9911796707
TMI Blog2000 (11) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... alore, for the asst. yr. 1994-95. Thus, the assessee has preferred two appeals herein being feeling herself aggrieved with the order of the CIT(A). Both these appeals are accordingly disposed of vide a consolidated order for sake of brevity and convenience. 2. The brief facts of the case are that the assessee had filed a return of income on 31st March, 1995, declaring a total income of Rs. 2,47,740 from the property; a scrutiny was done by the AO (AO for short) wherein on 27th March, 1997, he finalised the assessment on a total income of Rs. 1,23,37,070; whereas finalising the assessment under s. 143(3), the AO had computed the income from the business at Rs. 1,19,51,561 and income from capital gains at Rs. 33,26,350; while computing the income in original assessment, the AO had omitted to include the income from long-term capital gains amounting to Rs. 33,26,350, therefore, the AO had issued a notice under s. 154 of the Act on 25th April, 1997, calling for the objection of the assessee and subsequently revised assessment for 1994-95 by including the long-term capital gains of Rs. 33,26,350 and vide his order dt. 5th May, 1997, the AO finally arrived at a total income of Rs. 1,56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt reported in the case of Travancore Chemical & Manufacturing Co. Ltd. vs. CIT (1997) 137 CTR (Ker) 115 : (1997) 226 ITR 429 (Ker) and in the case of CIT vs. BPL Systems & Projects Ltd. (1997) 137 CTR (Ker) 98 : (1997) 227 ITR 779 (Ker) wherein it was held that the respondent before the Tribunal has two objections viz.: (1) To file cross-objection; (2) Specifically urge to support the order on the grounds decided against it although it may not have appeal. The learned Departmental Representative also cites the decision of the Bombay High Court in the case of CIT vs. Gilbert & Broker Manufacturing Co., USA 1977 CTR (Bom) 347 : (1978) 111 ITR 529 (Bom) wherein regarding raising new plea before the Tribunal, the High Court has observed as: The Tribunal has the discretion to allow any party to an appeal may be the appellant or the respondent to raise a new point or new contention provided two conditions are satisfied...... (i) No new facts are required to be brought on record for disposing of such new point; (ii) An opportunity is given to the other side to meet the point." The learned Departmental Representative also cites the decision of the Hon'ble Supreme Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended provisions have no bearing in the case of the assessee related to asst. yr. 1994-95. The learned counsel submits further, Re. 1 per annum in the tenancy agreement was rent and not the cost of tenancy as misunderstood by the CIT(A) in her order. He refers to para No. 2 p. 2 of the tenancy agreement in support. He also refers to para 3 p. 2 of the affidavit of Mr. P. Vincent in this regard wherein it has been stated that no separate consideration was payable by the assessee for obtaining the tenancy rights. The learned counsel also refers the certificate issued by the village accountant of Hulimavu, Begur, Hobli Bangalore South Taluk, confirming that the assessee was carrying on agricultural operations as a tenant during the years 1989-90, 1990-91, and 1991-92 in the lands belonging to that Panchayat. He submits that there was no cost to the assessee regarding her tenancy right, therefore there was no capital gains taxable as has been held in the case of M/s Joy Ice Cream (P) Ltd., so far the consideration received against the land property at Arekere Village as compensation for surrendering tenancy rights of the assessee therein is concerned. The learned counsel also cites ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty to be taken or retain in part-performance of a contract amounts to transfer. The learned Departmental Representative submits that the assessee had also taken over original title deeds which were handed over to her by the vendors as per cl. 4 of the agreement; subsequently the assessee applied for various clearances from the statutory authorities such as Urban Ceiling, BDA, etc., and obtained approval for developing real estate; the assessee had also entered into an agreement to develop the scheduled property along with her sons who also held contiguous bits of land with M/s Shanti Flat Builders for constructing apartment for sale; in the said development agreement dt. 25th March, 1989, the assessee was described as the absolute owner in possession and enjoyment of the property and the documents executed in favour of the ultimate purchasers of the land also did not indicate the status of the assessee as a tenant but as a absolute owner. He submits further that cl. 2.1 of the agreement specifically provides the time for performance by the purchase is not to be treated as essence of contract, thus despite paying the amount and taking possession of the land, the assessee never in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission of the parties in this regard as well, we find force in the submission of the learned counsel that the property scheduled to the agreement dt. 25th March, 1989, between the assessee and the developer does not pertain to the Arekere land wherein the appellant was a tenant. So far the issue related to taxability under the head business is concerned, we will discuss it at the appropriate stage while going through the relevant portion of the order of the CIT(A) considering the arguments advanced by the parties in this regard. 