INCOME TAX ACT, 1961

--Capital gains--Chargeability No cost of acquisiton incurred--A land was awarded as 'lnami' land to assessee's ancestor for service of the 'Dargah' (Mosque). Assessee had sold the land in representative capacity of his ancestor and deposited the amount of sale proceeds in bank account. Assessing officer was of the view that since assessee was entitled to receive the rent and other benefits derived from such land, the transfer of land was to be assessed under 'capital gain' head and the entire sale proceeds was liable to be taxed under 'capital gain' head. Held: Was not justified. For charging of capital gain, the assets referred to in section 45 has to be such, in the acquisition of which assessee had incurred a cost. The land was acquired by assessee's ancestor free of cost as lnami as land for maintenance and services of Dargah Peer Bahuddin Shah. Therefore, any element of cost in acquisition of aforesaid land by the ancestors of the assessee was inconceivable and the assessing officer had not brought anything on record to show that assessee had incurred any cost for acquisition of the land in question.

Income Tax Act, 1961, Section 45

IN THE ITAT, PUNE 'A' BENCH

SHAILENDRA KUMAR YADAV, J.M. & D. KARUNAKARA RAO, A.M.

ITO v. Pashu Mohammed Zainuddin