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Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC
Before: SHRI VIJAY PAL RAOvk;dj vihy la-@ITA No. 522/JP/2017
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh fot; iky jko] U;kf;d lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER vk;dj vihy la-@ITA No. 522/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Sh. Ram Lal Sharma, Income Tax Officer, Vs. Kototya Ki Dhani, Gram- Nindar, Ward 7(4), Tehsil- Amer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BLLPS4485A vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 523/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Sh. Gulla Ram Sharma, Income Tax Officer, Vs. Kototya Ki Dhani, Gram- Nindar, Ward 7(4), Tehsil- Amer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BBWPR0622K vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 524/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Sh. Prabhu Dayal Sharma, Income Tax Officer, Vs. Kototya Ki Dhani, Gram- Nindar, Ward 7(4), Tehsil- Amer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BPFPP3975N vihykFkhZ@Appellant izR;FkhZ@Respondent
2 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO vk;dj vihy la-@ITA No. 525/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Sh. Jagdish Prasad Sharma, Income Tax Officer, Vs. Kototya Ki Dhani, Gram- Nindar, Ward 7(4), Tehsil- Amer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: DIXPS2857B vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 526/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Sh. Ram Gopal Sharma, Income Tax Officer, Vs. Kototya Ki Dhani, Gram- Nindar, Ward 7(4), Tehsil- Amer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BBGPR7449A vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 527/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Sh. Ram Swaroop Sharma, Income Tax Officer, Vs. Kototya Ki Dhani, Gram- Nindar, Ward 7(4), Tehsil- Amer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: EVTPS8248N vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 528/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Sh. Ganga Sahai Sharma, Income Tax Officer, Vs. Kototya Ki Dhani, Gram- Nindar, Ward 7(4), Tehsil- Amer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAGHG1615R vihykFkhZ@Appellant izR;FkhZ@Respondent
3 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (C.A.) jktLo dh vksj ls@ Revenue by : Shri Punam Rai (D.CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 13/10/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 31/10/2017 vkns'k@ 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 28.03.2017 for the A.Y. 2009-
These assessees have raised common grounds in these appeals which
are as under:-
“1. The order passed u/s 144/147 and confirmed by Ld. CIT(A) is illegal and bad in law. 2. The CIT(A) has erred on facts and in law in confirming the addition of Rs. 41,35,500/- on account of long term capital gain by: (i) treating the land sold as a capital asset within the meaning of section 2(14) of IT Act. (ii) not allowing the deduction for cost of acquisition. (iii) not allowing the deduction u/s 54F on account of investment made.” 2. The assessees have also filed additional grounds which are common
in 7 appeals as under:-
“1. The Ld. CIT(A) has erred on facts and in law in confirming the assessment of capital gain even when the land acquired by the forefathers of the assessee is without cost and thus, in the absence of cost of acquisition, no capital gain can be charged to tax.
4 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
The Ld. CIT(A) has erred on facts and in law in confirming the assessment of capital gain in the hands of the assessee even when the land is ancestral land and thus, not assessable in the individual hands of the assessee but assessable in the hand of HUF.”
The assessees have also filed the applications for admission of
additional evidence Rules 29 of the ITAT Rules, 1963. Since the additionals
grounds raised by these assessees go to the root of the matters, therefore,
these grounds are taken up first for the hearing and adjudication.
I have heard the ld. AR as well as ld. DR on the admission of
additional grounds. The assessment orders were passed by the AO u/s 144
read with section 147. It is pertinent to note that the land in question was
agricultural land and therefore, the assessees were under belief that no
capital gain is chargeable to tax arising from transfer of agricultural land
in question. However the AO treated the land in question within the
municipal limit, Jaipur and therefore assessed the capital gain to tax. The
ld. CIT(A) has confirmed the action of the AO. In the additional grounds
the assessee has raised to two issues that the land was acquired by the
forefathers of the assessee without any cost as it was granted /awarded
to the forefathers without any consideration and the assessees have
inherited this land as an ancestral property. Therefore, in the absence of
any cost of acquisition the assessee claimed that the computing of the
5 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
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.
Additional ground No. 1 regarding no cost of acquisition and
therefore, capital gain cannot be charged to tax. The ld. AR of the
assessee has submitted that the forefathers of the assessees were
cultivators of the land which was under the jagirdari of Rao Inder Singh
and his wife (known as maa ji). Subsequently as per the Rajasthan Land
6 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
Reforms & Resumption of Jagirs Act, 1952 this land was allotted to Sh.
