CIT Vs Vasavi Pratap Chand (Delhi High Court)
As far as the question framed in the Revenue’s appeals, there may be no quarrel with the proposition that the figure indicated in the wealth tax return filed by the Assessee cannot possibly be taken to be the basis for determining capital gains.
At this juncture, it is necessary to refer to the decision of this in Siddharth Pratap Chand v. CWT (2014) 360 ITR 30 (Del). In the said decision, reference was made under Section 27 (3) of the WTA. Of the three questions framed, two read as under:
“a) Whether the Tribunal did not err in law in not accepting the claim of the assessee that 1/3rd share in the property No.6, Aurangzeb Road continuing to be in self occupation of the assessee, even after the collaboration agreement dated 2.5.84 with M/s Ansal Properties and Industries Ltd. was to be valued at Rs.2,03,334/- as returned on the valuation date in accordance with the provisions of sec. 7(4) of the W.T. Act, 1957?
b) (i) Whether the Tribunal did not err in law in holding that the ownership in the property situate at 6, Aurangzeb Road was not transferred after the execution of the collaboration agreement dt. 2.5.84 with M/s Ansal Properties & Industries Ltd. and the assessee was liable to the W.T. Act, 1957?”
The said questions pertained to AYs 1987-88 to 1992-93. After noting the facts and the submissions made by learned counsel, it was held that there was no transfer of title as far as land was concerned and the Assessee continued to be the one-third co-owner of the property. Accordingly, the questions (a) and (b)(i) were answered against the Assessee and in favour of the Revenue. It is further held that Section 7(4) of the WTA was not applicable since, although the Assessee had transferred the possession of the property, he had not transferred the title in the property in terms of the collaboration agreement dated 2nd October 1984 entered into with Ansal. It is further noted that clause 21 of the letter dated 2nd May 1984 reads as under:
“21. That after the building is ready for occupation, you will transfer the land, as and when required, in favour of the cooperative society or a limited company or Association of persons or firm of the flat-buyers or in the name of our/your nominees or successors as the case may be, or, alternatively, if desired by you, you may transfer the land in favour of a cooperative society earlier also if permissible under law and if practicable.”
Having heard Mr. Zoheb Hossain, learned Senior Standing Counsel for the Revenue, and Mr. S. Krishnan, learned counsel appearing for the Assessee, the Court is satisfied that no error was committed by the ITAT in holding that the value declared in the tax return filed by the Assessees under WTA cannot be taken to be the cost of acquisition in the hands of the Assessees.
