TMI Blog2012 (8) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... t-term capital gains as the appellant had received this amount as part of a family settlement which is not taxable. This addition is uncalled for and deserves to be deleted. 3. That the learned CIT(A), Shimla is not justified in upholding the order of the AO on account of not allowing the benefit of indexed cost of acquisition and construction as the appellant had duly submitted the valuation report of a Government approved registered valuer in support of her claim which was rejected by the AO without any strong basis and she is not a technical person. 4. That the learned CIT(A), Shimla is not justified in upholding the order of the AO on account of period of holding and treating the transaction as short-term capital gains. The sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent of share of immovable property wherein No. 36 (old No. 8/4), Osborne Road, Bangalore-560 042 being a three-storyed house and the land appurtenant thereto measuring 2,500 sq. ft. (for short said property ). The AO observed that surrender of right in the property in lieu of monetary consideration amount received from such transaction even if the transaction could be termed as gift and the same has to be treated as transfer of the right for the property which will be subject to capital gain tax. Therefore, the assessee was asked to furnish the cost of acquisition. The assessee furnished the valuation report dt. 22nd Dec, 2009 showing the valuation report as on 1st April, 1981 and further amounts were claimed towards construction because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r construction and cost of construction has also to be considered. 5. The learned CIT{A) agreed that the cost of acquisition has to be considered as fair market value as on 1st April, 1981 and thereafter the AO was directed to work out the cost of acquisition. However, he maintained the findings of AO that the same has to be considered as short-term capital gains. 6. Before us, the learned counsel of the assessee made detailed submissions which could be summarized as under : (1) The assessee got 40 per cent of the said property from her father through gift deed dt. 2nd Dec, 2006. He referred to the gift deed and pointed out what was given by her father is in a particular share of the property i.e. 40 per cent share in the overall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made further construction in the year 1987 and constructed two more storeys with cost of construction in form of two storeys to be considered as cost of improvement and indexation has to be allowed on such cost of improvement before computing the capital gain in the hands of the assessee. (4) He also contended that capital gain computed by the assessing authority has been wrongly treated as short-term capital gains. In this regard he referred to s. 2(42A), Expln. 1, cl. (b) which clearly provides that period of holding by previous owner has to be added to the period of holding of the present owner. 7. On the other hand, the learned Departmental Representative for the Revenue submitted that the AO has clearly given a finding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h share for consideration of release of share but in case before us only the property involved was share in the said property which has been released against the receipt of cash and therefore, instrument of release cannot be called a family settlement. 9. As far as other issues are concerned, we find force in the submissions of the learned counsel of the assessee. Sec 49 is clear that cost of acquisition-in case of property received under gift has to be reckoned with reference to the cost of previous owner and the previous owner has been defined in the Explanation to s. 49 as the last owner. In any case the learned CIT(A) has already accepted this position and directed the AO to consider the cost of acquisition as on 1st April, 1981 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of computing capital gain in terms of s. 48-If Expln. (iii) to s. 48 is interpreted in the way sought by the Departmental Representative by taking the date on which the capital asset received by the assessee under a gift becoming his property for the purpose of working out the indexed cost of acquisition, it will certainly not be in consonance with the scheme of the Act and will also defeat the very purpose of introducing the concept of 'indexed cost of acquisition'. Therefore, we direct the AO to allow the assessee to adopt fair market value as on 1st April, 1981 as cost of acquisition and is further directed to give indexation benefit. 10. We also find force in the submissions that if assessee's father ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
