Income Tax Appellate Tribunal - Mumbai
Dr. Mansukhlal B. Jain , Mumbai vs Assessee on 15 December, 2009
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES, 'G', MUMBAI
BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND
SHRI VIJAY PAL RAO, JUDICIAL MEMBER
ITA No. 522/Mum/2010
(Assessment Year: 1995-96)
Dr.Mansukhl al B Jain
33-A Pushpha Park,
Daftary road.
Malad (W ),
Mumbai-400097
PAN: AABPJ0210E ......Appellant
Vs
Incom e Tax officer
W ard 11(3)(1),
Ayakar Bhavan
4 t h fl, M K Road,
Mumbai-400020 ... Respondent
Assessee by : Shri Satish Mod y
Revenue by : Shri D Songate
O R D E R
PER VIJAY P AL RAO,JM This appeal by the assessee is directed against the order dated 15.12.2009 of the learned CIT(A)-II, Mum bai for the assessm ent year 1995-96.
2. The assessee has raised the following grounds in this appeal:
"1. The ld. AO has erred in assessi ng your petitioner on "long term capital gain" as "discussed in the order at Rs.55,98,041"IT A No. 522/Mum/2010
2 (Ass es s m en t Ye ar: 1 99 5- 96)
2. The ld. AO has erred i n adopting figure of Rs.55,98,041" as long term capital gain said to have been earned by your petitioner on the sale of pl ot of land and detailed in ori ginal assessment order passed earlier;
3. The ld. AO has erred in adopting the reasoning given in the earlier assessment order which held that the appellant had earned long term capital gain from sale of land;
4. The ld. AO has further erred in holding that the said plot of land had cost the assessee and as such the assessee was liable to pay tax on the long term capital gain arising on the transfer of the said plot of land.
5. The l d. AO has erred in over l ooking the fact that the property in question did not cost anything to your petitioner and as such your petitioner was not liable to pay any tax on the long term capital gain earned by it;
6. The ld. AO has further erred in holding that the assessee transferred the property in the previous year relevant to the assessment year 1995-96. Your petitioner submits that the AO has not taken into account the consent terms approved by the High Court in the case of petitioner as well as the agreement dated 4.07.1996;
7. The ld. AO has further erred in not strictly following the directions given by the ld. ITAT i n para 7 of ITAT order appeal no. ITA No.6321/Mum/2002. the ld. AO has further erred i n not following the directions given by ld Members of ITAT which only required the AO to decide about the correct and relevant assessment year in which the income is taxable and nothing further in the mater;
8.. The ld. CIT(A)has erred in confirming the Assessment order passed by the AO in holding that proper assessment order for taking the long term capital gain in the hand of the assessee was for the assessment year 1995-96 and not for Assessment year 1998-99.
IT A No. 522/Mum/2010
3 (Ass es s m en t Ye ar: 1 99 5- 96)
9. The ld. CIT(A)has erred in holdi ng that the following grounds of appeal taken up your petitioner did not arise out of the order of the AO;
(I) The ld. AO has erred in holdi ng that the assessee earned long term capital gains of Rs.55,98,041 on the sale of plot of land belonging to the assessee and situated in Malad (E). The ld. AO has further erred in holding that the said pl ot of land had cost the assessee and as such, the assessee was liable to pay tax on the transfer of the said plot of land (II) The ld. AO has further erred in overlooking the fact that the property in question did not cost anythi ng to your petitioner and as such your petitioner was not liable to pay any tax in the long term capital gain earned by it "
10. The ld. CIT has erred in over looking and ignoring the fact that the AO has relied upon and adopted the figure of long term capital gain from the original assessment order and also the detailed given in the ori ginal assessment order;
11 The ld. CIT has erred in over looking and ignoring the Appellate order passed in Sept 2002 by the ld. CIT(A) granting substantial relief of Rs.36,87,392/- in the computation of long term capital gain said to have been earned by your petitioner;
12. The ld. CIT should have taken into account the above mentioned appellate order an grounds of decision which are of vital importance in the matter of assessment of the income of your petitioner;
13. Your petitioner submits that by ignoring and not taking into account the relief granted in the earlier appellate order and by confirming the present assessment order an apparent contradiction between the two appellate orders to the determent of the petitioner has been taken place.
