Court remands case on capital gains computation for shade trees sale. Upheld decision on acquisition cost percentage.

The High Court remanded the case to the Assessing Officer for fresh consideration regarding the computation of capital gains on the sale of shade trees. The Assessing Officer's decision to adopt 20% of the sale price as the cost of acquisition was challenged by the assessee, who argued for 35% of the sale consideration. The CIT(A) dismissed the claim, stating it was not contested further at higher levels. The ITAT upheld this decision, ruling that the Assessing Officer lacked jurisdiction to reassess the actual sale consideration. Consequently, the appeal was dismissed, affirming the original assessment.

---

---

Issues:
1. Rejection of contention on quantum of sale consideration for computing capital gains.
2. Jurisdiction of Assessing Officer to reconsider actual sale consideration in reassessment proceedings.

Analysis:
1. The appeal was against the CIT(A)'s order concerning the assessment year 1996-97. The assessee raised 5 grounds of appeal, out of which the 1st and 5th grounds were dismissed as general. Ground no. 4, related to the levy of interest under section 234B of the Act, was dismissed as mandatory. Ground no. 3 was not pressed during the hearing and was dismissed. The remaining ground, ground no. 2, contested the rejection of the contention on the quantum of sale consideration for computing capital gains on the sale of shade trees.

2. The dispute regarding the sale of shade trees involved the Assessing Officer adopting the cost of acquisition at 10% of the estate value instead of the 35% of the sale consideration claimed by the assessee. The CIT(A) directed the Assessing Officer to adopt 30% of the sale value as the cost of acquisition. The matter was contested before the ITAT, where the sole issue was the adoption of 30% of the sale consideration as the fair market value of the shade trees. The ITAT allowed the department's appeal and dismissed the assessee's cross objection.

3. The High Court remanded the matter to the Assessing Officer for fresh consideration. The assessee contended that the cost of acquisition should be 35% of the sale consideration, which was Rs. 13.5 lakhs received instead of Rs. 30 lakhs receivable under a canceled agreement. The Assessing Officer, in the assessment order, considered the sale consideration as Rs. 30 lakhs and the cost of acquisition as 20% of the sale price, resulting in capital gains.

4. The CIT(A) dismissed the claim that the actual sale consideration was only Rs. 13.5 lakhs, citing that the issue was not contested further before the Tribunal or the High Court. The Assessing Officer's jurisdiction to reconsider the actual sale consideration in reassessment proceedings was questioned, leading to the dismissal of the appeal by the CIT(A).

5. The ITAT upheld the CIT(A)'s decision, emphasizing that the actual sale consideration issue was not part of the High Court's remand, and the Assessing Officer did not have jurisdiction to revisit this issue in the reassessment. Therefore, the ground of appeal raised by the assessee was rejected, and the appeal was dismissed.

---