2016 (7) TMI 22

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....tal income of Rs. 2,13,37,720/- During the relevant financial year, The assessee had sold her flat at 'Takshashila' Society Dader, Mumbai, for a total consideration of Rs. 1,01,00,000/-, The said flat had been acquired by her in lieu of surrender of tenancy rights. While working out the taxable gains the assessee calculated the cost of acquisition of the flat at Rs. 54,72,000/- as on 30/10/1993, i.e., the date when the assessee got possession of the flat in the re-developed building. After considering the contentions of the assessee, the AO made addition of the entire amount of Rs. 1,01,00,000/- as Long Term Capital Gain treating the cost of acquisition of the tenancy as 'NIL' and assessed the total income of the assessee at Rs. 3,14,37,720....

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.... of the flat as on the date of acquisition i.e. Rs. 54,72,000/- as against Rs. NIL adopted by the A.O without appreciating the fact that the assessee failed to prove the acquisition cost of the surrender of tenancy rights with corroborative evidence at the time of possession of flat given on 30/10/1993. (ii) On the facts and in the circumstances of the case the ld. CIT(A) erred in deleting addition made by the A.O under the head 'Long Term Capital Gain' by admitting additional evidence regarding cost of acquisition at Rs. 54,72,000/- without giving opportunity to the A.O as per Rule 46A of the I.T.Rules". 5. Before us the Ld. DR heavily relying upon the assessment order submitted that since the assessee has failed to prove the cost of a....

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....as Pasta Road, Dadar on surrender of tenancy rights in 1984-85, the assessee became owner of the saiod flat. The assessee has rightly calculated the cost of acquisition of the flat at Rs. 54,72,000/- as on 30/10/1993, i.e., the date when she got possession of the flat. Hence the impugned order does not suffer from any legal infirmity. Therefore, the appeal filed by the revenue has no merit. 7. We have heard the rival submissions and perused the material on record including the cases referred by the parties in support of their contentions. In the case of Atul G.Purnaik vs. ITO (supra) the assessee was allotted a plot of land to the assessee as compensation in lieu of agricultural land acquired by the government under "12.5% Expansion Scheme....

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.... issue was determination of cost of acquisition of the said plot of land for the purpose of computing capital gains. In this regard, the Tribunal noted that the market value of the plot of land as on the date of allotment is to be considered as full value of consideration at the time of computing capital gain on the first transaction. It was held that once a particular amount was considered as full value of consideration at the time of its purchase, the same shall automatically become the cost of acquisition at the time when such capital asset is subsequently transferred. It was held that the market value of the plot of land on the date of allotment thus shall constitute the cost of acquisition for the purpose of computing capital gain when....