Jeevan & Sh. Kanha. Thus the land was allotted without any cost of the
consideration and therefore, there was no cost of acquisition of this land in
the hand of the forefathers. Since the assessees have inherited this land
being an ancestral property, therefore, as per provisions of section 49(1)
the cost of acquisition of the asset in the hand of the assessee shall be
deemed to be the cost for which the previous owner of the property
acquired it. Further, as per the explanation to section 49(1) the cost of
previous owner of the property will be considered as in the hands of the
forefathers of the assesses who were allotted this land. The ld. AR of the
assessee has further submitted that even as per the provisions of section
55 (2) read with section 55 (3) no cost can be imputed to this asset as
there was no cost of acquisition. The ld. AR of the assessee has submitted
that the provisions of section 55 are applicable only when there is a cost
but which is not ascertainable whereas in the case of the assesse the cost
is nil or no cost then the question of ascertaining the cost does not arise.
In support of his contention he has relied upon the decisions of Hon’ble
Gujarat High Court in case of CIT Vs. Mandhar Singh Ji P. Jadeja 281 ITR
19 as well as Thakur Dwara Shri Krishanju Maharaj Handiyaya, Barnala vs.
CIT 162 ITR 93. He has also relied upon the decision of this Tribunal in
case of CIT vs. Pashu Mohammed Zainuddin 142 TTJ 17. Thus the ld.
7 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
AR has submitted the land is an ancestral land as accepted by the AO in
the assessment order and therefore, when there is no cost of acquisition
by the forefathers of the assessee then the capital gain cannot be
chargeable to tax. He has further contended that the amendment brought
into statute u/s 55(2) vide Finance Act 1987 provides the cost of
acquisition in relation a capital asset being goodwill of business or a trade
market or trade name or right to manufacture or right to carry in business
or tenancy right etc. The said provisions is not applicable in case of
tangible asset and particularly for land in question.
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
8 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
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 the Hon’ble Punjab and Haryana High Court while
following the full bench decision in case of Raja Malwinder Singh
reiterated the view has taken by the Full Bench. Through the decisions
relied upon by the AR will not help the case of the assessee.
I have considered the rival submissions as well as relevant material
on record. The land in question was acquired by the assessee by
succession, therefore, the cost of acquisition of the land in question in the
hand of the assessee would be taken as the cost in the hand of the
previous owner of the land. The ld. AR of the assessee has contended that
the land was allotted under the Rajasthan Land Reforms and Resumption
of Jagir Act, 1952 without any consideration, therefore, the cost of
acquisition in the hand of the previous owner is nil. Thus the ld. AR of the
assessee has submitted that in view of the decision of Hon’ble Supreme
Court in case of CIT Vs. B.C. Srinivasa Setty (supra), decision of Hon’ble
Gujarat High Court in case of CIT vs. Mandharshingji P. Jadeja (supra) as
well as CIT vs. H.H. Maharana Sahib Shri Lokendra Singhji the Jagir
property gifted to the forefathers of the assessee has no cost of
acquisition in the hand of the ancestors and therefore no capital gain
9 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
accrued where the cost of acquisition is not ascertainable. It was also
contended that the fair market price cannot be taken into consideration
where the cost of acquisition was not ascertainable. On the other hand,
the Full Bench decision of Hon’ble Punjab and Haryana High Court in case
of CIT vs. Raja Malwinder Singh (supra) has held that even in a case
where the cost of acquisition cannot be ascertained, section 55(3)
prescribes the cost to the equal to the fair market value on the date of
acquisition in case of acquiring the land either at some cost or without cost
but there can be no situation when the cost is incapable of ascertainment.
This view of the Hon’ble Punjab and Haryana High court was again
reiterated in case of Thakur Dwara Shri Krishanji Maharaja Handiyaya,
Barnala (Supra). Thus it is clear that there are divergent views of Hon’ble
High Courts on this issue particularly the interpretation and understanding
of the decision of Hon’ble Supreme Court in case of CIT vs. B.C. Srinivasa
Setty (supra). The issue before the Hon’ble Supreme Court in case of CIT
vs. B.C. Srinivasa Setty was the taxability of capital gain on transfer 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
10 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
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 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 such a class, it may, on the facts of a certain case, be acquired without the payment of money. That kind of case is covered by s. 49 and its cost, for the purpose of s. 48, is determined in accordance with those provisions. There are other provisions which indicate that s. 48 is concerned with an asset capital of acquisition at a cost. Sec. 50 is one such provisions. So also is such s s. (2) of s. 55. None of the provisions pertaining to the head “Capital gain” suggests that they include an asset in the acquisition of which no cost at all can be conceived. Yet there are assets which are acquired by way of production in which no cost element can be identified or envisaged. From what has gone before, it is apparent that the goodwill generated in a new business has been so regarded. The elements which create if have already been detailed. In such a case, when the asset is sold and the consideration is brought to tax, what is charged is the capital value of the asset and not any profit or gain.
