ITEM NO.110 COURT NO.5 SECTION IIIA SUPREME COURT OF INDIA RECORD OF PROCEEDINGS CIVIL APPEAL NO. 2314/2007 ASHOK PRAPANN SHARMA APPELLANT(S) VERSUS COMMR.OF INCOME TAX & ANR. RESPONDENT(S) Date : 24/11/2016 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE RANJAN GOGOI HON'BLE MR. JUSTICE N.V. RAMANA For Appellant(s) Mr. Guru Krishnakumar, Sr. Adv. Mr. Santosh Krishnan, Adv. For Respondent(s) Mr. Arijit Prasad, Adv. Ms. Gargi Khanna, Adv. Mr. Praneet Pranav, Adv. Mrs. Anil Katiyar, Adv. UPON hearing counsel Court made following ORDER appeal is allowed in terms of signed order. [VINOD LAKHINA] [ASHA SONI] COURT MASTER COURT MASTER [SIGNED ORDER IS PLACED ON FILE] Signature Not Verified Digitally signed by VINOD LAKHINA Date: 2016.11.28 16:42:29 IST Reason: 1 IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2314/2007 ASHOK PRAPANN SHARMA ...APPELLANT VERSUS COMMR.OF INCOME TAX & ANR. ...RESPONDENTS ORDER 1. Assessment Year in question is 1989-1990. Assessee has been subjected to payment of income-tax on capital gains accruing from land acquisition compensation and sale of land. dispute is as to how cost of acquisition is to be worked out for purposes of deduction of such cost from receipts so as to arrive at correct quantum of capital gains exigible to tax under Income-Tax Act, 1961 (for short Act ). 2 2. Assessing Officer as well as First Appellate Authority took into account declaration made in return filed by Assessee under Wealth Tax Act (Rs.2 per square yard) in respect of very plot of land as cost of acquisition. Some instances of comparable sales showing higher value at which such transactions were made (Rs.70/- per square yard) were also laid by Assessee before Assessing Officer. same were not accepted on ground that such sales were subsequent in point of time i.e. 1978-1979 whereas under Section 55(2)of Act crucial date for determination of cost of acquisition is 1st April, 1974. 3. matter reached learned Income Tax Appellate Tribunal (for short Tribunal ) by way of further appeal by 3 Assessee. learned Tribunal took view that comparable sales cannot altogether be ignored. Therefore, though comparable sales were at higher value of Rs.70/- per square yard, learned Tribunal thought it proper to determine cost of acquisition at Rs.50/- per square yard. In Second Appeal, High Court exercising jurisdiction under Section 260A of Act reversed said finding bringing Assessee to this Court by way of present appeal. 4. We have heard learned counsels for parties at length. 5. declaration in return filed by Assessee under Wealth Tax Act would certainly be relevant fact for determination of cost of acquisition which under Section 55(2) of Act to be determined by determination of fair 4 market value. Equally relevant for purposes of aforesaid determination would be comparable sales though slightly subsequent in point of time for which appropriate adjustments can be made as had been made by learned Tribunal (from Rs.70/- per square yard to Rs.50/- per square yard). Comparable sales, if otherwise genuine and proved, cannot be shunted out from process of consideration of relevant materials. same had been taken into account by learned Tribunal which is last fact finding authority under Act. Unless such cognizance was palpably incorrect and, therefore, perverse, High Court should not have interfered with order of Tribunal. order of High Court overlooks aforesaid severe limitation on exercise of jurisdiction under Section 260A of Act. 5 6. That apart, it appears that there was on-going process under Land Acquisition Act, 1894 for determination of compensation for part of land belonging to Assessee which was acquired [39 acres (approx.)]. Reference Court enhanced compensation to Rs.40/- per square yard. above fact, though subsequent, would not again be altogether irrelevant for purposes of consideration of entitlement of Assessee. However, as determination of cost of acquisition by learned Tribunal was on basis of comparable sales and not compensation awarded under Land Acquisition Act, 1894 (the order awarding higher compensation was subsequent to order of learned Tribunal) and basis adopted was open for learned Tribunal to consider, we 6 take view that in facts of present case High Court ought not to have interfered with order of learned Tribunal. 7. Consequently and taking into account all reasons stated above, we are of view that this appeal should be allowed which we hereby do. order of High Court is set aside and that of learned Tribunal is restored. ....................,J. (RANJAN GOGOI) ...................,J. (N.V. RAMANA) NEW DELHI NOVEMBER 24, 2016 Ashok Prapann Sharma v. Commr. of Income-tax & Anr