TaxTMI 
TaxTMI 
2018 (6) TMI 1033
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....IT(A) has erred in law as well as on facts in holding that the provision of section 55(2)(a) is not applicable to the case of the assessee when the section specifically deals with the cost of acquisition of tenancy rights. 2) On the facts and in the circumstances of the case, the CIT(A) has erred in law as well as on facts in ignoring the fact that the assessee could not prove that any expenditure was incurred by the previous owner for acquiring the tenancy right's. 3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the provisions of section 55(2)(b) are applicable to the case of the assessee whereas this section is applicable only in the case of any other asset which is not cover....
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....assessee an individual Late. Shri. Hormuz M. Bhamgara who is represented by his legal heir, Smt. Zenobia Bhamgara has inherited tenancy rights from Smt. Rati R. Bhiwandiwala in respect of a property at Sai Kunj, Plot No.214, Dadar, Mumbai. Smt. Rati Bhiwandiwala was occupying the property for more than 50 years. Photo copy of the rent received prior to 1966 was furnished as proof before the Assessing Officer. Shri. Harmuz M. Bhamgara had sold the tenancy rights during the relevant assessment year for Rs..60 lacs. The return of income was filed declaring NIL income. During the course of assessment, the AO noticed that the assessee has claimed exemption u/s. 54EC on account of investment made in certain funds and he asked the assessee to subm....
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....et becoming the property of the assessee by succession, inheritance or devolution and therefore provisions of section 55(2)(b) would be applicable and not the provisions of section 55(2)(a) of the Act. 5. Ld. DR vehemently supported the orders of the Assessing Officer and the Ld. Counsel for the assessee placed reliance on the order of the Ld.CIT(A). Ld. Counsel for the assessee also placed reliance on the following decisions in support of the contention that, once capital asset in question became property of the assessee by inheritance and the previous owner acquired the property prior to 01.04.1981 then the cost of acquisition of capital asset shall be the cost of acquisition of the asset to previous owner or fair market value as on 01.0....
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....spect of the matter has been considered by the Ld.CIT(A) with reference to the submissions and the facts of the assessee's case and relevant case laws and held that the case of the assessee is falling under section 52(2)(b) of the Act. The Ld.CIT(A) following the decision of the Coordinate Bench of the Mumbai Tribunal in the case of Meher R. Surti v. ITO (supra) held that assessee's claim for adopting fair market value as on 01.04.1981 to compute the cost of acquisition is proper by observing as under: "5.3. I have gone through the submissions of the appellant and find considerable force in the same. Section 55(2)(a) and 55(2)(b) are reproduced as under: - 55(2)(a) - (i) in the case of acquisition of such asset by the assessee by purcha....
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....he first day of April, 1981, means the cost of acquisition of the asset to the assessee or the Fair Market Value of the asset on the first day of April, 1981, at the option of the assessee. In this case, there is no dispute that the asset became the property of the appellant before 01.04.1981. Therefore, the appellant has an option of choosing the cost of acquisition of the asset to the assessee or Fair Market Value of the asset as on 01.04.1981. The appellant chose the latter. He had furnished a copy of the valuation report given by the Government Registered Valuer. 5.3.2. The Hon'ble ITAT, Mumbai "A" Bench has in the case of Ajay I. Thakore, on identical facts held that the Fair Market Value as on 1.4.1981 for the property inherite....
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....of the Ld.CIT(A), we do not find any infirmity in the order of the Ld.CIT(A) in holding that the assessee is entitled for exemption u/s. 54F of the Act. However, it is the finding of the Ld.CIT(A) that assessee has failed to comply to produce necessary proof for investment. We also find from the Assessment Order vide notice dated 07.07.2014 u/s. 142(1) of the Act issued to the assessee, it was asked by the Assessing Officer to submit proof of investment of Rs..60,00,000/- made u/s. 54EC of the Act. However, it is the finding of the Assessing Officer that no evidence whatsoever was furnished by the assessee in this regard. We also find that Assessee was once again asked to furnish the document to justify the claim for exemption u/s. 54EC vid....