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TMI Blog2018 (7) TMI 1755X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the valuation as on 01/04/1981. The flat, prima facie, was acquired by the assessee before 01/04/1981 and the law provides that in such a case the cost of acquisition would mean cost of acquisition or fair market value as on 01/04/1981, at the option of the assessee. AR, in support of cost of acquisition, has placed on record the copies of purchase documents which apparently have not been considered by Ld. AO. Hence, Ld. AO is directed to appreciate the same and re-compute the income of the assessee in terms of our directions bearing in mind that the assessee’s share in the property was to the extent of 17.14%. Assessee’s appeal stand allowed in terms of our order. - I.T.A. No.6964/Mum/2016 - - - Dated:- 25-7-2018 - SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM For The Assessee : A.K.Ghosh, Ld. AR For The Revenue : Jay Kumar, Ld. DR ORDER Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year [AY] 2011-12 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-49 [CIT(A)], Mumbai, Appeal No.CIT(A)-49/IT-112/2014-15 dated 16/09/2016. Ground No. 1 has not been pressed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uting the aforesaid gains. 3. Aggrieved, the assessee contested the same without any success before Ld. CIT(A) vide impugned order dated 16/09/2016 wherein a remand report was called against the same and the matter of valuation was referred to District Valuation Officer [DVO] in terms of assessee s objection. The Ld. DVO valued the property in the following manner:- No. Valuation Date Amount (Rs.) 1. As on 01/04/1981 Rs.6,27,000/- 2. As on 01/02/2011 Rs.4,15,38,750/- The assessee while accepting the valuation as on the date of sale, pleaded for allowance of cost of acquisition in the computations. The valuation adopted by Ld.DVO as on 01/04/1981 was also contested. However, not convinced, Ld. CIT(A) concluded the matter in the following manner:- Decision 6. I have carefully examined the facts of the case, the stand taken by the A.O in me assessment order, the grounds of appeal, the written submissions filed by the appellant during the hearing proceedings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Section 48 of the Act. 6.2 The relevant provisions for computing the capital gains are provided in Chapter IV of the I.T. Act. Section 48 provides for computing the capital gains by deducting from the full value of consideration received or accruing as a result of the transfer of the capital asset, the expenditure incurred wholly and exclusively in connection with such transfer and the cost of acquisition of the asset and the cost of any improvement thereto. It further provides that where long term capital gain arises, the words 'cost of acquisition' and 'cost of improvement' have to be substituted by the words 'indexed cost of acquisition' and 'indexed cost of any improvement. 6.2.1 Section 50C(1) provides that where the consideration received or accruing as a result of the transfer is less than the value adopted or assessed by the Stamp Valuation Authority, for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of Section 48, be deemed to be full value of the consideration. Section 50C(2) provides that the A.O, may refer the valuation of the capital asset to a Val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex at 711/100 and has computed the indexed cost at Rs. Nil. Therefore, the contention of the appellant that the fair market value as on 01.04.1981 should have been substituted and should have been determined by the A.O., by referring the matter to the Valuation Officer, is found to be without merit and against the provisions of the Act. 6.3.2. From the remand report and the report of the DVO-1, Mumbai dated 26.01.2016, it appears that the reference has been made to the Valuation Officer to determine the fair market value of the property as on 01.04.1981 uls.55A of the Act and as on 01.02.2011 u/s.50C(2) of the Act. In this regard, it is noted that as per the remand letter dated 25.08.2015, the AO. was directed to make a reference to the Valuation Officer in terms of Section 50C(2) of the Act to ascertain the value of consideration of the said asset. Further, the A.O. was required to enquire regarding the contention of the appellant that the cost of acquisition on 09.01.1981 of the said property was ₹ 33,000/- as per the supporting evidence (seized documents) flied along with the Paper Book. There is no direction in the remand report to make a reference to Valuation Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and adopted by the appellant in the return of income. As a result, the addition made uls.50C of the Act of ₹ 42,75,430/- will get restricted to Rs,11,19,742/-. In view of the above discussion, ground No.1 is partly allowed and ground No.2 is dismissed. Aggrieved, the assessee is in further appeal before us. 4. After hearing respective representatives, we find the issue to be in a very narrow compass i.e. whether the cost of acquisition of the property under question was allowable to the assessee and if yes, to what extent, it was allowable? It is trite law that the revenue could not benefit out of assessee s shortcomings / ignorance and principle of natural justice demand that whatever legitimate claim arose in assessee s favor, the same were allowable to him. The property under question has been sold and undisputedly assessed to revenue. As a logical consequence, the property must have been acquired by the assessee by some mode of acquisition. The cost of acquisition, in terms of computational provisions as contained in Section 48, was clearly allowable to the assessee. Hence, we hold that notwithstanding the fact that cost was not claimed in the return of income, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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