UDAI SINGH RATHORE, Jaipur V. ITO, Jaipur

ITA 818/JPR/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2146 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 30-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONUM RAI
• Assessee Lawyers: S L PODDAR
• Keywords: Capital asset; Gift; Income from undisclosed sources; Question of law; Cost of acquisition; Fair market value

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 818/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 SHRI UDAI SINGH RATHORE, 10, HH FLAT, TILAK MARGE, C-SCHEME, JAIPUR. CUKE VS. THE ITO, WARD-5(4), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AECPR0417C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S. L.PODDAR (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. POONUM RAI (DCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 01/02/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 06/02/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 03.09.2013 OF CIT (A) FOR THE ASSESSMENT YEAR 2006- 07. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 80,000/- BY NOT ACCEPTING AGRICULTURE INCOME AND TREATED THE SAME I S INCOME FROM UNDISCLOSED SOURCES WITHOUT CONSIDERING THE SU BMISSIONS AND EVIDENCES PRODUCED BY THE ASSESSEE. ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 2 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT(A) HAS ERRED IN SUSTAINED THE ADDITION OF RS. 2 1,43,470/- ON ACCOUNT OF CAPITAL GAIN ON THE BASIS OF REMAND REPO RT AS AGAINST ORIGINAL ADDITION OF RS. 25,15,980/-. 3. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. THE ASSESSEE HAS ALSO RAISED THE ADDITIONAL GROUND: - UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE NO C APITAL GAINS ARE TAXABLE ON SALE OF LAND WHEN THE SAME WAS AWARD ED FREE OF COST BY THE GOVERNMENT AND ACCORDINGLY THE LEARNED ASSESSING OFFICER HAS ALSO TAKEN THE COST OF ACQUISITION AT N ILL. THUS BOTH THE LEARNED ASSESSING AND THE LEARNED CIT(A) HAVE ERRED IN TAXING CAPITAL GAINS. 2. ADMISSION OF ADDITIONAL GROUND:- THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THIS ADDITIONAL GROUND HAS BEEN RAISED FIRST TIME BEFORE THE TRIBUNAL AS THE SAME GOES TO THE ROOT OF THE MATTER AND IT IS ALSO PURELY LEGAL IN NATURE. FOR ADJUDICATION OF TH IS ISSUE NO FACTS ARE REQUIRED TO BE EXAMINED BUT THE FACTS ALREADY AVAIL ABLE ON RECORDS ARE SUFFICIENT TO DECIDE THE ISSUE RAISED IN THE ADDITI ONAL GROUND. THUS, THE LD. AR HAS SUBMITTED THAT THE ADDITIONAL GROUND RAI SED BY THE ASSESSEE MAY BE ADMITTED FOR ADJUDICATION ON MERIT. IN SUPPO RT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT 229 ITR 383 AND SUBMITTED THAT WHEN THE QUESTION OF LAW ARISING FROM THE FACT S AVAILABLE ON RECORD ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 3 OF THE ASSESSMENT PROCEEDINGS THE SAME SHOULD BE CO NSIDERED FOR ADJUDICATION. 3. ON THE OTHER HAND, LD. DR HAS OBJECTED TO THE AD MISSION OF ADDITIONAL GROUND AND SUBMITTED THAT WHEN THE ASSES SEE HAS NOT EXPLAINED THE REASON AS TO WHY THIS GROUND WAS NOT RAISED BEFORE THE AUTHORITIES BELOW AND FURTHER, THE ASSESSEE HAS NOT BROUGHT ON RECORD THE CAUSE WHICH HAS PREVENTED THE ASSESSEE FROM RAI SING THE SAME BEFORE THE AUTHORITIES BELOW THEN, THE NEW GROUND R AISED BY THE ASSESSEE AT THIS STAGE SHOULD NOT BE ADMITTED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS REGARDING THE APPLICABILITY OF THE PROVISIONS OF CA PITAL GAIN WHEN THERE IS NO COST OF ACQUISITION OF THE LAND IN QUESTION. THU S, THE ADDITIONAL GROUND OF THE ASSESSEE PERTAINS TO THE QUESTION OF CHARGING OF CAPITAL GAIN IN RESPECT OF TRANSFER OF THE LAND IN QUESTION WHICH WAS AWARDED TO THE ASSESSEE BY THE GOVERNMENT OF RAJASTHAN AND THE REFORE THE ASSESSEE CLAIMED THAT IN THE ABSENCE OF ANY COST OF ACQUISITION THE COMPUTATION OF CAPITAL GAIN FAILS AND CONSEQUENTLY NO CAPITAL GAIN CAN BE CHARGED TO TAX IN VIEW OF THE DECISION OF HONBL E SUPREME COURT IN CASE OF CIT VS. B.C. SRINIVASA SETTY 128 ITR 294. W E FIND THAT FOR ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 4 DECIDING THIS ISSUE RAISED IN THE ADDITIONAL GROUND NO ADDITIONAL FACTS OR RECORD IS REQUIRED TO BE EXAMINED. HENCE, NO VERIFI CATION OR INQUIRY IS REQUIRED TO BE CONDUCTED AND THE FACTS RELEVANT TO THIS ISSUES ARE ALREADY ON RECORD ARE NOT IN DISPUTE. ACCORDINGLY, IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN CASE OF NTPC VS. CIT (S UPRA), THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTE D FOR ADJUDICATION ON MERITS. 