TaxTMI 
TaxTMI 
2011 (11) TMI 641
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....ree effective grounds in this appeal- (i) that action of AO by holding that only 1/3rd of the consideration paid by the buyer for acquiring vacant & peaceful possession of a portion of the flat was to be reduced from the total sale consideration, (ii) the computation of cost of acquisition of the flat as on 1.4.1981 and (iii) applying the provisions of section 50C of the Act. 4. During the assessment proceedings the AO noticed that the assessee has computed capital gain on sale of flat at Mumbai as under :- "The computation of long term capital loss was made as under:- Sale price of Premkutir flat 17,750,000 Less: (a) Paid to Mrs. Uma Kamalkishore Seth for vacating the portion occupied by her ....
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....t there was some dispute relating to various properties in the family including the properties sold and for which the assessee has declared capital gain. The dispute was resolved through mutual consent which was approved by Hon'ble Bombay High Court. As per mutual consent the assessee has to pay Rs. 59,16,000/- for vacating the flat and other properties. The AO has wrongly allowed only 1/3rd of the payment of Rs. 59,16,000/- deduction from the total consideration. The ld. AR referring to the documents of consent terms of the dispute and deed of transfer of the flat submitted that Rs. 59,16,000/- was agreed to be paid by the transferee to the occupant. The ld. AR submitted that the entire amount of Rs. 59,16,000/- of the sale consideration r....
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.... High Court in the case of CIT vs. Abhishek Industries Ltd. 286 ITR1 which has been overruled by Hon'ble Supreme Court in the case of Munjal Sales Corporation vs. CIT (2008) 298 ITR 298 (SC). Accordingly the claim may be allowed. 9. The ld. DR on the other hand relied on the order of ld. CIT (A). 10. We have heard the ld. representatives of the parties and perused the record. As regards reducing of the sale consideration of flat by Rs. 59,16,000/- we find that there s no dispute about the fact that as per the consent terms before the Hon. Bombay High Court this amount of Rs. 59,60,000/- was for various purposes. Relevant portion of the consent terms is reproduced below :- "4. Agreed, Declared and Confirmed that the parties herein h....
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.... Transfer the 6 shares of the Chikhal Market Company Ltd. bearing Share Certificate Nos.1676 to 1680 and 2243 issued by the Company in the name of Shamsunder Seth along with the use, occupation and possession of the Shop No.89 situated at Swadeshi Market, 89, Krishna Gulli, Kalbadevi Road, Mumbai 400 002." The ld. CIT (A) observed that payment of Rs. 59,16,000/- was not only related to the flats sold but it related to other properties and relinquishment of other rights also. The ld. CIT (A) was of the view that 1/3rd portion of payment in lieu of vacation of the flat will be justified. The assessee did not furnish any other basis. In absence of material a different estimation of allocation of the payment of Rs. 59,16,000/- at this sta....