GIRISH CHANDRA GUPTA J. - (1.) The assessee has come up in appeal u/s. 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') against an order dated 9th December, 2003 passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal') 'E' Bench Kolkata in ITA No.461 (Kol.) of 2002 relating to the assessment year 1997 -98. By an order dated 25th November, 2004 the appeal was admitted on the following substantial questions of law: - " I) When the learned Members of the Tribunal themselves recorded that they refrain from commenting on the direction of the learned CIT (Appeals) on the issue of admissibility of deduction under Section 54 of the I. T. Act which the Revenue has not agitated before the Tribunal was justified in allowing the appeal on the issues raised by the Revenue and in reversing the order of the CIT(Appeals) on the said issues and in doing so whether the Tribunal acted perversely? II) Whether the Tribunal failed to appreciate that the Divorce petition and/or decree read with other agreements and/or documents clearly establish the intention of the parties therein that the assessee was a co -owner of the property in question providing 50% of the consideration for acquiring the said property and/or by virtue of mutual agreement the ex -husband of the assessee parted with 50% of the property in question in favour of the assessee by way of alimony and as such Section 49(1)(iii) of the I.T. Act will be applicable and whether the Tribunal was justified in holding that 50% of the cost of acquisition of capital gains in the hands of the assessee and whether the said findings of the Tribunal are perverse? III) Whether the Tribunal is justified in upholding the disallowance made by the Assessing Officer of claim of the assessee for Rs.50,000/ - as brokerage for computation of long term capital gains and in doing so whether the findings and/or reasoning and/or decisions of the Tribunal are based on irrelevant materials and/or evidence and/or by failing to take into consideration relevant materials and/or evidence and/or law and as such the same are perverse - After hearing the learned advocates we have formulated the following substantial question of law under the proviso to Sub -section (4) of Section 260A of the Act for the purpose of determining the real question in controversy between the parties. IV) Whether 50% of the sale consideration received by the assessee with respect to the matrimonial house situated at 25, Mandeville Gardens, Calcutta was taxable in the hands of the assessee despite the fact that the Tribunal arrived at a finding that the said amount was paid on account of alimony?
(2.) Briefly stated the facts and circumstances of the instant case are as follows: - Shrimati Roma Sengupta the assessee herein married Mr D Chowdhury in the year 1966. The marriage was dissolved on 12th January 1994 by a decree of divorce passed in Mat Suit Number 626 of 1993. The assessee filed her return of income for the assessment year 1997 -98 disclosing an income of Rs.44,870/ - and long -term capital gain consequent to sale of 50% of her share in the matrimonial house at 25, Mandeville Gardens, Calcutta sold at Rs.22,81,500/ - and sought to deduct 50% of the cost of acquisition amounting to Rs.5,18,002/ -. The assessee claimed exemption u/s 54 of the Act with respect to the aforesaid long -term capital gain. The assessee further claimed deduction of brokerage amounting to Rs.50,000/ - from the amount of capital gain. The return was processed u/s 143(1) later on the assessee received a notice u/s 148 alleging that income had escaped assessment. In the course of the reassessment proceedings the assessee was asked to furnish inter alia evidence against the cost of acquisition of the matrimonial house. The assessee contended that the matrimonial house at 25, Mandeville Gardens was acquired using the sale proceeds of a flat situated at 9, Mandeville Gardens, Calcutta and that she was a co -owner of the said matrimonial house, having 50% share therein. The assessing officer deputed an inspector to verify the claims. Relying upon a report filed by the inspector the assessing officer held by his order dated 28th March, 2001 that Mr. D. Chowdhury, the ex - husband of the assessee was the exclusive owner of the flat at 9, Mandeville Gardens and the assessee was his nominee. The assessing officer also observed that since the flat at 9, Mandeville Gardens was owned exclusively by the former husband of the assessee and the sale proceeds from the said property were utilized to purchase the matrimonial house at 25, Mandeville Gardens, therefore the former husband of the assessee was the full owner of the newly purchased matrimonial house. The assessing officer on the aforesaid basis held as follows: - "...In the circumstances, the assessee could not get the benefit of cost of acquisition u/s 48 of the I.T. Act, 1961, as she did not contribute any investment to purchase the flat at 25, Mandeville Gardens, Calcutta. In Section 49(2) it was cleared that the self generated acquired property's cost of acquisition is taken to be nil."
(3.) The assessing officer by the aforesaid order also disallowed the claim for brokerage. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals) (hereinafter referred to as 'the CIT(A)') against the order of the assessing officer. The CIT(A) by his order dated 14th February, 2002 allowed the appeal of the assessee and held as follows: - "He has further disallowed the claim of brokerage paid to 4 different parties totaling Rs.50,000/ - on the ground that his Inspector could not find these persons. In his written submission dt. 14.2.2002 Sri A. Sinha who attended on behalf of the appellant has stated that the A.O. has taken the cost of acquisition of the said house property at nil without appreciating the fact that the legislature had inserted a specific section namely 49(1)(iii) of the Act to arrive at the cost of acquisition of any capital asset acquired by an assessee by succession, inheritance or devolution. In the instant case the appellant received the property from her ex -husband at the time of divorce and such an acquisition certainly can be - - - - - - - - - - - - - - - as having been received by devolution. Secondly the AO. has disallowed the brokerage paid to various parties for disposal of house property merely relying on the Inspector's report that he could not find the said parties. The appellant was not given any opportunity to rebut the Inspector's report. It was also ignored by the A.O. that the amount was paid through account a cheque and lastly the A.O. had not allowed deduction claimed by the appellant u/s. 54 of the I.T. after correctly computing the cost incurred by the appellant to purchase new property on 11.6.96. The A.O. has given no reason for this action on his part. It is a fact that the A.O. has not bothered to write a single line on why the appellant's claim was not admissible u/s 54 of the Act. Thus on the facts and circumstances of the case I am in full agreement with the appellant in this regard. The A.O. is hereby directed to compute the long term capital gain as per the computation of the appellant and also to allow the benefit of deduction U/s 54 of the Act." ;