSESSEES EXISTING RIGHTS IN T HE PROPERTY. UNDISPUTEDLY, THE RIGHT TO OWN / OBTAIN CONVEYANCE OF IMMOVEABLE PROPERTY WAS A CAPITAL ASSET IN TERMS OF JUDGMENT O F HONBLE BOMBAY HIGH COURT RENDERED IN CIT VS TATA SERVICES LTD. [122 ITR 594] AN ALSO IN CIT VS STERLING INVESTMENT CORPORATION LTD. [123 IT R 441]. THEREFORE, THE CONCLUSION DRAWN BY FIRST APPELLATE AUTHORITY THAT THE GAINS WERE LONG-TERM CAPITAL GAINS IN NATURE AS COUNTED FROM 16/03/2005 WOULD REQUIRE NO INTERFERENCE ON OUR PART. THE APPE AL STANDS DISMISSED TO THAT EXTENT. 5.3 THE REVENUE HAS RELIED UPON THE DECISION OF THI S TRIBUNAL RENDERED IN S.NARENDRAKUMAR & CO. VS DCIT [62 TAXMAN.COM 184] WHICH IS FACTUALLY DISTINGUISHABLE SINCE IN THAT CASE THE NA TURE OF THE TRANSACTIONS, ITSELF WAS UNDER DOUBT AND SURPLUS RECEIVED BY THE ASSESSEE WAS HELD TO BE ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES . SIMILARLY, THE DECISION OF HONBLE KERALA HIGH COURT IN LACHMANDAS & SONS VS DCIT [49 TAXMANN.COM 387] DEAL THE SITUATION WHEREIN THE TERMS OF THE MOU INDICATED THAT THE PROPERTY WOULD NOT BE TRANSFERRE D IN THE NAME OF THE ASSESSEE TILL ENTIRE AMOUNT WAS PAID. NO SUCH COVEN ANT IS POSTULATED BY RESERVATION OF ALLOTMENT LETTER IN THE PRESENT CASE . SIMILARLY, THE DECISION ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 8 OF HONBLE DELHI HIGH COURT IN GULSHAN MALIK VS. CIT [43 TAXMAN.COM 200] DEALS WITH A SITUATION WHEREIN THE CONFIRMATION LET TER DATED 06/08/2014 SPECIFICALLY STATED THAT NO RIGHT TO PRO VISIONAL / FINAL ALLOTMENT ACCRUES UNTIL THE BUYERS AGREEMENT IS SIGNED AND R ETURNED TO THE BUILDERS AND IT FURTHER STATED THAT NO RIGHT TO CLA IM TITLE / OWNERSHIP RESULTS FROM THE CONFIRMATION LETTER ITSELF. HOWEVER, SUCH CONDITIONS ARE MISSING IN THE PRESENT CASE BEFORE US. THEREFORE, ALL THESE CASE LAWS, IN OUR CONSIDERED OPINION, ARE DISTINGUISHABLE ON FACTS. 5.4 NOW, THE ONLY SURVIVING QUESTION THAT ARISE FOR CONSIDERATION IS MANNER OF COMPUTATION OF THE GAINS. IT IS NOTED THA T THE ASSESSEE HAS PAID UPFRONT PAYMENT TO THE EXTENT OF 5% UPON ALLOT MENT AND THE BALANCE PAYMENT HAS BEEN SPREAD OVER BY WAY OF INSTALLMENT DURING THE YEAR 2005 TO 2010. AS AGAINST THE SAME, THE ASSESSEE HAS SOUGHT INDEXATION OF FULL COST ON THE BASIS OF INDEX FOR 2005, WHICH, IN OUR CONSIDERED OPINION, IS NOT JUSTIFIED. LOGICALLY, THE INDEXATIO N WAS TO BE DONE BY APPLYING THE INDEXES OF THE RESPECTIVE YEARS IN WHI CH THE PAYMENTS WERE ACTUALLY MADE BY THE ASSESSEE WHICH IS IN LINE WITH THE DECISION OF THIS TRIBUNAL RENDERED IN LAKSHMAN M.CHARANJIVA VS ITO [ITA NO. 28/MUM/2017 DATED 03/10/2018], WHICH HAS BEEN AUTHORED BY ONE OF US, WHEREIN THE MATTER, AFTER DUE CONSIDERATION OF VARI OUS JUDICIAL PRONOUNCEMENTS, HAS BEEN CONCLUDED IN THE FOLLOWING MANNER:- 5. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED THE RELEVANT MATERIAL ON RECORD INCLUDING CITED JUDICIAL PRONOUN CEMENTS. WE FIND THAT LD. CIT(A) HAS REFERRED TO TWO DECISIONS OF THIS TRIBUNAL. UPO N PERUSAL, IT IS FOUND THAT IN THE CASE OF RAMPRAKASH BUBNA (SUPRA), THE BENEFIT OF IN DEXATION HAS BEEN PROVIDED FROM THE DATE OF AGREEMENT FOR ACQUISITION OF THE P ROPERTY WHEREAS THE DECISION RENDERED BY THIS TRIBUNAL IN VIKAS P.BAJAJ (SUPRA) HAS PRIMARILY DRAWN STRENGTH FROM THE DECISION OF DELHI TRIBUNAL RENDERED IN PRAVEEN GUPTA VS ACIT 137 TTJ (DEL.) 307. THE CASE OF VIKAS P.BAJAJ AS WELL AS PRAVEEN G UPTA DEALT WITH A SITUATION IN ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 9 WHICH THE ASSESSEE HIMSELF OFFERED CAPITAL GAINS BY INDEXING THE ACTUAL PAYMENTS MADE IN THE RESPECTIVE AYS BY APPLYING THE INDEXES FOR THOSE YEARS AND THEREFORE, IS NOT DIRECTLY ON THE ISSUE UNDER HAND SINCE THE TRIB UNAL, IN BOTH THE CASE LAWS, HAS CONFIRMED THE WORKINGS / COMPUTATIONS ADOPTED BY TH E ASSESSEE. 6. SO FAR AS THE STATUTORY PROVISIONS AS CONTAINED IN SECTION 48, EXPLANATION (III) AS EXTRACTED IN THE IMPUGNED ORDER IS CONCERNED, WE FIND THAT INDEXED COST OF ACQUISITION HAS BEEN DEFINED TO MEAN AN AMOUNT WHIC H BEARS TO THE COST OF ACQUISITION THE SAME PROPORTION AS COST INFLATION I NDEX FOR THE YEAR IN WHICH THE ASSET IS TRANSFERRED BEARS TO THE COST INFLATION INDEX FO R THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE. WE FIND THAT THE EXPRESSI ON USED IS 'HELD' AS AGAINST 'ACQUIRED' OR 'PURCHASED' AS USED IN OTHER SECTIONS LIKE SECTION 54 / 54F WHICH SHOWS THAT LEGISLATURES WERE CONSCIOUS WHILE MAKING USE O F THIS EXPRESSION. THE EXPRESSIONS LIKE 'OWNED' / ACQUIRED HAS NOT BEEN USED FOR ALLOWING THE INDEXATION BENEFIT TO THE ASSESSEE. HOWEVER, THE IMPORTANT QUE STION THAT ARISES FOR CONSIDERATION, AT THIS JUNCTURE, IS THAT WHETHER TH E INDEXATION BENEFIT OF EVEN THE FUTURE INSTALLMENTS WOULD ALSO BE ALLOWABLE TO THE ASSESSEE FROM THE YEAR IN WHICH THE ASSET IS FIRST HELD BY THE ASSESSEE. FOR THIS, OUR ATTENTION HAS BEEN DRAWN TO THE DECISION OF HONBLE GUJARAT HIGH COURT RENDERED IN NIRMAL KUMAR SETH VS CIT [17 TAXMANN.COM 127] WHEREIN HONBLE COURT HAS DECIDED THE ISSUE AS UNDER:- 6. WE HAVE HEARD BOTH THE PARTIES AT LENGTH AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. 7. FROM THE RECORD, IT APPEARS THAT THE LAND IN QUEST ION WAS PURCHASED FROM THE LUCKNOW DEVELOPMENT AUTHORITY ON INSTALMENTS BA SIS FOR WHICH REGISTRATION WAS MADE ON 01.12.1982 BY PAYING A SUM OF RS. 3000/- ONLY. THE REMAINING PAYMENT WAS MADE IN INSTALMENTS TO LU CKNOW DEVELOPMENT AUTHORITY, AS PER THE CHART GIVEN IN THE AO'S ORDER . AS PER THE AGREEMENT, THE RIGHT TO GET THE SALE DEED REGISTERED IN FAVOUR OF THE ASSESSEE WAS ACQUIRED, THOUGH SUBJECT TO THE FULL AND FINAL PAYMENT. AFTER MAKING THE FULL AND FINAL PAYMENT, THE ASSESSEE GOT THE ALLOTMENT LETTER IN H IS FAVOUR IN THE YEAR 1985. ON GETTING THE ALLOTMENT LETTER, THE ASSESSEE ALSO OBTAINED THE VALUABLE RIGHT TO HAVE A SALE DEED IN HIS FAVOUR. THUS, THE ASSESS EE HAS ACQUIRED THE CAPITAL ASSET. 8. IN THE INSTANT CASE, THE PLOT WAS SOLD DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. THE PERIOD IS MORE THAN 3 YEARS. SO, WE ARE IN AGREEMENT WITH THE OBSERVATIONS MADE BY THE TRIBUNAL THAT LONG TER M CAPITAL GAIN WILL HAVE TO APPLY IN THE ASSESSEE'S CASE AS PER THE PAYMENT CHA RT. 9. IT MAY BE MENTIONED THAT THE EXPRESSION 'COST OF A CQUISITION' IS DEFINED IN SECTION 55(2) OF THE ACT. THE DATE OF ACQUISITION W ILL HAVE A RELEVANCE IN DETERMINING THE COST OF ACQUISITION. AS PER THE RAT IO LAID DOWN IN THE CASE OF CIT V. SRINIVASA RAO [1987] 166 ITR 593 / 31 TAXMAN 466 (AP) THE EXPRESSION OF 'COST OF ACQUISITION' IS EXHAUSTIVE A ND THE LANGUAGE EMPLOYED IS PEREMPTORY. IT IS NOT OPEN TO THE COURT TO INTRO DUCE ANY OTHER FACTS OF MEANING TO THE EXPRESSION 'COST OF ACQUISITION'. 10. FROM THE RECORD, IT ALSO APPEARS THAT THE ACTUAL A MOUNT WAS PAID FROM TIME TO TIME AFTER THE DATE OF ISSUANCE OF ALLOTMEN T LETTER, WHICH HAS TO BE CONSIDERED FOR THE PURPOSE OF INDEXATION WITH REFER ENCE TO THE DATE OF PAYMENTS. THE TRIBUNAL HAS RIGHTLY ASKED TO COMPUTE THE LONG TERM CAPITAL GAIN AS PER THE PAYMENT SCHEDULE. THERE IS NOTHING WRONG IN THE TRIBUNAL'S ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 10 ORDER, WHICH IS BASED ON THE WELL ESTABLISHED LEGAL POSITION AS WELL AS THE CBDT CIRCULAR, WHICH HAVE ALREADY BEEN MENTIONED IN THE IMPUGNED ORDER PASSED BY THE TRIBUNAL. 11. DURING THE COURSE OF ARGUMENT, WE WERE TOLD THAT T HE LONG TERM CAPITAL GAIN HAS ALREADY BEEN DEPOSITED AS PER THE COMPUTAT ION MADE BY THE A.O. IN THE MANNER CLAIMED BY THE ASSESSEE. WHEN IT IS SO T HEN NOTHING SURVIVES IN THE APPEAL. 12. HENCE, WE DECLINE TO INTERFERE WITH THE IMPUGNED O RDER PASSED BY THE TRIBUNAL, WHICH IS HEREBY SUSTAINED ALONG WITH THE REASONS MENTIONED THEREIN. 13. THE ANSWER TO THE SUBSTANTIAL QUESTIONS OF LAW IS IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. RESPECTFULLY FOLLOWING THE WISDOM OF HIGHER JUDICIA L FORUM, WE HOLD THAT THE INDEXATION BENEFIT AGAINST THE COST OF ACQUISITION SHALL BE AVAILABLE TO THE ASSESSEE ON THE BASIS OF INDEX OF THE YEAR IN WHICH THE PAYM ENTS WERE ACTUALLY MADE BY THE ASSESSEE. THE PAYMENT MADE UP-TO THE DATE OF AGREEM ENT I.E. 18/10/2007 SHALL BE INDEXED BY APPLYING THE INDEX FOR FINANCIAL YEAR 20 07-08. ACCORDINGLY, SUBSEQUENT PAYMENTS MADE IN DIFFERENT FINANCIAL YEARS SHALL BE INDEXED BY APPLYING THE RESPECTIVE INDEXES OF THOSE YEARS. GROUND NUMBER-1 STAND DISMISSED. THEREFORE, TAKING THE SAME VIEW, FOLLOWING THE HIGH ER JUDICIAL WISDOM OF HONBLE GUJARAT HIGH COURT RENDERED IN NIRMAL KUMAR SETH VS CIT [17 TAXMANN.COM 127], WE DIRECT LD. AO TO WORK OUT THE INDEXED COST AFTER APPLYING INDEXES OF THE RESPECTIVE YEARS IN WHICH T HE PAYMENTS HAS ACTUALLY BEEN MADE BY THE ASSESSEE. ACCORDINGLY, GR OUND NO.5 STANDS ALLOWED. 5.5 LASTLY, IT IS AN UNDISPUTED POSITION THAT ADDIT IONAL GARAGE HAS BEEN PURCHASED BY THE ASSESSEE ONLY DURING NOVEMBER, 200 9 WHICH ESTABLISHES THAT IS WAS CAPABLE OF BEING TRANSACTED SEPARATELY AND THEREFORE, CONSTITUTE A SEPARATE CAPITAL ASSET IN T HE HANDS OF THE ASSESSEE. THEREFORE, THE GAIN FROM TRANSFER OF THIS ADDITIONAL GARAGE WOULD BE SHORT-TERM CAPITAL GAINS ONLY . SINCE THE SALE CONSIDERATION IS COMPOSITE ONE, LD. AO, WITH ASSISTANCE OF THE ASSES SEE, IS DIRECTED TO ITA NO. 4715/MUM/2015 MONISH KAAN TAHILRAMANI ASSESSMENT YEAR: 2011-12 11 BIFURCATE THE SALE CONSIDERATION ON SOME REASONABLE BASIS TO WORK OUT THE RESULTANT GAINS. 6. FINALLY, THE APPEAL STANDS PARTLY ALLOWED IN TER MS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND APRIL, 2019. SD/- SD/- (PAWAN SINGH) (MAN OJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 02/04/2019 SR PS : JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT 3. $$% ( ) / THE CIT(A) 4. $$% / CIT CONCERNED 5. & ''() , $) , / DR, ITAT, MUMBAI 6. ' +, / GUARD FILE / BY ORDER, / % (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.