DAMODARLAL BADRUKA Vs. THE INCOME TAX OFFICER

JUDGEMENT

(1.) THIS Appeal under Section 260(A) of the Income Tax Act, 1961 (for short, 'the Act'), preferred by the appellant - assessee, is directed against the order dated 13.06.2001 passed by the Income Tax Appellate Tribunal (for short, 'the Tribunal'), Hyderabad Bench 'B' in I.T.A. No. 1398/Hyd/1995 for the assessment year 1985 -86. By this order, the Tribunal dismissed the appeal filed by the assessee against the order dated 10.05.1995 passed by the Deputy Commissioner of Income Tax (Appeals) (DCIT).

(2.) THE substantial question that falls for consideration in the instant appeal reads thus:

(3.) THE assessee -HUF sold the property situated at Parbhani for a total consideration of Rs. 1,35,500/ -. He incurred an expenditure of Rs. 3,380/ - for selling the property and arrived at a net taxable capital gains of Rs. 26,620/ -, after deducting Rs. 1,05,500/ - as the value of the property on 01.01.1964 exercising his option under Section 49(1)(i) read with Section 55 of the Act. The assessment was accordingly completed under Section 143(1) of the Act accepting the returned income. Subsequently, an order under Section of the Act was passed by the Commissioner on 28.09.1987 having found the order of Assessing Officer prejudicial to the Revenue. The Commissioner accordingly set aside the order dated 22.07.1985 of assessment made under Section 143 (1) of the Act, and directed the Assessing Officer to conduct local enquiries into the correct value of the property as on 01.01.1964 and determine the correct amount of taxable capital gains, and to recompute the income for the assessment year 1985 -86 taking into consideration the correct amount of capital gain. Thus, the revisional authority cancelled the assessment made vide order dated 22.07.1985. In pursuance thereof, the Assessing Officer reopened the assessment under Section 143 (3) by issuing a notice under Section 143 (2) of the Act. During the fresh assessment under Section 143 (3), the property was referred to Valuation Cell of the Department under Section 55 -A and thus the correct market value was arrived at on 01.01.1964 and it was accordingly adopted as cost of the land and capital gain was thus computed on the basis thereof. On appeal, the DCIT (A) upheld the order of assessment. The Tribunal dismissed the appeal preferred by the assessee by order dated 13.06.2001.