TaxTMI 
TaxTMI 
2018 (12) TMI 1151
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....ring 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 during the year. The assessee had given the details of purchase of the said property and submitted the following....
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....er 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 the year of acquisition as F.Y. 2007-08. 6. In view of the above the LTCG ought to be worked out as under: Sr. No. Particulars 1 Date of sale 27.12.2012 2 Sale Consideration....
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....he 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 consideration of Rs. 64,00,000/-. At the time of execution of this agreement, the petitioner had paid sum of Rs. 6,50,000/- towards earnest money. The balance amount of Rs. 57,50,000/- would be paid upon issuance of no objection certificate by the appropriate authority as referre....
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....lminate 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, had argued that such an issue can always be examined by the assessing officer during the assessment proceedings and further in the present case, the working out of the indexed cost of acquisition would create a problem if the petitioner's contentions were to be accepted. 11. If the is....
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....(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 direction of a court by executing a sale deed in favour of a third party while being restrained from doing so. In the circumstances, for a justifiable reason, which was not within the control of the appellants, they could not execute the sale deed and the sale deed had been registered only on 24....
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.... 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 appellants could not have sold the property to someone else. In practical life, there are events when a person, even after executing an agreement to sell an immovable property in favour of one person, tries to sell the property to another. In our opinion, such an act would not be in accordance with law becaus....