11 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
In the case of goodwill generated in a new business there is the further circumstance that it is not possible to determine the date when it comes into existence. The date of acquisition of the asset is a material factor in applying the computation provisions pertaining to capital gains. It is possible to say that the “cost of acquisition” mentioned in s. 48 implies a date of acquisition, and that inference is strengthened by the provisions of ss 49 and 50 as well as sub-s (2) of s. 55. 10. It may also be noted that if the goodwill generated in a new business is regarded as acquired at a cost and subsequently passes to an assessee in any of the modes specified in sub-s. (1) of s. 49, it will become necessary to determine the cost of acquisition to the previous owner. Having regard to the nature of the asset, it will be impossible to determine such cost of acquisition. Nor can sub-s. (3) of s. 55 be invoked, because the date of acquisition by the previous owner will remain unknown. 11. We are of opinion that the goodwill generated in a newly commenced business cannot be described as an “asset” within the terms of s. 45 and, therefore, its transfer is not subject to income tax under the 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
12 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
strengthened by the provisions of sub-section 49 and 50 as well as sub-
section (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 such as class it may, on facts of certain cases be acquired
without the payment of money. Therefore, when a capital asset which
possesses the inherent quality or monetary value at the time when the
persons seeking to acquire it but it was acquired without the payment of
money would not take such capital asset in the category that it will not
possible to determine the cost of acquisition. Further, in case of self
generated intangible asset like goodwill there is not acquisition by the
transferor whereas in the case of land acquired by the transferor without
any cost but is capable acquisition of cost and therefore the land which
was acquired without cost cannot be put into category of the asset which
is self generated and the determination of cost of acquisition is not
possible. There may be two categories of capital asset where the cost of
acquisition is nil. In first category no cost is paid by the person who has
13 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
acquired it. In other case the asset is self generated in due course of time
and it is not possible to ascertain the cost of acquisition and date of
generation/acquisition. Therefore, the case of the assessee falls in the
categories of the land in question carried/ possesses cost or monetary
value though the forefathers of the assessee acquired it without any cost.
In such a situation the provisions of section 55 (2)(b) would come into
play. For reading reference section 55(2)(b) 55(3) are quoted as under:-
Section 55 (2(b)
“(b) in relation to any other capital asset,—] (i) where the capital asset became the property of the assessee before the [1st day of April, [1981]], means the cost of acquisition of the asset to the assessee or the fair market value of the asset on the [1st day of April, [1981]], at the option of the assessee ; (ii) where the capital asset became the property of the assessee by any of the modes specified in [sub-section (1) of] section 49, and the capital asset became the property of the previous owner before the [1st day of April, [1981]], means the cost of the capital asset to the previous owner or the fair market value of the asset on the [1st day of April, [1981]], at the option of the assessee ; (iii) where the capital asset became the property of the assessee on the distribution of the capital assets of a company on its liquidation and the assessee has been assessed to income-tax under the head "Capital gains" 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,
14 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
(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 Act the cost of acquisition of the asset acquired by
succession or inheritance or devaluation shall be deemed to be the cost
for which the previous owner of the property acquired it. Where the
capital asset become the property of the assessee or previous owner
before 01.04.1981 the cost of acquisition means the cost of acquisition of
the asset to the previous owner or fair market value of the asset on
01.04.1981 at the option of the assessee. Even in case 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 becomes the property of the previous
owner as provided under sub-section (3) of section 55. Since this case of
15 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
the assessee is covered by provisions of section 55(2)(b) read with section
49(1) of the Income Tax Act therefore, the cost of the acquisition of the
property for the purpose of computing the capital gain would be fair
market value as on 01.04.1981. The full bench of Hon’ble Punjab and
Haryana High Court after considering the decision of the Hon’ble Supreme
Court in case of CIT vs. B.C. Srinivasa Setty (supra) as well as other
decisions relied upon by the ld. AR on this point has observed in paras 5 to
7 as under:-