5. ON MERITS OF ADDITIONAL GROUND:- THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE LAND IN QUESTION WAS ALLOTTE D TO THE ASSESSEE BY THE GOVERNMENT OF RAJASTHAN VIDE LETTER DATED 10.06 .1969 PLACED AT PAGE 1 TO 5 OF THE PAPER BOOK. HE HAS FURTHER SUBMI TTED THAT THE ASSESSEE PARTICIPATED IN THE SECOND WORLD WAR, THER EFORE, THE GOVERNMENT HAS AWARDED THE ASSESSEE BY ALLOTTING TH IS LAND IN QUESTION AND THEREFORE, IT IS CLEAR THAT THE COST OF ACQUISI TION OF THE LAND IS NIL AND THIS FACT HAS BEEN ACCEPTED BY THE AO WHILE COMPUTI NG THE CAPITAL GAIN AS HE HAS TAKEN THE COST OF ACQUISITION AS NIL. THU S, THE LD. AR AS CONTENDED THAT IT IS SETTLED PROPOSITION OF LAW THA T WHERE THE COST OF ACQUISITION IS NIL THEN NO CAPITAL GAIN IS CHARGEAB LE. IN THE ABSENCE OF COST OF ACQUISITION THE CHARGE UNDER THE HEAD CAPIT AL GAIN CANNOT BE FASTEN TO THE FULL VALUE CONSIDERATION AS CAPITAL G AIN CANNOT BE EQUITY ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 5 WITH FULL VALUE CONSIDERATION. IN SUPPORT OF HIS CO NTENTION HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE CIT VS. B.C. SRINIVASA SETTY 128 ITR 294 AS WELL AS DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. MANDHARSHINGJI P. JADEJA 2 81 ITR 19. THE LD. AR HAS ALSO RELIED UPON THE DECISION OF HONBLE MP HIGH COURT IN CASE OF CIT VS. H.H. LOKENDRA SINGH 227 ITR 638 AND SUBMITT ED THAT THE ASSESSEE BEING THE ORIGINAL OWNER OF LAND IN QUESTI ON THE MACHINERY THE PROVISIONS OF CAPITAL GAIN FAILS AND THE RECEIPT FR OM THE SALE OF LAND DO NOT ATTRACT CAPITAL GAIN TAX U/S 45 & 48 OF THE I.T . ACT. THE LD. AR HAS FURTHER SUBMITTED THAT RELYING ON THESE DECISION OF HONBLE SUPREME COURT AS WELL AS HONBLE HIGH COURTS THE COORDINATE BENCHES OF THIS TRIBUNAL IN CASE OF ITO VS. ACHALANAND VIDE ORDER D ATED 03.11.2016 IN ITA NO. 901/JP/2012 HAS DECIDED AN IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. THUS, HE HAS CONTENDED THAT THE DECISION OF THE COORDINATE BENCHES OF THIS TRIBUNAL IS BINDING. HE HAS ALSO RE LIED UPON THE DECISION OF PUNE BENCHES OF THE TRIBUNAL IN CASE OF MANOHAR LAL PYARELAL SADANE VS. ITO 138 ITD 250. HENCE, THE LD. AR HAS SUBMITTE D THAT IN THE ABSENCE OF ANY COST OF ACQUISITION OF THE LAND IN Q UESTION NO CAPITAL GAIN IS CHARGEABLE. ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 6 6. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT THE DECISIONS RELIED UPON BY THE LD. AR HAVE BEEN DISTINGUISHED BY THE F ULL BENCH OF HONBLE PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT VS. R AJA MALWINDER SINGH 334 ITR 48. THE LD. DR HAS POINTED OUT THAT T HE HONBLE HIGH COURT HAS CONSIDERED THIS ISSUE OF NO COST OF ACQUI SITION AND HELD THAT EVEN IN A CASE WHERE THE COST OF ACQUISITION CANNOT BE ASCERTAINED, SECTION 55(3) PRESCRIBES THE COST TO BE EQUAL TO T HE MARKET VALUE ON THE DATE OF ACQUISITION. HENCE, THE CAPITAL GAIN IS NOT EXCLUDED EVEN ON THE PLEA THAT VALUE OF THE ASSET IN RESPECT OF WHIC H CAPITAL GAIN IS TO BE CHARGED WAS INCAPABLE OF BEING ASCERTAINED. THE LD. DR HAS ALSO RELIED UPON THE SUBSEQUENT DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN CASE OF THAKUR DWARA SHRI KRISHANJI MAHARA J HANDIYAYA, BARNALA VS. CIT 366 ITR 381 AND SUBMITTED THAT FOLL OWING THE EARLIER DECISION IN COST OF CIT RAJA MALWINDER SINGH (SUPRA ) THE HONBLE HIGH COURT HAS AGAIN DECIDED THIS ISSUE AGAINST THE ASSE SSEE. THE LD. DR HAS THEN RELIED UPON THE DECISION OF THE COORDINATE BEN CHES OF THIS TRIBUNAL DATED 31.10.2017 IN CASE OF RAM LAL SHARMA VS. ITO IN ITA NO. 522 TO 528/JP/2017 AND SUBMITTED THAT THE TRIBUNAL AFTER C ONSIDERING ALL THE DECISIONS OF BOTH SIDES HAS DECIDED THIS ISSUE BY F OLLOWING THE DECISION OF FULL BENCH OF HONBLE PUNJAB AND HARYANA HIGH CO URT IN FAVOUR OF THE ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 7 REVENUE AND AGAINST THE ASSESSEE. THE LD. DR HAS AL SO POINTED OUT THAT IN CASE OF THE ASSESSEE THE PROVISIONS OF SECTION 5 5(2)(B) OF THE ACT ARE APPLICABLE WHEREIN IT IS PROVIDED THAT IF THE CAPIT AL ASSET IS REQUIRED AS PER THE MODE OF ACQUISITION AS PROVIDED U/S SECTIO N 49(1) OF THE ACT THEN, THE COST OF ACQUISITION WOULD BE FAIR MARKET VALUE AS ON 01.04.1984. THUS, THE LD. DR HAS SUBMITTED THAT EVE N IN CASE THE COST OF ACQUISITION IS NILL IN THE HAND OF THE ASSESSEE THE CAPITAL GAIN HAS TO BE COMPUTED AS PER THE PROVISIONS OF SECTIONS 49(1) & 