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TMI Blog2012 (12) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... e's share in favour of his brother is application of capital gain income which has arisen to the assessee? b) Whether the Tribunal was justified in upholding the decision of the Commissioner of Income Tax (Appeals) in considering FMV as on 1/4/1981 estimated by the registered valuer ignoring the fact that rates adopted by the A.O. as from Nabhi's Guide to house to Delhi based on L& DO rates is more in consonance with the FMV? c) Whether the Tribunal was justified in upholding the findings of the Commissioner of Income Tax (Appeals) to adopt the FMV as per register valuer ignoring the fact that the valuer has not given any reasons for not adopting the Government approved rates in absence of comparable sales instances? d) Whether the Tribunal was justified in approving the decision of Commissioner of Income Tax (Appeal) to determine the cost inflation index of the property as on 1/4/1981 ignoring the fact that as per clause 3 of the inflation given in Section 48 of the Income Tax Act benefit of indexation can be given only from the year 1999 which is the year when the assessee inherited the property and became the owner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Order dated 22/12/2008 brought to tax the capital gain taxable in the hands of the respondent on the basis of the net consideration of Rs.7 crores as against Rs.6 crores declared by the respondent for sale of New Delhi property. (d) In appeal, the Commissioner of Income Tax (Appeals) held that the Memorandum of Understanding arrived at between the brothers is a legally binding document, which also finds mention in the sale deed dated 14/10/2005 under which New Delhi property was sold. The Commissioner of Income Tax (Appeals) held that by virtue of Memorandum of Understanding it is clear that the income of Rs.1 crores was diverted before it reached the respondent and is thus not includable in the respondent's income. (e) In Appeal, the Tribunal by its order dated 30/4/2010 upheld the finding of the Commissioner of Income Tax (Appeals). The Tribunal also recorded the fact that the additional amount of Rs.1 crores received by the brother of the respondent had been offered to tax by the brother and the same was duly accounted as his income under the head capital gain. The Tribunal observed that the assessment cannot be based on the perception o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the assessment order dated 22/12/2008. (b) In appeal the Commissioner of Income Tax (Appeals) by an order dated 4/5/2009 held that while determining the fair market value as on 1/4/1981 an element of estimation would creep in as one would have to envisage the existence of a hypothetical seller and a hypothetical buyer in a hypothetical market. The Commissioner of Income Tax (Appeals) held that the registered valuer's report could not be doubted as it explained the basis for adopting the value and the appellant had demonstrated that New Delhi property enjoyed a better value because of its location. The Commissioner of Income Tax (Appeals) held that Nabhi's Guide to House Tax was not applicable specially in view of the valuation report given by the registered valuer which has not been found to be incorrect. Consequently, the registered valuer's report valuing the New Delhi property at Rs.47.74 lacs as its fair market value on 1/4/1981 was accepted and the fair market value of Rs.17.33 as on 1/4/1981 as arrived at in the assessment order dated 22/12/2008 was not accepted. (c) In appeal, the Tribunal by its order dated 30/4/2010 upheld the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 54 of the Act being the investment made for purchase of flat Nos. 416A and 516A at Mittal Park, Juhu, Mumbai. The Assessing officer in his assessment order dated 22/12/2008 restricted the exemption under Section 54 to only Rs.1.34 crores on the ground that the exemption is allowable only in respect of investment in one residential house only. Further the fact that two flats had been joined and made into one flat would not be considered to be purchase of one flat but would be purchase of two separate flats. Consequently, the Assessing officer restricted the exemption to only Rs.1.45 crores as according to him Section 54 of the Act exempts investment in a residential house i.e. one residential house only. (b) In appeal, the Commissioner of Income Tax (Appeals) by his order dated 4/5/2009 held that the respondent herein is entitled to the benefit of exemption under Section 54 of the Act to the extent of Rs.3 crores as claimed in the return of income. This was on the basis that the respondent herein had produced a Certificate of Co-operative Society that two flats were inter connected by internal stair case. The site plan was also submitted inter alia showing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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