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TMI Blog2016 (6) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... m (M/s. Sarju Cold Storage). Therefore, the assessee would only be entitled to the indexation on the cost of acquisition of the firm on the amount of ₹ 2,50,000/-. The argument of the assessee that the AO has wrongly calculated the cost of acquisition of the assessee u/s 49(1)(iii)(a), in our view, is not correct as both the AO and ld. CIT (A) have applied the cost of acquisition on the basis of principles stated herein above i.e. cost of acquisition of the firm. The assessee, in our view, has wrongly got confused with the principles laid down under section 47 which talks about the transaction which are not regarded as transfer, with that of principles for determining of cost of acquisition under section 49. Section 49(1)(iii)(e) was introduced by the Finance Act, 2012 with effect from 1.4.1999. The said section, in our view, is only clarificatory in nature and has specifically provided the cost of acquisition in case of succession of firm to the company. However, the said cost of acquisition was already in existence under section 49(1)(iii)(a) of the IT Act. Therefore, in our view no fresh charge has been created on account of succession of a firm to the company. It has only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal position particularly when the amendment in statute was a retrospective charging amendment and the assessee has been denying completely its liability for such a charge of interest even if action of converting the Short Term Capital Loss into Long Term Capital Gain is upheld. 4. That in the facts and circumstances of the case, since the assessee had denied completely its liability to charge of interest u/s 234B, the ld. CIT (A) should have deleted the same cancelling the order of A.O. In not doing so, she has erred. 2. The brief facts of the case are that the appellant company filed its return on 30.09.2009 declaring total income of Rs. Nil after set off of loss. The same was processed under section 143(1) on 01.11.2010. Thereafter, the case was selected for scrutiny and the notice was issued calling upon the appellant company to furnish the details along with questionnaire. In pursuant thereto, the assessee company filed its reply. The assessee has submitted that the trading of shares and F O, commodities. During the assessment year under consideration, the assessee company has shown the total sales of ₹ 16,44,997/- and declared a net loss of ₹ 15,54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case is ₹ 2,50,000/- and ₹ 1,83,714/- being the registration and other charges incurred for purchasing the said land, which has also been taken into consideration by the then ACIT, Circle 2(1), Jaipur while assessing the assessee s case (M/s. Sarju Cold Storage PFAS) in AY 1990-91, order of which has been passed on 18.2.1992, therefore, the total value of the land comes to ₹ 4,33,714/- which is taken into consideration for working out the capital gain. 9. Assessee has also incurred an amount of ₹ 7,15,000/- which has been paid to RIICO in the FY 2007-08 for converting the name etc. which has been duly accounted for by the assessee company in the preceding year by capitalizing the same in the value of land. Hence, the same is also taken into considering while working out the capital gain. 10. It is also worthwhile to mention that the assessee who had purchased the land for ₹ 2,50,000/- has revalued it to ₹ 3,70,00,000/- before transferring the assets and liabilities in the assessee company and such revaluation has been done in the FY 2006- 07. The said land was sold during the year under consideration for ₹ 2,00,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minous with the Assessing Officer. The Commissioner (Appeals) can direct the Assessing Officer to do what the latter failed to do. Unless there are specific fetters placed upon the powers of the Commissioner (Appeals) by express words, he exercise the same powers as does the original court or authority. In fact, the entire assessment is thrown open before him. He can travel outside the record, i.e., the return made by the assessee and assessment order passed by the Assessing Officer. He is competent to conduct a detailed examination of any aspect dealt with summarily or briefly by the Assessing Officer. In view of the above observation of the Hon ble ITAT Allahabad Bench it is held that the cost of the property for determining the capital gains in the hands of the appellant is to be worked out as per section 49(1)(iii)(e). 4. Feeling aggrieved by the order passed by the ld. CIT (A), the assessee has filed the present appeal before us. 4.1. The primary contention of the ld. A/R before us and before the authorities below was that the land and building along with other assets were acquired by the assessee company on 29.12.2006 from a partnership firm, namely, M/s. Sarj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(1)(iii)(a) of the Act and on the basis of the above said submission, it was submitted that the AO was wrong in applying the provisions of sec. 49(1)(iii)(a) to determine the cost of acquisition. It was further submitted that even the ld. CIT (A) was wrong in applying the provisions of section 49(1)(iii)(e) as the said provision was not in existence at the time of transaction or during the assessment proceedings as the said provision was inserted by the Finance Act,2012. On the basis of the above said contention, the ld. A/R has submitted that the addition made by the authorities below on the basis of transfer of land was wrong. In fact, the assessee has suffered short term capital loss on account of sale of the assets and there is no short term capital gain to the assessee. In the alternative, it was submitted that provisions of section 234B 234C should not be applied for payment of interest on the basis of retrospective amendment on account of non-payment of advance tax. 4.4. The ld. D/R on the other hand, has submitted that the transfer within the meaning of law has taken place and the assessee company is successor and interest of the partnership firm M/s. Sarju Cold Stora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). Section 49 : Cost with reference to certain modes of acquisition. (1) Where the capital asset became the property of the assessee (i) On any distribution of assets on the total or partial partition of a Hindu undivided family; (ii) Under a gift or will; (iii) (a) by succession, inheritance or devolution, or (b) on any distribution of assets on the dissolution of a firm, body of individuals, or other association of persons, where such dissolution had taken place at any time before the 1st day of April, 1987, or (c) on any distribution of assets on the liquidation of a company, or (d) under a transfer to a revocable or an irrevocable trust, or (e) under any such transfer as is referred to in clause (via) or clause (v) or clause (vi) or clause (via) or clause (viaa) or clause (vica) or clause (vicb) or clause xiiib) of section 47; (iv) such assessee being a Hindu undivided family, by the mode referred to in sub-section (2) of section 64 at any time after the 31st day of December, 1969, The cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... got confused with the principles laid down under section 47 which talks about the transaction which are not regarded as transfer, with that of principles for determining of cost of acquisition under section 49. Section 49(1)(iii)(e) was introduced by the Finance Act, 2012 with effect from 1.4.1999. The said section, in our view, is only clarificatory in nature and has specifically provided the cost of acquisition in case of succession of firm to the company. However, the said cost of acquisition was already in existence under section 49(1)(iii)(a) of the IT Act. Therefore, in our view no fresh charge has been created on account of succession of a firm to the company. It has only clarified the existing basis of calculating the cost of acquisition in case of succession of the firm to the company. Therefore, the argument of ld. A/R for the assessee is devoid of any merit and is also dismissed. 5. Ground no. 3 relates to levy of interest under section 234B. Since we have dismissed the ground of the assessee relating to cost of acquisition on the basis of principles stated herein above i.e. cost of acquisition of the firm, therefore, levy of interest u/s 234B is rightly confirmed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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