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Income Tax Appellate Tribunal, “J”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN, JM
O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A), Mumbai, dated 2-1-2014, for the assessment year 2010-11 2. In this appeal, the assessee is aggrieved for addition made on account of capital gains. 3. Rival contentions have been heard and record perused. Even though six grounds of appeal
has been raised but assessee is only aggrieved for computing capital gain by taking value as on 1-4-1981 without considering the DVO’s report.
3. We have considered rival contentions and found the assessee is a partnership firm consisting of two partners. It is assessed to income tax since 1965-66. It acquired a plot of land on tenancy basis measuring 1500 sq.yards for their business for 11 months from 01-10-1964 to 30-09-1965.
2 The said plot of land is situated at Vithalwadi, Ghatla road, Chembur. The said partnership firm constructed factory sheds on the said land for the purpose of its business. The said Jamnadas & Co. carried on its business since last no. of years. However, for the last several years its business was totally dormant as can be seen from the various return of incomes filed by it during the last several years. It never claimed any depreciation on the factory sheds constructed by it. A case was filed by the Superior landlords i.e Jagdish Himatlal Jani & others being Suit No.287/386 of 1981 in the Small Causes at Bombay for getting vacant possession of the piece and parcel of the land at measuring 1500 sq.yards. The landlords lost the case under an order dated 29-01-2000 passed by the Judge Court Room No.25, Small Causes at Bombay. The assessee was confirmed as a tenant. The landlords again filed a case in the Court of Small Causes being T.E.R, Suit No.20 11224 of 2007 for getting the vacant possession of the premises. After prolonged litigation a consent decree was settled between the parties on 03-12-2009. As per the consent decree the assessee agreed, confirmed & undertook to surrender all its rights, title and interest in the plot of land as well as in the various structures constructed and owned by it and also the various structures belonging to Radheshyam Dying & Bleaching Works. It received total compensation of Rs.1,90,00,000/- for the same from the superior landlords. However, while computing capital gain, the AO referred the matter to the DVO for arriving at the fair market value as on 1-4-1981. In 3 ITA No.1542/14 the absence of DVO’s report, the AO himself had taken the value as on 1- 4-1981 and confirmed the capital gain.
We found that DVO’s report was delayed, therefore, cannot be considered by the AO. In the interest of justice, we restore this issue back to the file of AO with a direction to recompute capital gain by considering the DVO’s report determining/estimating value of property as on 1-4-1981. The AO is also directed to allow indexation on the valuation so arrived at by DVO as on 1-4-1981 and to recompute the capital gain. We direct accordingly.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 31/03/2016.
Sd/- Sd/- (SANDEEP GOSAIN) (R.C.SHARMA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक Dated 31/03/2016 प्र.कु.मभ/pkm, नन.स/ PS आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai. 3. आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 5. गार्ा पाईर / Guard file. 6. सत्मावऩत प्रनत //True Copy// आदेशाि सार/ BY ORDER,