TaxTMI 
TaxTMI 
2005 (10) TMI 215
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....g disposed of by this common order. 2. In both the appeals, common grievance of the revenue is that learned CIT(A) has erred in allowing the adoption of fair market value at Rs. 33.73 lakhs as on 1-4-1981 for the purpose of computation of capital gains on the property purchased for Rs. 1,05,643 vide agreement dated 16-3-1981 and the other grievance of the revenue is that learned CIT(A) has erred in allowing indexation with effect from financial year 1981-82 instead of financial year 1991-92. 3. Briefly stated, the facts are that both the assessees were coparcener of the HUF of Shri Kishore S. Kanungo. This HUF has entered into an agreement dated 16-3-1981 for purchase of flat in a building called 'Cliff at Ridge Road, Mumbai for a conside....
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....DR of the revenue that page Nos. 15 to 22 of the paper book contains, an agreement dated 16-3-1981 and our attention was drawn to the second para on page No. 17 of the paper book, as per which, it is clear that a Society is constructing a building and hence, building was not completed on the date of agreement. It was submitted that page Nos. 23 to 36 of the paper book contains valuation report and in particular, our attention was drawn to page No. 27 of the paper book, as per which, construction of the building commenced about 1978 and was completed about 1988 and it was contended that there could not be any market value of the building as on 1-4-1981 when the construction of the building was completed in about 1988. Regarding the Judgment ....
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....ffect from 1-4-1988; and hence, provisions of these sections are not applicable in the present case because in the present case, agreement is dated 16-3-1981. Regarding the indexing, our attention was drawn to Explanation (iii) to section 48 as per which, cost inflation index for the first year in which, asset was held by the assessee or for the year beginning on the first day of April, 1981, whichever is later is to be adopted. It was submitted that in the present case, both the assessees were holding the asset from financial year 1991-92 when the partition of the HUF took place and hence they are entitled to indexing only from financial year 1991-92 as per this Explanation. Regarding section 49, it was submitted that section 49 deals with....
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....sed the materials on record. We find that in the present case, HUF has entered into an agreement for acquiring a flat on 16-3-1981 for a consideration of Rs. 11,01,101. Consideration was paid partly up to 31-3-1981 but major portion was paid after 1-4-1981 and last payment was made on 27-7-1981. As per the valuation report submitted by the assessee, construction of the property was completed in about 1988. Now, the issue before us is whether the capital asset, which became the property of previous owner i.e., HUF on 16-3-1981 was the house property, which was transferred for consideration of Rs. 3.61 crores in financial year 1992-93 or capital asset which became property of HUF was only the right to acquire that flat and not the flat itself....
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....ated as equivalent to the conveyance of the immovable property and since, the sale deed in that case was executed after 1-4-1948, it was held that no capital gain arose in assessment year 1948-49, previous year of which has ended on 31-3-1948. Judgment of Hon'ble Delhi High Court in the case of Mercury General Corpn. (P.) Ltd. relied upon by learned DR of the revenue also supports the case of the revenue because it was held in that case that no sale was affected during the previous year because there could be no sale without a duly registered documents. Similarly, it was held by the Hon'ble Apex Court in the case of Nawab Sir Mir Osman Ali Khan relied upon by learned DR of the revenue that for the purpose of wealth tax, the property belongs....
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....previous owner before 1-4-1981 to make the assessee entitled for this benefit i.e., adopting market value as on 1-4-1981 but since, in the present case, flat was not even in existence till 1988, the assessee cannot be given this benefit. In our considered opinion till 1988, the previous owner i.e., HUF was not owner of the flat but was owner of right to get possession and title of the flat. In view of the above, the first issue i.e., whether the assessee can be given benefit to adopt market value of the flat is decided against the assessee and order of learned CIT(A) is reversed and that of the Assessing Officer is restored to this extent. Regarding the second issue, i.e., from which year the assessee should be entitled for indexation, we f....