TaxTMI 
TaxTMI 
2018 (12) TMI 1151
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.... income for A.Y. 2013-2014 on 27.07.2013, declaring total income at Rs. 65,51,362/-. The return was processed u/S. 143(1) of the Act and returned income was accepted. 2. On verification of the ITR for A.Y. 2013-14 it is seen that the assessee has worked out LTGC on sale of Flat as under: Sr. No. Particulars 1 Date of sale 27.12.2012 2 Sale Consideration Rs. 6,42,05,500 3 Date of purchase / acquisition 30.10.1992 4 Cost of acquisition 62,63,227 5 Cost inflation index for F.Y. 2012-13 852 6 Year of acquisition 1992 7 Cost inflation index for year of acquisition 223 8 Indexed cost of acquisition 2,39,29,459 9 Indexed cost of purchase 36,27,459 9 Capital gain 3,66,48,582 Thus, the assessee has shown the year of acquisition as 1992 and based on this worked out the indexed cost of acquisition at Rs. 2,39,29,459/-. 3. During the assessment proceedings for A.Y. 2014-15, the assessee was requested to provide the sources of investments made during the year. The assessee had submitted that she had in the previous year sold one property and through its proceeds made investment dur....
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....04.06.2007 in F.Y. 2007-08. The order of the Hon'ble Bombay High Court dated 29.06.2007 in WP No. 289 of 1993 in para No. 2 reads as under:- Paragraph No. 34 of our order dated 4th June 2007 stands deleted and substituted by the following paragraph:- 34. The Income Tax Department shall hand over the possession of the premises and also execute necessary deed of sale and convey the property and register the same immediately on receipt of the said sum of Rs. 56,13227/-. 5. From the plain reading of the above para, it is clear that as per the order of the Hon'ble High Court, the assessee became the owner of the property in F.Y. 2007-08. However, for the purpose of computing the indexed cost of acquisition the assessee has taken F.Y. 1992-93 as year of acquisition, which is erroneous as the property was transferred to the assessee in 2007-08. Therefore, the assessee has wrongly computed the indexed cost of acquisition and thereby wrongly computed the capital gains. As per the order of the Hon'ble Bombay High Court the assessee became the owner of the property only in F.Y. 2007-08. Therefore, the indexed cost of acquisition has to be computed after taking....
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....l for the parties and having perused the documents on record, we are conscious that the return filed by the assessee having been accepted without scrutiny, the assessing officer would enjoy a greater latitude in reopening of the assessment as is held by the Supreme Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd., 291 ITR 500 (SC). Nevertheless, it is well settled that even in such a case, the requirement that the assessing officer must have reason to believe that income chargeable to tax has escaped assessment, must be satisfied. In other words, within the narrow confine, it is always open for the Court to verify whether in fact, the reasons recorded demonstrate prima facie material suggesting the escapement of income chargeable to tax. 7. In this background, we have examined the facts on record and the reasons recorded by the assessing officer. The entire controversy revolves around the computation of capital gain arising out of a sale of residential property of the assessee. The admitted facts are that the previous owner one Mrs. Clare Fernandes had executed an agreement to sale the said property in favour of the petitioner on 30.10.1992 for agreed sale co....
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....ty as 30.10.1992 instead of correct date of 4.6.2007 i.e the date of judgment of the High Court. This is the only controversy raised by the assessing officer in the reasons recorded. 9. In this context, learned counsel for the petitioner submitted that the agreement to sale did not culminate into a final sale only because the competent authority under Chapter XX-C of the Act refused to grant NOC and instead ordered compulsory acquisition of the property by the Central Government. This order was declared as ab initio void by the Bombay High Court. In that view of the matter, the transfer of the property in question would relate back to the original date of agreement to sale since, but for the illegal intervention by the Income Tax Authorities, the sale would have taken place as envisaged in the agreement to sale. He submitted that at no stage, the original owner, the proposed seller of the property had raised any dispute about the agreement to sale or the terms thereof. In this context, he has placed heavy reliance on the judgment of the Supreme Court in the case of Sanjeev Lal & Ors. Vs. CIT reported in (2015) 5 SCC 775. 10. Mr. Walve, the learned counsel for the department, ....
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.... department objected contending that the acquisition of the new asset was before the sale of the capital asset by the assessee. In this context, the issue reached the Supreme Court at the hands of the assessee. The Supreme Court referred to the provisions of Section 54 of the Act and Section 2(47) which defines a term transfer in relation to capital assets and observed as under: "22. In the light of the aforestated definition, let us look at the facts of the present case where an agreement to sell in respect of a capital asset had been executed on 27.12.2002 for transferring the residential house/original asset in question and a sum of Rs. 15 lakhs had been received by way of earnest money. It is also not in dispute that the sale deed could not be executed because of pendency of the litigation between Shri Ranjeet Lal on one hand and the appellants on the other as Shri Ranjeet Lal had challenged the validity of the will under which the property had devolved upon the appellants. By virtue of an order passed in the suit filed by Shri Ranjeet Lal, the appellants were restrained from dealing with the said residential house and a law-abiding citizen cannot be expected to violate the ....
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.... a stranger and an incompatible partner to the Income Tax Act and it is also said that equity and tax are strangers to each other, still this Court has often observed that purposive interpretation should be given to the provisions of the Act. In the case of Oxford University Press v. Commissioner of Income Tax [(2001) 3 SCC 359] this Court has observed that a purposive interpretation of the provisions of the Act should be given while considering a claim for exemption from tax. It has also been said that harmonious construction of the provisions which subserve the object and purpose should also be made while construing any of the provisions of the Act and more particularly when one is concerned with exemption from payment of tax. Considering the aforestated observations and the principles with regard to the interpretation of Statute pertaining to the tax laws, one can very well interpret the provisions of Section 54 read with Section 2(47) of the Act, i.e. definition of "transfer", which would enable the appellants to get the benefit under Section 54 of the Act. 25. Consequences of execution of the agreement to sell are also very clear and they are to the effect that the appellan....