Tribunal allows appeal on indexed cost, capital gain computation & interest levy.

The appellant's appeal was allowed by the Tribunal in a case involving disallowance of indexed cost of improvement, computation of capital gain, and levy of interest under Sections 234B and 234C. The Tribunal held that the appellant likely spent Rs. 3,07,946 on improvements based on evidence provided, overturning lower authorities' decision. It was also determined that the actual sale consideration in the deed should be used for exemption purposes under Section 54F. The Assessing Officer was directed to re-compute interest under Sections 234B and 234C. The appeal was allowed, and the order was pronounced on 29th May 2015 in Chennai.

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Issues:
1. Disallowance of indexed cost of improvement.
2. Computation of capital gain.
3. Levy of interest under Section 234B and 234C.

Issue 1: Disallowance of indexed cost of improvement
The appellant's appeal was against the Commissioner of Income Tax (Appeals)-16's order regarding the disallowance of the indexed cost of improvement amounting to Rs. 3,07,946 for the assessment year 2010-11. The appellant sold an immovable property and claimed indexed cost of acquisition and cost of improvement. The Assessing Officer disallowed the claimed improvement cost as the appellant failed to provide evidence. The appellant argued that evidence was produced, including a letter from the person who made the improvements. The Tribunal noted that the bills and vouchers were submitted to the CIT(Appeals) and then to the Assessing Officer. It was observed that improvements could be made to farm land, not just buildings. The Tribunal held that the appellant likely spent Rs. 3,07,946 on improvements based on the evidence provided, overturning the lower authorities' decision.

Issue 2: Computation of capital gain
The next issue was the computation of capital gain. The appellant sold the property for Rs. 90 lakhs, but the Assessing Officer considered Rs. 1,06,17,750 as per Section 50C of the Act, leading to excess capital gain calculation. The appellant argued that for exemption under Section 54F, the sale consideration in the deed should be used, not Section 50C. The Departmental Representative supported the Assessing Officer's decision. The Tribunal determined that the actual sale consideration in the deed should be used for exemption purposes unless there was evidence of additional undisclosed money. Therefore, the Assessing Officer was directed to consider the actual sale consideration of Rs. 90 lakhs for the exemption under Section 54F.

Issue 3: Levy of interest under Section 234B and 234C
Regarding the levy of interest under Sections 234B and 234C, it was noted that such levy is mandatory and consequential. The Assessing Officer was instructed to re-compute the interest under these sections while implementing the Tribunal's order. Consequently, the appeal of the assessee was allowed, and the order was pronounced on 29th May 2015 in Chennai.

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