“5. It is pointed out that the judgment in B.C. Shrinivasa Setty’s case (supra) is distinguishable. It was observed therein that in a newly started business the value of goodwill was not ascertainable, and on sale of goodwill, capital gain was not attracted. It is submitted that in the case of acquisition of land, the same is either acquired at some cost or without cost and under the scheme of the Act, there can be no situation when the cost is incapable of ascertainment. Section 55(2) provides for taking the cost either equal to the market value as on January 1, 1954, or at the option of the assessee equal to the cost of acquisition of the previous owner. Section 55(3) provides that where the cost of acquisition of the previous owner cannot be ascertained, it has to be taken to be equal to the market value on the date the asset was acquired by the previous owner. The Explanation to section 49(2), i.e., who acquires property otherwise than by way of gift, will or by succession. 6. In the present case, the assessee acquired the property by succession from the previous owner. According 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
16 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
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 v. H.H. Maharaja Sahib Shri Lokendra Singhji [1986] 162 ITR 93/25 Taxman 66 cannot be accepted. The said judgment also does not give effect to the mandate of section 55(3) which provides for a situation where the value of the asset acquired could not be ascertained. If the market value can be ascertained, it has to be taken to be equal thereto and if the value cannot be ascertained, it has to be equal to the market value on a specified date at the option of the assess. It is not the case of the assessee that land had no market value at all on the date of its acquisition. The contention that the value was incapable of being ascertained, as already observed, the value in such case has to be taken as being equal to market value on a specified date. 7. We, thus, hold that even where the cost of acquisition of capital asset cannot be ascertained but the asset has a market value, capital gain will be attracted by taking the cost of acquisition to be fair market value as on January 1, 1954, or on date statutorily specified or at the option by the assessee, the market value on the date of acquisition. The Hon’ble Punjab and Haryana High Court reiterated this view in case of
Thakur Dwara Shri Krishanji Maharaj Handiyaya, Barnala vs. CIT (supra).
17 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
In view of the facts and circumstances of the case as well as the above
discussion and following the full bench decision of Hon’ble Punjab and
Haryana High Court in case of Thakur Dwara Shri Krishanji Maharaj
Handiyaya, Barnala vs. CIT (supra) I am of the considered opinion that the
land in question does not fall in the category of the capital asset for which
the cost of acquisition is not possible to be ascertained. Accordingly, the
cost of acquisition in the hand of the assessee would be the fair market
value as on 01.04.1981. Accordingly this issue is decided against the
assessees.
Ground No. 2 is regarding the capital gain is assessable in the hand
of HUF and not in the hand of the assessee. In support of this ground the
assessee has also filed additional evidence in the shape of copy of sale
deed on 08.05.2008 and revenue record in respect of the land in question
as well as the copies of revenue record/ mutation in the name of earlier
owners of the land.
I have heard the ld. AR as well as ld. DR and considered the
relevant material on record. The ld. DR has vehemently objected to the
admission of the 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.
18 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO
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 assessee is admitted.
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. Accordingly the additional ground No. 2 of the
assessee is set aside to the record of the Assessing Officer for adjudication
after consideration and examination of additional evidence filed by the
assessees. Needless to say that the assessee is be given an opportunity of
hearing.
19 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO Now Main Ground
Ground No. 1 and Ground 2 (iii) of the original grounds are not
pressed by the assessee as at the time of hearing. The ld. AR of the
assessee has stated at bar that the assessee does not press ground No. 1
and Ground No. 2(ii) of the appeals. The ld. DR has no objection even
these two grounds are dismissed as not pressed. Accordingly, the ground
No. 1 and ground No. 2(iii) of the grounds of appeals are dismissed having
not pressed. The other grounds are on the merits of confirming the capital
gain. Since the additional ground regarding the assessment of capital gain
in the hand of HUF has been remanded to the record of the AO and the
same goes to the root of the matter therefore, the other grounds of the
assessees appeal are also set aside to the record of the AO to consider the
objection of the assessee and then decide the same if need arises.
In the result, assessee’s appeals are partly allowed for statistical purposes.
Order pronounced in the open court on 31/10/2017.
Sd/- ¼ fot; iky jko ½ (VIJAY PAL RAO) U;kf;d lnL; @Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 31/10/2017 *Santosh
20 ITA 522 To 528/JP/17_ Ram Lal Sharma and others Vs. ITO आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Sh. Ram Lal Sharma, Sh. Gulla Ram 1. Sharma, Prabhu Dayal Sharma, Jagdish Prasad Sharma, Sh. Ram Gopal Sharma, Sh. Ram Swaroop Sharma & Sh. Ganga Sahai Sharma, Kototya Ki Dhani, Gram- Nindar,Tehsil- Amer, Jaipur. izR;Fkh@ The Respondent- The ITO, Ward 7(4), Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 522 to 528/JP/17) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंतअ