9911796707
TMI Blog1977 (12) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural lands not liable to capital gains tax. This issue is covered by the Andhra Pradesh High Court in the case of Addl. CIT, Andhra Pradesh, Hyderabad vs. Sri G.M. Omerkhan (R.C. No. 18 of 1976 CMP No. 9787/77 decided on 7th Sept., 1977 A.P. High Court) judgment dt. 7th Sept., 1977, where an indentical contention came up for consideration. As in that case, Ibrahimbagh is undoubtedly within the limits of Hyderabad Municipal Corporation. SEc. 2(14) which defines capital asset reads as under: " capital asset means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include (i) XXX XXX XXX (ii) XXX XXX XXX (iii) agricultural land in India, not being land situate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icipality but the population of the Municipal Corporation of a Contonment Board as a whole. Several constituent parts of the Municipality are known as villages by different names. The mere fact that a particular part, area or locality of a Municipality or a Contonment is called a village will not take it out of the territorial jurisdiction of the Municipality. It is the jurisdiction of the Municipality that it the relevant factor which determines whether the area where the agricultural lands in question are situate, viz., Gaddimalkapur village is within the jurisdiction of the Hyderabad Municipal limits, and not whether that particular part of the Hyderabad Municipal Corporation has a separate name. The Municipality comprises of several are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te finally fixed by the High Court. As regards survey numbers 88 and 89, it is contended that the rate claimed by the assessee should not be taken as representing the fair market value until the appeal before the High Court is decided. For the Department it is contended that the assessee themselves were contending before the High Court that the fair market value as Rs. 7 per sq. yard, they cannot now contend that the same should be taken at a lower rate. 5. We do not think that there need be any dispute as to what should be taken as fair market value for the purpose of computing capital gains in this case. Whatever the High Court fixes as fair market rate will have to be taken as the basis for computing the capital gains. Insofar as the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be acquired. We are given to understand that the assessees made the aforesaid payments to protected tenants before acquisition notice was given by the Government. The ITO disallowed the assessees claim on the ground that these payments were not incurred in connection with the acquisition of the lands. He also observed that one of the protected tenants by name Basaiah could not be produced by the assessees. It, however, appears that other person, Sri Malla Rao was produced before him and he confirmed the fact of having received the sum of Rs. 60,000 for relinquishing his right as protected tenant. In appeal, the AAC agreed with the ITO and confirmed the disallowance. 8. Before us the learned Representative of the assessee has submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire compensation awarded was paid to the assessees only. The protected tenants could not have vacated the lands without receiving any consideration for relinquishing their right. When it is found that one of them had been paid Rs. 60,000, there is no reason to doubt that the other person was also paid a similar amount. The question then is whether these payments could be allowed as a deduction in computing the capital gains. 10. Sec. 48 of the IT Act, 1961, reads as under: "The Income chargeable under the head Capital gains shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely: (i) expenditure incurred wholly and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 319 (Cal). In that case, the assessee incurred (i) litigation expenses for compelling a company to register its shares in the name of the assessee and which were purchased earlier in an auction sale and (ii) for acquiring the voting rights in respect of each and every share by cancelling a special resolution amending the articles of association giving only one vote in respect of each member and claimed these expenses as being capital in nature for the purpose determining the capital gains arising on the sale of certain of the shares. The ITO held that the expenses claimed were not incurred either in connection with the sale or as expenses of a capital nature in making any addition or alteration to the capital assets, the same could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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