55(2)(B)(II) OF THE ACT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE LA ND IN QUESTION WAS AWARDED TO THE ASSESSEE BY THE GOVERNMENT OF RAJAST HAN FREE OF COST AND THEREFORE, THE COST OF ACQUISITION IN THE HAND OF THE ASSESSEE IS NIL. THE LD. AR OF THE ASSESSEE HAS CONTENDED THAT SINCE THE COST OF ACQUISITION IS NIL, THEREFORE, THE COMPUTATION OF C APITAL GAIN FAILS AND NO CAPITAL GAIN IS CHARGEABLE ON FULL RECEIPT OF SALE OF THE LAND. HE HAS RELIED UPON THE VARIOUS DECISIONS INCLUDING THE DEC ISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. B.C. SRINIVASA SET TY (SUPRA). IT IS PERTINENT TO NOTE THAT ALL THESE DECISIONS AS RELIE D UPON BY THE ASSESSEES WERE RENDERED PRIOR TO THE FULL BENCH DEC ISION OF HONBLE ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 8 PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT VS. RA JA MALWINDER SINGH (SUPRA) WHEREIN THE FULL BENCH OF HONBLE PUNJAB AN D HARYANA HIGH COURT AFTER CONSIDERING THE JUDGMENT OF HONBLE SU PREME COURT IN CASE OF CIT VS. B.C. SRINIVASA SETTY (SUPRA) AS WEL L AS THE DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. MANDH ARSHINGJI P. JADEJA(SURPA) AND THE DECISION OF HONBLE OF MP HIG H COURT IN CASE OF CIT VS. H.H. LOKENDRA SINGH (SUPRA) HAS DECIDED THI SISSUE AGAINST THE ASSESSEE. WE HAS FURTHER NOTED THAT EVEN THE DECISI ONS RELIED UPON BY THE ASSESSEE OF COORDINATE BENCHES OF THIS TRIBUNAL AS WELL AS PUNE BENCH OF THE TRIBUNAL WERE WITHOUT CONSIDERING THE DECISION OF FULL BENCH OF HONBLE PUNJAB AND HARYANA HIGH COURT. SIN CE, THESE DECISIONS WERE PRIOR TO THE DECISION OF HONBLE HIG H COURT, THEREFORE, ALL THESE DECISIONS RELIED UPON THE LD. AR OF THE ASSES SEE WERE RENDERED WITHOUT HAVING THE BENEFIT OF THE DECISION OF FULL BENCH OF HONBLE PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT VS. RA JA MALWINDER SINGH (SUPRA). WHEREAS THE COORDINATE BENCH OF THIS TINUN AL IN CASE OF SHRI RAM LAL SHARMA VS. ITO(SUPRA) HAD THE BENEFIT OF FU LL BENCH DECISION AND HAS CONSIDERED AN IDENTICAL ISSUE IN PARA 6 AS UNDER:- 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE LAND IN QUESTION WAS ACQUIR ED BY THE ASSESSEE BY SUCCESSION, THEREFORE, THE COST OF ACQU ISITION OF THE ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 9 LAND IN QUESTION IN THE HAND OF THE ASSESSEE WOULD BE TAKEN AS THE COST IN THE HAND OF THE PREVIOUS OWNER OF THE L AND. THE LD. AR OF THE ASSESSEE HAS CONTENDED THAT THE LAND WAS ALL OTTED UNDER THE RAJASTHAN LAND REFORMS AND RESUMPTION OF JAGIR ACT, 1952 WITHOUT ANY CONSIDERATION, THEREFORE, THE COST OF A CQUISITION IN THE HAND OF THE PREVIOUS OWNER IS NIL. THUS THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT IN VIEW OF THE DECISION OF HON BLE SUPREME COURT IN CASE OF CIT VS. B.C. SRINIVASA SETTY (SUPR A), DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. MAN DHARSHINGJI P. JADEJA (SUPRA) AS WELL AS CIT VS. H.H. MAHARANA S AHIB SHRI LOKENDRA SINGHJI THE JAGIR PROPERTY GIFTED TO THE F OREFATHERS OF THE ASSESSEE HAS NO COST OF ACQUISITION IN THE HAND OF THE ANCESTORS AND THEREFORE NO CAPITAL GAIN ACCRUED WHE RE THE COST OF ACQUISITION IS NOT ASCERTAINABLE. IT WAS ALSO CONTE NDED THAT THE FAIR MARKET PRICE CANNOT BE TAKEN INTO CONSIDERATIO N WHERE THE COST OF ACQUISITION WAS NOT ASCERTAINABLE. ON THE OTHER HAND, THE FULL BENCH DECISION OF HONBLE PUNJAB AND HARYANA H IGH COURT IN CASE OF CIT VS. RAJA MALWINDER SINGH (SUPRA) HAS HE LD THAT EVEN IN A CASE WHERE THE COST OF ACQUISITION CANNOT BE A SCERTAINED, SECTION 55(3) PRESCRIBES THE COST TO THE EQUAL TO T HE FAIR MARKET VALUE ON THE DATE OF ACQUISITION IN CASE OF ACQUIRI NG THE LAND EITHER AT SOME COST OR WITHOUT COST BUT THERE CAN B E NO SITUATION WHEN THE COST IS INCAPABLE OF ASCERTAINMENT. THIS V IEW OF THE HONBLE PUNJAB AND HARYANA HIGH COURT WAS AGAIN REI TERATED IN CASE OF THAKUR DWARA SHRI KRISHANJI MAHARAJA HANDIY AYA, BARNALA (SUPRA). THUS IT IS CLEAR THAT THERE ARE DIVERGENT VIEWS OF HONBLE HIGH COURTS ON THIS ISSUE PARTICULARLY THE INTERPRE TATION AND UNDERSTANDING OF THE DECISION OF HONBLE SUPREME CO URT IN CASE OF CIT VS. B.C. SRINIVASA SETTY (SUPRA). THE ISSUE BEFORE THE HONBLE SUPREME COURT IN CASE OF CIT VS. B.C. SRINI VASA SETTY WAS THE TAXABILITY OF CAPITAL GAIN ON TRANSFER OF GOODW ILL OF A NEWLY COMMENCED BUSINESS. THE HONBLE SUPREME COURT HAS O BSERVED THAT NO BUSINESS COMMENCED FOR THE FIRST TIME POSSE SSES GOODWILL FROM THE START. IT