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of <h1>Appeal Dismissed: Capital Gain Recalculation Upheld</h1> <h3>Sri Nalin Ranjan, D-41, Phase-V Versus ITO, Ward 1 (3), 47, C.H. Area, Bistupur, Jamshedpur</h3> Sri Nalin Ranjan, D-41, Phase-V Versus ITO, Ward 1 (3), 47, C.H. Area, Bistupur, Jamshedpur - TMI Issues:- Appeal against the order of the Commissioner of Income Tax(Appeals) for the assessment year 2014-2015.- Determination of short term capital gain based on a development agreement.- Calculation of capital gains considering cost of construction and land value.- Recalculation of long term capital gain by allowing relief to the assessee.Issue 1: Appeal against CIT(A) OrderThe appeal was filed against the Commissioner of Income Tax(Appeals) order for the assessment year 2014-2015. The grounds of appeal raised by the assessee challenged the rejection of contentions and the method of computing capital gain employed by the Assessing Officer.Issue 2: Determination of Short Term Capital GainThe Assessing Officer calculated short term capital gain based on a development agreement where the assessee sold a flat for a consideration different from the stamp duty valuation. The AO considered the cost of construction at Rs. 750 per sq.ft and apportioned the capital gain proportionately. The CIT(A) directed the AO to recalculate the long term capital gain by providing relief to the assessee.Issue 3: Calculation of Capital GainsThe Assessing Officer determined the cost of the flat at Rs. 750 per sq.ft based on the agreement. The AO considered the holding period and sale consideration as per section 50C of the Income Tax Act. The CIT(A) directed the AO to calculate long term capital gain with cost inflation index, considering the conversion date and holding period.Issue 4: Recalculation of Long Term Capital GainThe CIT(A) directed the AO to recalculate the capital gains after considering the conversion date and holding period, providing relief to the assessee. The assessee's arguments regarding the agreement terms and subsequent sale prices were considered, leading to the confirmation of the CIT(A) order. The appeal was dismissed, confirming the CIT(A) decision to recalculate long term capital gain with cost inflation index.This detailed analysis covers the key issues involved in the legal judgment, addressing the appeal, determination of short term and long term capital gains, and the calculation methodology based on the development agreement and relevant provisions of the Income Tax Act.
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