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Income Tax Appellate Tribunal, BENCH “G”, MUMBAI
O R D E R PER PAWAN SINGH; 1. This appeal u/s. 253 of Income Tax Act (‘Act’) is directed by the assessee against the order of Commissioner of Income Tax (Appeals)-38, Mumbai dated 18.09.2014 for Assessment Years (AY) 2010-11. 2. The assessee has raised following grounds of appeal :
The Learned Commissioner of Income Tax (Appeals) has erred in not accepting the appellant contention that purchase price of 3 plots should be as per purchase agreement only
3. The brief facts of the case are that assessee filed return of income for the relevant assessment year on 31 July 2007, declaring total income at Rs.36,33,462 /-. The return was selected for scrutiny. The AO while framing assessment noted that assessee has claimed Long Term Capital Gain on sale of immoveable property. The assessee has computed gain on the sale of building at Rs 2,50,000/-. It was further observed assessee purchased the said property vide Sale deed dated 26 June1983, ITA 4737/M/2012 Gautam T Shroff consisting of the land and building for a consideration of Rs. 5,45,400/- along with her wife. While claiming Capital Gain the assessee has taken the cost of indexation for computing Capital Gain. The AO issued show cause notice as to why the Capital Gain on the sale of building be calculated by taking purchased consideration as it attributable to the building instead of entire purchase consideration which consist of cost of land and building both. In response to the show cause notice the assessee filed reply dated 18 December 2009 and also revise computation of income computing Long Term Capital Gain on building at Rs 21,92,440/- as against earlier claim of Rs 2,50,000/-. The contention of assessee was not accepted by the assessing officer and he calculated Long Term Capital Gains at Rs 22,54,390 /- on sale of building. Aggrieved by the order of Assessing Officer, the assessee filed appeal before Commissioner of income tax (Appeal). In appeal assessee urged that AO erred in calculating the value of building at the rate of Rs. 69,154 /-instead of Rs. 3,85,000 /-. During the first appellate stage the assessee contended vide written submissions date 03.02.2012 that the assessee sold three separate parcel (peace) of land and not one as compared by Assessing Officer. The cost of purchase by the assessee for three properties was Rs. 5,85,000/- and not Rs.5,84,000/-. It was further contended that the assessee had paid Rs. 10,000/- to Sh. TV Kini and Rs. 30,000/- to sons of Ganapthy for land. The appellant with her wife sold land with an area of 4.82 acre and building with two other parcel of land vide sale deed dated 14 February 2007. The contention of assessee was not accepted by Learned CIT (Appeals) holding that the assessee himself had offered Long Term Capital Gain of Rs 21,92,440/- in the revise computation and AO assessed the same at Rs 22,54,390/- and dismissed the appeal. Aggrieved by the order of Commissioner of income tax appeals, the assessee has filed the present appeal before us.
We have heard the ld AR of the assessee and the ld DR for the Rrevenue and perused the material available on record. The Learned AR of the assessee argued that the assessee has transferred three piece of land vide the sale deed dated 14th February, 2007. The assessee along with his wife acquired all three property on different dates. All those properties were transferred by way of single sale deed referred above. It was further argued that the Assessing Officer as well as ld ITA 4737/M/2012 Gautam T Shroff Commissioner of income tax (Appeals) failed to consider the contention of assessee which were duly supported with the documentary evidence. The ld AR for the assessee would argue that the cost of acquisition of all three properties be considered at Rs.5,85,000/- instead of Rs.5,45,000/-. The ld AR for the assessee finally would argue that Revenue may be directed to consider the cost of acquisition of three property/ piece of land at Rs.5,85,000/- The Learned DR for the Revenue strongly supported the order of authorities below. The Learned DR for the Revenue would argue that the assessee himself has taken inconsistent stand about cost of the acquisition of property. The Assessee himself provided the working of Long Term Capital Gain of Rs.2,50,000 /-which was subsequently revised by the assessee himself. It was finally argued that the order of authority below does not require any interference at this stage.
We have considered the rival contention of the parties and gone through the material available on record. A very short question for our consideration is that what is cost of acquisition of properties which were sold by assessee in the sale deed dated 14th February 2007. The perusal of assessment order shows that AO has not gone through the contents of sale deed dated 14th February, 2007. The contents of said sale deed clearly mentioned about the transfer of three piece (parcel) of land which consist of one Farm House with Godowns and two other piece of land (page no.1to10 of P/B). The first piece of land consist of Farmhouse and building which was acquired by sale deed dated 22 June 1983(page11to28), second piece of land was acquired by way of deed of declaration dated 29 September 1982(page 29to 38 of p/b) and 3rd piece of land was acquired vide deed of settlement dated 28 December 1982 (page 39 to 58 of p/b). The assessee has explained the payment of consideration of Rs. 40,000/- in respect of two remaining piece of lands. We have observed that neither the Assessing Officer nor the learned CIT(A) taken into account the cost of remaining two piece of land while computing the Long Term Capital Gain. Thus, we are accepting the contention of assessee that the cost of acquisition of the properties sold in the sale deed is/ was Rs. 5,85,000/-. Accordingly, the AO is directed to re- compute the working of LTCG while taking into the consideration the cost of acquisition at Rs.5,85,000/- of three properties. We order accordingly.
ITA 4737/M/2012 Gautam T Shroff