Dr. Ashok Mohan Dwarkadas-legal heir of (Late) Dr. Nirmala Dwarkadas, New Delhi V. ITO, New Delhi

ITA 997/DEL/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6871 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-01-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 29-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JAIN SENIOR
• Keywords: Capital asset; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND SHRI KULDIP SINGH SHRI KULDIP SINGH SHRI KULDIP SINGH SHRI KULDIP SINGH, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 997/DEL/2012 997/DEL/2012 997/DEL/2012 997/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2006 2006 2006 2006 - -- - 07 0707 07 DR. ASHOK MOHAN DWARKADAS, DR. ASHOK MOHAN DWARKADAS, DR. ASHOK MOHAN DWARKADAS, DR. ASHOK MOHAN DWARKADAS, LEGAL HEIR OF LEGAL HEIR OF LEGAL HEIR OF LEGAL HEIR OF (LATE) DR. NIRMA (LATE) DR. NIRMA (LATE) DR. NIRMA (LATE) DR. NIRMALA LA LA LA DWARKADAS, DWARKADAS, DWARKADAS, DWARKADAS, B BB B- -- -6/61, SAFDARJUNG ENCLAVE, 6/61, SAFDARJUNG ENCLAVE, 6/61, SAFDARJUNG ENCLAVE, 6/61, SAFDARJUNG ENCLAVE, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 029. 110 029. 110 029. 110 029. PAN : AAAPD0044R. PAN : AAAPD0044R. PAN : AAAPD0044R. PAN : AAAPD0044R. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -45(4), 45(4), 45(4), 45(4), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.K. GUPTA, CA. RESPONDENT BY : SHRI S.K. JAIN, SENIOR DR. DATE OF HEARING : 05.01.2017 05.01.2017 05.01.2017 05.01.2017 DATE OF PRONOUNCEMENT : 25.01.2017 25.01.2017 25.01.2017 25.01.2017 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2006-07 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXVIII , NEW DELHI DATED 2 ND JANUARY, 2012. 2. THE ASSESSEE HAS RAISED THE FOLLOWING REVISED/AM ENDED GROUNDS OF APPEAL :- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE LD. AO GROSSLY ERRED IN LAW AS WELL AS ON MERITS IN CALCUL ATING SHORT TERM CAPITAL GAIN ON SALE OF PROPERTY OF 410 SQ. YDS. IN GHAZIABAD AT RS.56,39,553/- AGAINST CORRECTLY AT RS.10,89,553/- BY NOT INCLUDING THE UN-PAID PURCHAS E CONSIDERATION OF RS.45.50 LACS IN COST OF ACQUISITI ON WHILE CALCULATING CAPITAL GAIN. ITA-997/DEL/2012 2 2. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE LD. AO GROSSLY ERRED IN LAW AS WELL AS ON MERITS IN CALCUL ATING THE LONG TERM CAPITAL GAIN ON SALE OF PROPERTY OF 396 S Q. YDS. IN GHAZIABAD AT RS.33,68,063/- AGAINST CORRECTLY AT RS.12,80,693/- BY :- A. WRONGLY TREATING THE YEAR OF ACQUISITION AS 1997 AGAINST CORRECTLY AS 1958, THUS, DEEMED YEAR OF ACQ UISITION TO BE TAKEN AS 1981-82 (AS ON 01.04.1981). B. WRONGLY APPLYING THE INDEXATION FACTOR OF ACQUIS ITION YEAR AS 331 WHICH IS APPLICABLE FOR A.Y. 1997-98 AG AINST CORRECTLY APPLYING THE INDEXATION FACTOR AS 100 APP LICABLE FOR AS ON 01.04.1981. C. WRONGLY TAKING THE COST OF ACQUISITION AT RS.15,45,365/- (BEFORE INDEXATION) AGAINST CORRECTL Y AT RS.8,86,872/- (BEFORE INDEXATION) AS PER GOVT. APPR OVED VALUERS REPORT FOR VALUATION AS ON 01.04.1981. 3. THAT ORDER OF BOTH THE LOWER AUTHORITIES ON THE ABOVE POINTS IS UNSUSTAINABLE IN LAW AS WELL AS ON MERITS . 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED THE MATERIAL PLACED BEFORE US. THE ONLY DISPUTE IN THI S CASE IS WITH REGARD TO COMPUTATION OF CAPITAL GAIN FROM SALE OF A PLOT OF LAND ADMEASURING 806 SQ.YARDS FOR A SUM OF `1,15,78,000/-. SINCE TH E PLOT WAS ACQUIRED IN TWO DIFFERENT PIECES, THE ASSESSEE WORKED OUT TH E CAPITAL GAIN FOR TWO PIECES OF PLOT SEPARATELY, ONE AS SHORT TERM CA PITAL GAIN AND ANOTHER LONG TERM CAPITAL GAIN. SO FAR AS COMPUTAT ION OF SHORT TERM CAPITAL GAIN IS CONCERNED, THE ONLY DISPUTE IS WITH REGARD TO NON- CONSIDERATION OF UNPAID PURCHASE CONSIDERATION OF ` 45,50,000/- IN THE COST OF ACQUISITION. OUT OF 806 SQ. YARDS SOLD BY THE ASSESSEE, 410 SQ. YARDS WERE PURCHASED BY THE ASSESSEE FROM M/S RAGI REALTORS ON 8 TH JANUARY, 2005 FOR A SUM OF `48,00,000/-, OUT OF WHI CH, THE SUM OF `45,50,000/- REMAINED UNPAID. THE ASSESSING OFFICE R REDUCED THE SAME FROM THE COST OF ACQUISITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL PLACED BEFORE US. IN OUR OPINION, THE COS T OF ACQUISITION OF A ITA-997/DEL/2012 3 CAPITAL ASSET IS THE COST FOR WHICH THE CAPITAL ASS ET IS PURCHASED BY THE ASSESSEE AS PER SALE DEED. ADMITTEDLY, AS PER SALE DEED, THE CAPITAL ASSET I.E., PLOT OF LAND OF 410 SQ.YARDS WAS PURCHA SED BY THE ASSESSEE FOR A SUM OF `48,00,000/-. THUS, THE COST OF ACQUI SITION OF THE SAID PLOT IS `48,00,000/-. MERELY BECAUSE OUT OF THE ABOVE P URCHASE CONSIDERATION OF `48,00,000/- THE SUM OF `45,50,000 /- IS UNPAID, WOULD BE NO GROUND FOR REDUCING THE COST OF ACQUISITION. THE SELLER OF THE LAND HAS A RIGHT TO RECOVER THE SAID MONEY FROM THE PURCHASER OF THE LAND I.E., THE ASSESSEE. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO CONSIDER THE COST OF LAND AT `48,00,000/- AND WORK OUT THE CAPITAL GAIN ACCORDINGLY. GROUND NO.1 OF THE ASSESSEES APPEAL IS ALLOWED. 5. SO FAR AS GROUND NO.2 IS CONCERNED, AS PER THE A SSESSEE, THE LAND WAS PURCHASED IN THE YEAR 1958 AND THEREFORE, THE A SSESSEE HAS TAKEN THE MARKET VALUE OF SUCH LAND AS ON 01.04.1981 AND ACCORDINGLY WORKED OUT THE INDEXED COST OF ACQUISITION AT `44,0 7,753/-. THE ASSESSING OFFICER ADOPTED THE COST OF LAND AT THE R ATE AT WHICH THE ASSESSEE PURCHASED 400 SQ. YARDS IN THE YEAR 1997 A ND ACCORDINGLY ALLOWED THE INDEXATION FROM 1997 TILL THE DATE OF S ALE WHICH WORKED OUT AT `23,20,383/-. LEARNED DR STATED THAT THERE IS N O RELIABLE EVIDENCE FOR THE ESTIMATED MARKET VALUE DISCLOSED BY THE ASS ESSEE AS ON 01.04,1981. WHILE THE ADJOINING PLOT WAS PURCHASED BY THE ASSESSEE IN THE YEAR 1997 AND THEREFORE, THE MARKET VALUE OF THAT PLOT AS ON 1997 IS UNDISPUTED AND IS MORE RELIABLE BASIS FOR D ETERMINING THE INDEXED COST OF ACQUISITION. HE FURTHER STATED THA T IF THE INDEXED COST OF ACQUISITION WORKED OUT BY THE ASSESSING OFFICER IS NOT ACCEPTABLE TO THE ITAT, THE MATTER MAY BE SENT BACK TO THE ASSESS ING OFFICER FOR REFERRING TO DVO FOR DETERMINING THE FAIR MARKET VA LUE AS ON 01.04.1981. THE LEARNED COUNSEL FOR THE ASSESSEE, IN THE REJOINDER, STATED THAT IT IS AN OLD MATTER AND MORE THAN A DEC ADE HAS ALREADY PASSED AND THE STAKE INVOLVED IS ALSO VERY LESS BEC AUSE THE DISPUTE IS BETWEEN THE INDEXED COST OF ACQUISITION TAKEN BY TH E ASSESSING OFFICER ITA-997/DEL/2012 4 AT `23,20,383/- AND `44,07,753/- BY THE ASSESSEE. HE FURTHER SUGGESTED THAT IF DEEMED FIT, THE ITAT MAY MAKE A F AIR ESTIMATE OF INDEXED COST OF ACQUISITION SO AS TO AVOID PROLONGE D LITIGATION. 6. AFTER CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS OF BOTH THE SIDES AND TO AVOID PROLONGED LITIGATION, W E DEEM IT PROPER TO ESTIMATE THE INDEXED COST OF ACQUISITION AT `30,00, 000/- (RUPEES THIRTY LAKHS ONLY) AS AGAINST `23,20,383/- DETERMINED BY T HE ASSESSING OFFICER AND `44,07,753/- CLAIMED BY THE ASSESSEE. ACCORDINGLY, GROUND NO.2 IS PARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 25.01.2017 . SD/- SD/- (KULDIP SINGH (KULDIP SINGH (KULDIP SINGH (KULDIP SINGH ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : DR. ASHOK MOHAN DWARKADAS, DR. ASHOK MOHAN DWARKADAS, DR. ASHOK MOHAN DWARKADAS, DR. ASHOK MOHAN DWARKADAS, LEGAL HEIR OF (LATE) DR. NIRMALA DWARKADAS, LEGAL HEIR OF (LATE) DR. NIRMALA DWARKADAS, LEGAL HEIR OF (LATE) DR. NIRMALA DWARKADAS, LEGAL HEIR OF (LATE) DR. NIRMALA DWARKADAS, B BB B- -- -6/61, SAFDARJUNG ENCLAVE, 6/61, SAFDARJUNG ENCLAVE, 6/61, SAFDARJUNG ENCLAVE, 6/61, SAFDARJUNG ENCLAVE, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 029. 110 029. 110 029. 110 029. 2. RESPONDENT : INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD- -- -45(4), NEW DELHI. 45(4), NEW DELHI. 45(4), NEW DELHI. 45(4), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR