Shyam Sunder Chiripal, Kolkata V. ITO, Ward - 29(4), Kolkata, Kolkata

ITA 966/KOL/2008

• Counselvise Citation: 96623514 RSA 2008
• Duration Of Justice: 3 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 28-05-2008
• Court: TRIBUNAL
• Department Lawyers: D J MEHTA
• Assessee Lawyers: S M SURSANA
• Keywords: Cost of acquisition; Valuation report; Set aside; Capital Gains

Judgement Text

1 , A , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- A, KOL KATA [ , . .. . ! ! ! !. .. . , , , , '# ] BEFORE SRI N.VIJAYAKUMARAN, JUDICIAL MEMBER & SRI C.D. RAO, AC COUNTANT MEMBER $ $ $ $ / ITA NO. 966 (KOL) OF 2008 %& '( / ASSESSMENT YEAR 2004-05 SHYAM SUNDAR CHIRIPAL, KOLKATA. (PAN-ACKPC9953E ) INCOME-TAX OFFICER, WARD-29(4), KOLKATA. (+, / APPELLANT ) - - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANT: / SRI S.M. SURSANA /0+, 1 2 ' / FOR THE RESPONDENT: / SRI D.J. MEHTA 3 1 !# / DATE OF HEARING : 16/11/2011 4' 1 !# / DATE OF PRONOUNCEMENT : 29/12/2011 '5 / ORDER ( . .. . ! ! ! !. .. . ), '# (C.D. RAO), ACCOUNTANT MEMBER : THIS APPEAL OF THE ASSESSEE ARISING OUT OF THE OR DER DATED 25/2/2008 OF THE LD. C.I.T.(A)-XVI, KOLKATA FOR ASSESSMENT YEAR 2004-05 WAS EARLIER DISPOSED BY THE TRIBUNAL VIDE ORDER DATED 30/4/2010, IN WHICH GROUN D NO.2 WAS AS UNDER :- 2. FOR THAT THE LD. CIT(A) ERRED IN NOT TAKIN G INTO ACCOUNT THE COST OF THE BUILDING AS ON 1.4.81 FOR THE PURPOSE OF INDEXATION WHEN THE SAME PART AND PARCEL OF THE TRANSACTION OF THE TRANSFER FOR DEVELOPMENT OF THE PROPERTY. 2. THE ASSESSEE PREFERRED MISCELLANEOUS APPLICATIO N STATING THAT THE TRIBUNAL WHILE ADJUDICATING UPON THE ABOVE GROUND DID NOT TA KE INTO CONSIDERATION THE DECISION OF I.T.A.T., HYDERABAD BENCH CITED BY THE ASSESSEE, WHICH CAUSED TO BE A MISTAKE APPARENT FROM RECORD. AFTER HEARING THE PARTIES, T HE TRIBUNAL VIDE ORDER DATED 23/7/2010 HAS ACCEPTED TO DECIDE THE ISSUE AFRESH O N THE AFORESAID GROUND AND, ACCORDINGLY, RECALLED THE OBSERVATIONS MADE AGAINST GROUND NO.2 FOR FRESH ADJUDICATION. 3. THE RELEVANT FACTS ON THIS GROUND ARE THAT THE ASSESSEE WAS THE JOINT OWNER OF A TWO STORIED BUILDING CONSTRUCTED ON 19 COTTAH 4 CH. 44 SFT. LAND AT 8/1/1, ALIPORE 2 ROAD, KOLKATA IN OR ABOUT 1958, ALONG WITH HIS TWO BROTHERS, LATE HANUMAN PRASAD CHIRIPAL AND BISHWANATH CHIRIPAL. ON 29TH JULY, 199 5, THE ASSESSEE ALONG WITH SMT. SARLA DEVI JHUNJHUNWALA, SMT. SHARDA DEVI PASARI AN D SMT. SUSHILA KAJARIA (ALL DAUGHTERS OF LATE HANUMAN PRASAD CHIRIPAL) ENTERED INTO AN AGREEMENT WITH THE DEVELOPER M/S. SAKET ESTATES & HOLDINGS PVT. LTD.. IT WAS AGREED BY THE CO-OWNERS THAT THEY WILL ASSIGN THE ABOVE PIECE OF LAND AFTER DEMOLITION OF THE HOUSE PROPERTY TO DEVELOPER FOR CONSTRUCTION OF MULTI-STORIED BUILDIN G WITH SEVERAL UNITS/FLATS AT THE SAME PLACE. IT WAS ALSO AGREED THAT OWNERS SHARE OUT OF THE PROPERTY SO DEVELOPED IN THE VACANT PIECE OF LAND BY THE DEVELOPER WILL BE 51% A ND THE DEVELOPER WILL RETAIN REMAINING 49%. IT WAS FURTHER AGREED THAT THE DEVEL OPER WILL BE ALLOWED TO COMMERCIALLY UTILIZE HIS SHARE OF THE PROPERTY SO D EVELOPED ONLY AFTER HANDING OVER THE OWNERS SHARE. UNDISPUTEDLY THE CO-OWNERS WERE HANDE D OVER THEIR SHARE OF FLATS ON 24.7.2003. THE ASSESSEE RECEIVED FLATS NO.10E, L0W, 2E AND 1/3 RD OF FLAT 1E, THE MARKET PRICE OF WHICH AS PER THE COMPUTATION OF INC OME FILED BY THE ASSESSEE WAS AS UNDER: 10E & 10W RS. 78,00,000 2E RS. 40,00,000 1/3 RD OF IE RS. 12,20,000 RS. 1,30,20,000 THE LD. A.O. ACCEPTED THE ABOVE MARKET VALUE OF THE FLATS OBSERVING THAT THIS VALUE MORE OR LESS MATCHES WITH THE VALUES OF SIMILAR PRO PERTIES SOLD BY THE DEVELOPER. THE