9911796707
TMI Blog2014 (5) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee read as under: "On the facts and circumstances of the case and in law 1.a The learned CIT(A) erred in confirming the sum of Rs.85,00,000/- as Long Term Capital Gain, while the same was a capital receipt as moneys were received in lieu of inheritance. b. The learned CIT(A) erred in inferring that the moneys were received for surrender of rights, while the Appellant did not hold any rights to possession and enjoyment over part of the property, whereas infact the amount was received on account of bequest that was made by grandfather. c. Without prejudice to ground (a) & (b) above, the learned CIT(A) failed to take into consideration that the amounts received from her Uncle, Mr. Sukumar Shah, would amount to a gift, given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount received by the assessee is nothing but the compensation in lieu of surrendering of rights in the property. Therefore, the amount of Rs. 85 lacs received by the assessee is taxable and cannot be said that the amount received was as per bequest of will. The AO finally concluded that Rs.85 lacs received by the assessee was towards surrendering of her rights in the property and the same was taxable as capital gains. The cost of acquisition was taken at Rs nil and the entire compensation of Rs.85 lacs was added as Long term capital gain. The assessee carried the matter before the CIT(A). It was explained that Shri Natwarlal Manilal Shah was the maternal grandfather of the assessee, who was in joint ownership and possession of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty was received through inheritance. The CIT(A) further observed that the amounts were received from Shri Kamlesh Mehta, the purchaser of the property. Since the assessee has surrendered such right, there was no cost of acquisition and the same has to be treated as nil. The CIT(A) confirmed the action of the AO. Aggrieved by this the assessee is before us. 4. The counsel for the assessee strongly submitted that what the assessee has received was as per the discretion vested upon Shri Sukumar Shah by virtue of will of Late Shri Natwarlal Shah. The counsel took us through the will of Late Shri Natwarlal Shah and drew our attention to para 4 of that will, which read as under: "I have got one daughter viz Nayana Suresh Gandhi whatever I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record shows that the assessee has also filed a valuation report to substantiate her claim of fair market value as on 01.04.1981. The AO has completely ignored this fact holding that the cost of acquisition has to be taken at nil, which is not a correct proposition of law. In our considered view and holding that the transaction involves capital gains tax liability, the same has to be computed as per the provisions of law. We accordingly restore this issue back to the file of the AO. The AO is directed to determine the cost of acquisition of the property as on 01.04.1981 by referring the matter to the valuation cell or in alternative accept the valuation report of the assessee and re-determine the Long term capital gains after giving a re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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