IS GENERATED AS THE BUSINESS IS CARRIED ON AND MAY BE AUGMENTED WITH THE PASSAGE OF TIME. THEREFOR E, GOODWILL ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 10 IN A NEWLY COMMENCED BUSINESS IS A SELF GENERATED A SSET AND IN THIS SAID CONTEST THE HONBLE SUPREME COURT HAS HEL D THAT THE COST OF ACQUISITION OF SELF GENERATED ASSET LIKE GO ODWILL IS NOT POSSIBLE. THE RELEVANT FINDING OF THE HONBLE SUPR EME COURT DECISION IN CASE OF CIT VS. B.C. SHRINIVASA SETTY IN PARAS 8 TO 11 AS HELD AS UNDER:- 8 THE MODE OF COMPUTATION AND DEDUCTIONS FORTH IN S. 48 PROVIDE THE PRINCIPLE BASIS FOR QUANTIFYING THE INC OME CHARGEABLE UNDER THE HEAD CAPITAL GAIN. THE SECTION PROVIDES THAT THE INCOME CHARGEABLE UNDER THAT HEAD SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET: (II) THE COST OF ACQUISITION OF THE CAPITAL WHAT IS CONTEMPLATED IS AN ASSET IN THE ACQUISITION OF WHICH IT IS POSSIBLE TO ENVISAGE A COST. THE INTENT GOES TO THE NATURE AND CHARACTER OF THE ASSET, THAT IT IS AN ASSET WHICH P OSSESSES THE INHERENT QUALITY OF BEING AVAILABLE ON THE EXPENDIT URE OF MONEY TO A PERSON SEEKING TO ACQUIRE IT. IT IS IMMATERIAL THAT ALTHOUGH THE ASSET BELONGS TO SUCH A CLASS, IT MAY, ON THE F ACTS OF A CERTAIN CASE, BE ACQUIRED WITHOUT THE PAYMENT OF MONEY. THA T KIND OF CASE IS COVERED BY S. 49 AND ITS COST, FOR THE PURP OSE OF S. 48, IS DETERMINED IN ACCORDANCE WITH THOSE PROVISIONS. THE RE ARE OTHER PROVISIONS WHICH INDICATE THAT S. 48 IS CONCERNED W ITH AN ASSET CAPITAL OF ACQUISITION AT A COST. SEC. 50 IS ONE SU CH PROVISIONS. SO ALSO IS SUCH S S. (2) OF S. 55. NONE OF THE PROVISI ONS PERTAINING TO THE HEAD CAPITAL GAIN SUGGESTS THAT THEY INCLUDE AN ASSET IN THE ACQUISITION OF WHICH NO COST AT ALL CAN BE CONCEIVE D. YET THERE ARE ASSETS WHICH ARE ACQUIRED BY WAY OF PRODUCTION IN W HICH NO COST ELEMENT CAN BE IDENTIFIED OR ENVISAGED. FROM WHAT H AS GONE BEFORE, IT IS APPARENT THAT THE GOODWILL GENERATED IN A NEW BUSINESS HAS BEEN SO REGARDED. THE ELEMENTS WHICH C REATE IF HAVE ALREADY BEEN DETAILED. IN SUCH A CASE, WHEN TH E ASSET IS SOLD AND THE CONSIDERATION IS BROUGHT TO TAX, WHAT IS CHARGED IS THE CAPITAL VALUE OF THE ASSET AND NOT ANY PROFIT O R GAIN. ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 11 9. IN THE CASE OF GOODWILL GENERATED IN A NEW BUSIN ESS THERE IS THE FURTHER CIRCUMSTANCE THAT IT IS NOT POSSIBLE TO DETERMINE THE DATE WHEN IT COMES INTO EXISTENCE. THE DATE OF ACQU ISITION OF THE ASSET IS A MATERIAL FACTOR IN APPLYING THE COMPUTAT ION PROVISIONS PERTAINING TO CAPITAL GAINS. IT IS POSSIBLE TO SAY THAT THE COST OF ACQUISITION MENTIONED IN S. 48 IMPLIES A DATE OF ACQUISITION, AND THAT INFERENCE IS STRENGTHENED BY THE PROVISIONS O F SS 49 AND 50 AS WELL AS SUB-S (2) OF S. 55. 10. IT MAY ALSO BE NOTED THAT IF THE GOODWILL GENER ATED IN A NEW BUSINESS IS REGARDED AS ACQUIRED AT A COST AND SUBS EQUENTLY PASSES TO AN ASSESSEE IN ANY OF THE MODES SPECIFIED IN SUB-S. (1) OF S. 49, IT WILL BECOME NECESSARY TO DETERMINE THE COST OF ACQUISITION TO THE PREVIOUS OWNER. HAVING REGARD TO THE NATURE OF THE ASSET, IT WILL BE IMPOSSIBLE TO DETERMINE SUCH COST OF ACQUISITION. NOR CAN SUB-S. (3) OF S. 55 BE INVOKED , BECAUSE THE DATE OF ACQUISITION BY THE PREVIOUS OWNER WILL REMA IN UNKNOWN. 11. WE ARE OF OPINION THAT THE GOODWILL GENERATED I N A NEWLY COMMENCED BUSINESS CANNOT BE DESCRIBED AS AN ASSET WITHIN THE TERMS OF S. 45 AND, THEREFORE, ITS TRANSFER IS NOT SUBJECT TO INCOME TAX UNDER THE HEAD CAPITAL GAINS. THUS IT IS CLEAR THAT THE RULING LAID DOWN BY THE H ONBLE SUPREME COURT IS BASED ON SPECIFIC FACTS AND NATURE OF CAPI TAL ASSET BEING GOODWILL WHICH IS SELF GENERATED AS IT IS NOT POSSI BLE TO DETERMINE THE DATE WHEN IT COMES INTO EXISTENCE. THE DATE OF ACQUISITION OF THE ASSET IS A MATERIAL FACTOR AS OBSERVED BY THE H ONBLE SUPREME COURT IN APPLYING THE COMPUTATION PROVISIONS PERT AINING TO THE CAPITAL GAINS. THE HONBLE SUPREME COURT HAS FURTHE R OBSERVED THAT IT IS POSSIBLE TO SAY THAT THE COST OF ACQUISI TION AS MENTIONED IN SECTION 48 IMPLIES A DATE OF ACQUISITION, AND TH AT INFERENCE IS STRENGTHENED BY THE PROVISIONS OF SUB-SECTION 49 AN D 50 AS WELL AS SUB-SECTION (2) OF SECTION 55. THUS WHILE ANALYZ ING THE TERM THE COST OF ACQUISITION OF CAPITAL ASSET AS PER SEC TION 48 OF THE ACT THE HONBLE SUPREME COURT HAS HELD THAT WHAT IS CON TEMPLATED IS ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 12 AN ASSET IN