9. In nutshell before us there are two main issues which have been raised by the assessee in the present appeals while challenging the order of the CIT(A) in this regard. Firstly, as to whether the CIT(A) was just and proper in directing the AO to adopt the figure of Rs. 100 per sq. ft., as on 1st April, 1981, in respect of the property at Marenahalli, 9th Block, Jayanagar, Bangalore, to arrive at the indexed cost of acquisition for the purpose of computing the capital gains on the sale of the said property? and Secondly, as to whether the CIT(A) was just and right that there was a cost of Re. 1 per annum to the assessee for tenancy, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consist of land was sold in 1985 in 9th Block, Jayanagar, for a consideration of Rs. 400 per sq. ft., and another sale instance before the CIT(A) was of Banashankari wherein during February, 1985, the land was sold for the consideration at the rate of Rs. 250 per sq. ft. Accordingly the CIT(A) has fixed the fair market value of the property in question as on 1st April, 1988 (sic-1991) at the rate of Rs. 100 per sq. ft., and has accordingly directed the AO to arrive at the indexed cost of acquisition for the purpose of computing the capital gains on the sale of the property. 10.1. The contention of the assessee that the gold rate as on 1st April, 1981 and 31st March, 1984, be taken as criterion to arrive at the just and fair market value of the property as on 1st April, 1981, in absence of the sale instance as on the date, does not appear to be convincing especially when the sale instances of the nearby area in the same block in the year 1985 was available with CIT(A) and another sale instance of the year 1985 in the nearby Banashankari area was very much to the notice of the CIT(A) while arriving at the said figure of Rs. 100 per sq. ft. We thus find no reason to interfere with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made it possible to tax the capital gain, as an income; therefore, if a particular receipt is not capable of being computed as a capital gain, the said receipt cannot be charged to tax as a "capital gain". The High Court has also relied upon the judgment of the Supreme Court in the case of CIT vs. B.C. Srinivasa Setty (1981) 24 CTR (SC) 138 : (1981) 128 ITR 294 (SC). 11.1. The facts of the case before the Special Bench of Delhi in the aforesaid case were that the assessee was in possession of a bungalow which was used for office-cum-residential purpose; originally the bungalow was leased under a lease deed dt. 11th June, 1956; the duration of lease was 11 months and 29 days; the lessee was restrained from subletting the bungalow or any part thereof; on the expiry of the lease, the landlord tried to evict the assessee but he was not successful; subsequently the bungalow was sold subject to the existing tenancy; the tenancy of the assessee was duly attorned in favour of the purchaser; thereafter there was an agreement whereby the landlord agreed with the assessee that the vacant possession of the premises shall be handed over to the firm on payment of Rs. 37 lakhs which was receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the land-owner with the assessee and handing over of the possession of the land by the land-owner in lieu thereof. Therefore, it is not correct on the part of the CIT(A) to say that the cost of only Re. 1 per annum was involved in obtaining the tenancy right by the assessee. Considering the totality of the circumstances we agree with the CIT(A) that the transaction was not an adventure in the nature of trade and, therefore, it cannot be taxed as income from business. We thus while affirming the finding of the CIT(A) that the transaction cannot be taxed as income from business, differ with the order of the CIT(A) to this extent that Re. 1 per annum to be paid by the assessee as rent for the scheduled property to the land-owner vide tenancy agreement dt. 1st Oct., 1991, was the cost of the assessee with regard to the said capital gains. We are rather of the view that the advance money paid by the assessee towards purchasing the property in question and making a stop-gap arrangement of tenancy to secure the payment of advance money was indeed cost borne by the assessee to secure the said tenancy rights. It is, however, not clear from the materials available on the record as to how ..... X X X X Extracts X X X X X X X X Extracts X X X X
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