TaxTMI 
TaxTMI 
2016 (6) TMI 328
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....Gain and taxing the same because the settled position of law is that the validity of an order of a statutory functionary has to be judged on the basis of material available and legal position prevailing at the time when such an action was taken or an order is framed because subsequent happenings if are put into use and considered, it may validate an order which was otherwise an illegal order in law when was made. This is impermissible in the eye of law. Hence the action of ld. A.O. was erroneous and which was liable to be cancelled, by deleting the addition by the ld.CIT (A), which was not done. Hence she erred. The addition may kindly be deleted. 3. That without prejudice to the ground no. 1 and 2 above, the ld. CIT (A) grossly erred in law and in facts in upholding levy of interest u/s 234B of the Act ignoring the submissions and legal position particularly when the amendment in statute was a retrospective charging amendment and the assessee has been denying completely its liability for such a charge of interest even if action of converting the Short Term Capital Loss into Long Term Capital Gain is upheld. 4. That in the facts and circumstances of the case, since the assess....
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....as sold, a total sale consideration of Rs. 2,00,00,000/- was received as a result thereof. There was a short term capital loss of Rs. 1,81,62,525/- in the hands of the assessee. The AO had examined the submissions made by the assessee and after examining the reply submitted by the assessee has held as under :- " 8. From the above facts it is clear that the assessee has revalued its land to Rs. 3,70,00,000/- from Rs. 2,50,000/- and this has been done simply to inflate the value and revaluation of any asset does not entitle the assessee to claim the revalued figure as cost of the land and the value which has been paid for acquiring the land can only be considered as the cost of asset. Hence, the cost of land can be amount paid by the assessee for acquiring the said land which in the present case is Rs. 2,50,000/- and Rs. 1,83,714/- being the registration and other charges incurred for purchasing the said land, which has also been taken into consideration by the then ACIT, Circle 2(1), Jaipur while assessing the assessee's case (M/s. Sarju Cold Storage PFAS) in AY 1990-91, order of which has been passed on 18.2.1992, therefore, the total value of the land comes to Rs. 4,33,714/- whi....
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....ory and not substantive in nature. The AR of the appellant has submitted that the cost could not have been determined u/s 49(1)(iii)(a) which has been done by the AO but should have been done u/s 49(1)(iii)(e). First of all, it is a presumption that the cost worked out by the AO is u/s 49(1)(iii)(a) and not u/s 49(1)(iii)(e) because the assessment order is completely silent regarding the section under which the cost of the property has been worked out. Therefore, the AR of the appellant is making a presumption that the cost of the property has been worked out u/s 49(1)(iii)(a). The Hon'ble ITAT in the case of Ishrawati Devi vs. ITO (2008) 298 ITR (AT) 313 (Allahabad) has held that the CIT (A) "has powers coterminous with the Assessing Officer. The Commissioner (Appeals) can direct the Assessing Officer to do what the latter failed to do. Unless there are specific fetters placed upon the powers of the Commissioner (Appeals) by express words, he exercise the same powers as does the original court or authority. In fact, the entire assessment is thrown open before him. He can travel outside the record, i.e., the return made by the assessee and assessment order passed by the Asses....
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....ble Supreme Court, particularly, CIT vs. Hindustan Electro Graphites Ltd., 109 Taxman 342 and Sedco Forex International Drill vs.CIT, 279 ITR 310 (SC). 4.2. The next contention of the ld. Counsel for the assessee was that the tax planning within the four corners of the law is an accepted practice. No malafide can be attributed to the assessee. This has been so recognized by the Hon'ble Supreme Court in the case of Vodaphone International case wherein the principles laid down in McDowell's (154 ITR 148 (SC) case was upheld. 4.3. It was thereafter contended by the ld. A/R for the assessee that the specific provisions of section 47(xiii) which prevail over the general provisions i.e. section 49(1)(iii)(a) of the Act and on the basis of the above said submission, it was submitted that the AO was wrong in applying the provisions of sec. 49(1)(iii)(a) to determine the cost of acquisition. It was further submitted that even the ld. CIT (A) was wrong in applying the provisions of section 49(1)(iii)(e) as the said provision was not in existence at the time of transaction or during the assessment proceedings as the said provision was inserted by the Finance Act,2012. On the basis of the ab....
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....n any form or manner, other than by way of allotment of shares in the company; and (d) The aggregate of the shareholding in the company of the partners of the firm is not less than fifty per cent of the total voting power in the company and their shareholding continues to be as such for a period of five years from the date of the succession; (e) The demutualization or corporatization of a recognized stock exchange in India is carried out in accordance with a scheme for demutualization or corporatization which is approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 to 1992). Section 49 : Cost with reference to certain modes of acquisition. (1) Where the capital asset became the property of the assessee - (i) On any distribution of assets on the total or partial partition of a Hindu undivided family; (ii) Under a gift or will; (iii) (a) by succession, inheritance or devolution, or (b) on any distribution of assets on the dissolution of a firm, body of individuals, or other association of persons, where such dissolution had taken place at any time before the 1st day of Apr....