THE ACQUISITION OF WHICH IT IS POSSIBL E TO ENVISAGE A COST. THE INTENT GOES TO THE NATURE AND CHARACTER O F THE ASSET, THAT IT IS AN ASSET WHICH POSSESSES THE INHERENT QU ALITY OF BEING AVAILABLE ON THE EXPENDITURE OF MONEY TO A PERSON S EEKING TO ACQUIRE IT. IT IS IMMATERIAL THAT ALTHOUGH THE ASSE T BELONGS TO SUCH AS CLASS IT MAY, ON FACTS OF CERTAIN CASES BE ACQUI RED WITHOUT THE PAYMENT OF MONEY. THEREFORE, WHEN A CAPITAL ASSET WHICH POSSESSES THE INHERENT QUALITY OR MONETARY VALUE AT THE TIME WHEN THE PERSONS SEEKING TO ACQUIRE IT BUT IT WA S ACQUIRED WITHOUT THE PAYMENT OF MONEY WOULD NOT TAKE SUCH CA PITAL ASSET IN THE CATEGORY THAT IT WILL NOT POSSIBLE TO DETERM INE THE COST OF ACQUISITION. FURTHER, IN CASE OF SELF GENERATED INT ANGIBLE ASSET LIKE GOODWILL THERE IS NOT ACQUISITION BY THE TRANSFEROR WHEREAS IN THE CASE OF LAND ACQUIRED BY THE TRANSFEROR WITHOUT ANY COST BUT IS CAPABLE ACQUISITION OF COST AND THEREFORE THE LAND WHICH WAS ACQUIRED WITHOUT COST CANNOT BE PUT INTO CATEGORY O F THE ASSET WHICH IS SELF GENERATED AND THE DETERMINATION OF CO ST OF ACQUISITION IS NOT POSSIBLE. THERE MAY BE TWO CATEG ORIES OF CAPITAL ASSET WHERE THE COST OF ACQUISITION IS NIL. IN FIRS T CATEGORY NO COST IS PAID BY THE PERSON WHO HAS ACQUIRED IT. IN OTHER CASE THE ASSET IS SELF GENERATED IN DUE COURSE OF TIME AND IT IS N OT POSSIBLE TO ASCERTAIN THE COST OF ACQUISITION AND DATE OF GENERATION/ACQUISITION. THEREFORE, THE CASE OF THE ASSESSEE FALLS IN THE CATEGORIES OF THE LAND IN QUESTION CARRIED/ POSSESSES COST OR MONETARY VALUE THOUGH THE FOREFATHERS OF THE AS SESSEE ACQUIRED IT WITHOUT ANY COST. IN SUCH A SITUATION THE PROVISIONS OF SECTION 55 (2)(B) WOULD COME INTO PLAY. FOR READING REFERENCE SECTION 55(2)(B) 55(3) ARE QUOTED AS UNDER:- SECTION 55 (2(B) (B) IN RELATION TO ANY OTHER CAPITAL ASSET,] (I) WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BEFORE THE [1ST DAY OF APRIL, [1981]], MEANS THE CO ST OF ACQUISITION OF THE ASSET TO THE ASSESSEE OR THE FAI R MARKET VALUE OF THE ASSET ON THE [1ST DAY OF APRIL, [1981]], AT THE OPTION OF THE ASSESSEE ; ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 13 (II) WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BY ANY OF THE MODES SPECIFIED IN [SUB-SECTION (1) O F] SECTION 49, AND THE CAPITAL ASSET BECAME THE PROPERTY OF THE PR EVIOUS OWNER BEFORE THE [1ST DAY OF APRIL, [1981]], MEANS THE CO ST OF THE CAPITAL ASSET TO THE PREVIOUS OWNER OR THE FAIR MAR KET VALUE OF THE ASSET ON THE [1ST DAY OF APRIL, [1981]], AT THE OPT ION OF THE ASSESSEE ; (III) WHERE THE CAPITAL ASSET BECAME THE PROPERTY O F THE ASSESSEE ON THE DISTRIBUTION OF THE CAPITAL ASSETS OF A COMP ANY ON ITS LIQUIDATION AND THE ASSESSEE HAS BEEN ASSESSED TO I NCOME-TAX UNDER THE HEAD 'CAPITAL GAINS' IN RESPECT OF THAT A SSET UNDER SECTION 46, MEANS THE FAIR MARKET VALUE OF THE ASSE T ON THE DATE OF DISTRIBUTION ; (IV) [***] [(V) WHERE THE CAPITAL ASSET, BEING A SHARE OR A ST OCK OF A COMPANY, BECAME THE PROPERTY OF THE ASSESSEE ON (A) THE CONSOLIDATION AND DIVISION OF ALL OR ANY OF THE SHARE CAPITAL OF THE COMPANY INTO SHARES OF LARGER AMOUNT THAN IT S EXISTING SHARES, (B) THE CONVERSION OF ANY SHARES OF THE COMPANY IN TO STOCK, (C) THE RE-CONVERSION OF ANY STOCK OF THE COMPANY INTO SHARES, (D) THE SUB-DIVISION OF ANY OF THE SHARES OF THE C OMPANY INTO SHARES OF SMALLER AMOUNT, OR (E) THE CONVERSION OF ONE KIND OF SHARES OF THE COM PANY INTO ANOTHER KIND, MEANS THE COST OF ACQUISITION OF THE ASSET CALCULAT ED WITH REFERENCE TO THE COST OF ACQUISITION OF THE SHARES OR STOCK FROM WHICH SUCH ASSET IS DERIVED. SECTION 55 (3) 'WHERE THE COST FOR WHICH THE PREVIOUS OWNER ACQUIR ED THE PROPERTY CANNOT BE ASCERTAINED, THE COST OF ACQUIS ITION TO THE PREVIOUS OWNER MEANS THE FAIR MARKET VALUE ON THE D ATE ON WHICH THE CAPITAL ASSET BECAME THE PROPERTY OF THE PREVI OUS OWNER. ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 14 THUS AS PER CLAUSE (B) SUB-SECTION (2) OF SECTION 5 5 READ WITH SECTION 49 (1)(III)(A) OF THE ACT THE COST OF ACQU ISITION OF THE ASSET ACQUIRED BY SUCCESSION OR INHERITANCE OR DE VALUATION SHALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIOUS OW NER OF THE PROPERTY ACQUIRED IT. WHERE THE CAPITAL ASSET BECOM E THE PROPERTY OF THE ASSESSEE OR PREVIOUS OWNER BEFORE 01.04.1981 THE COST OF ACQUISITION MEANS THE COST OF ACQUISITION OF THE AS SET TO THE PREVIOUS OWNER OR FAIR MARKET VALUE OF THE ASSET ON 01.04.1981 AT THE OPTION OF THE ASSESSEE. EVEN IN CASE WHERE THE COST FOR WHICH THE PREVIOUS OWNER ACQUIRED THE PROPERTY CANNOT BE ASCERTAINED THE COST OF ACQUISITION TO THE PREVIOUS OWNER MEANS THE FAIR MARKET VALUE ON THE DATE ON WHICH THE CAPITAL ASSET BECOMES THE PROPERTY OF THE PREVIOUS OWNER AS PROVIDED UNDER SU B-SECTION (3) OF SECTION 55. SINCE THIS CASE OF THE ASSESSEE IS C OVERED BY PROVISIONS OF SECTION 55(2)(B) READ WITH SECTION 49 (1) OF THE INCOME TAX ACT THEREFORE, THE COST OF THE ACQUISIT ION OF THE PROPERTY FOR THE PURPOSE OF COMPUTING THE CAPITAL G AIN WOULD BE FAIR MARKET VALUE AS ON 01.04.1981. THE FULL BENCH OF HONBLE PUNJAB AND HARYANA HIGH COURT AFTER CONSIDERING THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF CIT VS. B.C. S RINIVASA SETTY (SUPRA) AS WELL AS OTHER DECISIONS RELIED UPON BY THE LD. AR ON THIS POINT HAS OBSERVED IN PARAS 5 TO 7 AS UNDER:- 5. IT IS POINTED OUT THAT THE JUDGMENT IN B.C. SHR INIVASA SETTYS CASE (SUPRA) IS DISTINGUISHABLE. IT WAS OBSERVED TH EREIN THAT IN A NEWLY STARTED BUSINESS THE VALUE OF GOODWILL WAS NO T ASCERTAINABLE, AND ON SALE OF GOODWILL, CAPITAL GAI N WAS NOT ATTRACTED. IT IS SUBMITTED THAT IN THE CASE OF ACQU ISITION OF LAND, THE SAME IS EITHER ACQUIRED AT SOME COST OR WITHOUT COST AND UNDER THE SCHEME OF THE ACT, THERE CAN BE NO SITUAT ION WHEN THE COST IS INCAPABLE OF ASCERTAINMENT. SECTION 55(2) P ROVIDES FOR TAKING THE COST EITHER EQUAL TO THE MARKET VALUE AS ON JANUARY 1, 1954, OR AT THE OPTION OF THE ASSESSEE EQUAL TO THE COST OF ACQUISITION OF THE PREVIOUS OWNER. SECTION 55(3) PR OVIDES THAT WHERE THE COST OF ACQUISITION OF THE PREVIOUS OWNER CANNOT BE ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 15 ASCERTAINED, IT HAS TO BE TAKEN TO BE EQUAL TO THE MARKET VALUE ON THE DATE THE ASSET WAS ACQUIRED BY THE PREVIOUS OWN ER. THE EXPLANATION TO SECTION 49(2), I.E., WHO ACQUIRES PR OPERTY OTHERWISE THAN BY WAY OF GIFT, WILL OR BY SUCCESSIO N. 6. IN THE PRESENT CASE, THE ASSESSEE ACQUIRED THE P ROPERTY BY SUCCESSION FROM THE PREVIOUS OWNER. ACCORDING TO TH E STAND OF THE ASSESSEE, THE COST OF ACQUISITION BY THE PREVIO US OWNER COULD NOT BE ASCERTAINED. HOWEVER, HE FAILED TO EXERCISE THE OPTION OF GOING EITHER BY THE DATE OF MARKET VALUE ON THE DAT E OF ACQUISITION OR BY THE COST OF THE PREVIOUS OWNER IN WHICH CASE THE ONLY OPTION AVAILABLE TO THE ASSESSING OFFICER WAS TO PROCEED TO COMPUTE CAPITAL GAIN BY TAKING THE COST OF THE ASSE T TO BE THE FAIR MARKET VALUE ON THE SPECIFIED DATE, I.E., JANUARY 1 , 1954 AS PER APPLICABLE PROVISION FOR ASSESSMENT YEAR 1977-78 AN D AS ON JANUARY 1, 1964 FOR THE ASSESSMENT YEAR 1978-79. EV EN IN A CASE WHERE THE COST OF ACQUISITION CANNOT BE ASCERTAINED , SECTION 55(3) STATUTORILY PRESCRIBES THE COST TO BE EQUAL TO THE MARKET VALUE ON THE DATE OF ACQUISITION. THIS BEING THE POSITION, C APITAL GAIN IS NOT EXCLUDED EVEN ON THE PLEA THAT VALUE OF THE ASSET I N RESPECT OF WHICH CAPITAL GAIN IS TO BE CHARGED WAS INCAPABLE O F BEING ASCERTAINED. THE VIEW TAKEN IN AMRIK SINGHS CASE ( SUPRA) BASED ON THE ASSUMPTION THAT WHERE MARKET VALUE CANNOT BE ASCERTAINED, CAPITAL GAIN CANNOT BE APPLIED, IS NOT CORRECT BEING AGAINST THE STATUTORY SCHEME. SIMILARLY, THE VIEW T AKEN BY THE MADHYA PRADESH HIGH COURT IN CIT V. H.H. MAHARAJA S AHIB SHRI LOKENDRA SINGHJI [1986] 162 ITR 93/25 TAXMAN 66 CAN NOT BE ACCEPTED. THE SAID JUDGMENT ALSO DOES NOT GIVE EFFE CT TO THE MANDATE OF SECTION 55(3) WHICH PROVIDES FOR A SITUA TION WHERE THE VALUE OF THE ASSET ACQUIRED COULD NOT BE ASCERT AINED. IF THE MARKET VALUE CAN BE ASCERTAINED, IT HAS TO BE TAKEN TO BE EQUAL THERETO AND IF THE VALUE CANNOT BE ASCERTAINED, IT HAS TO BE EQUAL TO THE MARKET VALUE ON A SPECIFIED DATE AT THE OPT ION OF THE ASSESS. IT IS NOT THE CASE OF THE ASSESSEE THAT LAN D HAD NO MARKET VALUE AT ALL ON THE DATE OF ITS ACQUISITION. THE CO NTENTION THAT THE ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 16 VALUE WAS INCAPABLE OF BEING ASCERTAINED, AS ALREAD Y OBSERVED, THE VALUE IN SUCH CASE HAS TO BE TAKEN AS BEING EQU AL TO MARKET VALUE ON A SPECIFIED DATE. 7. WE, THUS, HOLD THAT EVEN WHERE THE COST OF ACQUI SITION OF CAPITAL ASSET CANNOT BE ASCERTAINED BUT THE ASSET H AS A MARKET VALUE, CAPITAL GAIN WILL BE ATTRACTED BY TAKING THE COST OF ACQUISITION TO BE FAIR MARKET VALUE AS ON JANUARY 1 , 1954, OR ON DATE STATUTORILY SPECIFIED OR AT THE OPTION BY THE