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2019 (11) TMI 329 - AT - Income TaxCapital gain computation - Cost of acquisition - what is the transferred is the property right ? - Capital asset u/s 2(14) - Assessee retired from the firm and as per retirement deed he is entitled to receive certain amount in cash or certain share in property to be constructed by the firm - cost of acquisition shall be the market value as on 30.04.2005 or ₹Nil as adopted by the AO - assessee contended that the cost of acquisition shall be the market value of the property when first, the property was owned by the assessee since in the present case, the property was first owned by the assessee on 30.04.2005, the prevailing market rate as on 30.04.2005 will remain same - HELD THAT:- What is the transferred is the property right therefore, the same is capital asset within the meaning of section 2(14) of the Act. In our view such right has been sold by the partnership firm M/s Keshav Co. and therefore, the same is a transfer within the meaning of section 2(47) of the Act and therefore capital asset. Even if the market value as on 30.04.2005 is not taken as cost of acquisition then the cost of acquisition remains unconclusive and cannot be determined and once the same cannot be determined, the decision of Hon’ble Supreme Court in the case of B.C. Srinivasa Setty [1981 (2) TMI 1 - SUPREME COURT] comes into play and computation provision fails. In any eventuality, the assessee has not earned any profit because the cost of acquisition as on 30.04.2005 should be the market value of the entitlement as on 30.04.2005 because the same is the value in the books of accounts as on 30.04.2005 at ₹17,22,47,975/- as the date of retirement. Hence, in our view, the CIT(A) has rightly deleted the addition and we confirm the same. The appeal of Revenue is dismissed.
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