TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 1158
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....of by this common order. The issues involved in both the appeals are identical in nature. For the sake of convenience, the facts have been taken from ITA No.2488/M/2011. ITA No.2488/M/2011 2. The assessee has taken the following grounds of appeal: "1. The learned Commissioner of Income-tax (Appeals) erred in upholding that the appellant is not entitled to a deduction in respect of "fair market value" of rights in the residential property. It is submitted that the learned assessing officer in computing the Capital Gains on surrender of tenancy rights, ought to have allowed the deduction in respect of "fair market value" of rights in the property as on 1-4-1981 acquired by the appellant prior to 1970. It is further submitted that the te....
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....cto owners of the portions of the premises occupied by them. It was claimed that since the rights of the assessee were like that of an owner of the property, hence the cost of acquisition of the tenancy rights was required to be taken as fair market value of the property as on 01.04.1981 for the purpose of computing the capital gains while allowing the indexation cost. The Ld. CIT(A), however, held that there was no evidence on the file that the father of the assessee namely Shri Charandas Kapadia was the tenant of the property. Even it was not known as to from what date the tenancy rights came into existence. He observed that the assessee had placed on record the copy of family settlement dated 14.09.1962 and the copy of agreement dated 09....
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....ribunal for admission of additional evidence wherein he has sought to produce in evidence the rent receipts in respect of rent paid to the landlord Shri Krishanraj Dwarakadas Kapadia by the father of the assessee namely Shri Charandas Kapadia. The Ld. A.R. has submitted that some of the rent receipts pertained to the period before 01.04.1981. He has submitted that the evidence in the shape of rent receipts prior to 01.04.1981 proves that the father of the assessee was tenant of the property prior to 01.04.1981 and further that the tenancy rights have devolved upon the assessee and his brother. 6. The Ld. AR has further contended that as per the provisions of section 55(2)(a)(ii), the cost of acquisition is not to be treated as nil, if the ....
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....y, or (d) under a transfer to a revocable or an irrevocable trust, or (e) under any such transfer as is referred to in clause (iv) or clause (v) or clause (vi) or clause (via) or clause (viaa) or clause (vica) or clause (vicb)] or clause (xiii) or clause (xiiib) or clause (xiv) of section 47; [(iv) in sub-section (2) of section 64 at any time after the 31st day of December, 1969,] the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be. ......" Section 55: Meaning of "adjusted", "cost of improvement" and "cost of acquisition". ....
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....d it. However, we find that section 55(2)(b) deals with capital asset other than that being discussed in section 55(2)(a) of the Act. Since the tenancy rights have been dealt with/discussed in section 55(2)(a), hence, in our view, the provisions of section 55(2)(b) are not attracted in the case of the assessee. However, section 55(3) states that where cost for which the previous owner acquired the property cannot be ascertained the cost of acquisition to the previous owner will be the fair market value on the date on which the capital asset became the property of the previous owner. However, this aspect has not been considered by the lower authorities. Even the date of acquisition of tenancy rights by the father of the assessee is required....
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....elating to the tenancy rights and cost of the acquisition of the tenancy rights by the father of the assessee in the property in question and thereafter to decide the issue afresh as per provisions of law and in the light of observations made above. 10. The issue relating to ground No.2 is as to whether the provisions of section 54 are applicable in case of transfer of tenancy rights. The Ld. A.R. of the assessee has fairly admitted that the issue is covered against the assessee by the decision of the co-ordinate Bench of the Tribunal in the case of "Meher R Surti vs. ITO" (2013) 27 ITR 340(T) (Mum. - Tri.). So, the issue raised vide ground No.2 is accordingly dismissed. ITA No.2489/M/2011 11. The assessee in this case is the brother of ....