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2019 (3) TMI 1139 - HC - Income TaxCapital gain computation - sale of old books, part of library inherited by as family members on the death of Shri. Late Muthiah, who expired on 04.06.1992 and which books were sold by them to the University of Chicago, USA.Denial of benefit of indexation of cost - absence of cost of acquisition as on 01.04.1981 - HELD THAT - No substantial question of law arises in the present case, since the Assessees failed to adduce any evidence or material to establish the cost of acquisition of the books in question, which they simply inherited on the death of the owner, Late Mr.Muthiah, on 04.06.1992 and sold away such books to the University of Chicago, USA. In the absence of cost of acquisition as on 01.04.1981 having been established by the Assessees, the authorities were naturally unable to give the benefit of indexation of cost in the present facts. Therefore, such findings of facts on the basis of estimate nonetheless remain as findings of facts only and do not give rise to any substantial question of law requiring interference under Section 260A of the Act. Therefore, we do not find any substance in the present appeals filed by the Assessee - Questions of law framed above are answered against the Assessee and in favour of Revenue.
Issues involved:
1. Estimation of cost of acquisition for old books sold by the Assessees. 2. Application of indexation under Section 48 of the Income Tax Act, 1961. 3. Justification of the orders passed by the Income Tax Appellate Tribunal and the Commissioner of Income Tax (Appeals). Detailed Analysis: 1. The Assessees appealed against the order of the Income Tax Appellate Tribunal, which dismissed their appeals for Assessment Years 1995-96 to 1999-2000 regarding the sale of old books inherited from Late Mr. Muthiah. The issue revolved around the cost of acquisition of these books. The CIT (A) justified estimating the cost at 30% of the sale value due to the Assessees' failure to prove the cost as of 01.04.1981 for indexation purposes. The Assessing Authority estimated the cost at 30%, but the CIT (A) increased it to 40% for computing capital gains liability. 2. The questions admitted for appeal included the Tribunal's failure to appreciate the market value of the library materials as of 01.04.1981 for indexation under Section 48. The Assessees argued that most materials were acquired before 01.04.1981 and should have been indexed accordingly. The Departmental Representative contended that the Assessees did not provide evidence for the cost incurred on acquisition, leading to the adoption of 30% of the sale price as the cost of acquisition. 3. The High Court analyzed the lack of evidence presented by the Assessees to establish the cost of acquisition as of 01.04.1981. The Court upheld the decision to estimate the cost at the date of sale, rejecting the Assessees' presumption that assets were acquired before 01.04.1981. The Court emphasized that indexation was not applicable in the absence of concrete evidence for the cost of acquisition. The judgment referenced a previous case to support the estimation made by the CIT (A) and dismissed the Assessees' appeals, ruling in favor of the Revenue. In conclusion, the High Court dismissed the appeals, stating that no substantial question of law arose due to the Assessees' failure to provide evidence for the cost of acquisition. The Court upheld the authorities' decisions to estimate the cost at the date of sale and denied the benefit of indexation under Section 48. The judgment emphasized the importance of substantiating claims with evidence in tax matters and confirmed the orders against the Assessees in favor of the Revenue.
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