TaxTMI 
TaxTMI 
2009 (7) TMI 848
X X X X Extracts X X X X
X X X X Extracts X X X X
....original cost of acquisition of Rs. 63,59,980 and thereby taking indexation total acquisition cost with effect from 6-1-1992 which is the date of improvement and the learned Commissioner of Income-tax (Appeals) erred in confirming the same. 2. Thereby the learned Income-tax Officer has erred in taking the Index Cost of the assets sold (i.e., Shreyas Property) at Rs. 1,05,52,579 as against Rs. 1,12,23,085 declared by the appellant in the return of income and thereby taking the Long Term Capital Gain on sale of Shreyas Property at Rs. 52,25,981 as against Rs. 45,55,475 declared by the appellant and thereby making the addition of Rs. 6,25,981 in the taxable long-term capital gain after allowing the claim of deduction of Rs. 46,0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d contended that the ownership right vide agreement dated 27-12-1990 was with the assessee even though the physical possession of the property was obtained on 6-1-1992 after paying the amount to the tenant. Since the ownership right was assigned on 27-12-1990, the assessee contended that the cost of indexation should be allowed from 27-12-1990 and not from 6-1-1992 as was done by the Assessing Officer. It was further submitted that the expenditure incurred for vacating the tenancy is also to be considered as cost of improvement under section 48(2) on the basis of the Hon'ble Bombay High Court decision in the case of CIT v. Ms. Piroja C. Patel [2000] 242 ITR 5821 which is material for cost of improvement and not for date of ownership. The CI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s short-term capital gains, the learned counsel submitted that property was purchased and sold on agreement only and referred to the fact that the assessee has entered into agreement for purchase of the property as on 27-12-1990 and accordingly deemed to have held the property from that date. 5. The learned D.R., however, relied on the orders of the Assessing Officer and CIT(A) to hold that the Assessing Officer was correct in allowing indexation only from 6-1-1992. 6. We have considered the issue. The Explanation (iii) to provisions of section 48 is as under :- "(iii) "indexed cost of acquisition" means an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r or tenant of (property, stock, land ....). Thus, a person can be said to be holding the property as an owner, as a lessee, as a mortgagee or on account of part performance of an agreement, etc. The assessee entered into an agreement for purchase of a flat in New Delhi on May 29, 1970. Pursuant to the agreement he was put in possession of the flat on the same date. According to the stipulation, the assessee was to pay the amount due in instalments and the final amount was paid on February 10, 1973. The assessee sold the property on February 10, 1973, and claimed that the gains arising from the transfer were long-term capital gains. His claim was accepted by the Tribunal. On a reference: Held, that the Tribunal was right in law in hol....
X X X X Extracts X X X X
X X X X Extracts X X X X
....UL(3) as early as 13-2-1991. The assessee paid the balance also subsequently as per the agreement after obtaining the certificate. The ownership has been passed by virtue of this agreement but the property was in the possession of the tenant for which the settlement was made later on by paying further amount for the vacation of the tenant. It cannot be stated that only after vacating the tenant the assessee got possession because the assessee is the owner of the property with effect from 27-12-1990, but is in the adverse possession of a tenant which was subsequently got vacated. On the facts of the case decision of the Hon'ble Bombay High Court in the case of R.R. Sood (supra) does not apply and hence the reliance on the decision made by th....