ACIT, CHENNAI v. M/s T.N.K.Govindaraju Chetty & Co.Pvt. Ltd., CHENNAI

ITA 1109/CHNY/2009 | 2005-2006
Pronouncement Date: 23-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 110921714 RSA 2009
Assessee PAN AAACT1818Q
Bench Chennai
Appeal Number ITA 1109/CHNY/2009
Duration Of Justice 2 year(s) 2 month(s) 16 day(s)
Appellant ACIT, CHENNAI
Respondent M/s T.N.K.Govindaraju Chetty & Co.Pvt. Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 23-09-2011
Date Of Final Hearing 15-09-2011
Next Hearing Date 15-09-2011
Assessment Year 2005-2006
Appeal Filed On 07-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE SHRI N. S. SAINI ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NOS. 1049 & 1109/MDS/2009 ASSESSMENT YEARS : 2004-05 AND 2005-06 THE ASSISTANT COMMISSIONER OF INCOME-TAX MEDIA CIRCLE-II CHENNAI. V. M/S. TNK GOVINDARAJU CHETTY & CO. PVT. LTD. TNK HOUSE 48 ANNA SALAI CHENNAI-600 002. PAN : AAACT1818Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI E. SANKAR CIT-DR RESPONDENT BY : SHRI R. VIJAYARAGHAVAN ADVOCATE DATE OF HEARING : 15-09-201 1 DATE OF PRONOUNCEMENT : 23-09-2011 O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : ITA NO. 1109/MDS/2009 IS AN APPEAL FILED BY THE RE VENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-VI CHENNAI IN ITA NO. 272/07-08 DATED 16-03-2009 FOR THE ASSESSMENT YEAR 2005-06 AND ITA NO. 1049/MD S/2009 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT (APPEALS)-VI CHENNAI IN ITA I.T.A. NOS.1049 & 1109/MDS/2009 2 NO. 202/06-07 DATED 16-02-2009 FOR THE ASSESSMENT Y EAR 2004-05. AS THE ISSUES IN BOTH THE APPEALS ARE SIMILAR AND INTER-CONNECTED THE SAME ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI E. SANKAR LEARNED CIT-DR REPRESENTED ON BEH ALF OF THE REVENUE AND SHRI R. VIJAYARAGHAVAN ADVOCATE REPRESENTED ON BEH ALF OF THE ASSESSEE. 3. IN THE REVENUES APPEAL IN ITA NO. 1109/MDS/2009 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LD CIT(A) ERRED IN MAKING DELETING THE DISA LLOWANCE OF INTEREST MADE OF ` 6 56 783/-. 2.1 THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THAT THE ASSESSEE HAD NOT ESTABLISHED THE FACT THAT THE MONEY WAS ADVANCED OUT OF COMMERCIAL EXPEDIENCY. 2.2 THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THAT THE ASSESSEE HAS NOT ESTABLISHED THE FACT THAT THE INTEREST FREE ADVANCES WERE NOT MADE OUT OF BORROWED FUNDS. 3. THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSES SING OFFICER TO ADOPT 1981-82 AS THE BASE YEAR IN COMPUT ATION OF LONG TERM CAPITAL GAINS. 3.1 THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE FA CT THAT AS PER THE PROVISIONS OF SECTION 48(III) THE COST INDE X NUMBER IS TO BE APPLIED FOR THE YEAR IN WHICH THE ASSESSEE BECAME T HE OWNER. 