Tribunal overturns CIT(A) decisions, reinstates Assessing Officer's assessments on Short Term Capital Gains.

The Tribunal allowed the Revenue's appeal, setting aside the CIT(A)'s orders on both issues. The Tribunal reinstated the A.O.'s assessments of Rs. 4,83,500 as Short Term Capital Gain (STCG) for the Pinnacle property and Rs. 21,27,723 as the cost of acquisition for the Essel Tower property, correcting the STCG to Rs. 28,72,276 for the latter.

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Issues Involved:
1. Deletion of addition on account of Short Term Capital Gain (STCG) on sale of property located at PNA-013, The Pinnacle, Gurgaon.
2. Deletion of addition on account of STCG on sale of property located at PC-II/303, Essel Tower, Gurgaon.

Issue-wise Detailed Analysis:

1. Deletion of Addition on Account of STCG on Sale of Property Located at PNA-013, The Pinnacle, Gurgaon:
The primary issue revolves around whether the CIT(A) erred in deleting the addition of Rs. 4,18,050 on account of STCG on the sale of the property at PNA-013, The Pinnacle, Gurgaon. The assessee declared a STCG of Rs. 65,449 based on a sale consideration of Rs. 42,58,100 and a cost of acquisition of Rs. 40,92,651. However, the Assessing Officer (A.O.) assessed the STCG at Rs. 4,83,500 based on a receipt indicating a sale price of Rs. 43,51,500. The CIT(A) observed that the A.O. erroneously assessed the cost of acquisition at Rs. 38,68,000 instead of Rs. 40,92,651. The CIT(A) also allowed expenses of Rs. 36,442 as transfer charges and Rs. 30,000 as commission, which the Tribunal found to be based on assumptions without substantial evidence. The Tribunal noted that the actual cost of acquisition should be Rs. 38,68,000 as per the receipt and disallowed the additional costs claimed by the assessee. Consequently, the Tribunal set aside the CIT(A)'s findings, reinstating the A.O.'s assessment of Rs. 4,83,500 as the correct STCG.

2. Deletion of Addition on Account of STCG on Sale of Property Located at PC-II/303, Essel Tower, Gurgaon:
The second issue concerns whether the CIT(A) erred in deleting the addition of Rs. 11,33,524 on account of STCG on the sale of the property at PC-II/303, Essel Tower, Gurgaon. The assessee, along with co-sharers, sold the property for Rs. 1.50 crores, claiming a cost of acquisition of Rs. 32,61,247 for his 1/3rd share. The A.O. assessed the cost of acquisition at Rs. 21,27,723, similar to the other co-sharers, resulting in an addition of Rs. 11,33,524. The CIT(A) erroneously included interest on a borrowed loan in the cost of acquisition, relying on judgments that were not applicable. The Tribunal referenced the Supreme Court judgment in CIT Vs Tata Iron & Steel Co. Ltd., which clarified that the cost of acquisition should not include interest paid on loans for purchasing the asset. Consequently, the Tribunal set aside the CIT(A)'s findings, reinstating the A.O.'s assessment of the cost of acquisition at Rs. 21,27,723 and the resultant STCG.

Conclusion:
The Tribunal allowed the Revenue's appeal, setting aside the CIT(A)'s orders on both issues. The Tribunal reinstated the A.O.'s assessments of Rs. 4,83,500 as STCG for the Pinnacle property and Rs. 21,27,723 as the cost of acquisition for the Essel Tower property, thereby correcting the STCG to Rs. 28,72,276 for the latter. The order was pronounced in the open court on 30th Sep., 2015.

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