9911796707
TMI Blog1982 (5) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee came forward with an explanation for the long delay. We have heard the learned counsel for the assessee as also the learned departmental representative on the question of limitation, in filing the cross-objection. We are not satisfied with the explanation given by the assessee. The question whether the assessee is liable to tax on capital gains was the basic question involved in the assessment which was the subject-matter of appeal before the Commissioner (Appeals). On this question the Commissioner (Appeals) negatived the assessee's plea, though on another aspect the assessee got relief. The order of the Commissioner (Appeals) was served on the assessee through the secretary of the trust, which is the assessee before us. The i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, to be dismissed. 3. Coming to the appeal, we need to notice a few facts. The assessee is the owner of a vacant land situated at Pali Hill, Bandra, bearing Survey No. 329 and measuring 2,299 sq. yards. This land was leased out for a period of 98 years to one Shri Tejumal Hemraj. The agreement to lease the property is dated 15-5-1973. The consideration stipulated therein is that the lessee shall pay rent of Rs. 900 per month commencing from the expiry of one year from the date of the execution of the lease deed. By a letter dated 16-5-1973 it was agreed that the lessee shall pay a sum of Rs. 2,82,500 to the assessee-lessor in addition to the monthly rent of Rs. 900. It was, however, mentioned therein that the aforesaid amount of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration is erroneous. Thirdly, the cost of acquisition determined by the ITO is very low. 5. The Commissioner (Appeals) rejected the first submission and held that the lease resulted in transfer of property, thereby attracting levy of tax on capital gains. With regard to the alternative contention, as regards the capitalised value of rent, the Commissioner (Appeals) accepted the assessee's contention and deleted the sum of Rs. 1,94,500. So far as the value as on 1-1-1954 is concerned, the Commissioner (Appeals) determined it at Rs. 43,000. Consequently, he directed the recomputation of the capital gains. 6. The revenue has come up in appeal on two grounds. The first ground relates to the deletion of Rs. 1,94,500 being the capitalised v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there was no transfer involved in the transaction and as such no capital gains is leviable and this plea he is entitled to raise even though his cross-objection is dismissed on the ground of limitation, inasmuch as, as a respondent, he is entitled to support the order of the Commissioner (Appeals) on any ground which has been decided against him. On these premises, he addressed arguments on the question as to whether the lease would amount to transfer resulting in capital gain. Naturally, therefore, the learned departmental representative also replied to the submissions made by Shri Harish. 7. So far as the basic and fundamental question raised by Shri Harish as to whether there is transfer or not, we need not decide that issue in this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he land. The income by way of monthly rent which is nothing but ground rent is taxable as income from other sources. When such income is assessable under the head 'Income from other sources', there cannot be a levy of tax on capital gains on the basis of capitalisation of rent. We, accordingly, hold that the Commissioner (Appeals) rightly deleted the capitalised value of Rs. 1,94,500 in determining the capital gains. 9. The second ground relates to the value as on 1-1-1954. Here again we are one with the Commissioner (Appeals). He has examined the question of valuation on the basis of several instances of sale at the relevant time. In para 6 of his order, he noticed several instances of sale. He has also considered the report of the valuer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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