Tribunal allows appeal, directs reassessment of capital gains computation.

The Tribunal allowed the appeal for statistical purposes, setting aside the orders of the learned CIT(A) and directing the Assessing Officer to re-determine the issue on merits. The AO was instructed to compute the full value of consideration by adding unpaid liabilities assumed by the buyer to the sale consideration, grant relief on deductions, and provide the assessee with a proper opportunity to be heard and submit relevant evidence. The Tribunal emphasized adherence to the Income Tax Act provisions in the computation of capital gains.

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Issues Involved:
1. Taxation of Long Term Capital Gains without claiming indexation.
2. Computation of Long Term Capital Gains on the sale of inherited property.
3. Applicability of Section 50C of the Income Tax Act.
4. Rejection of exemption claim under Section 54EC.
5. Non-granting of set off for long-term and short-term capital losses.

Detailed Analysis:

1. Taxation of Long Term Capital Gains without claiming indexation:
The assessee initially raised the issue of taxing Long Term Capital Gains (LTCG) of Rs. 16,44,413 computed without claiming indexation at 20% as against 10%. However, this ground was withdrawn by the assessee as the Assessing Officer (AO) provided relief in his order under section 154 of the Income Tax Act, 1961.

2. Computation of Long Term Capital Gains on the sale of inherited property:
The primary issue before the Tribunal was the computation of LTCG on the sale of the inherited property, 'Roshan Villa.' The AO observed that the property was sold for Rs. 25 lakhs without a registered document and invoked Section 50C of the Act to compute the capital gains. The AO referred the matter to the stamp duty valuation authority, which valued the land at Rs. 26,83,044, but could not value the building due to the lack of registration. The AO used the assessee's valuer's report to value the building and indexed it to arrive at a total value of Rs. 72,22,644. The assessee contended that Section 50C was not applicable as the property was sold before the amendment effective from 1-10-2009, which included unregistered properties within its ambit. The Tribunal agreed with the assessee, noting that the amendment was prospective and not applicable to transactions before 1-10-2009.

3. Applicability of Section 50C of the Income Tax Act:
The Tribunal analyzed the applicability of Section 50C, which deals with the deemed valuation of property for capital gains computation. It was noted that the provision, as amended by the Finance Act, 2009, effective from 1-10-2009, included properties that were not registered but assessable for stamp duty. Since the sale of 'Roshan Villa' occurred on 16-01-2009, before the amendment, the Tribunal held that Section 50C was not applicable. The Tribunal cited the CBDT Circular No. 05/2010 and the decision of the Hon'ble Madras High Court in CIT v. R. Sugantha Ravindran, which supported their view.

4. Rejection of exemption claim under Section 54EC:
The assessee's claim for exemption under Section 54EC amounting to Rs. 8,00,000 was initially rejected by the AO. However, this ground was also withdrawn by the assessee as the AO provided relief in his order under section 154.

5. Non-granting of set off for long-term and short-term capital losses:
The assessee claimed set off for long-term capital loss of Rs. 40,138 on redemption of mutual funds and short-term capital loss of Rs. 210 on the sale of shares. This ground was similarly withdrawn by the assessee as the AO provided relief in his order under section 154.

Conclusion:
The Tribunal set aside the orders of the learned CIT(A) and restored the issue back to the file of the AO for de-novo determination of the issue on merits. The AO was directed to compute the full value of consideration by adding unpaid and outstanding liabilities assumed by the buyer to the sale consideration of Rs. 25,00,000. The AO was also instructed to grant relief on account of deductions of indexed cost of acquisition and other deductions/reliefs the assessee is entitled to under the Act. The Tribunal emphasized providing the assessee with a proper opportunity of being heard and allowing the submission of relevant evidence. The appeal was allowed for statistical purposes.

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