ASSESSEE, THE MARKET VALUE ON THE DATE OF ACQUISITION. THE HONBLE PUNJAB AND HARYANA HIGH COURT REITERATE D THIS VIEW IN CASE OF THAKUR DWARA SHRI KRISHANJI MAHARAJ HAND IYAYA, BARNALA VS. CIT (SUPRA). IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE ABOVE DISCUSSION AND FOL LOWING THE FULL BENCH DECISION OF HONBLE PUNJAB AND HARYANA HIGH C OURT IN CASE OF THAKUR DWARA SHRI KRISHANJI MAHARAJ HANDIYAYA, B ARNALA VS. CIT (SUPRA) I AM OF THE CONSIDERED OPINION THAT THE LAND IN QUESTION DOES NOT FALL IN THE CATEGORY OF THE CAPIT AL ASSET FOR WHICH THE COST OF ACQUISITION IS NOT POSSIBLE TO BE ASCERTAINED. ACCORDINGLY, THE COST OF ACQUISITION IN THE HAND OF THE ASSESSEE WOULD BE THE FAIR MARKET VALUE AS ON 01.04.1981. AC CORDINGLY THIS ISSUE IS DECIDED AGAINST THE ASSESSEES. THUS, IT IS CLEAR THAT THE TRIBUNAL HAS ANALYZED VA RIOUS DECISIONS RELIED UPON THE LD. AR OF THE ASSESSEE AND WAS OF THE VIEW THAT THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. B.C. SR INIVASA SETTY (SUPRA) IS BASED ON SPECIFIC FACT OF INTANGIBLE ASSET BEING GOODWILL WHICH IS SELF- GENERATED AND THEREFORE, IT WAS NOT POSSIBLE TO DET ERMINE THE DATE WHEN IT CAME INTO EXISTENCE. THE DATE OF ACQUISITIO N OF THE ASSET IS A MATERIAL FACTOR AS OBSERVED BY THE HONBLE SUPREME COURT IN APPLYING ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 17 THE COMPUTATION PROVISIONS PERTAINING TO THE CAPITA L GAIN. THUS, AS PER THE PROVISIONS OF SECTION 48 THE COST OF ACQUISITIO N HAS TO BE TAKEN ON THE DATE OF ACQUISITION AND IN CASE OF GOODWILL IN A NEWLY SET UP BUSINESS IS CONSIDERED AS SELF-GENERATED ASSET AND IT IS NOT POSSIBLE TO ENVISAGE THE COST OF ACQUISITION. THUS, THE DECISIO N OF HONBLE SUPREME COURT IN CASE OF CIT VS. B.C. SRINIVASA SETTY (SUPR A) IS BASED ON PECULIAR FACTS WHERE A SELF-GENERATED INTANGIBLE ASSET IS NO T CAPABLE OF ASCERTAINING COST OF ACQUISITION AND THEREFORE, WHE N THE COST OF ACQUISITION IS NOT CONCEIVABLE THEN THE COMPUTATION PROVISION IN RESPECT OF CAPITAL GAIN FAILS. IN VIEW OF TAKEN BY THE HON BLE PUNJAB AND HARYAN HIGH COURT IN CASE OF CIT VS. RAJA MALWINDER SINGH (SUPRA) WAS REITERATED BY THE HONBLE COURT IN CASE OF THAKUR D WARA SHRI KRISHANJI MAHARAJ HANDIYAYA, BARNALA VS. CIT (SUPRA) IN PARA 5 TO 7 AS UNDER:- 5. WE ARE NOT IMPRESSED WITH THE SUBMISSIONS OF LEARN ED COUNSEL FOR THE APPELLANT. THE MATTER IS NO LONGER RES INTE GRA. THE FULL BENCH OF THIS COURT IN RAJA MALWINDER SINGH'S CASE (SUPRA) AFTER CONSIDERING THE JUDGMENT OF THE APEX COURT IN B.C.S RINIVASA SETTY'S CASE (SUPRA) AND THE PROVISIONS OF SECTIONS 48, 49, 55(2) AND 55 (3) OF THE ACT UNDER SIMILAR CIRCUMSTANCES O BSERVED AS UNDER: '5. IT IS POINTED OUT THAT JUDGMENT IN CIT V. B.C.S RINIVASA SETTY, [1981] 128 ITR 294 (SC) , IS DISTINGUISHABLE. IT WAS OBSERVED THEREIN THAT IN A NEWLY STARTED BUSINESS THE VALUE OF GOODWILL WAS NOT ASCERTAINABLE, AND ON SALE OF GOODWILL, CAPITAL GAIN WAS NOT ATTRACTED. IT IS SUBMITTED THAT IN CASE OF ACQUISIT ION OF LAND, THE ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 18 SAME IS EITHER ACQUIRED AT SOME COST OR WITHOUT COS T AND UNDER THE SCHEME OF THE ACT, THERE CAN BE NO SITUATION WHEN T HE COST IS INCAPABLE OF ASCERTAINMENT. SECTION 55(2) PROVIDES FOR TAKING THE COST EITHER EQUAL TO THE MARKET VALUE AS ON 1.1.195 4 OR AT THE OPTION OF THE ASSESSEE EQUAL TO THE COST OF ACQUISI TION OF THE PREVIOUS OWNER. SECTION 55(3) PROVIDES THAT WHERE C OST OF ACQUISITION OF THE PREVIOUS OWNER CANNOT BE ASCERTA INED, IT HAS TO BE TAKEN TO BE EQUAL TO THE MARKET VALUE ON THE DAT E THE ASSET WAS ACQUIRED BY THE PREVIOUS OWNER. EXPLANATION TO SECT ION 49 PROVIDES THAT PREVIOUS OWNER IS THE PERSON NOT COVERED BY TH E CLAUSES MENTIONED IN SECTION 49(2) I.E. WHO ACQUIRES PROPER TY OTHERWISE THAN BY WAY OF GIFT, WILL OR BY SUCCESSION. 