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2015 (5) TMI 509 - AT - Income TaxComputation of capital gain - Compulsory acquisition of land by Government of Maharashtra from JHF - what is the date of acquisition of the impugned property? - Held that - It is an undisputed fact that the Maharashtra Government acquired the land belonging to the father of the assessee which was acquired by him prior to 1972. It is also an undisputed fact that subsequent to the notification issued by the Ld. CIT(A), land was allotted to the assessee and the family members as compensation in lieu of the land acquired. The letter of allotment is issued by CIDCO Ltd. Dated 29.8.2003 and 8.9.2003. With this letter of allotment the assessee acquired a right to receive the land which was subsequently transferred on 19.7.2007 by way of tripartite agreement with CIDCO Ltd. And M/s. Sea Queen Developments. Reliance on the decision of Shri Atul G. Puranik (2011 (5) TMI 576 - ITAT, Mumbai) is well founded. The date of allotment of leasehold land is rightly taken by the Ld. CIT(A) as the date of acquisition resulting into long term capital gains as the transfer took place on 19.7.2007 i.e. after more than 36 months from the date of acquisition. - Decided against revenue. Cost of acquisition of the impugned property - Held that - In the case of Shri Atul G. Puranik (supra), the Tribunal has held that the actual cost or alternatively the market value of the leasehold right should be taken as cost of acquisition. In the present case, we find that the assessee has paid cost towards these impugned 2 plots at ₹ 1,63,212/- which has also been ascertained by the authorities and confirmed by them. As actual amount paid by the assessee for getting the leasehold right in these plots is available on record, we do not find it necessary for adopting market value of the same. As mentioned above, this view is also supported by the decision in the case of Shri Atul G. Puranik (supra). Accordingly, ₹ 1,63,212/- is the cost of acquisition of the two plots rightly taken by the Ld. CIT(A) and therefore we do not find any error or infirmity in this finding of the Ld. CIT(A). - Decided against assessee. Sale consideration - Held that - The assessee s claim of taking the consideration as per agreement entered in 1999 does not hold any water as we have held that the leasehold right has come into existence only in the year 2003. We find that the assessee himself has furnished valuor s report which states the sale consideration at ₹ 5,72,94,000/-. We find that the Ld. CIT(A) has accepted assessee s valuor s report on this issue. We, therefore do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against assessee. Co-owners for the impugned property - assessee claimed that there were 9 legal heirs of Shri Ramchandra Mahadu Tandel, therefore the assessee s share in the said capital gain should be taken only 1/9th - CIT(A) dismissed this claim of the assessee holding that only four members have signed the deal therefore assessee s share comes to 25% - Held that - Before us, the Ld. Counsel for the assessee stated that an affidavit from the sisters of the assessee have been filed before the Ld. CIT(A) and in the affidavit it has been specifically mentioned that the sisters have also received consideration from the sale of leasehold right. We find that there is no mention of the affidavit in the findings of the Ld. CIT(A). We, therefore, restore this issue to the file of the AO. The AO is directed to verify the contents of the affidavit and decide the issue afresh as per provisions of the law after giving reasonable opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. Applicability of Sec. 50C - Held that - It is an undisputed fact that the assessee has transferred leasehold rights in the two plots. This issue was also considered by the Tribunal in the case of Shri Atul G. Puranik (supra) wherein the Tribunal has held that Sec. 50C applies only to a capital asset being land or building or both, it cannot be made applicable to lease rights in a land. As the Ld. CIT(A) has followed this decision of the Tribunal and no contrary decision has been brought on record before us by the Ld. DR, we do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against revenue.
Issues Involved:
1. Date of acquisition of the impugned property. 2. Cost of acquisition of the impugned property. 3. Sale consideration. 4. Number of co-owners for the impugned property. 5. Applicability of Section 50C of the Income Tax Act. Detailed Analysis: i) Date of Acquisition: The primary issue was determining the date of acquisition of the impugned property. The land originally belonged to the father of the assessee and was acquired by the Maharashtra Government prior to 1972. The letter of allotment for compensation land was issued by CIDCO Ltd. on 29.8.2003 and 8.9.2003. The assessee transferred the rights on 19.7.2007. The Tribunal relied on the decision in the case of Shri Atul G. Puranik, concluding that the date of allotment (2003) is the date of acquisition, resulting in long-term capital gains since the transfer took place more than 36 months later. The Tribunal dismissed the Revenue's appeal on this ground. ii) Cost of Acquisition: The cost of acquisition was contested. The Tribunal, referring to the decision in the case of Shri Atul G. Puranik, held that the actual cost paid by the assessee, Rs. 1,63,212/-, should be taken as the cost of acquisition. This amount was confirmed by the authorities. The Tribunal found no error in this finding and dismissed the assessee's appeal on this ground. iii) Sale Consideration: The assessee's claim to consider the sale consideration as per a 1999 agreement was rejected. The Tribunal noted that the leasehold right came into existence in 2003, and the assessee's valuor's report stated the sale consideration at Rs. 5,72,94,000/-. The Tribunal upheld the Ld. CIT(A)'s acceptance of this valuation and dismissed the assessee's appeal on this issue. iv) Number of Co-owners: The assessee claimed there were 9 legal heirs, and thus the capital gains should be divided among 9 individuals. The Ld. CIT(A) dismissed this, noting only four members signed the deal, thus the assessee's share was 25%. The Tribunal remanded this issue to the AO for verification of affidavits from the assessee's sisters, directing the AO to decide the issue afresh after giving the assessee a reasonable opportunity to be heard. v) Applicability of Section 50C: The Tribunal considered whether Section 50C of the Income Tax Act, which applies to capital assets being land or building, was applicable to leasehold rights. Citing the case of Shri Atul G. Puranik, the Tribunal held that Section 50C does not apply to leasehold rights. The Tribunal found no reason to interfere with the Ld. CIT(A)'s findings and dismissed the Revenue's appeal on this ground. Conclusion: The Tribunal dismissed the appeal filed by the Revenue and partly allowed the assessee's appeal. The decision for other assessees was aligned with the decision in the case of Shri Hemant R. Tandel. The order was pronounced in the open court on 22nd April, 2015.
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