TMI Blog2014 (10) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee cannot consider the cost incurred on construction of the structures as the cost of acquisition of tenancy rights. In our view, the value of tenancy right has to be determined in accordance with the practice adopted in real estate market. The assessee is entitled to adopt fair market value of the tenancy rights as on 1-4-1981 as the cost of acquisition of tenancy rights. However, from the records we notice that neither the assessee nor the A.O. has attempted to ascertain the fair market value of the tenancy rights as on 1-4-1981. Accordingly, we are of the view that the issue relating to the determination of fair market value of the tenancy rights as on 1-4-1981 should be decided afresh at the end of the A.O. Accordingly, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Tribunal in the case of Saleem Fazelbhoy [2006 (6) TMI 139 - ITAT BOMBAY-G] Disallowance of development charges, proportionate share of tax and other charges - Held that:- all these expenses have been incurred by the assessee for peaceful enjoyment of the property and not for acquisition of the property -Accordingly, we find merit in the decision taken by the ld. CIT(A) in confirming the decision taken by the A.O. Accordingly we hold that the assessee is not entitled to include this amount in the cost of acquisition of new flat. - I .T.A. No.4587/Mum/2012 - - - Dated:- 17-10-2014 - SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER Appellant by Shri Dharmesh Shah Respondent by : Shri Pitamber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to have been undertaken during the period from 23-01-1976 to 15-12-1988. The A.O. noticed that, as per the provisions of section 55(2)(a)(ii) of the Act, the cost of acquisition of tenancy right should be taken as NIL. Accordingly, the A.O. took the view that the question of allowing deduction towards cost of improvement also shall not arise. Accordingly the A.O. disallowed the claim for deduction of ₹ 29,83,021/- made by the assessee against the Long term capital gain. 4. In respect of deduction claimed u/s 54 of the Act towards the cost of new house property, the A.O noticed that the assessee, apart from claiming deduction towards the cost of new house, has also claimed deduction of ₹ 72,000/- paid to the builder towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) to contend that the provisions of section 55(2)(a)(ii) of the Act shall not apply in the cases where tenancy rights are inherited and the applicable provision is sec. 55(2)(b)(ii) of the Act. The ld. Counsel for the assessee submitted that the assessee herein has also inherited tenancy rights from his father and hence the provisions of section 55(2)(b)(ii) of the Act shall apply. Accordingly the Ld A.R submitted that the assesse is entitled to adopt the fair market value of the tenancy rights as on 1-4-1981 as the cost of acquisition of the tenancy right for the purpose of computing the Capital gain, since the father of the assessee was residing in the building prior to 1.4.1981 also. 7. On the other hand, the ld. D.R. contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat of the case decided by the co-ordinate Bench in the case of Meher R. Surti (supra), consistent with the view taken therein, we also hold that the assessee is entitled to adopt fair market value of the tenancy rights as on 1-4-1981 as the cost of acquisition of tenancy rights. However, from the records we notice that neither the assessee nor the A.O. has attempted to ascertain the fair market value of the tenancy rights as on 1-4-1981. Accordingly, we are of the view that the issue relating to the determination of fair market value of the tenancy rights as on 1-4-1981 should be decided afresh at the end of the A.O. Accordingly, we set aside the order of the ld. CIT(A) on this issue and restore the matter to the file of A.O. with a direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the decision of co-ordinate Bench of this Tribunal in the case of Saleem Fazelbhoy vs. DCIT [2007] 291 ITR (AT) 169 (Mumbai) wherein the Tribunal has held that the investment made in residential house would not only include the cost of purchase of the house but also the cost incurred in making the house inhabitable subject to the condition that the payment was made during the period specified in section 54F of the Act. We are inclined to follow the view taken by the co-ordinate bench of the Tribunal in the case of Saleem Fazekbhoy (supra). Accordingly, we hold that the assessee is entitled to include the expenditure incurred on the new flat in the cost of the new flat, provided they were incurred within in the prescribed time. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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