6. IN THE PRESENT CASE, THE ASSESSEE ACQUIRED THE P ROPERTY BY SUCCESSION FROM PREVIOUS OWNER. ACCORDING TO THE ST AND OF THE ASSESSEE, COST OF ACQUISITION BY THE PREVIOUS OWNER COULD NOT BE ASCERTAINED. HOWEVER, HE FAILED TO EXERCISE THE OPT ION OF GOING EITHER BY THE DATE OF MARKET VALUE ON THE DATE OF A CQUISITION OR BY THE COST OF THE PREVIOUS OWNER IN WHICH CASE ONLY O PTION AVAILABLE TO THE ASSESSING OFFICER WAS TO PROCEED TO COMPUTE CAPITAL GAIN BY TAKING THE COST OF THE ASSET TO BE FAIR MARKET VALU E ON THE SPECIFIED DATE I.E. 1.1.1954 AS PER APPLICABLE PROVISION FOR ASSESSMENT YEAR 1977-78 AND AS ON 1.1.1964 FOR ASSESSMENT YEAR 1978 -79. EVEN IN A CASE WHERE COST OF ACQUISITION CANNOT BE ASCERTAI NED, SECTION 55(3) STATUTORILY PRESCRIBES THE COST TO BE EQUAL T O THE MARKET VALUE ON THE DATE OF ACQUISITION. THIS BEING THE POSITION , CAPITAL GAIN IS NOT EXCLUDED EVEN ON THE PLEA THAT VALUE OF THE ASS ET IN RESPECT OF WHICH CAPITAL GAIN IS TO BE CHARGED WAS INCAPABLE O F BEING ASCERTAINED. THE VIEW TAKEN IN AMRIK SINGH'S CASE [2008] 299 ITR 14 (P&H) BASED ON THE ASSUMPTION THAT WHERE MARKET VALUE CA NNOT BE ASCERTAINED, CAPITAL GAIN CANNOT BE APPLIED, IS NOT CORRECT BEING AGAINST THE STATUTORY SCHEME. SIMILARLY, THE VIEW T AKEN BY THE MADHYA PRADESH HIGH COURT IN CIT V. H.H.MAHARAJA SA HIB SHRI LOKENDRA SINGHJI, [1986] 162 ITR 93 (MP) CANNOT BE ACCEPTED. THE SAID JUDGMENT ALSO DOES NOT GIVE EFFECT TO THE MAND ATE OF SECTION ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 19 55(3) WHICH PROVIDES FOR A SITUATION WHERE VALUE OF THE ASSET ACQUIRED COULD NOT BE ASCERTAINED. IF MARKET VALUE CAN BE ASCERTAINED, IT HAS TO BE TAKEN TO BE EQUAL THERETO AND IF THE VALUE CANNOT BE ASCERTAINED, IT HAS TO BE EQUAL TO MARKET VALUE ON A SPECIFIED DATE AT THE OPTION OF THE ASSESSEE. IT IS NOT THE CASE OF THE ASSESSEE THAT LAND HAD NO MARKET VALUE AT ALL ON TH E DATE OF ITS ACQUISITION. CONTENTION THAT VALUE WAS INCAPABLE OF BEING ASCERTAINED, AS ALREADY OBSERVED, THE VALUE IN SUCH CASE HAS TO BE TAKEN AS BEING EQUAL TO MARKET VALUE ON A SPECIFIED DATE.' 6. FURTHER, WHILE CONCLUDING, IT WAS HELD : 'EVEN WHERE THE COST OF ACQUISITION OF CAPITAL ASSE T CANNOT BE ASCERTAINED BUT THE ASSET HAS A MARKET VALUE, CAPIT AL GAIN WILL BE ATTRACTED BY TAKING THE COST OF ACQUISITION TO BE F AIR MARKET VALUE AS ON JANUARY 1, 1954, OR ON DATE STATUTORILY SPECIFIE D OR AT THE OPTION BY THE ASSESSEE, THE MARKET VALUE ON THE DATE OF AC QUISITION.' 7. THE FULL BENCH OF THIS COURT IN RAJA MALWINDER SIN GH'S CASE (SUPRA) HAD DISSENTED FROM JUDGMENT OF THE MADHYA P RADESH HIGH COURT IN CIT V. H.H.MAHARAJA SAHIB SHRI LOKENDRA SI NGHJI, [1986] 162 ITR 93/25 TAXMAN 66 (MP) , WHEREAS THE GUJARAT HIGH COURT IN MANOHARSINHJI P.JADEJA'SCASE (SUPRA) HAD APPLIED THE PRINCIPLES ENUNCIATED THEREIN. WE ARE UNABLE TO SUBSCRIBE TO T HE VIEW EXPRESSED IN MANOHARSINHJI P.JADEJA'S CASE (SUPRA). ACCORDINGLY, IN VIEW OF THE DECISIONS OF FULL BENCH OF HONBLE PUNJAB AND HARYANA HIGH COURT AS WELL AS SUBSEQUENT DECISI ON IN CASE OF THAKUR DWARA SHRI KRISHANJI MAHARAJ HANDIYAYA, BARN ALA VS. CIT (SUPRA) WE DO AGREE WITH THE VIEW TAKEN BY THE COORDINATE B ENCH OF THIS TRIBUNAL IN CASE OF SHRI RAM LAL SHARMA VS ITO (SUP RA). THE LD. AR HAD ATTEMPTED TO DISTINGUISH THE CASE OF THE ASSESSEE O N THE GROUND THAT THE ASSESSEES CASE DOES NOT FALL IN THE CATEGORY O F ACQUISITION AS ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 20 PROVIDED U/S 49(1) OF THE ACT AND THEREFORE, THESE DECISIONS CANNOT BE APPLIED. WE DO NOT FIND ANY SUBSTANCE ON THIS CONTE NTION OF THE LD. AR AS THE ISSUE HAS BEEN THOROUGHLY AND ISSUED BY THE HONBLE HIGH COURT. HENCE, IN VIEW OF THE ABOVE DISCUSSION WE HOLD THAT THE LAND IN QUESTION DOES NOT FALL IN THE CATEGORY FOR WHICH TH E COST OF ACQUISITION CANNOT BE ASCERTAINED. THEREFORE, COST OF ACQUISITI ON OF LAND IN QUESTION WOULD BE FAIR MARKET VALUE AS ON 01.04.1981. SINCE, THE AO HAS TAKEN THE COST OF ACQUISITION AT NIL. THEREFORE, WE DIREC T THE AO TO RECOMPUTED THE CAPITAL GAIN BY TAKING THE COST OF ACQUISITION OF THE LAND AS FAIR MARKET VALUE AS ON 01.04.1981. 8. AS REGARDS THE ORIGINAL GROUNDS THE LD. AR OF TH E ASSESSEE HAS STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROU ND NOS. 1 TO 3 OF THE ORIGINAL GROUNDS AND THE SAME MAY BE DISMISSED AS N OT PRESSED. THE LD. DR HAS NO OBJECTION IF THE GROUNDS OF THE ASSES SEE APPEAL ARE DISMISSED AS NOT PRESSED. ACCORDINGLY, THE ORIGINAL GROUNDS NOS. 1 TO 3 OF THE ASSESSEE APPEAL ARE DISMISSED BEING NOT PRES SED IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/02/2018 SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER ITA NO. 818/JP/2013 SHRI UDAI SINGH RATHORE VS. ITO, JAIPUR 21 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06/02/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI UDAI SINGH RATHORE, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT - ITO, WARD-5(4), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 818/JP/2013} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR