DCIT CIR 18(2), MUMBAI V. LEELAVATI S. MEHTA, MUMBAI

ITA 7105/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1042 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 15-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Capital asset; Cost of acquisition; Fair market value; Set aside; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, A, MUMBAI BEFORE SHRI R V EASWAR, PRESIDENT AND SHRI B RAMAKOTAIAH, ACCOUNTANT MEMBER I T A NO: 7105/MUM/2008 (ASSESSMENT YEAR: 2005-06) DEPUTY COMMISSIONER OF INCOME TAX APPELLANT CIRCLE 18(2), MUMBAI VS SMT LEELAVATI S MEHTA, MUMBAI RESPONDENT (PAN: AGWPM9540P) APPELLANT BY: SHRI SANJEEV JAIN RESPONDENT BY: SHRI SANJIV M SHAH O R D E R R V EASWAR, PRESIDENT: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS D IRECTED AGAINST THE ORDER DATED 05.09.2008 PASSED BY THE CI T(A) FOR THE ASSESSMENT YEAR 2005-06. THE GROUNDS TAKEN BY THE REVENUE ARE AS UNDER: - I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN : I. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. II. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DIRECTING TO OPT INDEXATION COST OF ACQUISITION ON 1/4/81 IGNORING THAT THE ASSESSEE ACQUIRED 33% SHARE IN THE FIRM AFTER 1983 AND THE SAME WAS DISSOLVED IN 10.09.1990 AGAINST THE ORDER OF ITAT G- BENCH, MUMBAI IN THE CASE OF DCIT VS. KISHORE KANNUNGO (290 ITR 298) AS THE FACTS OF THE CASE ARE SIMILAR TO THOSE OF THE ASSESSEE. III. FOR THESE AND OTHER REASONS IT IS SUBMITTED THAT THE ORDER OF THE CIT(A) ITA NO: 7105/MUM/2008 2 MAY BE SET ASIDE AND THAT OF THE AO RESTORED. 2. THE ASSESSEE IS AN INDIVIDUAL. SHE OWNED SHOP N O.3 IN SIDDIVINAYAK CO-OPERATIVE HOUSING SOCIETY SINCE 10 TH SEPTEMBER 1990, HAVING ACQUIRED THE SAME UNDER A DISTRIBUTION OF ASSETS ON THE DISSOLUTION OF A FIRM BY NAME M/S SONA TIMBER A ND PLYWOOD ON THAT DATE. THE CHRONOLOGICAL EVENTS WHICH RESULTED IN THE ASSESSEE ACQUIRING THE SHOP ARE THESE. IN THE YEAR 1974, LA TE MR SUSHILCHANDRA MEHTA, THE HUSBAND OF THE ASSESSEE H EREIN ACQUIRED TENANCY RIGHTS IN THE SHOP ON RENT BY PAYI NG PREMIUM. HE WAS A PARTNER IN THE AFOREMENTIONED FIRM HOLDING 33 % SHARE. THE OTHER TWO PARTNERS HELD THE REMAINING 67% SHARE. O N 15.11.1982 MR SUSHILCHANDRA MEHTA RETIRED FROM THE FIRM LEAVI NG THE TENANCY RIGHTS IN THE SHOP TO THE REMAINING TWO PARTNERS. ON 17.01.1983 A NEW PARTNERSHIP DEED WAS EXECUTED WHEREIN TWO NEW P ARTNERS WERE INDUCTED, INCLUDING THE ASSESSEE WHO WAS GIVEN 18% SHARE. ON 26.12.1987 ONE OF THE PARTNERS RETIRED FROM THE FIRM AND TRANSFERRED HIS SHARE TO THE ASSESSEE HEREIN WHEREB Y HER SHARE ROSE TO 33% FROM 18% HELD EARLIER. ON 10.09.1990 T HE FIRM GOT DISSOLVED UNDER