AO to accept declared sale consideration for long-term capital gains; one-third ownership apportionment; improvements allowed; deposits remanded

ITAT DELHI-AT directed the AO to adopt the sale consideration declared by the assessee for computing long-term capital gains, finding the DVO's 4.74% higher estimate marginal. The tribunal held the assessee owned one-third of the property and directed 1/3rd of net capital gains to the assessee and 1/3rd to the other co-owner. It allowed Rs.100,000 each as cost of improvements. Additions for unexplained cash deposits were set aside to the AO for fresh inquiry; the assessee must explain the deposits and produce evidence, AO to afford reasonable hearing and decide accordingly.

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Issues Involved:
- Computation of Long Term Capital Gain
- Addition made on account of cash deposits in bank accounts

Computation of Long Term Capital Gain:
The appeals were filed against orders of CIT(A) relating to assessment years 2010-11 under the Income-tax Act, 1961. The common issues raised were regarding the computation of Long Term Capital Gain and addition made on account of cash deposits in bank accounts. The assessee had sold an immovable property and declared the sale consideration. The Assessing Officer noted discrepancies in the declared value and circle rate of the property. The CIT(A) directed re-computation based on a Valuation Officer's report. The tribunal directed to adopt the sale value declared by the assessee for computing the Long Term Capital Gains. It was established that the property was jointly owned by three co-owners, and the capital gains were distributed accordingly. The tribunal allowed the appeal on the grounds related to the computation of capital gains.

Addition on Account of Cash Deposits:
The addition was made on unexplained deposits in HDFC Bank and State Bank of India. The assessee failed to provide sufficient evidence for the source of cash deposits. The tribunal noted that the onus was on the assessee to explain each deposit in the bank accounts. It was decided that the matter be sent back to the Assessing Officer for the assessee to provide necessary evidence regarding the source of cash deposits. The tribunal allowed the appeal on the grounds related to the addition of cash deposits in bank accounts.

Conclusion:
Both appeals were allowed, with directions given for the computation of Long Term Capital Gain and the addition made on account of cash deposits in bank accounts. The tribunal provided detailed analysis and reasoning for each issue involved, ensuring a fair and just decision based on the facts presented during the proceedings.

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