TaxTMI 
TaxTMI 
2025 (6) TMI 559
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....the fact that the assessee had not furnished any evidences in support of the deposition of the same." 2. The brief facts of the case are that the assessee filed his return of income on 31.03.2024 for the year under consideration at Rs. 49,13,080/-. The case of the assessee was selected for scrutiny assessment through 'CASS" and subsequently the assessment u/s 143(3) of the Act was completed on 29.02.2016, by making various additions, including an amount of Rs. 4,40,00,000/- towards Long Term Capital Gain and Rs. 61,32,400/- u/s 69A of the Act towards the unexplained deposits in the savings bank account of the assessee. 3. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who deleted the aforesaid two additions made by the Assessing Officer. 4. Aggrieved by the order of the Ld. CIT(A) deleting the additions made by the Assessing Officer, the Revenue is now in appeal before us. Issue No. 1. - Deletion of addition on account of LTCG u/s 55(2)(a)(ii) 5. The relevant facts relating to this issue are that the Assessing Officer made addition of Long Term Capital Gain of Rs. 4,40,00,000 on the ground that the assessee had transferred only....
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....ance with the prevailing rate of interest and by deducting the annual rent payable to the lesser out of the total income of the assessee by valuing "fair market value" of the land as on 1.4.1981 as observed in the judgement rendered by the Hon'ble ITAT Ahmedabad Bench in the case of M/s Natraj Vs DCIT in ITA No.3063/Ahd/2010. He also argued that the Assessing Officer thoroughly examined all clauses of lease deed no. 4847 of 5th October 1932 and also examined deed no. 4645 executed between assessee's father and M/s. Picker's Ltd for lease rent of Rs 600/- p.a. He submitted that the Assessing Officer has also examined deed no 4644 which was stated to be executed between assessee's father and the landlord and it was found that deed of assignment of lease dated 01.05.2012 clearly shows that deed no. 4644 was executed between assessee's father and M/s. Picker's Ltd and was not at all executed between assessee's father and the landlord and nothing was mentioned in the said deed about the payment of Rs 3000/- to get waiver of right to sub lease without landlord's consent. 6.3 Reliance was placed on the following judgements: 1. DCIT vs Tejinder Singh Hon&....
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....bordinate right to the right of the ownership of the property. 3. It is further most humbly submitted that the cost of acquisition in the hands of the assessee's would be that of the forefathers by virtue of section 49(1) (iii) (a) providing that where capital assets become property of the assessee by succession, inheritance or devolution, cost of acquisition of the assets deemed to be the cost at which the previous owner of acquired the property. 4. It is most humbly submitted that in the instant case, nowhere in any of the lease deed, it is mentioned that the assessee's father had paid any consideration while getting the leasehold right on the property nor it is mentioned that the assessee's father had paid Rs. 3000/- in 1944 and merely on the basis of affidavit dated 21.06.2016 submitted by the assessee after 72 years, it cannot be said that Rs. 3000/- was actually paid by the assessee's father for the waiver of right especially when the same is not also mentioned in the lease deed executed by the assessee and picker's Ltd. Therefore, the cost would be NIL in the hands of the previous lessee so also in the hands of the present lessee. 1. Thus, it is most humbly submitt....
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....6 and the appellant expired on 07.01.2017, so it is a matter of 72 years back when the appellant was only 8 years old in 1944. How can anyone be so specific about payment of Rs. 3000/- by his father in 1944 in cash? Therefore, the affidavit filed after the span of 72 years have no legal validity and it is a mere self-serving evidence. It is also mind boggling to note as to why there is no mention of payment of Rs. 3000/- in deed no. 4645 and 4644 which were executed in 1944. This clearly proves that no such payment was made by appellant's father for waiver of taking permission from landlord for further sub-leasing. The CIT(A) has not appreciated the legal value of affidavit and too in absence of any corroborative evidence. 5.4 The CIT (A) has stated in para 3.3 (page 9 of the order) "Affidavit if on record and the contents of the said affidavit have remained uncontroverted. The same was not disproved or found to be false". But the fact is that neither the AO nor the DVO has accepted the validity of affidavit. Therefore, it is wrong to conclude by the CIT (A) that contents of the said affidavit have remained uncontroverted. 6. It is further most humbly submitted that from the le....
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.... the CIT (A) held that long tenancy of 999 years is as good as ownership of asset as has been accepted in the many judicial pronouncement. However; no authorities have been quoted by the CIT (A) as to how much inference was drawn. Further, no specific case laws have been cited in support of above observation of the CIT (A). Therefore, again there appears incorrect understanding of the law| at the end of the CIT (A). 9. Hence, the Ld. CIT (A) should consider the market value derived by the DVO as cost of acquisition on that date as the Ld. AO had allowed as deduction with benefits of indexation cost of the assessee. 10. It is most humbly submitted that there is nothing in section 55A which debars the Assessing Officer from making reference to the DVO. In support of this, I would like to rely upon the judgment rendered by the Hon'ble ITAT Mumbai Bench in the case of Vijay P. Karnik Vs. Income Tax Officer, Ward 19(2)(2). The relevant extract of the judgement is reproduced herein for the kind consideration of your honour. "There is nothing in section 55A which debars the Assessing Officer from making reference under clause (b) even when registered valuers report has been file....
