JUDGEMENT
A.V. Balasubramanyam, Judicial Member -
(1.)THIS appeal, by the-assessee, raises two questions.
(2.)The assessee, a former Government servant, was allotted a site by the City Improvement Trust Board in the 4th T Block of Jayanagar, Bangalore, admeasuring 430 sq. yds., in 1958 for which he incurred a cost of Rs. 3,000. He was put in possession of the site on 14-3-1958. He got a sanctioned plan in March, 1958, and constructed a building in the year 1960-61. The expenditure incurred for the building was Rs. 63,000. The successor to City Improvement Trust Board (Bangalore Development Authority) gave a conveyance in favour of the assessee on 19-6-1982.
The assessee had let the property to a tenant. There was an ejectment suit against the tenant which the assessee had instituted on 24-7-1978. It ended in a compromise on 25-2-1982. As per the compromise, the assessee agreed to sell the property to the tenant for Rs. 2 lakhs. Pursuant thereto the sale was effected on 25-9-1982. The tenant agreed to pay Rs. 75,000 to the assessee towards 'manse profits and post of the suit'.
(3.)IN the assessment for 1983-84, for which the previous year terminated on 31-3-1983, the question of capital gains arose. For the purpose of cost, the value of the property as on 1 -1 -1964, had to be determined. The ITO made a reference to the DVO who fixed the cost at Rs. 49,000. Since the sale was for Rs. 2 lakhs, he brought to charge Rs. 1,51,000 as income by way of short-term capital gains. We may remark here that, according to the ITO, the assessee acquired ownership on 19-6-1982, when he obtained a conveyance from the Bangalore Development Authority. He, therefore, treated it as a short-term capital gain.
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