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The agricultural land situated in areas lying within a distance not exceeding 8 kms. from the local limits of Municipalities or Cantonment Boards are covered by the amended definition of ‘capital asset’, if such areas are, having regard to the extent of and scope for their urbanization and other relevant considerations, is notified by the Central Government in this behalf. Central Government in its Notification No. 11186 dated 28-12-1999 clearly clarifies that agricultural land situated in rural areas, areas outside the municipality or cantonment board etc.,
In case of transfer of capital asset forming part of block of assets in respect of which depreciation has been allowed, mode of computation and cost of acquisition shall be as per modifications provided in section 50. Thus, special provision made for computation of capital assets in respect of which depreciation has been allowed, is confined for the purpose of section 50 in relation to sections 48 and 49 only.
The learned DR has opposed the submissions of the learned counsel for the assessee. He submitted that no cost of acquisition was incurred by the assessee as per the terms and conditions of the registered lease deed, and therefore in accordance with the provision of section 55(2)(a)(ii) of the Act, the cost of acquisition has to be taken at NIL. He referred to the term-4 of the lease deed dated 15.9.1966 wherein it was agreed that all the building and structure put up by the lessee on the said land remain the property of the lessee only.
In the background of above legal position, we have to ascertain from the facts on record whether it is possible to ascertain the cost of acquisition of the tenancy rights. We may recall that the assessee and the landlord entered into an agreement under which, the landlord agreed to rent out four existing floors to the assessee, and for three more under construction floors of the building,
Amalgamation does not come within the scope of ‘transfer’ as defined in Section 2(47) of the Act and such being the view taken not only by this court, but Madras High Court and also the Supreme Court, there is no question of holding that the assessee disentitles the benefit of Section 80-I of the Act.
Section 48(1) of the Act provides for mode of computation and deduction while charging capital gain. Clause-I thereof in particular provides for a payment from the value of consideration received or accrued as a result of transfer of capital asset, expenditure incurred wholly and exclusively in connection with such transfer. The Tribunal found that looking to the peculiar facts of the case noted above, such expenditure cannot be stated to be incurred wholly and exclusively in connection with such transfer. We do not find that Tribunal committed any legal error.
When the bona fideof the transaction and the actual sale consideration received by the assessee has not been suspected, then for the purpose of computation of capital gains, the full value of consideration can not be substituted by market price or value of the capital asset as on the date of transfer.
This issue in fact fell for decision before this Court in the case of CIT v. Karam Chand Thapar and Bros. Ltd. [IT Appeal No. 130 of 1998, dated 17-12-1998] wherein this Court by its judgment and order has upheld the decision of the Tribunal that the claim of loss of the assessee in the matter of sale of Part B of the PCD in the self-same rights issue is permissible as short-term capital loss.
Deduction under section 24(b) and computation of capital gains under section 48 of the Act are altogether covered by different heads of income i.e., income from ‘house property’ and ‘capital gains’. Further, a perusal of both the provisions makes it unambiguous that none of them excludes operative of the other.
Notification No. 44/2012-Income Tax In exercise of the powers conferred by sub-section (2) of section 54, sub-section (2) of section 54B sub-section (2) of section 54D sub-section (4) of section 54F sub-section (2) of section 54G and sub-section (2) of section 54GB of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme to amend the Capital Gains Account Scheme, 1988, namely:-
