Dr. O.K. Narayanan, A.M. - (1.) THESE two appeals are filed by the assessees for the assessment year 1998-99. THESE appeals are filed against the orders of the CIT(A)-XIII at Mumbai passed on 19-12-2001 and arises out of the assessments completed under section 143(3) of the Income Tax Act, 1961.
(2.) The assessees are brothers and the facts and circumstances of the cases are one and the same and, therefore, these appeals are disposed of through this common order. The assessees herein had sold their houses situated at Hiranandani Gardens, Powai in Mumbai. Shri Charanbir Singh Jolly sold the house for a consideration of Rs. 22,05,372 and Shri Kanwarbir Singh Jolly sold his house for a consideration of Rs. 22,18,8 10. The houses were acquired by the brothers through agreements dated 31-3-1993 for a consideration of Rs. 5,25,000 and Rs. 5,85,056 respectively. The payments towards acquisition of the house property were made by the assessee in instalments between the period from 25-7-1992 and 17-6-1996. While computing the capital gains exigible on the sale of the house property, the assessees have computed the indexed cost of the houses on the rate of indexation pertaining to the previous year 1992-93, in. which the first instalment of payment was, paid by the assessees.
(3.) BUT the assessing authority has taken a different view. He treated the first instalment paid by the assessees as the cost of acquisition of the house property and treated the subsequent instalments paid by the assessees as cost of improvements made from time-to-time. The result is that the total cost incurred by the assessees for acquiring the houses were not taken as the cost of acquisition for the purpose of indexation, but, on the other hand, cost was taken at static points corresponding to the instalments paid by the assessees. This has resulted in a differential loss of indexation benefit to the assessees. As against capital gains of Rs. 13,40,651 and Rs. 13,50,408 disclosed by the assessees respectively, the AO has determined a capital gain of Rs. 14,18,382 and Rs. 14,13,904 respectively. This position was accepted by the CIT(A) in first appeal, therefore, these appeals before us.;