Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (2) TMI 998 - AT - Income TaxScope of Rectification of application - while computing capital gains deduction may be given for cost of acquisition the tenancy rights by adopting fair market value of tenancy right as on 01/04/1981 - entitlement to deduct index cost of acquisition of tenancy rights - Held that:- CIT(A) has rightly pointed out that the A.O has not given correct appeal effect to the order of the ITAT. The Ld. CIT(A) has further pointed out that the A.O has been committing legal mistake again and again by applying the provisions of section 55(2)(a)(ii) instead of the provisions of section 55(2)(a)(i) of the Act because appellant firm had purchased the cloth business along with the tenancy rights vide deed of assignment dated 21/11/1950 for ₹ 9,500/- This amount of ₹ 9,500/- paid for acquiring ongoing concern also included amount paid by the appellate firm for acquiring the tenancy rights. We also agree with the Ld. CIT(A) that the A.O has not given correct effect to the order of the Tribunal. It is apparent form the deed of assignment that a sum of ₹ 9,500/- was paid by the appellant firm in 1950 towards the acquisition of business including tenancy rights. We further noticed that copies of Agreement dated 19/09/1950, Letter dated 21/11/1950 indicting therein transfer of business along with benefit of tenancy right, Power of Attorney dated 21/11/1950 given by Assignor, Mr. Dhansing Netram referring to Deed of Assignment dated 21/11/1950 to carry on correspondence with Landlord, etc., Letter dated 17/10/1950 addressed to Bombay Samachar and Government Gazzette for Public Notice, Public notice dated 19/09/1950, Suit filed by landlord for eviction of the premises and Consent terms and order of the small causes court in regard to surrender of premises by the appellant firm etc. were made available by the assessee to the AO during assessment proceedings. On the basis of the said documents the AO could have safely concluded that the assessee firm had paid ₹ 9,500/- in 1950 towards acquisition of business including tenancy rights. Hence, in our considered view the AO has wrongly treated the cost of acquisition of tenancy as NIL. CIT(A) has rightly directed the A.O. to work out capital gain on surrender of tenancy rights after taking into account the cost of acquisition of tenancy right as worked out by the registered approved valuer and allow the benefit of indexation of the cost of acquisition as per the provisions of section 48 of the Act.
|