TMI Blog2004 (8) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Commissioner of Income-tax (Appeals) erred in holding that ( a )There was no tenancy as claimed; ( b )That the appellant had received a gift of the capital asset from Madanlal Gupta, thus attracting provisions of section 49(1)( ii ); ( c )That there was a transfer of capital asset to a trust by Shri Madanlal Gupta, thus attracting provisions of section 49(1)( iii )( d ); ( d )That the cost of acquisition of the capital asset was the cost to the previous owner and that the said cost had to be determined with reference to the assessment records of Shri Madanlal Gupta. 3.Without prejudice to the above, the learned Commissioner of Income-tax (Appeals) erred in not holding that the cost of acquisition of the capital asset transferred would be the market value as on the date when the appellant became the legal owner on the vesting of title of the capital asset on 21-9-1993. 4.The learned CIT(A) erred in not adjudicating on the following grounds of appeal : ( a )Assessment of income from house property at Rs. 2,73,919 as against Rs. 2,72,919 returned by the appellant. ( b )Against non-granting of deduction under section 80L. 4. First three grounds of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmission to the assessee-trust for the development of the property. Construction and development was completed in 1987 and completion certificate was issued by the Bombay Municipal Corporation vide their letter dated 1-10-1987. The assessee-trust was given possession of the premises being G-002, Vikas Centre, Santacruz, Mumbai on 1-10-1987. The assessee-trust let out the premises on a monthly rent of Rs. 40,000 from 1-11-1988. Shri Madanlal Gupta submitted a declaration under the Apartment Ownership Act on 15-1-1990. The conveyance and registration of the property in question in favour of the assessee-trust was completed on 21-9-1993. The said property was thereafter transferred by the assessee-trust on 2-5-1995 which the Assessing Officer has subjected to the levy of capital gains tax. 5. The contention of the assessee before the authorities below was that the property in question was received by the assessee-trust as an alternative accommodation on surrender of its tenancy rights from the owner, i.e., Shri Madanlal Gupta and hence, it was received by the assessee free of cost with the result that no tax on capital gains was chargeable in the light of the decision in CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon his submissions as made before the authorities below and more particularly before the learned CIT(A). He has placed reliance on the decisions of the Hon ble Calcutta High Court in Mrs. A. Ghosh v. CIT [1983] 141 ITR 45 (Cal.) and CIT v. Debmalya Sur [1994] 207 ITR 996. 8. In reply, the learned Departmental Representative has relied upon the orders of the authorities below. 9. We have considered the rival submissions. In our view, the case of the assessee is squarely covered, as held by the learned CIT(A), by the provisions of sub-clause ( d ) of clause ( iii ) of sub-section (1) of section 49 which read as under :- "49. Cost with reference to certain modes of acquisition (1) Where the capital asset became the property of the assessee ( i ) ( ii ) ** ** ** ( iii )( d ) under a transfer to a revocable or an irrevocable trust. the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be." 10. There is no dispute that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h section 49(1)( iii )( d ). 13. Ground Nos. 1 and 2 taken in the assessee s appeal are disposed of as per the observations made above. 14. As regards Ground No. 3 in the assessee s appeal, we find that the learned CIT(A) has already directed the Assessing Officer to modify the assessment order in the light of his directions. Having held above that the capital gains arising on transfer/sale of the property in question is exigible to tax under section 45 read with section 49(1)( iii )( d ), we consider it appropriate to restore the matter of calculation of cost of acquisition of the property in question to the file of the Assessing Officer. The Assessing Officer is directed to work out the cost of acquisition in accordance with law particularly the provisions of section 49 and tax the resultant capital gain. Ground No. 3 is treated as allowed for statistical purposes. 15. As regards Ground No. 4 taken by the assessee, the grievance of the assessee is that the learned CIT(A) has erred in not adjudicating on the following grounds of appeal taken by the assessee before the learned CIT(A) : ( a )Assessment of income from house property at Rs. 2,73,919 as against Rs. 2,72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case. Ground No. 1 taken by the Department is therefore dismissed. 20. As regards Ground No. 2, the assessee s case was and continues to be that the transfer of the property effected by it is not taxable under section 45 as it did not have any cost of acquisition and therefore, the mode of computation as statutorily prescribed under section 48 would fail. It is only in this context that the assessee, in order to deny its liability to capital gains tax, had contended that section 49 was not applicable and that the stamp duty paid on acquisition of the property in question did not amount to cost of acquisition within the meaning of section 48. We have already rejected the aforesaid contention of the assessee and upheld the order of the learned CIT(A) that the capital gain arising on transfer of the property in question is exigible to tax under section 45 read with section 49(1)( iii )( d ). The cost of acquisition required to be adopted under section 49 has therefore to be calculated and adopted by the Assessing Officer. Ground No. 2 taken by the Department is therefore dismissed. 21. In view of the aforesaid, the appeal filed by the department is dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
