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Issues involved: Dispute over computation of capital gain from the sale of property.
Summary: The assessee, a former tenant who became the owner of a property under a government scheme, sold the property and claimed long term capital gain based on holding since 1984. However, the Assessing Officer considered it short term gain as the property was sold within 36 months of ownership acquisition. The dispute centered on the cost of acquisition, with the assessee arguing for the market value of the tenancy right plus payment made, while the authorities upheld the cost at the price paid for ownership. The Tribunal agreed on short term gain computation but disagreed on the cost of acquisition, directing a fresh assessment considering the market value of the tenancy right and the payment made. The Tribunal upheld the CIT(A)'s decision on treating the gain as short term capital gain due to the property being sold within 36 months of ownership acquisition. However, it disagreed with the cost of acquisition determination, stating that it should be the market value of the tenancy right as of the ownership acquisition date plus the payment made by the assessee, not just the price paid for ownership. The Tribunal emphasized the need for a reassessment by the Assessing Officer to consider these factors properly.
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