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TMI Blog2014 (1) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... e shops sold by the assessee durig the year - The observation of the Assessing Officer to the effect that depreciation were claimed on these shops in earlier years, are not supported by material on record - The Assessing Officer has not considered indexed cost of acquisition claimed by assessee at Rs. 39,52,699/- while computing capital gains nor CIT(A) has deliberated on this issue – Provisions of section 50 are not applicable in this case - The issue was restored for fresh adjudication. - ITA. No. 331/Ind/2013 - - - Dated:- 30-10-2013 - Shri Joginder Singh, J. M. And Shri R. C. Sharma, A.M.,JJ. For the Appellant : Shri R. A. Verma, Sr. DR For the Respondent : Shri R. N. Gupta, C. A. ORDER Per R. C. Sharma, A.M. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company M/s. Bharat Pictures Pvt.Ltd., and brother of Shri Reghunandan Agarwal, Managing Director of the company. Shri Ashwini Kumar Agarwal is the son of Shri Ramesh Kumar Agarwal, thus, it is very much clear that the claim of compensation is transaction within the family. Accordingly, the same was added back by the Assessing Officer to the total income of the assessee. Assessing Officer also treated the capital gains as short term u/s 50 on the plea of shops so sold were depreciable assets. 3. By the impugned order, the ld. CIT(A) allowed assessee's claim of deduction of Rs. 9,92,000/- after having the following observations :- "7. I have carefully gone through the assessment order and submissions of the appellant. The instant case ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there is mention of payment of compensation to the tenants for vacating the shops. It is also seen that the buyer had made the payment of compensation to the tenants directly, therefore, the genuineness of the payment is not disputed. From the perusal of Income Tax Return and Computation of Total Income of the tenants placed before me, it is seen that the tenants did disclose the compensation received and computed capital gain on transfer of tenancy rights. It is not the case of the A.O that such deduction is not allowable under the provisions of the Act. The A.O has made the disallowance for the reason that the tenants and appellant company's directors are from same family. It is seen that the tenants were in occupation of the shops for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of acquisition, the appellant's claim is fully supported by the valuation report; that in A Y 2000-01 also, the same valuation was submitted and the long term capital gain was also computed on the same basis; that the observations of the AO in the assessment order are wholly erroneous and misconceived; that the rental income from the shop has been separately shown and merely because it is not computed as the income from house property for tax purposes, the said income do not cease to become the house property income; that the appellant submits that had he made proper computation he would have got additional deduction of 30% u/s 24; that the schedule which the A.O is referring is prepared for the purpose of finalization of accounts i.e. prep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axed as a short term capital gain. The Assessing Officer also declined to allow expenditure claimed u/s 48(1) for eviction of premises. Thus, as against long term capital loss of Rs. 29,44,699/-, the Assessing Officer assessed the same at short term capital gains of Rs. 20 lakhs. From the record, we found that the shops sold during the year were already in possession of tenants. Therefore, the assessee has actually paid Rs. 9,92,000/- for vacating the shops to the tenants. The ld. CIT(A) has recorded factual finding regarding actual payment of eviction to the tenants as per sale deed so executed. Accordingly, we confirm the action of the CIT(A) for giving deduction of Rs. 9,92,000/- paid to the tenants for evicting the shops while computing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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