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TMI Blog2015 (6) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of section 55(3) are applicable to the case of the assessee are the questions of facts and law which are required to be determined by way of appreciation of evidence. Photostat copies of the rent receipts shows that there are certain notable differences and discrepancies in the said receipts when the said receipts are compared with each other e.g. the signatures of the landlord Shri Krishanraj Dwarakadas Kapadia appears to be different on different receipts and even there is tampering in dates of receipts and further in one of the receipts the date has been mentioned as 31st Jan 06 by striking off ‘199’. The possibility of any or some of the receipts to be true or correct cannot be ruled out. We restore this issue to the file of the AO with the direction that the AO will give proper opportunity to the assessee to produce the evidences relating to the tenancy rights and cost of the acquisition of the tenancy rights by the father of the assessee in the property in question and thereafter to decide the issue afresh as per provisions of law and in the light of observations made above. Whether the provisions of section 54 are applicable in case of transfer of tenancy rights? - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med indexation of cost of acquisition of tenancy rights which had been sold by the assessee in relation to which the income under the head Capital gains was offered by the assessee. The Assessing Officer (hereinafter referred to as the AO) denied the indexation in view of the provisions of section 55(2)(a) as per which the cost of acquisition of tenancy rights is to be treated as nil, if the assessee has not paid any purchase price for the acquisition of the same. 4. Before the Ld. CIT(A), the assessee submitted that on the death of the father of the assessee, the tenancy rights devolved on the assessee and his brother. He submitted that the tenancy rights were duly protected by law and as such the assessee and his brother were de-facto owners of the portions of the premises occupied by them. It was claimed that since the rights of the assessee were like that of an owner of the property, hence the cost of acquisition of the tenancy rights was required to be taken as fair market value of the property as on 01.04.1981 for the purpose of computing the capital gains while allowing the indexation cost. The Ld. CIT(A), however, held that there was no evidence on the file that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. 6. The Ld. AR has further contended that as per the provisions of section 55(2)(a)(ii), the cost of acquisition is not to be treated as nil, if the case falls under sub clause (i) to (iv) of sub section (1) to section 49 of the Act. He has further contended that as per section 49(1)(iii), if a capital asset becomes the property of the assessee by succession, inheritance or devolution then the cost of acquisition of the asset is to be deemed to be the cost for which the previous owner of the property acquired it. He has further contended that since the tenancy rights were obtained by his father Shri Charandas Kapadia in 1962 i.e. prior to 01.04.1981, hence the cost of acquisition should be taken as fair market value of the tenancy rights as on 01.04.1981. He has further submitted that even otherwise the tenancy rights of the assessee were akin to the ownership rights in the property; hence the assessee was entitled to deduction under section 54 of the Act. 7. The Ld. D.R., on the other hand, has relied upon the findings of the lower authorities. 8. We have considered the rival submissions. For the sake of refrance, the relevant provisions of section 55 and section 49 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to (iv) of sub caluse (1) of section 49, then the cost of acquisition will be treated as nil. As per the provisions of section 49(1)(iii) where the capital asset becomes the property of the assessee by succession, inheritance or devolution, then the cost of acquisition of the asset is deemed to be the cost for which the previous owner of the property acquired it. However, we find that section 55(2)(b) deals with capital asset other than that being discussed in section 55(2)(a) of the Act. Since the tenancy rights have been dealt with/discussed in section 55(2)(a), hence, in our view, the provisions of section 55(2)(b) are not attracted in the case of the assessee. However, section 55(3) states that where cost for which the previous owner acquired the property cannot be ascertained the cost of acquisition to the previous owner will be the fair market value on the date on which the capital asset became the property of the previous owner. However, this aspect has not been considered by the lower authorities. Even the date of acquisition of tenancy rights by the father of the assessee is required to be ascertained and further whether the father of the assessee had acquired the ten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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