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TMI Blog2015 (1) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... the owner of immovable property bearing No.96, Brigade Road, Civil Station, Bangalore. When the said property was sold, she received a sum of Rs. 92,80,350/- towards her share as a co-owner. She declared a capital gain of Rs. 34,31,912/-. She claimed exemption under Section 54F of the Act as she invested the said amount in purchase of another property. Return was processed under Section 143(1)(a) of the Act. Later on, a notice under Section 148 of the Act was issued on 24.11.2006 calling upon her to show-cause as to why the return of Income should be revised, as the income declared under the head capital gains as Rs. 44,04,743/- is not correct. She filed a reply. The assessee had claimed the fair market value as on 01.04.1981 at Rs. 280/- p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81. It shows that without any material before him, he had initiated proceedings for re-opening and therefore, the very initiation of proceedings in re- opening was one without jurisdiction and it is set-aside. Alternatively, he has contended that though the property purchased was habitable, the assessee spent money on the property purchased by way of improvements to make the premises convenient for her living which also should be taken into consideration in calculating the cost of investment, which has not been done by the authorities. Therefore, he submits that the impugned order requires to be set-aside. 5. The learned counsel for the Revenue submitted that on the day the notice under the Act was issued, the Assessing Authority had in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 54F of the Act?" 7. Insofar as the extracts made in the order of the Tribunal is concerned, it discloses that the assessing authority, before issuing notice under Section 148 of the Act was satisfied that the assessee, while computing indexed cost of acquisition has taken the value as on 01.04.1981 as Rs. 280/- per sq.ft., but as per the Government notification, the value is at Rs. 45 per sq. ft. Therefore, he came to the conclusion that the assessee has taken higher value while working out indexation and therefore, he recorded an opinion that the income chargeable to tax has escaped assessment under Section 147 of the Act. Merely because, he addressed a letter to the Sub-Registrar asking him to furnish the particulars would not lead t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the benefit of deduction in determining the capital gains. The approach of the authorities that once a habitable asset is acquired, any additions or improvements made on that habitable asset is not eligible for deduction, is contrary to the statutory provisions. The said reasoning is unsustainable. To that extent, the impugned order passed by the Tribunal as well as the Lower authorities require to be set-aside and it is to be held that in arriving at cost of the new asset, Rs. 18 lakhs spent by the assessee for modification, alterations and improvements of the asset acquired is to be taken note of. Thus, the second substantial question of law is answered in favour of the assessee and against the Revenue. Hence, we pass the following ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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