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2014 (3) TMI 60 - AT - Income TaxDetermination of indexed cost of acquisition - Increase in capital gains computation – Held that:- The AO was of the view that fair value was very high since assessee was holding the property since 1979 - to make a reference under section 55A of the Act, Assessing Officer has to form an opinion that value claimed is less than the fair market value - the opinion of the Assessing Officer here is that the value shown was very high or in other words, more than the fair market value - the reference under section 55A could not have been made – the decision in Commissioner of Income-tax Versus Umedbhai International P. Ltd. [2010 (2) TMI 631 - Calcutta High Court ] followed - where there was a substitution of the cost as on 1.4.1981, by value based by DVO on a reference under section 55A of the Act, such a reference could not be made unless and until the Assessing Officer formed an opinion that value shown by the assessee was less than fair market value – thus, the substitution of cost of acquisition with the value fixed by the DVO set aside – Decided in favour of Assessee. Claim of expenditure while computation of the LTCG – Held that:- Payment was directly made to Shri Nikhil Chanda and this was evident - Shri Nikhil Chanda had acknowledged receipt - it was a necessary outgo without which the sale would not have taken place - the computation of capital gains under section 48 of the Act - Sub-clause (i) of that Section states that expenditure incurred wholly and exclusively in connection with the transfer of capital asset has to be deducted from full value consideration received or accruing - Shri Nikhil Chanda was a confirming party who had nominated the buyers to the vendors. The vendors have contracted with the purchaser for sale and transfer of the said premises free from all encumbrances mortgages charges attachments liens lispendens leases tenancies occupancy rights uses debutters trusts acquisition requisition alignment claims demands and liabilities whatsoever or howsoever by the vendors to the purchaser at or for the consideration of Rupees four crores fifty lacs only paid to the vendors by the purchaser in the proportion as aforesaid and the confirming party has agreed to concur confirm and assure such sale - the payment could only be considered as an expenditure incurred only and exclusively in connection with the transfer of the property - thus, It was an allowable one under section 48(i) of the Act – Decided in favour of Assessee.
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