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TMI Blog2015 (10) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... observed the Ld CIT(A), the assessee has exchanged the existing flat with a new flat plus compensation amount. Under sec. 2(47) of the Act, the expression “transfer” includes exchange also. Hence, in our view, the Ld CIT(A) was justified in holding that the impugned transaction would give rise to Capital Gains. - Decided against assessee. Compensation received towards hardship and other inconveniences treated as part of consideration - Held that:- The assessee was entitled to receive a flat of 441 Sq. ft. and ₹ 2,50,000/- in cash towards hardship compensation. Since the above said amount has been given as consideration for handing over the old flat, in our view, the tax authorities are justified in taking as part of consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the manner of acquisition is not in the methods listed out in sec.49 of the Act, the AO may then decide the issue in accordance with the law. - Decided in favour of assessee for statistical purposes. Rejection of deduction claimed by the assessee u/s 54 - Held that:- CIT(A) did not adjudicate this issue. We notice that the AO rejected the above said claim on the reasoning that the allotment of new flat cannot be considered as either purchase or consideration. We are unable to agree with the same, since we have already held that the handing over of the possession of the old flat is a “transfer” within the meaning of Sec. 2(47) of the Act. In consideration of the transfer, the assessee has obtained a new flat and certain sum by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has rejected the identical ground urged before him on the reasoning that there is no discussion in the assessment order about the assessability of the amount of ₹ 2,20,000/-, referred above. At the time of hearing, the ld A.R admitted that the AO did not discuss about the taxability of ₹ 2.20,000/- referred above. Hence, we are of the view that the ld. CIT(A) was justified in rejecting this claim, as the same is not an issue arising out of the assessment order. 4. Before discussing about other grounds, it is necessary to discuss about the facts relating to the case, as it will help to appreciate the contentions in a better manner. The Assessee was having a Flat at No.226, Building No.18, 1st Floor Sunshine CHS, Ram Krishna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the said claim saying that the new flat is neither purchased by the Assessee nor constructed by him. 6. The Assessee carried the matter in appeal before the ld. CIT(A). The first appellate authority held that the impugned transaction would give rise to capital gain, since under the provisions of Section 2(47) of the Income Tax Act, 1961 (the Act) transfer includes exchange. The ld. CIT(A) held that the AO has rightly taken the cost as on 1.4.1981 as NIL since the cost was NIL to the father of the assessee. The ld. CIT(A) also held that the sum of ₹ 2,50,000/- relating to the compensation for hardship is forming part of sale consideration. However, the ld. CIT(A) did not adjudicated the issue relating to deduction claimed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for handing over the old flat, in our view, the tax authorities are justified in taking as part of consideration. 9. Ground No.4 relates to the decision of tax authorities in taking cost of the of flat as NIL. The assessee had inherited the property from his father. The father of the assessee had inherited the property from his wife (mother of the assessee). Since the cost was NIL in the hands of the father of the assessee, from whom the assessee had inherited, the tax authorities have rejected the claim of the assessee for adopting the market value as on 1.4.1981 as the cost of the assessee. In this regard, it is pertinent to extract below the Explanation given under sec. 49(1) of the Act:- Explanation:- In this sub section the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the rejection of deduction claimed by the assessee u/s 54 of the Act. We notice that the Ld CIT(A) did not adjudicate this issue. We notice that the AO rejected the above said claim on the reasoning that the allotment of new flat cannot be considered as either purchase or consideration. We are unable to agree with the same, since we have already held that the handing over of the possession of the old flat is a transfer within the meaning of Sec. 2(47) of the Act. In consideration of the transfer, the assessee has obtained a new flat and certain sum by way of money. When the value of new flat is taken as part of sale consideration, then the said value should also be considered as investment made by the assessee eligible for deduction u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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