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....ing the valuation report submitted by the assessee in toto. 13. Finally, the AO has been highly painstaking during the entire assessment proceedings and have considered all documents and materials submitted and gathered. The AO thoroughly examined all clauses of lease deed no. 4847 of 5th October 1932. Further, the AO also examined deed no 4645 executed between assessee's father and the picker's Ltd for lease rent of Rs 600/- p.a. Furthermore, the AO also examined deed no 4644 stated to be executed between assessee's father and the landlord. Here it is clarified that the AO found that deed of assignment of lease dated 01.05.2012, clearly shows that deed no 4644 was executed between assessee's father and the picker's Ltd and was not at 0II executed between assessee's father and the landlord and nothing was mentioned in the said deed about the payment of Rs 3000/- to get waiver of right to sub lease without landlord's consent. 14. Hence, the undersigned heavily rely upon the finding of the AO given in para 4.1 to para 4.10 of the order. Further, the undersigned also rely upon the alternative finding of the AO given in para 4.11 to para 4.16 of the order. It is therefore, ....
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.....1981" has to be adopted and considered for the purposes of indexation. - However, AO took a view that cost of acquisition of leasehold rights has to be taken as Nil. Consequently, AO treated the entire sale consideration of Rs. 4,40,00,000/- as Long Term Capital Gain ("LTCG" for short). - Without prejudice, AO also made following observations: * AO further made reference to DVO u/s 55A pursuant to which, DVO determined FMV as at 01.04.1981 at Rs. 285.52/- per sq. meters; * Based on such rate, cost of 4000 sq. meters of land as at 01.04.1981 was worked out at Rs. 11,42,080/- and Indexed cost of such land was worked out at Rs. 97,30,521/-. * Consequently, LTCG was determined by AO at Rs. 3,42,69,479/-(Rs.4,40,00,000/- minus Rs. 97,30,521/-). * Since AO had added entire sale consideration by Rs. 4,40,00,000/- as LTCG, no separate addition of Rs. 3,42,69,479/- was made. - CIT(A) deleted the impugned addition on both the counts discussed by AO. Hence, revenue is in appeal before Hon'ble the ITAT. - Factum of payment of Rs. 3,000/- by assessee's father to the landlord in the year 1944 is duly supported by assessee's "affidavit", AO has not brought on record anything ....
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...." than "FMV as al 01.04.81"; Hence. Assessing Officer could not have made reference to DVO u/s 55A for ascertaining "FMV as at 01.04.1981"; "Amendment to S.55A" w.e.f. "01.07.2012" is not applicable since property was transferred on 01.05.2012 (i.e. prior to amendment): - S.55A has been amended w.e. f. 01.07.2012 as per which, AO can refer the valuation of capital assets to the valuation officer if the valuation claimed by the assessee is at "variance" with its FMV. - Prior to such amendment. AO could have referred the case to the valuation officer for valuation of a capital assets only when the value claimed by the assessee is "less " than its FMV. - Following two dates are material in the present case: * 01.05.2012 - Date of transfer of property in question; * 01.07.2012 - Date with effect from which S.55A has been amended. - Since 'transfer' took place 'prior to 01.07.2012', AO could not have referred valuation of the underlying capital assets to DVO since the valuation claimed by assessee as at 01.04.1981 is "more" than FMV. Reliance is placed on: * DCIT vs Vinod Harilal Mehta - ITA 2945/Ahd/2013; * CIT vs. Gauranginiben S. Shodhan - (2014) 367 ITR 238 (Guj); ....
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.... of that Act. Explanation.-In this section, "Valuation Officer" has the same meaning, as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).] viii. *Substituted for "is less than its fair market value" by the Finance Act, 2012, w.e.f. 1-7-2012. Since the provisions of Act do not support the action of the Assessing Officer to refer the matter to the DVO, the appeal of the Revenue is liable to be dismissed. We decline to interfere with the order of the Ld. CIT(A) in this regard and this ground of appeal raised by the Revenue is dismissed. Issue No. 2. - Deletion of addition of Rs. 61,32,000/- u/s 69A of the Act 9. The Assessing Officer observed that funds aggregating to Rs. 61,32,400/- had been deposited in the savings bank account held by the assessee. The Assessing Officer, therefore, called upon the assessee to show cause as to why such sum should not be treated as unexplained money and added as income u/s 69A of the Act. Since no satisfactory reply was filed by the assessee, the Assessing Officer made addition of Rs. 61,32,400/- by treating such deposits as unexplained. On appeal before the Ld. CIT(A), he deleted the impugned addition, after considering th....