2013 (7) TMI 410

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.... from salary and from other sources. She had acquired a residential flat in F.Y. 1995-96 for Rs.2.8 crores along with her husband Mr. Dinesh Kumar Agarwal. The share of the assessee in that flat was 25% and the balance 75% share was held by her husband. During the F.Y. 2005-06 her husband expired leaving behind the assessee, his wife, being the sole legal heir inherited the said property. During the A.Y. 2007-08, the assessee sold the above flat for Rs.2.25 crores. The assessee in her income tax return computed the Long term capital gain by considering the indexation factor from the year of purchase i.e. F.Y. 1995-96 on the whole value and thereby claimed Long term capital loss of Rs.3,36,50113/-. However, the AO relying upon the Explanatio....

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....d that, in fact, the assessee had rightly claimed Long term capital loss of Rs.3,36,50,113/- holding that Explanation (iii) to section 48 has to be read to mean that the indexed cost of acquisition has to be computed by taking into account the period for which the asset was held by the previous owner. In his order, he has also justified his finding by relying upon various judgments of Hon'ble High Courts in this respect. He further observed that when an explanation is offered by the assessee in support of his claim, penalty cannot be levied merely because the explanation is found unsatisfactory. He further observed that the assessee did not file any inaccurate parties to conceal her income. Merely because the assessee had claimed the loss w....