TaxTMI 
TaxTMI 
2010 (11) TMI 199
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....of Income-tax (Appeal) erred in ignoring the fact that as per provisions of section 48, taking value as on 1-4-1981 is fundamental right, Appellant prays to take value as per valuation report as on 1-4-1981. 4. Learned commissioner of Income-tax (Appeal) erred in directing to take value of Rs. 3008000 as per D.V.O's report dated 28-8-2008. appellant pray that D.V.O's report dated 28-8-2008 is without considering objections of Appellant as per letter dated 10-6-2008. Submitted to D.V.O. Appellant prays to take value after considering objections raised vide letter dated 10-6-2008." 3. Briefly stated, during the relevant assessment period the assessee has sold office premises in Everest Building at Tardeo Road for a consideration of Rs. 21,00,000. Computation of Long Term Capital Gain as shown with return of income is as under :- Sale consideration of office at Tardeo on 02-2-2005 Rs. 21,00,000 Less: transfer cost Rs. 90,000 Net consideration received Rs. 20,10,000 Less: Cost of acquisition (61,200x480/100) acquired on 1-9-1978 Rs. 2,93,760 Long Term Capital Gain on sale of office premises Rs. 17,16,240 Consideration on sale of shares ....
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....n her rights to adopt the cost of acquisition as on 1-4-1981 but mistakenly has taken the purchase cost as on 1-9-1978 and the Assessing Officer was not correct in refusing to entertaining the claim of adopting the value as on 1-4-1981. It was his submission that the CIT(A) as well as the ITAT has power to entertain the issue. 5. The learned D.R., however, objected to on the basis of the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. v. CIT 284 ITR 323. 6. We have considered the issue and arguments of the learned counsel and the learned D.R. As seen from the facts of the case the assessee has purchased the property which was sold during the year, on 1-9-1978. The Act permits the assessee to adopt the fair market value as on 1-4-1981 or the actual cost if it is acquired prior to 1-4-1981. Provisions of section 55(2)(b) is as under :- "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 fair market value of the asset on the 1st day of April, 1981, at the option of the assessee" This provision permits the assessee to adopt either the actual cos....
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....ee's claim without filing revised return of income. To properly appreciate the issue, we would like to reproduce the finding given by Hon'ble Supreme Court in case of Goetz India Ltd. cited supra, reads as under:- "The decision in question is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the income-tax appellate tribunal under section 254 of the Income-tax Act, 1961. There shall be no order as to costs." 21.1 From the above finding of the Apex court, we find that the Apex court has decided the issue for a limited purpose in respect of power of the assessing authority. The Apex court clarified in its judgment itself that their finding does not impinge ....
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....to the AAC in appeal to consider the new sources and to assess them. 21.3 On appeal to the Supreme Court, The Supreme Court has held as under:- "(Pages 612 to 614)" In Jute Corpn. of India Ltd.'s case (supra) this Court has referred to the earlier decision of this Court in CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225, which was also a decision of a three Judge Bench wherein the scope of section 31(3)(a) of the Indian Income-tax Act, 1922 [which was almost identical to section 251(1)(a) of the 1961 Act] was considered and it was held: "'If an appeal lies, section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under section 31(3)(a), in disposing of such an appeal, the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income-tax Officer to make afresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is coterminous with that of the Income-tax Officer. He can do what the Income-tax Officer can do and al....
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....which had heen considered by the ITO and the AAC exceeded his jurisdiction in making an addition of Rs. 2,30,000 on the basis of the other 10 items of hundis which had not been explained by the assessee." 21.4 In the light of the above discussion, we find that the Assessing Officer has no power to admit fresh claim otherwise than revised return but appellate authorities including CIT(A) & ITAT have power to admit such claim. Without prejudice to the above finding, we admit the assessee's claim which is in accordance with the judgment of the Apex Court in the case of Goetz India Ltd. (supra). In the interest of natural justice and keeping in view the ratio laid down by the Apex Court in the case of Goetze (India) Ltd., 284 ITR 323, we remit the matter back to the file of the CIT(A) with a direction to decide the issue on merit in accordance with law after providing reasonable opportunity of hearing to both the sides." 8. In view of the above principles laid down with which we agree, we direct the Assessing Officer to adopt the fair market value of the asset on 1st of April 1981. Since the registered valuer's report was filed in the course of assessment itself but Assessing Off....
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....Hon'ble Bombay High Court has approved the decision of Hon'ble ITAT Mumbai, Third Member decision in the case of Ms. Rubab M. Kazerani, 91 ITD 429 (Mum.)(TM)and the Hon'ble ITAT Pune decision in the case of Smt. Krishnabai Tingre v. ITO, 101 ITD 317 (Pune)(TM). Further the decision of Hon'ble Gujarat High Court in the case of Hiaben Jayantilal Shah v. ITO, 310 ITR 31 (Guj.) is also on the same issue. In view of this the Assessing Officer has no option than to accept the fair market value of Rs. 3,80,000 as on 1-4-1981 and the indexed cost of acquisition at Rs. 18,24,000. However the issue is restored to the file of Assessing Officer to examine the registered valuer's report and allow the amount as such. Ground Nos. 1,2 & 3 are considered allowed. 10. Ground No. 4 pertains to the issue of adoption of substituted value on the basis of DVO's report. As stated earlier the Assessing Officer adopted the market value as per section 50C on the basis of stamp value at Rs. 42,27,104 subject to modification thereafter once the DVO's report was received. Consequent to the receipt of the report, the CIT(A) without considering the objections of the assessee, directed the Assessing Officer to ....