A DEED EXECUTED ON THAT DATE AND TH E THREE SHOPS PROPOSED BY THE BUILDER AND ALLOTTED TO THE FIRM IN LIEU OF THE TENANCY IN THE OLD SHOP WERE DIVIDED ACCORDING TO THE PROFI T SHARING RATIO. SINCE THE ASSESSEE HAD 33% SHARE IN THE FIRM, WHICH AMOUNTED TO 1/3 RD SHARE, SHE WAS ALLOTTED ONE SHOP UNDER THE DISTRIB UTION OF ASSETS PURSUANT TO THE DISSOLUTION DEED. THIS IS H OW THE ASSESSEE CAME TO ACQUIRE THE SHOP NO.3 IN SIDDIVINAYAK CO-OP ERATIVE HOUSING SOCIETY. ITA NO: 7105/MUM/2008 3 3. IN THE YEAR ENDED 31.03.2005 RELEVANT TO THE ASS ESSMENT YEAR UNDER APPEAL, THE ASSESSEE SOLD THE SHOP AND W ORKED OUT THE LONG TERM CAPITAL GAINS IN THE FOLLOWING MANNER: - SALE PROCEEDS OF PROPERTY 15,00,000 MARKET VALUE OF PROPERTY AS PER STAMP DUTY EVALUATION 21,00,000 LESS: TRANSFER FEES 11,500 BROKERAGE PAID 21,101 32,601 ------------- 20,67,399 INDEXED COST OF ACQUISITION FMV AS ON 1981 RS.2,03,964*497/100 (10,13,701) CONTRIBUTION BY ASSESSEE 6,250*497/150 (20,708) (10,34,409) --------------- LTCG 10,32,990 LESS: LTCG B/F (34,146) -------------- TAXABLE LTCG 9,98,844 -------------- THE ASSESSING OFFICER HOWEVER TOOK THE VIEW THAT TH E COST OF THE THREE SHOPS BEFORE DISSOLUTION WAS RS.4,18,750/- OF WHICH THE ASSESSEES 1/3 RD SHARE WAS ONLY RS.6,250/- AT THE RATE OF RS.18/- PER SQ. FT. AND THAT THE SHOPS WERE ALLOTTED IN LIE U OF RELINQUISHMENT OF TENANCY RIGHTS UNDER THE TERMS AGREED WITH THE B UILDER. HE THEREFORE ASKED THE ASSESSEE TO SHOW CAUSE WHY THE COST OF ACQUISITION SHOULD NOT BE TAKEN AT THAT FIGURE (I.E . RS.6,250/-) AND THE CAPITAL GAINS REWORKED ACCORDINGLY. THE ASSESS EE SUBMITTED THAT THE FIRM ACQUIRED THE SHOP ON TENANCY BASIS IN 1974, THAT THE AGREEMENT BETWEEN THE LANDLORD AND THE TENANTS WAS MADE ON 24.06.1997, THAT THEREAFTER THERE WAS AN AMENDED AG REEMENT FOR GETTING ALTERNATE ACCOMMODATION AND SINCE THE RIGHT S IN THE ORIGINAL PROPERTY HAD BEEN ACQUIRED PRIOR TO 01.04.1981, THE FAIR MARKET VALUE ON 01.04.1981 HAS TO BE SUBSTITUTED AS THE CO ST FOR PURPOSES ITA NO: 7105/MUM/2008 4 OF CALCULATING CAPITAL GAINS AND THAT IN THESE CIRC UMSTANCES THE PROPOSAL OF THE AO TO ADOPT ONLY RS.6,250/- AS THE COST WAS NOT JUSTIFIED. 4. THE AFORESAID CONTENTION OF THE ASSESSEE DID NOT FIND ACCEPTANCE IN THE HANDS OF THE AO, WHO HELD THAT SI NCE THE ASSESSEE BECAME THE OWNER OF THE PROPERTY ONLY ON 1 0.09.1990, THE BENEFIT OF INDEXATION OF COST WILL BE AVAILABLE TO HER ONLY FROM THE FINANCIAL YEAR 1990-91. HE REFERRED TO THE VALUATI ON REPORT DATED 11.03.2006 PREPARED BY M/S PATWARDHAN & ASSOCIATES IN WHICH THEY HAD MENTIONED THAT THE ASSESSEE HAD CONTRIBUTE D HER 33% SHARE FOR 230 SQ. FT. OF SHOP