14. The order appealed against is bad in law and is against the principal of natural justice"
15. The order appealed agai nst is based on surmises and conjectures"
IT A No. 522/Mum/2010
4 (Ass es s m en t Ye ar: 1 99 5- 96)
3. At the tim e of hearing, the learned AR of the assessee has stated that the assessee does not press grounds no.1 to 7 and the same may be dismissed as not pressed.
23. The ld. DR has no objection, if grounds of appeal no.1 to 7 are dismissed as not pressed.
4. Accordi ngly, grounds of appeal no.1 to 7 are dismissed being not pressed
5. Ground no.8, regarding assessabiliy of long term capital gain for the assessment year 1995-96. This is a second round of litigati on. In the first round, during the assessment proceedings, the AO noticed that during the previous year relevant to the assessm ent year under consideration the assessee sold land and structure standing t hereon to M/s Arihant Developers as per agreement for sale dated 28.12.1994 for a total consideration of Rs.85,98,991.50. The assessee did not offer the capital gain for tax i n the return of income. However, the assessee along with the return filed computation of capital. The AO asked the assessee to explain as to why the capital gain has not been offered while advance tax has been paid with full understanding that the capital liability is involved in this case. The assessee contended that the gains of land t o the assessee is NIL because he has not purchased it and has also not incurred any expenditure for betterment or IT A No. 522/Mum/2010 5 (Ass es s m en t Ye ar: 1 99 5- 96) improvem ent of it. Therefore, being no cost to the assessee no tax is payabl e on the surplus arisen out of the above said land. The AO computed the capital gain while passing the assessm ent order dated 31.3.1995 as under :
Subject to these capital gain is com puted as under :
Sale value of land Rs.85,98,991.50
Less: cost of land Rs 26,34,030.
`.1,01,7000 x
2.59 (there is no
sale of structure
hence no
indexation of the
same can be
allowed )
Cost of residential Rs.3,66,920 Rs.30,00,950
flat purchased on
30.3.1995
6. The matter was carried up to this Tribunal by filing the
cross-appeals by the respective parties. During the second
appellate proceedings before this Tribunal, the assessee has raised the additional ground vide letter dated 15.5.2006 as under :
"Vide letter dated 15.5.2006, the assessee also raised an addition ground which reads as under :. "Without prejudice to the ground already raised, the appellant submits that both the AO an d CIT(A) failed to appreciate that transfer of property was not effected duri ng the relevant previous year and therefore, no capital gai n arise which could be taxed for the assessment year 1995-96"IT A No. 522/Mum/2010
6 (Ass es s m en t Ye ar: 1 99 5- 96)
7. This tribunal without going into the merits of the issue raised in the appeals by the parties restored the issue raised in the additional ground to the file of the AO vide tribunal's order dated 29.11.2006 passed in ITA No.263/Mum/2002 and 401/Mum/2002 as under :
"6. After hearing both the sides, we have carefully gone through the orders of the revenue authorities. Regarding admission of the additional ground, we have also gone through the decision of the Apex Court in the cast of NTPC(supra). The Hon. Gauhati High Court in the case of CIT v/s George Williamson (Assam )Ltd (No.2) (1997) 223 ITR 310 (Gau) held that merely because a ground was not taken in the memo of appeal the parties should not suffer, deni al to take up an additional ground, it if is necessary for proper adjudication of the matter will amount to deni al of justice. It is true that neither before the AO nor before the CIT(A), the assessee took the plea, that the transf er of property in question did not take place in the previous year relevant to the AY under appeal withi n the meaning of section 47(ii) of the IT Act, 1961. Be that it may, the ground taken by the assessee goes to the root of taxing the capital gain itself, therefore, we are of the view that additional ground raised by the assessee deserves to be admitted in view of the decision of the Supreme Court i n the case of NTPC (supra).
7. On merit, before us, the ld. Counsel for the assessee submitted that facts are available on record, therefore, this issue be decided. Keeping in view the nature of ground raised , we consi der it fit to restore the issue involved in additional ground of appeal to the file of the AO, who will examine the relevant facts available on assessment record, make necessary enquiry if required, i.e. whether the assessee handed over the possession of land in question i n the previous year relevant to the assessment year under appeal and re-adjudicate the same afresh after giving opportunity of being heard to the assessee. Order accordingly"IT A No. 522/Mum/2010
7 (Ass es s m en t Ye ar: 1 99 5- 96)
8. Consequentl y, the AO passed the order dated 28.3.2008 giving effect to the order of this Tribunal and held as under :
"As per the direction of the Hon. ITAT enquiry has been made regarding the handing over the possession of the land i n question during the FY 94- 95 relevant to assessment yar 1995-96. The date of handing over possession is 27.10.1994 which falls withi n the FY 94-95 relevant to the assessment year 1995-96 and therefore, it is clear and it is held the said transaction has taken place during the FYr 94- 95 and is therefore, taxable in AY 1995-96"
9. On further appeal, the CIT(A) upheld the order of the AO vide impugned order.
10. Before us, the learned AR of the assessee has submitted that the assessee entered into an agreement dated 28.03.1994 with the Developer M/s Arihant Developers. The propert y i n question consists of land together with three structures sanding thereon. The first structure was occupied by the assessee, for running hospital in the name and styl e of MAHAVIR GENERAL HOSPIAL and partly by three tenants. The second structure being shop was occupied b y one Shri Suresh Uda y Sharma and the third structure was occupied by the watchman of the assessee. The tenants were paying monthly rent in respect of their premises to the assessee. The assessee applied to the competent authority f or permission for demolition and reconstruction of the said propert y which was granted vide letter dated 28.10.1992. IT A No. 522/Mum/2010
8 (Ass es s m en t Ye ar: 1 99 5- 96) There was a litigati on between the assessee and one Mr. Shett y in respect of one part of the propert y admeasuring about 60 sq. mtrs. The assessee filed suit against t he Shri Shett y for encroachment of the said propert y. The learned AR of the assessee has submitted that as per the term s and conditions of the agreement dated 28.12.1994, the Developer paid a sum of Rs.5,12,50,000/- at the time of execution of the agreem ent and the balance am ount of Rs.34,73,991/- was to be paid within a period of three months from the date of obtaining the commencement certificate as per clause (b) of paragraph 4 of the Agreement. The said agreem ent coul d not be materialized and subsequently the assessee and the developer entered into another agreement dated 4.07.1996. The learned AR has pointed out, since the balance payment was not made by the developer, therefore, in the second agreem ent, the time of payment was rescheduled. The learned AR of the assessee then submitted that even after the second agreement , som e dispute between the parties arose and the assessee filed a suit before the Hon. High Court adjudicature at Bombay. The said suit was disposed by the hon. High Court vide order dated 16.10.1998 in terms of consent decree arrived between the parties and filed before the Hon. High Court. He has referred the said order along with the consent terms at pages 94 to 104 of the paper book Thus, the learned AR of the assessee IT A No. 522/Mum/2010 9 (Ass es s m en t Ye ar: 1 99 5- 96) has submitted that the transaction of transfer was not concluded or completed in the year 1994, when the first agreem ent was entered into between the parties. The disput e was finally settled by the parties when they have compromised in the suit filed by the assessee which was disposed by the Hon. HIGH Court vide order dated 16.10.1998. The learned AR of the assessee has submitted that the transfer of the property i n the present case does not fall under the provisions of section 2(47)(v) of the Income Tax Act, 1961 as the conditions laid down u/s 53A of the Transfer of Propert y Act for transfer were not fulfilled. He has f urther contended that the assessee remained the owner of the propert y despite entered into agreement with the developer. Therefore when the transfer did not take pl ace in the year 1994, then the of capital gain, if any, arisen out of the sale of the said propert y cannot be assessed in the assessm ent year 1995-96. He has relied upon the order of this Tribunal in the case of General Glass Co.(P) Ltd V/s DCIT reported in (2007) 14 SOT 32 (MUM) and submitted that when the parties were not willing to perform their part then it cannot be deemed transfer of the property at the time of the first agreement. The learned AR the vehemently contented that due to the subsequent devel opm ent and revocation of the agreement and final compromise in the suit filed before the Hon. High Court IT A No. 522/Mum/2010 10 (Ass es s m en t Ye ar: 1 99 5- 96) the transaction of transfer was not completed at the time of the first agreem ent entered into in the year 1994.
11. On the other hand, the learned DR has submitted that the assessee himself has disclosed the sale/transfer of the propert y in questi on in the return of income for the assessment year 1995-96. He has further submitted that apart from the agreem ent dated 28.12.1994, the assessee also executed a n irrevocable power of attorney i n favour of the developer. The assessee received part payment of sale consideration. Subsequent agreement and the compromise are self serving docum ent and do not effect the validity of the first agreement. The l d. AR has further submitted that when the assessee received the part paym ent of consideration of sale and th e possession of the land was handed over to the developer at the time of first agreem ent for developm ent of the property then the transaction of transfer was completed as per th e provisions of section 2(47)(v) of the Act. Even otherwise, the assessee himself has disclosed the transfer of the property at the time in the said year then the issue raised by th e assessee is only after thought for avoi ding the tax liability.
12. W e have considered the rival contentions and rel evant record. Undisputedly, the assessee entered i nto an agreem ent dated 28.12.1994. The said agreement is on a IT A No. 522/Mum/2010 11 (Ass es s m en t Ye ar: 1 99 5- 96) non-judicial stamp paper of Rs.20. W hereas the second agreem ent date 4.7.1996 has been executed only on a plain paper without paying any stamp dut y. Both the agreements are not registered. After going through the terms and conditions of the both agreement, we find that there is no change and modification in t he terms and conditions of the first agreement dated 28.12.1994, at the time of second agreem ent dated 4.07.1996 except time peri od of payment of consideration and the part payment of consideratio n acknowledged at the time of the first agreement was also not disputed but was accepted as it is in the subsequent agreem ent. Therefore, the second agreement is not in contraventi on of the first agreem ent but only in f urtherance of the first agreement for modif ying the terms of pa ym ent of consideration. The consideration itself has not been changed but only the time period was extended. Thus, there is no specific cancellation or termination of the first agreement by the parties at the time of the second agreement therefore, the sam e cannot be treated as termination or cancellation of the earlier agreement. Similarly, the terms of consent filed before the Hon. High Court are also referring the execution of the agreem ent dated 28.12.1994 as well as dated 4.7.1996 and accepted the payment made at the time of the first agreem ent. Therefore, there is no material change in the terms and conditions agreed between the parties at the time IT A No. 522/Mum/2010 12 (Ass es s m en t Ye ar: 1 99 5- 96) of earlier agreem ent as well as at the time of the consent terms filed before the Hon.High Court. It is undisputed fact em ergi ng from the record that at the time of the first agreem ent the assessee has received the payment of part consideration and handed over the possessi on of the propert y to the developer f or development purposes. The developer also acted for obtaining the necessary permission in terms of the agreement between the parties. Therefore, when the parties have never expressed any unwillingness but even at the time of subsequent agreem ent and compromise between the parties they were willing to perform their parts. Thus, the condition provided u/s section 53A of the Transfer of Property Act are fulfilled and consequently as per the provisions of section 2(47)(v) of the IT Act, the property is deemed to have been transferred on the day when the assessee handed over the possessi on of the propert y to the developer against the part payment of the sale consideration. Moreover, the assessee has also executed the irrevocable power of attorne y in favour of the developer which corroborate the deemed transfer as per the provisions of section 2(47)(v) of the IT Act. The transaction of transfer as per the deeming provision of section 2(47)(v) is com pleted at the time when the condition under section 53A of the Transfer of Property Act are fulfilled . Even otherwise it is not absolute transf er by wa y of execution of sale deed but the transaction is deemed to be IT A No. 522/Mum/2010 13 (Ass es s m en t Ye ar: 1 99 5- 96) a transfer of the capital asset if the certain conditions as provided u/s 53A of the Transfer of Propert y Act are fulfilled. Thus, the deemed transfer is complete once the conditions laid down u/s 53A of the Transfer of Propert y Act are fulfilled. There is no point is saying that one should wait till unforeseeable dispute between the parties arises in fut ure and if so, t he initial transfer cannot be treated as transfer. In the case i n hand the condition as prescribed u/s 53A of the Transfer of the Property Act were completed at the time of the first agreem ent dated 24.12.1994 entered into between the parties when the part payment of consideration was renewe d and the possession was handed over, as well as irrevocable power of attorney was executed and even if the parties subsequently altered certain conditions of paym ent which does not affect any m aterial terms and conditions of the transfer agreed between the parties then the position of deemed transfer rem ains unchanged. It is pertinent to note that when the assessee himself disclosed the transfer of property in th e year 1994 rel evant to the assessm ent year under consideration and has not disclosed the said transfer in any of the subsequent year then taking the plea after a period of more than 10 years that the said transfer did not take place in the said year cannot be permitted because by that time no remedy is available with the revenue to assess the capital gain, if any, arises from the transfer of the said assets in the IT A No. 522/Mum/2010 14 (Ass es s m en t Ye ar: 1 99 5- 96) subsequent assessment year. This Tri bunal has not decided the issue on the point of transfer of the assets but simply remanded the issue to the record of the AO for deciding the same as per the facts and circumstances of the case and material available on record. Theref ore merely admitting the additional ground and remitting the same to the AO for deciding the sam e would not have any bearing on the merits of the subsequent orders passed by the authorities. The decisions relied upon b y the assessee has no relevance in the facts and circumstances of the present case. 12.1 In view of the above discussion, we decide this issue against the assessee and in favour of the revenue and hold that the asset would be deemed to have been transferred at the time of execution of the agreement dated 28.12.1994 and accordingl y consequential capital gai n, if any, arisen from the said transfer is assessable for the assessm ent year under consideration. .
13. Ground no.2 regarding no capital gain on sale of the land in question as the said land had no costs to the assessee. The assessee took the stand before the AO during the original assessment proceedings that the cost of land was NIL to the assessee and the assessee had also not incurred cost for betterm ent and improvement to the said land. IT A No. 522/Mum/2010
15 (Ass es s m en t Ye ar: 1 99 5- 96) Therefore, the capital gain arisen from the sale of the land i s not taxable. The AO rejected the contention of the aseseee on the ground that the assessee himself has admitted the cost of land and structure at Rs.14,51,000/-. The land was earlier owned by Shri R H Baldota, who vide letter dated 7.10.1975 had given no objection for transferring the propert y in the name of the assessee in the city survey record. The AO was of the opinion that this am ounts to gift from Shri Baldota to the assessee and therefore, the cost of the assets may be substituted in the hand of the assessee. The AO referred to the past assessment records of the assessee and particularl y schedule of assets for the assessment year 1987-88, wherei n the assessee has shown the value of the land at Rs.22,000/-. This value continued to be shown till assessment year 1994-
95. In the assessment year 1995-96 the details of the assets includes the land for Rs.22,000/- and hospital building at Rs.77470/-. The assessee sold both the land as well as the building. The AO also noted that in the W ealth Tax Return assessm ent, the cost of the land also shown at Rs.22,000/- and the cost of the tem porary structure at Rs.40,000/-. The assessee got the said land converted from Agricultural land t o Non agricultural land and paid penalty to the Municipal Corporation. The AO treated the conversion charges and penalty paid by the assessee as cost of the land incurred by the assessee. Thus, the capital gain arisen from the sale IT A No. 522/Mum/2010 16 (Ass es s m en t Ye ar: 1 99 5- 96) transaction of the land held to be chargeabl e as capital gain under section 45F of the IT Act. Since the sale was not onl y for land but it was the transaction for sale of entire propert y consisting of land and building thereupon.
14. On appeal, the CIT(A) in the first round of litigation vide order dated 16.10.2002 in paragraph 2.5 held as under :
"2.5 I have considered the arguments of the appellant and the contentions of the AO. The appellant has based the argumen ts only on the ground that the appellant did not incur any cost therefore, capital gains could not arise. The claim of the appellant has rightly been rejected by the AO. In the case of B C Srinivas Shetty the issue bef ore Hon. Supreme Court was transfer of Goodwill which is an intangible asset generated over a period of years by the reputation of a particular busi ness. Even such transactions have been brought under the text- net by amendment to section 55(2) to the ITAT. The asset in questi on is tangible and not self generated by the appellant. As far as the judgment in case of Maharaja Sahib Shri Lokand Singhji is concerned, the Jagir was gifted to the ancestors of the assessee and was inherited by next generations. While in case of the appellant the assets belongs to appellant himself. Moreover, the assessment year in question was 1996-67 si nce when several amendments have been made to the provisions of charging capital gains. Therefore, I do not find any merit in this argument of the appellant and hold that the capital gains are chargeable to tax "
15. It is pertinent to note that this issue was not adjudicated upon by this tribunal because the matter was remanded back to the record of the AO on the additional ground raised by the assessee.
IT A No. 522/Mum/2010
17 (Ass es s m en t Ye ar: 1 99 5- 96)
16. Before us, the learned AR of the assessee has submitted that the assessee was in adverse and hostile possession of the said property which was earlier owned by the other owner Shri R H Baldota since 1954. Since the assessee was enjoying t he possession of the propert y without any interruption the assessee got the right over the property due to adverse possession. The assessee has been pa ying all the taxes in respect of the said property. The Sai d Shri R H Baldota vide his letter dated 7.10.1975 conveyed his no objection if the sai d property is transferred in the city survey record to the nam e of the assessee. Thus, the assessee incurred no cost for acquiring the property in question. In view of the letter dated 7.10.1975 the property was transferred in the name of the assessees in the said survey record. Thus, the learned AR of the assessee has vehemently contended that when the assessee has not incurred any cost for acquiring the property then the profit arised from the transacti on of the sale of the property is not liable to tax as capital gain. He has relied upon the decision of the Hon. Supreme Court in the case of Commissioner of Incom e-tax v.B. C. Srinivasa Sett y [1981] 128 ITR 294 (SC).
17. On the other hand, the learned DR has submitted that when the assessee himself has admitted the cost of land at Rs.22,000/- and the cost of the building at Rs.77,000/- in the books of account as well as in the wealth tax return filed b y IT A No. 522/Mum/2010 18 (Ass es s m en t Ye ar: 1 99 5- 96) the assessee then it cannot be said that the property in questi on costs no cost NIL to the assessee. The learned DR has further poi nted out that the assessee has also paid conversion charges from agricultural to non-agriculture as well as penalty charges which is also the cost of the property. He has relied upon the orders of the CIT(A) and the AO passed in the first round of litigation.
18. W e have considered the rival contentions and rel evant record. The property in question is a plot of land as per the City Survey no.26 Part -II adm easuring about 2092 sq. mtr. situated at Kurar Village, near Jain Temple to the east of W estern Express High way Malad(E), Bombay-97. The assessee has claimed that the property was acquired by wa y of adverse possession and no objection was given by the earlier owner of the propert y Shri R H Baldota. As far as the acquisition of the property by adverse possession is concerned, the aseseee has not produced any record whereb y the assessee was declared the owner of the property or acquire the property due to uninterrupted adverse possession. The claim of the assessee is not substanti ated wi th an y concrete evi dence or any declaration by any court of law in this respect. However, it is undisputed fact that the propert y was transferred in the name of the assessee in the city surve y record because the owner of the property Shri R H Baldota IT A No. 522/Mum/2010 19 (Ass es s m en t Ye ar: 1 99 5- 96) has given no objection for transferring the same in the name of the assessee. It is not the case of the assessee that the said owner has given no objection during the proceeding bef ore the court for declaration of adverse possession of the assessee and consequently the assessee became the owner of the property. The assessee got the property because of no objection of the owner and not because of adverse possession of the propert y. Thus we find ourselves unable to accept the contention and claim of the assessee. Moreover, when the assessee himself has admitted and declared the cost of the propert y in question in the books of account, in the return of incom e as well as in the W ealth Tax Return, then at the time of sale the assessee cannot take a totall y different and contrary plea that the assessee has not incurred any cost for acquiring the said property. It is also undisputed fact that apart from the assessee has shown Rs.22,000/- the cost of the land and hospital building at Rs.77,470/-, the assessee has also paid charges of conversion of the land from agricultural to non-agricultural land. Only after conversion of the land from agricultural to non-agricultural and the profit could have sold for considerati on and therefore the expenditure incurred for conversion is certai nly the cost of improvem ent of the land. It cannot be said that the propert y has cost no cost to the assessee as evident from the order of the AO as well as the CIT(A). Ri ght from the beginning the IT A No. 522/Mum/2010 20 (Ass es s m en t Ye ar: 1 99 5- 96) assessee was showi ng the land i n its books of account and particularly in the balance sheet at the cost of Rs.22,000/-. Only at the time of computation of capital gain the assessee took a plea that the said cost was only for erection of boundary wall. In any case the assessee has sold the entire propert y i ncluding the structure on the land then cost incurred was for acquiring, conversion of land and structure of building would be cost of the property for the purpose of computation of capital gain. W e find substance and force in the view taken by the lower authorities that if the property was transferred by the earlier owner in the nam e of the assessee without any consi deration, then the cost of the sam e in the hands of the assessee would be the cost of the land and propert y in the hands of the original owner. As far as the decision of the Hon. Supreme Court in the case of Commissioner of Income-tax v.B. C. Srinivasa Setty (supra) is concerned the same is not applicable to the present case, firstly on the ground that the said decision was in respect of the transf er of the goodwill and it pertains to the assessment year prior to the amendment to the section 55(2) of the Act. 18(1) In view of the above discussion when the facts of the case clearl y indicate the cost of the propert y in the hands of the assessee then the assessee cannot escape from the tax on the capital gain arisen from the sale of the propert y. Accordi ngly, this issue is decided against the assessee IT A No. 522/Mum/2010 21 (Ass es s m en t Ye ar: 1 99 5- 96)
19. Grounds no.11 to 13 regarding, overlooking the order passed in September 2002 by the ld. CIT(A) granting substantial relief of Rs.36,87,392 in the computation of long term capital gain said to have been earned by the assessee.
20. W e have heard the learned AR as well as the learned DR and considered the relevant record. This issue is regarding indexation of cost of land which was decided by the CIT(A) in the earlier round of litigation vide order dated 16.10.2002 as under :
S a le c o n s id e r at i on as per Rs. 5 2 , 2 5 , 0 00
c on s e nt de cr e e
A d d: c o s t o f c o n s t r u c t io n of Rs. 4, 1 4 , 4 0 00
10 3 6 s q. f t a r ea Rs. 5 9 , 3 9, 4 00
Le s s: I n d e x c o st of la n d Rs. 3 2, 4 7, 8 6 0
Rs. 1 2 , 5 4, 0 00 x 2 . 5 9
Co st of f lat as p er A O Rs. 3 , 6 6 , 9 2 0 . 0 0
Fe es p a i d t o B MC Rs. 1 , 1 3 , 9 7 0 . 0 0 Rs. 3 7 , 2 8 , 7 50 . 0 0
Ca p it a l g a ins Rs. 1 9 , 1 0 , 6 50 . 0 0
The appellant gets relief of Rs.36,87,391/-. The value for 3000 sq. ft of builtup area towards alternate accommodation to tenants is not considered as part of consideration separately as it has to be allowed as deduction and shall neutralize the effect "
21. It is evident from the above findings of the CIT(A) that the assessee was granted the relief of Rs.36,87,391/- while computing the capital gain after indixation of the cost of the land. Since the revenue is not in appeal before us and the assessee has also not raised new plea in respect of the relief IT A No. 522/Mum/2010 22 (Ass es s m en t Ye ar: 1 99 5- 96) granted by the CIT(A) in the earlier order. Accordingly, we direct the AO to grant relief of `.36,87,91/- as per earlier order of the CIT(A) which as attained the finality.
22. In the result, the appeal of the assessee is partl y allowed..
Order pronounced in the open court on 15. 10.2010 Sd sd (P.M.JAGTAP) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 15 th Oct 2010 SRL:111010 copy to:
1. Appellant
2. Respondent
3. CIT Concerned
4. CIT(A) concerned
5. DR concerned Bench BY ORDER True cop y ASSTT. REGISTRAR, ITAT, MUMBAI