1982 (10) TMI 62 - AT - Income Tax

Summary

Issues Involved:
1. Determination of the date of acquisition of the flat for capital gains computation.
2. Determination of the actual sale proceeds received by the assessee.

Issue-wise Detailed Analysis:

1. Determination of the date of acquisition of the flat for capital gains computation:

The first issue revolves around whether the asset sold by the assessee was a long-term or short-term capital asset. The assessee contended that the flat was acquired on 7-3-1969, the date of the agreement with the builders, thus making it a long-term capital asset. The Income Tax Officer (ITO) argued that the flat was acquired in August 1971, when the assessee took possession, thus making it a short-term capital asset. The Commissioner (Appeals) sided with the assessee, referencing previous Tribunal decisions which held that the date of the purchase agreement is the date of acquisition, regardless of when possession or payment occurred. The Tribunal upheld this view, citing the decision in IT Appeal No. 1529 (Bom.) of 1977-78 and the Bombay High Court ruling in CIT v. Tata Services Ltd., which recognized the right to occupy a flat as being acquired on the date of the agreement.

2. Determination of the actual sale proceeds received by the assessee:

The second issue concerns whether the assessee received an additional Rs. 68,000 in cash over the declared sale proceeds of Rs. 2,25,000. The ITO based this conclusion on the broker's statement and entries in the broker's books. The assessee denied receiving any additional amount and pointed out discrepancies in the broker's statement. The Commissioner (Appeals) found the broker's statement unreliable and unsupported by evidence, noting that similar allegations by the broker in other cases were found baseless. The Tribunal agreed, emphasizing that self-serving statements or book entries do not constitute proof, as established in CIT v. Durga Prasad More. The Tribunal found no corroborative evidence to support the ITO's claim and noted that the declared sale proceeds were reasonable compared to other sales in the same building. Consequently, the Tribunal upheld the Commissioner (Appeals)'s finding that the assessee received only Rs. 2,25,000.

Conclusion:

The Tribunal dismissed the department's appeal, affirming the Commissioner (Appeals)'s decisions on both points: the asset was a long-term capital asset acquired on the date of the agreement, and the sale proceeds were Rs. 2,25,000 without any additional cash receipt.