The Income Tax Appellate Tribunal (ITAT), Pune bench, allowed a deduction on the cost of acquisition of land acquired from allottees of the government for the rehabilitation dam project.
The assessee, Vasant Haribhau’s assessment, was completed under Section 143(1) of the Income Tax Act, 1961. As per the assessment order, the Assessing Officer went on to disallow/add the assessee’s cost of acquisition of the former asset to the tune of Rs. 25,72,000 and assessed the sale consideration of the latter asset as short-term capital gains to the tune of Rs. 1,01,00,000, respectively.
Aggrieved by the order, the assessee filed an appeal before the CIT(A), who dismissed the appeal filed by the assessee. Thus, the assessee filed a second appeal before the tribunal.
During the proceedings, Kishor Phadke, Counsel for the assessee, argued that the assessee purchased two lands. The former land was received from the allottees (Kedare) of the government who purchased the land for the rehabilitation of the Kasarsai dam project, ousters from Mahadev Tulshiram Gaikwad. However, the High Court struck down the project, even though the property was allotted to the allottees.
As per the revenue record, allottees are considered as the owners of the land. Furthermore, the assessee was only one of the co-vendees along with the two owners. Hence, Kedare had also been declared as the owner in exclusive possession, which made the assessee purchase all of his rights over the land in question. M.G. Jasnani, Counsel for Revenue, supported the order of the lower authorities.
The tribunal observed that both the said lower authorities had not given due consideration to the clinching fact that there were two registered agreements executed by the assessee as a co-vendee. It was also observed that Mahadev Tulshiram Gaikwad, etc., had been treated as the exclusive owner in possession in the former registered agreement, and Kedare’s rights/title no longer continued as per the jurisdictional High Court’s decision. Thus, the assessee is only entitled to the cost of acquisition, coming to 1/3rd share in Rs. 58 lakhs, plus expenses involving the vendors, S/Shri Mahadev Tulshiram Gaikwad, etc.
After reviewing the facts and records, the bench of Satbeer Singh Godara (Judicial Member) and Dr. Dipak P. Ripote (Accountant Member) granted a deduction for the cost of acquisition of land acquired from allottees of the government for the rehabilitation dam project.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