LD. A.O. CONSIDERED THE MARKET VALUE OF THE LAND AS ON 1.4.1981, TO ARRIVE AT THE COST OF ACQUISITION OF THE LAND TRANSFERRED TO DEVELOPER, B Y CONSIDERING THE VALUE @ RS.50,000 PER COTTAH AS ESTIMATED BY THE ASST. VALUATION OFFI CER IN HIS REPORT DATED 22.12.2006, AS AGAINST RS.2,00,000/- PER COTTAH STATED BY THE A SSESSEE, WHICH RESULTED IN ADDITION OF RS.7,49,503/- UNDER THE HEAD CAPITAL GAIN. THE VA LUATION PREPARED BY THE REGISTERED VALUER WAS DISCARDED BY THE LD. A.O. STATING THAT T HE VALUATION REPORT WAS PREPARED AFTER SUBMISSION OF THE RETURN OF INCOME BY THE ASS ESSEE. 4. ON APPEAL, THE LD. C.I.T.(A) OBSERVED THAT AS P ER AGREEMENT BETWEEN THE DEVELOPERS AND THE LAND OWNERS, THE DEVELOPER AT IT S COST SHALL GET THE LAND FREE FROM THE TENANTS AND THEREUPON THE OWNERS OF THE LAND SH ALL DELIVER VACANT POSSESSION TO THE DEVELOPERS. THEREFORE, THE ASSET TRANSFERRED FOR T HE PURPOSE OF DETERMINING THE CAPITAL 3 GAIN WAS A VACANT LAND. THE LD. C.I.T.(A), THEREFO RE, UPHELD THE DENIAL OF INDEXATION AND UPHELD THE ACTION OF THE LD. A.O., AGGRIEVED AG AINST WHICH THE ASSESSEE RAISED THE AFORESAID GROUND IN APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED COUNSEL RELYING ON THE DECISION OF I.T.A.T., HYDERABAD BENCH IN THE CASE OF DR. MAYA SHENOY VS. A.C.I.T. [(2009) 12 4 TTJ (HYD) 692] SUBMITTED THAT AS THE BUILDING ON THE LAND HAS BEEN DEMOLISHED BEF ORE HANDING OVER THE POSSESSION TO THE DEVELOPERS, THE COST OF THE BUILDING IS TO BE T AKEN FOR PURPOSES OF COMPUTATION OF CAPITAL GAIN. HE, THEREFORE, REQUESTED TO FOLLOW T HE AFORESAID DECISION OF CO-ORDINATE BENCH OF I.T.A.T. IN THE CASE OF THE ASSESSEE ALSO. 6. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT THE ASSESSEE HAS NOT SHOWN THE SALE PROCEEDS OF THE DEMOLISHED BUILDING. HENC E THE CASE LAW RELIED UPON BY THE LEARNED COUNSEL IS NOT RELEVANT TO THE FACTS OF THE PRESENT CASE. 7. IN REJOINDER, THE LEARNED COUNSEL SUBMITTED THA T THE ASSESSEE HAS ALREADY OFFERED THE SALE PROCEEDS OF DEMOLISHED BUILDING ON REALIZA TION IN THE SUBSEQUENT ASSESSMENT YEARS. THEREFORE, THE FACTS OF THIS CASE ARE QUITE IDENTICAL TO THOSE OF THE CASE DECIDED BY THE I.T.A.T., HYDERABAD BENCH, CITED SUPRA. 8. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL PLACED ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDER OF THE CO-ORDINATE BENC H RELIED ON BY THE LEARNED COUNSEL. IN THE CASE OF DR. MAYA SHENOY VS. A.C.I.T. (SUPRA) , IT HAS BEEN HELD THAT THE COST OF OLD SUPERSTRUCTURE DEMOLISHED BY THE ASSESSEE BEFOR E HANDING OVER POSSESSION OF LAND TO DEVELOPER UNDER DEVELOPMENT AGREEMENT IS ALLOWAB LE DEDUCTION IN COMPUTING CAPITAL GAINS. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF CO-ORDINATE BENCH, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON TH IS ISSUE AND RESTORE THE MATTER TO THE FILE OF LD. A.O. WITH A DIRECTION TO TAKE INTO CONS IDERATION THE VALUE OF THE BUILDING WHICH WAS DEMOLISHED WHILE CALCULATING THE CAPITAL GAINS. WE ORDER ACCORDINGLY. 9. IN THE RESULT, ASSESSEES APPEAL ON GROUND NO.2 IS ALLOWED, AS INDICATED ABOVE. SD/- SD/- ( ) ( . .. . ! ! ! !. .. . ) '# (N.VIJAYAKUMARAN) JUDICIAL MEMBER (C.D. RAO), ACCOUNTANT MEMBER ( (( (!# !# !# !#) )) ) DATE: 29 -12-2011 4 $ $ $ $ / ITA NO. 966 (KOL) OF 2008 '5 1 /%% 6''7- COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT : SHYAM SUNDER CHIRIPAL, 8//1/1, ALIPORE ROAD, KOL-27 2 /0+, / THE RESPONDENT : I.T.O., WARD-29(4), KOLKATA. 3. %5 () : THE CIT(A)-XVI, KOLKATA. 4. %5/ THE CIT, KOL-X, 5 . ;%< /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 . GUARD FILE . 0 /%/ TRUE COPY, '5/ BY ORDER, (DKP) ASSTT. REGISTRAR .