PREMISES, I.E. RS.6,2 50/- TOWARDS CONSTRUCTION COST TO THE DEVELOPER. HE ACCORDINGLY HELD THAT ONLY RS.6,250/- CAN BE ADOPTED AS THE COST OF ACQUISITIO N FOR INDEXATION PURPOSES. HE ACCORDINGLY REWORKED THE CAPITAL GAIN S BY ALLOWING ONLY RS.17,067/- AS INDEXED COST OF ACQUISITION (62 50 X 497 / 182). THE TAXABLE LONG TERM CAPITAL GAINS, CAME TO RS.20, 16,186/- AS AGAINST RS.9,98,844/- DECLARED BY THE ASSESSEE. 5. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) A ND TOOK UP SEVERAL CONTENTIONS, THE FIRST OF WHICH WAS THAT UN DER SECTION 45(4), WITH EFFECT FROM THE ASSESSMENT YEAR 1988-89, DISTR IBUTION OF ASSETS ON DISSOLUTION OF A FIRM GAVE RISE TO CAPITAL GAINS ONLY IN THE HANDS OF THE FIRM AND NOT IN THE HANDS OF THE PARTNER. I T WAS ALSO CONTENDED THAT UNDER SECTION 49(3)(B), THE COST OF ANY ASSET RECEIVED BY A PARTNER ON DISSOLUTION OF THE FIRM SH ALL BE DEEMED TO BE THE COST WHICH THE FIRM ACQUIRED AT, PROVIDED TH E DISSOLUTION TOOK PLACE PRIOR TO 01.04.1987 AND SINCE THE DISSOLUTION IN THE PRESENT ITA NO: 7105/MUM/2008 5 CASE TOOK PLACE ON 10.09.1990, THE PROVISION WAS NO T APPLICABLE TO THE PRESENT CASE. IT WAS ALSO SUBMITTED THAT THE A O OUGHT TO HAVE TAKEN THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1 0.09.1990 (THE DATE OF DISSOLUTION) WHILE CALCULATING THE LONG TER M CAPITAL GAINS ON SALE OF THE ASSET BY THE ASSESSEE. THE DENIAL OF B ENEFIT OF INDEXATION TO THE ASSESSEE, TAKING THE FAIR MARKET VALUE AT RS.2,03,964/- AS ON 01.04.1981 AS VALUED BY THE APP ROVED VALUERS WAS ALSO QUESTIONED. 6. THE CIT(A) AFTER CONSIDERING THE ABOVE SUBMISSIO NS OF THE ASSESSEE, HELD AS FOLLOWS: - (A) SINCE THE ASSESSEE ACQUIRED THE PROPERTY ON DISSOLUTION OF THE FIRM ON 10.09.1990 THE BENEFIT O F INDEXATION WOULD BE AVAILABLE TO HER FROM THE FINAN CIAL YEAR 1990-91. (B) SINCE THE RIGHTS IN THE PROPERTY WERE IN EXISTE NCE PRIOR TO 01.04.1981, THE FAIR MARKET VALUE AS ON THAT DAT E WOULD BE TREATED AS COST OF ACQUISITION WITH THE BE NEFIT OF INDEXATION TAKING 1981 AS THE BASE YEAR. (C) OUT OF THE TWO ALTERNATIVES AS ABOVE, THE ALTER NATIVE (B) WOULD BE MORE APPROPRIATE TO THE FACTS AND THE LEGAL PROVISIONS. IT WAS NOT CORRECT ON THE PART O F THE AO TO ADOPT THE COST AT RS.6,250/- IGNORING THE FAI R MARKET VALUE AS ON 01.04.1981 TOTALLY. THE CIT(A) ACCORDINGLY DIRECTED THE AO TO ACCEPT TH E ASSESSEES COMPUTATION OF THE LONG TERM CAPITAL GAINS AT RS.9, 98,844/-, IN WHICH THE ASSESSEE HAD CLAIMED DEDUCTION OF THE FAIR MARK ET VALUE AS ON ITA NO: 7105/MUM/2008 6 01.04.1981, DULY INDEXED AS ALSO THE COST OF ACQUIS ITION (I.E. RS.6,250/-), ALSO DULY INDEXED. 7. HAVING HELD AS ABOVE, THE CIT(A) IN PARAGRAPH 4. 3 OF HIS ORDER HELD THAT THE CAPITAL GAINS OUGHT TO HAVE BEE N ASSESSED IN THE HANDS OF THE ERSTWHILE FIRM, PRESUMABLY HAVING IN M IND THE PROVISIONS OF SECTION 45(4) OF THE INCOME TAX ACT, 1961. HE ALSO DIRECTED THE AO TO CONSIDER THE APPLICABILITY OF TH E PENAL PROVISIONS OF SECTION 271A(2)(B) TO THE FIRM. 8. THE REVENUE IS IN APPEAL. WE HAVE ALREADY REPRO DUCED THE GROUNDS. THE CONTENTION IS THAT THE ASSESSEE ACQUI RED 1/3 RD SHARE IN THE FIRM ONLY IN 1983 AND THEREFORE THE COST OF ACQUISITION CANNOT BE TAKEN AS ON 01.04.1981. THE ORDER OF THE MUMBAI BENCH OF THE TRIBUNAL IN DCIT VS. KISHORE KANUNGO (2006) 102 ITD 437 (MUM) IS CITED IN SUPPORT THEREOF. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HAS SUPPORTED THE ORDER OF THE CIT(A ) AND HAS SUBMITTED THAT THE SAME SHOULD BE ACCEPTED. ON A C AREFUL CONSIDERATION OF THE MATTER, WE ARE OF THE VIEW THA T THE ASSESSEES COMPUTATION OF THE LONG TERM CAPITAL GAINS HAS BEEN RIGHTLY DIRECTED BY THE CIT(A) TO BE ACCEPTED. WE HAVE TO REFER TO ONE FACT WHICH HAS NOT BEEN MENTIONED IN THE ASSESSMENT ORDER BUT HAS BEEN STATED IN THE STATEMENT OF FACTS FILED BEFORE THE C IT(A) AND WHICH HAS NOT BEEN DISPUTED BY THE DEPARTMENTAL AUTHORITI ES. AFTER THE DRAWING UP OF THE NEW PARTNERSHIP DEED ON 17.01.198 3 UNDER WHICH THE ASSESSEE WAS INDUCTED AS PARTNER WITH 18% SHARE AND AFTER THE SHARE ROSE TO 33% CONSEQUENT TO THE RETIREMENT OF O NE OF THE PARTNERS ON 26.12.1987, AN AGREEMENT WAS ENTERED IN TO BETWEEN A ITA NO: 7105/MUM/2008 7 FIRM BY NAME RAJUL DEVELOPERS AND THE TENANTS ON 24 TH JUNE 1987, UNDER WHICH THE TENANTS AGREED TO VACATE AND SURREN DER THE PREMISES IN THE OLD BUILDING TO ENABLE THE BUILDER TO PUT UP A NEW BUILDING THEREON. M/S SONA TIMBER AND PLYWOOD AGRE ED TO PAY RS.18,750/- TOWARDS ALTERNATIVE ACCOMMODATION ON OW NERSHIP BASIS AND TOWARDS CONSTRUCTION COST FOR THE ENTIRE 697 SQ . FT. IN THE NEW PREMISES. THE NEW PREMISES WERE THE THREE SHOPS, O UT OF WHICH THE ASSESSEE WAS ALLOTTED ONE SHOP UNDER THE DISSOL UTION DEED ON 10.09.1990. THE FIGURE OF RS.6,250/- ADOPTED BY TH E AO IS 1/3 RD OF RS.18,750/- AND REPRESENTS THE ASSESSEES SHARE IN THE TOTAL AMOUNT PAID BY THE FIRM FOR THE ALTERNATIVE ACCOMMO DATION. THE ENTIRE CHRONOLOGY OF EVENTS STARTING FROM THE YEAR 1974 UNDER WHICH TENANCY RIGHTS IN THE SHOP WERE OBTAINED BY THE LAT E HUSBAND OF THE ASSESSEE WHO WAS ALSO A PARTNER DURING HIS LIFETIME IN M/S SONA TIMBER AND PLYWOOD HAVING 33% SHARE, SHOWS THAT THE SHOP THAT WAS ALLOTTED TO THE ASSESSEE WAS IN LIEU OF THE TEN ANCY RIGHTS WHICH BECAME THE PROPERTY OF THE FIRM ON 15.11.1982 WHEN HE RETIRED FROM THE FIRM. IT WAS ONLY ON 17.01.1983 THAT THE ASSES SEE BECAME PARTNER IN THE FIRM AND IN THAT CAPACITY CAN BE SAI D TO HAVE HELD THE TENANCY RIGHTS IN THE OLD SHOP ONLY FROM THAT DATE. BUT WHAT HAS BEEN SOLD BY HER ARE NOT THE TENANCY RIGHTS IN THE OLD SHOP BUT THE SHOP ALLOTTED TO HER IN LIEU OF THE OLD TENANCY. I F THE CAPITAL GAINS HAVE TO BE COMPUTED ON THE SALE OF THE NEW SHOP ALL OTTED TO HER UNDER THE DISSOLUTION DEED, STRICTLY SPEAKING THE S AME CAN BE COMPUTED ONLY BY TAKING THE FAIR MARKET VALUE OF TH E SHOP ON THE DATE OF DISSOLUTION I.E. 10.09.1990 HAVING REGARD T O THE PROVISIONS OF ITA NO: 7105/MUM/2008 8 SECTION 45(4). IN THE GROUNDS OF APPEAL FILED BEFO RE THE CIT(A) THE ASSESSEE HAS BROUGHT OUT THE FIGURE OF FAIR MARKET VALUE AS ON 10.09.1990 AS PER THE APPROVED VALUERS REPORT. IT WOULD APPEAR THAT THE APPROVED VALUER M/S PATWARDHAN & ASSOCIATE S GAVE A REPORT ON 10 TH MARCH 2006 IN WHICH THE FAIR MARKET VALUE BOTH AS ON 1981 AND AS ON 10.09 1990 WERE GIVEN. THE FAIR MAR KET VALUE AS ON 1981 WAS RS.2,03,964/- AND AS ON 10.09.1990 WAS RS.8,28,000/-. IF THIS FIGURE, I.E. THE FAIR MARKE T VALUE AS ON 10.09.1990 IS INDEXED, THE COST OF ACQUISITION MAY COME TO AROUND RS.22,00 LAKHS, GOING BY THE INDEXED COST OF RS.8,3 5,583/- WHICH INCLUDES THE FAIR MARKET VALUE OF RS.8,28,000/- AS ON 10.09.1990 AND THE CONTRIBUTION OF RS.6,250/- PAID BY THE ASSE SSEE, WHICH IS SHOWN BY THE ASSESSEE AT RS.22,81,784/-. THIS CALC ULATION IS GIVEN IN THE GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFO RE THE CIT(A). IF THE LONG TERM CAPITAL GAINS IS COMPUTED IN THIS MAN NER, AS THEY OUGHT TO BE, ON THE FOOTING THAT THE CAPITAL ASSET SOLD IS THE NEW SHOP NO.3 OF WHICH THE ASSESSEE BECAME THE OWNER ON 10.09.1990, THE DATE OF DISSOLUTION, THERE WOULD PE RHAPS BE A CAPITAL LOSS SINCE THE MARKET PRICE OF THE PROPERTY AS PER STAMP DUTY VALUATION, EVEN AS PER THE AO IS ONLY RS.21.00 LAKHS. IN ANY CASE THE CAPITAL GAINS WOULD BE EITHER A LOSS OR VE RY NEGLIGIBLE POSITIVE FIGURE IF THEY ARE COMPUTED ON THIS BASIS. WHILE COMPUTING THE CAPITAL GAINS THE ASSESSEE HAS ASSUMED THAT SHE ACQUIRED THE SHOP EVEN BEFORE 1981, AN ASSUMPTION WHICH IS FACTU ALLY NOT CORRECT. WHAT WAS ACQUIRED EARLIER WAS ONLY A TENA NCY RIGHT IN THE OLD SHOP WHICH WAS EXCHANGED FOR OWNERSHIP OF THREE NEW SHOPS. ITA NO: 7105/MUM/2008 9 THE DEPARTMENT IS RIGHT IN ITS GROUND THAT THE ASSE SSEE CAN BE SAID TO HAVE ACQUIRED 33% SHARE IN THE FIRM ONLY IN 1983 WHEN SHE BECAME A PARTNER AND CONSEQUENTLY CAN BE SAID TO HA VE ACQUIRED 33% SHARE IN THE TENANCY RIGHTS ONLY FROM THAT YEAR . HOWEVER, THE TENANCY RIGHTS WERE LATER EXCHANGED FOR THREE SHOPS ALLOTTED BY THE BUILDER, ONE OF WHICH WAS ALLOTTED TO THE ASSESSEE ON DISTRIBUTION OF THE ASSETS PURSUANT TO THE DISSOLUTION DEED DATED 1 0.09.1990. THE ASSESSEE SEEMS TO BE WRONG IN HER ASSUMPTION THAT S HE HELD THE SHOP PRIOR TO 01.04.1981, A CONTENTION WHICH SHE HA S PROJECTED BEFORE THE AO AND EXTRACTED IN THE ASSESSMENT ORDER AT PAGE 2 (PARA 3, SUPRA). IT WAS ON THIS ASSUMPTION THAT SH E HAD WORKED OUT THE CAPITAL GAINS IN THE RETURN AT RS.9,98,844/-. IF THE AO HAD ASSESSED THE FIRM UNDER SECTION 45(4), HE WOULD CER TAINLY HAVE TAKEN THE FAIR MARKET VALUE OF THE SHOP ON THE DATE OF THE TRANSFER I.E. 10.09.1990 AS THE FULL VALUE OF THE CONSIDERAT ION RECEIVED OR ACCRUING TO THE FIRM AS A RESULT OF THE TRANSFER. IN THAT CASE THE FAIR MARKET VALUE AS ON 10.09.1990 WOULD HAVE BEEN THE C OST OF ACQUISITION FOR THE ASSESSEE WHEN SHE SOLD THE SHOP WITHIN A SHORT SPAN OF TIME. THE CAPITAL GAINS WOULD HAVE BEEN NE GLIGIBLE. CERTAINLY IT COULD NOT HAVE BEEN RS.20,16,186/- AS COMPUTED BY THE AO IN THE ASSESSMENT ORDER, IN WHICH HE HAS GIVEN D EDUCTION FOR ONLY THE COST OF RS.6,250/- AS INDEXED, WHICH CAME TO RS.17,067/-. 9. IN THE ABOVE CIRCUMSTANCES IT COULD BE ARGUED TH AT A DIRECTION SHOULD BE GIVEN TO THE AO TO REWORK THE C APITAL GAINS TAKING THE COST OF ACQUISITION AS ON 10.09.1990. W E MAY CLARIFY THAT NO SUCH PRAYER WAS MADE ON BEHALF OF THE ASSESSEE B EFORE US AND ITA NO: 7105/MUM/2008 10 ADVISEDLY SO BECAUSE THE ASSESSEE HAS NOT FILED ANY APPEAL BEFORE THE TRIBUNAL RAISING THE PLEA THAT THE CAPITAL GAIN S SHOULD BE COMPUTED ON THE BASIS THAT THE ASSESSEE BECAME THE OWNER OF THE SHOP ONLY ON 10.09.1990 AND THE DEPARTMENT, HAVING APPEALED AGAINST THE ORDER OF THE CIT(A) UPHOLDING THE ASSES SEES COMPUTATION OF THE CAPITAL GAINS AT RS.9,98,844/-, SHOULD NOT BE WORSE OFF, A SITUATION WHICH IS VERY LIKELY TO ARIS E IF A DIRECTION IS ISSUED TO THE AO TO COMPUTE THE CAPITAL GAINS IN TH E HANDS OF THE ASSESSEE ON THE FOOTING THAT SHE ACQUIRED THE SHOP ONLY ON 10.09.1990 AND THE FAIR MARKET VALUE AS ON THAT DAT E SHOULD BE TAKEN AS HER COST OF ACQUISITION. THE RESULT IS TH AT WE CAN ONLY CONFIRM THE ORDER OF THE CIT(A) DIRECTING THE AO TO ACCEPT THE CAPITAL GAINS OF RS.9,98,844/- DECLARED IN THE RETU RN. WE DO SO AND DISMISS THE APPEAL FILED BY THE REVENUE WITH NO ORD ER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JULY 2010. SD/- SD/- (B RAMAKOTAIAH) (R V EASWAR) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DATED 23 RD JULY 2010 SALDANHA COPY TO: 1. SMT LEELAVATI S MEHTA VASANT NIWAS, RANADE ROAD DADAR (WEST), MUMBAI 400 028 2. DCIT CIRCLE 1892) 3. CIT-XVIII 4. CIT(A)-XVIII 5. DR A BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI