TMI Blog2014 (1) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... he property and the assessee and his co-owners cleared off the mortgage so created, it could not be said that they incurred any expenditure by way of effecting any improvement to the capital asset that was originally purchased by the previous owner - Decided against assessee. Applicability of section 50C - Held that:- The properties got registered only after 01/04/2003 i.e. after the provisions of section 50C were brought on the statute - The contention that the land has been sold away by way of an agreement of sale in 2000 and 2001 itself, has not been substantiated by the assessee with enough evidence and documents - It cannot be concluded that the agreement had actually acted upon - Decided against assessee. - ITA No. 954/HYD/2012 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect, a copy of the assignment deed dtd. 28/09/2000, executed between M/s Voltas Ltd. and M/s Alladin Investments and Properties was submitted along with a letter from M/s Voltas Ltd. dtd. 03/10/2010. Vide letter dtd. 06/12/2010, the AO required the assessee to explain as to why in the light of the decision of the Hon ble Bombay High Court in the case of CIT Vs. Roshan Babu Mohammed Hussain Merchant, 275 ITR 231, the expenditure of Rs. 25 lakhs should not be disallowed. The assessee submitted that such expenditure had been incurred to perfect the title of the assessee, therefore, the same has to be allowed as cost of acquisition. The assessee also contended that the assessee has not created any encumbrance on the property as it was ancestral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of acquisition u/s 48 of the Act. The assessee also relied on the decision in the case of CIT Vs. Shakuntla Rajeswar, 160 ITR 840 (Del.) and Nawzar Chenoy Vs. CIT, 234 ITR 98 (A). After considering the submissions of the assessee, the CIT(A) confirmed the order of the AO by holding as under: 6 Since the appellant acquired the property only on account of succession, the cost of acquisition would get restricted only to that in the hands of his ancestors, which indeed excludes the cost of any encumbrance created by them. Accordingly, even if the appellant had to discharge the liability on this account by making any payment to M/s Voltas Ltd., this cannot be said as constituting a part of the cost of acquisition of the property t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held as follows: While we are affirming the impugned judgment of the High Court, we are unable to endorse the view of the Kerala High Court in Ambat Echukutty Menon v. CIT [1978] 111 ITR 880 to which reference has been made by the High Court in the impugned judgment. In that case, the assessee, as one of the heirs, had inherited property from the previous owner who had mortgaged the same during his lifetime and after his death the heirs, including the assessee, had discharged the mortgage created by the deceased. The said property was subsequently acquired under the Land Acquisition Act and for the purpose of capital gains the assessee sought deduction of the amount spent to clear the mortgage. The High Court held that the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismiss the ground of appeal of the assessee. 7. As regards the next issue u/s 50C, the AO proposed to adopt the market value of the properties as per the sale deeds of Rs. 95,11,180/- in terms of the provisions of section 50C, as against the sale consideration recorded at Rs. 54 lakhs. 8. On appeal, before the CIT(A), it was submitted that the transactions were entered into well before 01/04/2003 and, therefore, provisions of section 50C are not applicable, as the said section was not enforce then. The learned AR relied on the decision of the Kolkata ITAT in the case of Neville De Noranha Vs. ACIT, 115 TTJ 390. The CIT(A) observed that the properties under documents 838, 1925 and 1926 of 2003 were got registered only after 01/04/2003 i. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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