https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=761434 https://www.taxtmi.com/caselaws?id=761434 Benefit of indexation in respect of capital gain on sale of land - HELD THAT:- We find that the CBDT Circular No. 471 dated 15.10.1986 and the ratio of the decision of CIT Vs, Ram Gopal [ 2015 (2) TMI 500 - DELHI HIGH COURT] squarely applies to the facts and circumstances of the case as stated that the allottee gets title to the property on the issuance of the allotment letter and the payment of installments is only a follow up action and taking the delivery of possession is only a formality Thus, we hold that the AO has erred in denying the benefit of indexation from FY 2007-08. In that view of the matter, the assessee is allowed benefit from the date of allotment letter i.e. 17.02.2008. To that extent, the decision of the CIT(A) is sustained. Cost of acquisition/improvement of the land sold determination of cost of land on proportionate basis and the other pertains to cost of improvement of land - AO has calculated the proportionate cost of acquisition for the parcel of land admeasuring 9900 sqmts. We find that the assessee has maintained a separate account for each parcel of land in its books of account since FY 2013- 14 as non-current asset. Since the accounts are separately maintained for each parcel of land, the cost of the parcel of land admeasuring 9900 sqmts can be determined and taken from the books of account itself unless it is bogus or unsubstantiated. We therefore, hold that the CIT(A) has rightly accepted the assessee bifurcation of land parcel for determining the cost of the parcel of 9900 sq mts as per the books. Other aspect for determining the cost of improvement - As we find that the assessee has claimed an amount in FY 2015-16. AO has held that the assessee has not been able to substantiate the expenses on improvement of land to the extent of Rs 65,78,905/-. Before us also the ld AR admitted that details were not filed before the AO earlier but the same can be filed if required. In the light of the above, we find it appropriate to set aside the issue of determining the cost of improvement to the file of the AO for a fresh investigation and determination. In view of the above discussion, the ground number 1 is partly allowed for statistical purposes. Disallowance of expenses - assessee failed to explain as to why such expenses are being claimed when there is no revenue in the given year - AO has not examined the issue of commencement of the business in a proper manner for allowance of expenses u/s 37(1) - assessee has also not been able to substantiate the factum of commencement of business in the previous year. Assessee has merely claimed that the interest has been paid towards the loans borrowed for the purchase of land which the AO has not examined thoroughly. There is, however, some substance in the alternate claim of assessee that where the interest paid is towards loans borrowed for purchase of land, the same may be allowed to be capitalized. We find that the complete facts on this issue have not been enquired/examined by the AO. We therefore deem it appropriate to set aside this issue to the file of the AO to enquire and examine the facts comprehensively and reach a conclusion in accordance with law. Case-Laws Income Tax Tue, 27 Aug 2024 00:00:00 +0530