3.2 THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE FA CT THAT THE PROVISIONS OF SECTION 49 IS REFERRING TO DEEMED CO ST OF ACQUISITION BUT IT DOES NOT DEEM THE ASSESSEE TO BE THE PREVIOU S OWNER. I.T.A. NOS.1049 & 1109/MDS/2009 3 3.3 THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE FA CT THE STATUTE MAKES A CLEAR DISTINCTION BETWEEN THE PREV IOUS OWNER AND THE ASSESSEE AS REGARDS ALLOWING THE BENEFIT OF INDEXATION WHILE COMPUTING THE LONG TERM CAPITAL GAINS. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 4. IN THE REVENUES APPEAL IN ITA NO. 1049/MDS/2009 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LD CIT(A) ERRED IN MAKING DELETING THE DISALLOWANCE OF INTEREST MADE OF ` 7 08 742/-. 2.1 THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE HAD NOT ESTABLISHED THE FACT THAT THE MONEY WAS ADVANCED OUT OF COMMERCIAL EXPEDIENCY. 2.2 THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE HAS NOT ESTABLISHED THE FACT THAT THE INTEREST FREE ADVANCES WERE NOT MADE OUT OF BORROWED FUNDS. 3. THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSE SSING OFFICER TO ADOPT 1981-82 AS THE BASE YEAR IN COMPUT ATION OF LONG TERM CAPITAL GAINS. 3.1 THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THAT AS PER THE PROVISIONS OF SECTION 48(III) THE COST I NDEX NUMBER IS TO BE APPLIED FOR THE YEAR IN WHICH THE ASSESSEE BE CAME THE OWNER. I.T.A. NOS.1049 & 1109/MDS/2009 4 3.2 THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THAT THE PROVISIONS OF SECTION 49 IS REFERRING TO DEEME D COST OF ACQUISITION BUT IT DOES NOT DEEM THE ASSESSEE TO B E THE PREVIOUS OWNER. 3.3 THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THE STATUTE MAKES A CLEAR DISTINCTION BETWEEN THE PREV IOUS OWNER AND THE ASSESSEE AS REGARDS ALLOWING THE BENEFIT OF INDEXATION WHILE COMPUTING THE LONG TERM CAPITAL GAINS. 4. THE LD CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER NOT TO ADOPT THE PROVISIONS OF SECTION 50C 4.1 THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THAT THE ASSESSING OFFICER HAS RIGHTLY INVOKED THE PROVI SIONS OF SECTION 50C. 4.2 THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THE CONSIDERATION AS A WHOLE IS HIGHER THAN THE MARKET VALUE IS NOT CORRECT AS PROVISIONS OF SECTION 50C HAD BEEN APPLI ED FOR EACH SALE INSTANCE. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCE D AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER RESTORED. 5. IN EFFECT IN BOTH THE APPEALS THE ISSUES INVOLV ED ARE (I) AGAINST THE ACTION OF THE LEARNED CIT(A) IN DELETING THE DISALLOWANCE OF INTEREST AND (II) AGAINST THE ACTION OF THE LEARNED CIT(A) IN DIRECTING THE ASSES SING OFFICER TO ADOPT THE BASE YEAR FOR COMPUTATION OF LONG TERM CAPITAL GAINS AS 1981-82 AND TO GRANT THE ASSESSEE THE BENEFIT OF INDEXATION FROM THE YEAR 19 81-82. FOR THE ASSESSMENT I.T.A. NOS.1049 & 1109/MDS/2009 5 YEAR 2004-05 THE THIRD ISSUE RELATES TO THE ACTION OF THE LEARNED CIT(A) IN DIRECTING THE ASSESSING OFFICER NOT TO ADOPT THE PR OVISIONS OF SECTION 50C OF THE INCOME TAX ACT 1961. 6. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE IS A PRIVATE LIMITED COMPANY WHICH IS DOING THE BUSINESS OF EXHIBITION O F CINE FILMS. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD NETTED THE INTERES T PAYMENTS AGAINST THE INTEREST INCOME. IT WAS THE SUBMISSION THAT THE IN TEREST PAYMENTS WERE ON ACCOUNT OF FIXED TERM LOANS CASH CREDIT AND LOANS. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD GIVEN SUBSTANTIAL NON-INTEREST BEARING FUNDS TO VARIOUS CONCERNS INCLUDING AN ASSOCIATED FIRM NAMELY M/S. TNK GOVIN DARAJU CHETTY. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD SUBMITTED THAT THE ASSESSEE WAS HAVING SUFFICIENT RESERVES AND CAPITAL FUNDS TO ADVANCE SU CH LOANS TO ASSOCIATED CONCERNS AND SOME OF THEM ARE ALSO TAKEN OVER FROM AMALGAMAT ING COMPANIES AND IN MANY CASES THE ADVANCES ARE OLD BALANCES. IT WAS T HE SUBMISSION THAT AS THE EXPLANATION GIVEN BY THE ASSESSEE WAS FOUND TO BE N OT SATISFACTORY THE INTEREST PAYMENTS CLAIMED BY THE ASSESSEE ON THE BORROWED FU NDS WAS DISALLOWED ON THE GROUND THAT THE ASSESSEE COMPANY HAD DIVERTED ITS I NTEREST-FREE FUNDS FOR NON- BUSINESS PURPOSES. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD DELETED THE ADDITION BY FOLLOWING A DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF S.A. BUILDERS REPORTED IN 288 ITR 1 WHEREIN IT HA D BEEN HELD THAT THE EXPRESSION FOR THE PURPOSE OF BUSINESS IS WIDER IN SCOPE THA N THE EXPRESSION FOR THE I.T.A. NOS.1049 & 1109/MDS/2009 6 PURPOSE OF EARNING PROFITS. THE EXPRESSION FOR T HE PURPOSE OF BUSINESS INCLUDES EXPENDITURE VOLUNTARILY INCURRED FOR COMME RCIAL EXPEDIENCY AND IT IS IMMATERIAL IF A THIRD PARTY ALSO BENEFITS THEREBY. IT WAS THE SUBMISSION THAT THE COMMERCIAL EXPEDIENCY HAD NOT BEEN PROVED NOR WAS I T SHOWN AS TO HOW THE NON- INTEREST BEARING LOANS WERE GIVEN FOR THE PURPOSE O F THE BUSINESS OF THE ASSESSEE. 7. IN REGARD TO THE CLAIM THAT MANY OF THE ADVANCES WERE OLD BALANCES OR WERE TAKEN OVER ON ACCOUNT OF THE AMALGAMATION IT WAS T HE SUBMISSION THAT DURING THE YEAR THE INCREASE IN THE LOAN ITSELF WAS ` 43 LAKHS AND JUST BECAUSE THE ASSESSEE HAD ADEQUATE RESERVES AND CAPITALS IT CANNOT BE SAI D THAT THE ASSESSEE WAS PERMITTED TO CONTINUE PAYING INTEREST ON ITS LOANS BUT GIVE ITS SISTER CONCERNS OR ASSOCIATED CONCERNS INTEREST-FREE ADVANCES. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) WAS LIABLE TO BE REVERSED. 8. IN REGARD TO THE ISSUE OF THE ADOPTION OF 1981-8 2 AS THE BASE YEAR FOR COMPUTATION OF THE CAPITAL GAINS IT WAS THE SUBMIS SION THAT THE ASSESSEE HAD SOLD ITS UNDIVIDED INTEREST IN THE LAND OF TWO PROPERTIE S ONE AT NO.15 DR. NAIR ROAD T.NAGAR CHENNAI AND ANOTHER AT TONDIARPET CHENNAI . IT WAS THE SUBMISSION THAT THE AGREEMENT WAS ORIGINALLY ENTERED INTO BY M/S. D EVI FILMS PVT. LTD. AND M/S. EAST INDIA INDUSTRIES (M) P. LTD. IN 2000 AND 1996 R ESPECTIVELY. THE SAID TWO COMPANIES CAME TO BE AMALGAMATED WITH THE ASSESSEE COMPANY WITH EFFECT FROM 01-04-2001. IT WAS THE SUBMISSION THAT CONSEQUENT TO THE SCHEME OF MERGER WITH EFFECT FROM 01-04-2001 THE CAPITAL GAINS ARIS ING ON THE SALE OF THE UNDIVIDED I.T.A. NOS.1049 & 1109/MDS/2009 7 SHARE OF THE LAND WITH RESPECT TO THE TWO PROPERTIE S WAS COMPUTED WHEREIN THE ASSESSING OFFICER HAD ADOPTED THE FAIR MARKET VALUE AS ON 01-04-1981. HOWEVER THE ASSESSING OFFICER WHILE APPLYING THE COST INFLA TION INDEX HAD HELD THAT THE BENEFIT OF PERIOD OF COST INFLATION INDEX WAS LIABL E TO BE GIVEN ON THE DATE THE CAPITAL ASSET COULD BE SAID TO BE FIRST HELD BY THE ASSESSEE COMPANY I.E. FROM THE ASSESSMENT YEAR 2001-02. IT WAS THE SUBMISSION THA T THE LEARNED CIT(A) HAD HELD THAT THE COST INFLATION INDEX WAS LIABLE TO BE GRANTED TO THE ASSESSEE RIGHT FROM THE YEAR 1981-82. HE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 9. IN REGARD TO THE ISSUE OF APPLICABILITY OF SECTI ON 50C OF THE ACT IT WAS THE SUBMISSION THAT FOR THE ASSESSMENT YEAR 2004-05 IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE SALE CONSIDERATION DISCLOSED BY TH E ASSESSEE IN REGARD TO THE SALE OF THE UNDIVIDED INTEREST IN THE PROPERTY WHICH WAS REGISTERED DURING THE RELEVANT ASSESSMENT YEAR WAS BELOW THE GUIDELINE VALUE RELAT ABLE TO THE PORTION OF THE LAND SOLD AND CONSEQUENTLY APPLIED THE PROVISIONS OF SEC TION 50C OF THE ACT. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD DELETED THE DISALLOWANCE AND HELD THAT THE PROVISIONS OF SECTION 50C COULD NOT BE APPLIED. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD RELIED UPON THE DECISION IN THE CASE OF PRIME TEXTILES LTD. (2007) TIOL-170-ITAT-MAD WHICH WAS NOT ON THE ISSUE AT ALL. IT WAS THE SUBMISSION THAT AS THE SALE CONSIDERATION DISCLOSED BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR WAS LOWER THAN THE GUIDELI NE VALUE FOR THE PURPOSE OF I.T.A. NOS.1049 & 1109/MDS/2009 8 CAPITAL GAINS SECTION 50C WAS LIABLE TO BE APPLIED . HE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 10. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT IN REGARD TO THE ISSUE OF THE DISALLOWANCE OF INTEREST THE ASSE SSEE HAD ADEQUATE NON-INTEREST BEARING FUNDS TO GIVE THE INTEREST-FREE ADVANCES. IT WAS THE FURTHER SUBMISSION THAT HE HAD NO OBJECTION IF THE ISSUE IS RESTORED T O THE FILE OF THE ASSESSING OFFICER FOR PROVING THE COMMERCIAL EXPEDIENCY. IT WAS THE SUBMISSION THAT AS THE ASSESSEE DID HAVE ADEQUATE NON-INTEREST BEARING FUN DS TO GIVE ADVANCES THE ORDER OF THE LEARNED CIT(A) IS LIABLE TO BE UPHELD. 11. IN REGARD TO THE ISSUE OF THE APPLICABILITY OF THE COST INFLATION INDEX RELATABLE AS ON 1.4.1981 IT WAS SUBMITTED BY THE LEARNED AUT HORISED REPRESENTATIVE THAT THE AGREEMENT FOR SALE ITSELF WAS ENTERED INTO BY T HE EARLIER OWNERS OF THE LAND AND IT WAS ONLY ON ACCOUNT OF THE AMALGAMATION THAT THE ASSESSEE BECAME THE OWNER OF THE LAND. ONCE THIS IS SO THE ASSESSEE S HOULD BE DEEMED TO BE THE OWNER RIGHT FROM THE BEGINNING ONCE THE AMALGAMATIO N WAS DONE. CONSEQUENTLY IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME-TAX V. SYED MAQBUL HUSSAIN REPORTED IN (2010) 4 ITR (TRIB) 44 (CHENNAI) THE COST INFLATION INDEX LIABLE TO BE APPLIED WAS FROM 1981-82. 12. IN REGARD TO THE ISSUE OF APPLICABILITY OF SECT ION 50C OF THE ACT IT WAS THE SUBMISSION THAT IN THE SUBSEQUENT YEARS THE ASSESSE E HAD RECEIVED SALE I.T.A. NOS.1049 & 1109/MDS/2009 9 CONSIDERATION IN REGARD TO THE BALANCE UNDIVIDED SH ARE IN THE LAND WHICH WAS SOLD AND THE NET CONSIDERATION RECEIVED BY THE ASSESSEE WAS MORE THAN THE GUIDELINE VALUE AND CONSEQUENTLY THE PROVISIONS OF SECTION 50 C WAS NOT APPLICABLE TO THE TRANSACTIONS DONE DURING THE RELEVANT ASSESSMENT YE AR. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT FOR THE ASSESSMENT YEAR 20 04-05 OUT OF AN INTEREST PAYMENT OF ` 7 09 530/- AN AMOUNT OF ` 6 00 000/- HAS BEEN PAID TO M/S. TNK GOVINDARAJU CHETTY. FURTHER A PERUSAL OF THE ASSES SMENT ORDER CLEARLY SHOWS THAT FOR THE ASSESSMENT YEAR 2004-05 THE NON-INTEREST BE ARING ADVANCE GIVEN TO M/S. TNK GOVINDARAJU CHETTY IS ` 36 17 000/- AND FOR THE ASSESSMENT YEAR 2005-06 IT INCREASED TO ` 46 82 779/-. THUS WHAT IS NOTICED IS THAT THE ASS ESSEE HAS BORROWED FROM THE SAME PERSON BY PAYING INTEREST BU T HAS GIVEN NON-INTEREST BEARING ADVANCES TO THE SAME PERSON. WHERE IS THE COMMERCIAL EXPEDIENCY? THE ASSESSEE HAS BEEN UNABLE TO EXPLAIN THIS TRANSACTIO N. ONCE THIS INTEREST PORTION IS REMOVED THE INTEREST PAYMENTS TO THE BANKS ARE BUT MINOR. THIS CLEARLY SHOWS THAT THE ADVANCEMENT OF NON-INTEREST BEARING FUNDS TO RELATED PARTIES IS NOT COMPELLED BY ANY COMMERCIAL EXPEDIENCY. THE ASSESS EE HAS ALSO NOT PROVED BEFORE US ANY COMMERCIAL EXPEDIENCY IN REGARD TO AN Y OF THE INTEREST-FREE ADVANCES GIVEN TO THE RELATED PARTIES. THE CLAIM O F THE ASSESSEE THAT IT HAD ADEQUATE NON-INTEREST BEARING FUNDS TO GIVE THE INT EREST-FREE ADVANCES IS SEEN I.T.A. NOS.1049 & 1109/MDS/2009 10 OTHERWISE INSOFAR AS THE NON-INTEREST BEARING FUNDS AVAILABLE WITH THE ASSESSEE IS IN THE FORM OF PROFITS OF THE YEAR WHICH OBVIOUSLY CANNOT BE DETERMINED UNTIL THE END OF THE YEAR. EVEN ASSUMING THAT THESE FUNDS WER E AVAILABLE IT WOULD HAVE TO BE SEEN IN LINE WITH THE CASH BOOK OF THE ASSESSEE. HERE IT WOULD BE PERTINENT TO NOTE THAT THE RESOLUTION TO ADVANCE THE AMOUNTS TO ONE OF THE CONCERNS NAMELY M/S. GLENROCK ESTATES P. LTD. TO AN EXTENT OF ` 250 LAKHS WAS HELD ON 22-04-2002 I.E. AT THE BEGINNING OF THE FINANCIAL YEAR WHEREAS THE PROFITS COULD BE DETERMINED ONLY DURING THE END OF THE FINANCIAL YEAR. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE IS LIABLE TO BE REVERSED AND WE DO SO. IN THE CIRCUMSTANCES THE DISALLOWAN CE OF INTEREST AS MADE BY THE ASSESSING OFFICER STANDS RESTORED AND THE FINDING O F THE LEARNED CIT(A) STANDS REVERSED ON THE ISSUE. 14. IN REGARD TO THE ISSUE OF DETERMINATION OF THE APPLICABILITY OF COST INFLATION INDEX FROM THE YEAR 1981-82 IT IS NOTICED THAT THE ASSESSEE BECAME THE OWNER OF THE PROPERTY IN 2001 ON ACCOUNT OF THE AMALGAMATION . BEFORE THAT THE PROPERTIES BELONGED TO M/S. DEVI FILMS P. LTD. AND M/S. EAST IN DIA INDUSTRIES (M) P. LTD. ONCE IT IS HELD THAT THE ASSESSEE HAS BECOME THE OW NER ON ACCOUNT OF THE AMALGAMATION THEN WHILE COMPUTING THE CAPITAL GAIN S IT IS THE VALUE AS IS IN THE HANDS OF THE PREVIOUS OWNER WHICH WOULD HAVE TO BE CONSIDERED AND AS THE PROPERTY HAD BEEN ACQUIRED BY THE PREVIOUS OWNERS P RIOR TO 1981 WHICH IS AN ACCEPTED FACT BY THE ASSESSING OFFICER ALSO INSOFAR AS HE HAS ADOPTED THE FAIR I.T.A. NOS.1049 & 1109/MDS/2009 11 MARKET VALUE AS ON 1.4.1981 THE COST INFLATION IND EX RELEVANT TO THE FINANCIAL YEAR 1981-82 WOULD HAVE TO BE ADOPTED. IN THE CIRCUMSTA NCES THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE STANDS UPHELD. 15. IN REGARD TO THE APPLICABILITY OF THE PROVISION S OF SECTION 50C A PERUSAL OF THE PROVISIONS OF SECTION 50C CLEARLY SHOWS THAT IT IS THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET BEING LAND AND BUILDING WHICH IS CONSIDERED. IF SUCH VALUE I S LESS THAN THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY FOR THE P URPOSE OF STAMP DUTY IN RESPECT OF THE TRANSFER THE VALUE SO ADOPTED IS TO BE TREATED AS THE FULL CONSIDERATION. HERE IN THE PRESENT CASE WHAT IS NO TICED IS THAT THE ASSESSEE HAS BEEN REGISTERING A PART OF THE UNDIVIDED INTEREST I N THE LAND TO VARIOUS PERSONS DURING VARIOUS YEARS. WHEN THE ASSESSEE REGISTERS ITS UNDIVIDED INTEREST IN THE LAND TO VARIOUS PERSONS EACH TRANSACTION HAS TO BE CONSIDERED INDEPENDENTLY AND INDIVIDUALLY AS EACH TRANSFER IS A TRANSFER OF THE CAPITAL ASSET BEING THE UNDIVIDED INTEREST IN THE LAND. IT CANNOT BE SAID THAT AT TH E END OF THE SALE OF ALL THE UNDIVIDED INTEREST CAPITAL GAINS IS TO BE DETERMINE D. EACH TRANSACTION GIVES RISE TO CAPITAL GAINS AND THE PROVISIONS OF SEC. 50C WOULD APPLY TO EACH TRANSACTION INDEPENDENTLY AND INDIVIDUALLY. IN THE CIRCUMSTANC ES WE ARE OF THE VIEW THAT THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE IS NOT ON A RIGHT FOOTING. CONSEQUENTLY THE SAME IS REVERSED AND THAT OF THE ASSESSING OFFI CER IS RESTORED. IN THE I.T.A. NOS.1049 & 1109/MDS/2009 12 CIRCUMSTANCES THE APPEALS OF THE REVENUE IN ITA NO S. 1049 AND 1109/MDS/2009 STAND PARTLY ALLOWED. 16. THE ORDER WAS PRONOUNCED IN THE COURT ON 23/09/ 2011. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 23 RD SEPTEMBER 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE