TMI Blog2017 (10) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. It is noted that all the documents sought to be filed by the assessee are either the copies of the Revenue record showing the status of the land in question in past or a sale deed dated 08.05.2008. Therefore from the very nature of the documents filed by the assessee as additional evidence it is clear that there is no possibility or scope of creating or manipulating with the evidence. Thus the question of creating any evidence or putting up a claim in the nature of afterthought is ruled out. Having admitted the additional ground no. 2 is required to be adjudicated after examination and verification of the evidence filed by the assessee at this stage. - ITA No. 522/JP/2017, ITA No. 523/JP/2017 , ITA No. 524/JP/2017, ITA No. 525/JP/2017, ITA No. 526/JP/2017, ITA No. 527/JP/2017 ITA No. 528/JP/2017 - - - Dated:- 31-10-2017 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER Assessee by : Shri P.C. Parwal (C.A.) Revenue by : Shri Punam Rai (D.CIT) ORDER PER: VIJAY PAL RAO, J.M. These 7 appeals by the 7 individual assessees who are related and co-owners of the land in question directed against the separate orders of CIT(A) -5, Jaipur dated 27.03.2017 and 28.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the computing of the capital gain provision fails and therefore, no capital gain can be charged to tax in respect of transfer of the land in question in view of the decision of Hon ble Supreme Court in case of CIT vs. B.C. Srinivasa Setty 128 ITR 294 as well as decisions of Hon ble High Courts. The second issue raised by the assessee in the additional ground is regarding the land in question was ancestral property and therefore it was assessable in the hands of the HUF and not in the hand of the individual assessee. These two issues raised in the additional grounds are purely legal in nature though in the absence of these issues raised before the authorities below no verification or enquiry was conducted by the authorities below specifically in the contest of these two legal issues however, from the findings of the authorities below it cannot be inferred that there was a cost of acquisition and the property was not an ancestral land. Accordingly, in the facts and circumstances of the case and in view of the decision of Hon ble Supreme Court in case of CIT vs. NTPC Limited 229 ITR 383 the additional grounds raised by the assessees are admitted for consideration and adjudication. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. The said provisions is not applicable in case of tangible asset and particularly for land in question. 5. On the other hand, ld. DR has submitted that it is not a case where the cost of acquisition cannot be ascertained but no consideration was paid. Thus she has contended when the property was acquired by the assessee by succession and the cost of acquisition by the previous owner could be ascertained then the decision relied upon by the Hon ble Supreme Court in case of Vs. B.C. Srinivasa Setty as well other Hon ble High Courts are not directly applicable in the facts and circumstances of the present case. The ld. DR has pointed out that even if no cost is paid but the cost was ascertainable at the time of acquisition of land then the provisions of section 55(3) are applicable in this case and the fair market value of the asset as on 01.04.1981 would be the cost of acquisition of land for the purpose of computing capital gain. She has relied upon the decision of Hon ble Punjab and Haryana High Court in case of CIT Vs. Raja Malwinder Singh 334 ITR 48 as well as decision in case of Thakur Dwara Shri Krishanju Maharaj Handiyaya, Barnala vs. CIT 366 ITR 38 and submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer of goodwill of a newly commenced business. The Hon ble Supreme Court has observed that no business commenced for the first time possesses goodwill from the start. It is generated as the business is carried on and may be augmented with the passage of time. Therefore, goodwill in a newly commenced business is a self generated asset and in this said contest the Hon ble Supreme Court has held that the cost of acquisition of self generated asset like goodwill is not possible. The relevant finding of the Hon ble Supreme Court decision in case of CIT Vs. B.C. Shrinivasa Setty in paras 8 to 11 as held as under:- 8 The mode of computation and deductions forth in s. 48 provide the principle basis for quantifying the income chargeable under the head capital gain . The section provides that the income chargeable under that head shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset: (ii) the cost of acquisition of the capital What is contemplated is an asset in the acquisition of which it is possible to envisage a cost. The intent goes to the nature and character of the asset, that it is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head Capital gains . Thus it is clear that the ruling laid down by the Hon ble Supreme Court is based on specific facts and nature of capital asset being goodwill which is self generated as it is not possible to determine the date when it comes into existence. The date of acquisition of the asset is a material factor as observed by the Hon ble Supreme Court in applying the computation provisions pertaining to the capital gains. The Hon ble Supreme Court has further observed that it is possible to say that the cost of acquisition as mentioned in section 48 implies a date of acquisition, and that inference is strengthened by the provisions of sub-section 49 and 50 as well as subsection (2) of section 55. Thus while analyzing the term the cost of acquisition of capital asset as per section 48 of the Act the Hon ble Supreme Court has held that what is contemplated is an asset in the acquisition of which it is possible to envisage a cost. The intent goes to the nature and character of the asset, that it is an asset which possesses the inherent quality of being available on the expenditure of money to a person seeking to acquire it. It is immaterial that although the asset belongs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of that asset under section 46, means the fair market value of the asset on the date of distribution ; (iv) [***] [(v) where the capital asset, being a share or a stock of a company, became the property of the assessee on- (a) the consolidation and division of all or any of the share capital of the company into shares of larger amount than its existing shares, (b) the conversion of any shares of the company into stock, (c) the re-conversion of any stock of the company into shares, (d) the sub-division of any of the shares of the company into shares of smaller amount, or (e) the conversion of one kind of shares of the company into another kind, means the cost of acquisition of the asset calculated with reference to the cost of acquisition of the shares or stock from which such asset is derived. Section 55 (3) Where the cost for which the previous owner acquired the property cannot be ascertained, the cost of acquisition to the previous owner means the fair market value on the date on which the capital asset became the property of the previous owner. Thus as per clause (b) sub-section (2) of section 55 read with section 49 (1)(iii)(a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the stand of the assessee, the cost of acquisition by the previous owner could not be ascertained. However, he failed to exercise the option of going either by the date of market value on the date of acquisition or by the cost of the previous owner in which case the only option available to the Assessing Officer was to proceed to compute capital gain by taking the cost of the asset to be the fair market value on the specified date, i.e., January 1, 1954 as per applicable provision for assessment year 1977-78 and as on January 1, 1964 for the assessment year 1978-79. Even in a case where the cost of acquisition cannot be ascertained, section 55(3) statutorily prescribes the cost to be equal to the market value on the date of acquisition. This being the position, capital gain is not excluded even on the plea that value of the asset in respect of which capital gain is to be charged was incapable of being ascertained. The view taken in Amrik Singh s case (supra) based on the assumption that where market value cannot be ascertained, capital gain cannot be applied, is not correct being against the statutory scheme. Similarly, the view taken by the Madhya Pradesh High Court in CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional evidence and submitted the despite sufficient opportunity given to the assessee by the AO and ld CIT(A) the assessee has not explained the reasons as to why this evidence was not filed before the authorities below. 9. I have considered the rival submissions and careful perusal of the additional evidence proposed to be filed by the assessee. It is noted that all the documents sought to be filed by the assessee are either the copies of the Revenue record showing the status of the land in question in past or a sale deed dated 08.05.2008. Therefore from the very nature of the documents filed by the assessee as additional evidence it is clear that there is no possibility or scope of creating or manipulating with the evidence. Thus the question of creating any evidence or putting up a claim in the nature of afterthought is ruled out. Accordingly, in the facts and circumstances of the case and the in the interest of justice when all the documents sought to be filed by the assessee as additional evidence are beyond the control and reach of the assessee and further when the assessment was framed due to the time constrained the additional evidence sought to be filed by the ass ..... 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