2016 (6) TMI 423

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.... Officer erred in disallowing the expenditure of transfer to decide the correct Short Term Capital Gains on transfer of property. 2. The method of accounting is redundant for proper calculation of Short Term Capital Gains and therefore Assessing Officer erred in rejecting the claim of expenses on transfer as the same being not claimed in the regular return of income." 3. The brief background of the case is that the original assessment was completed u/s. 143(3) on 29.11.2005, wherein Short Term Capital Gains on sale of clinic Gala was computed at Rs. 4,17,104/- by adopting the market value at Rs. 8,77,500/- as determined by the Stamp Duty authorities in terms of Sec. 50C, as against the sale consideration of Rs. 6,00,000/- as per....

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....before Ld. CIT(A), assessee submitted that out of Rs. 47,200/-, half of the amount was borne by the purchaser and the other half by the seller. Therefore, same should be liable for deduction. Further evidences were also filed by the assessee before the Ld. CIT(A) with regard to the transfer fee paid to the CHS. The matter was sent back to the Assessing Officer to submit his remand report and in the remand report, the Assessing Officer objected to such additional evidence on the ground that, firstly, the said expenses were not claimed in the return of income filed for Assessment Year 2003-04 and secondly, assessee is following cash system of accounting and the said expenses were not made during the year under consideration. Lastly, he also r....

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....consideration as per the Deed of Transfer at Rs. 6,00,000/-, whereas the FMV as per the Stamp Duty authorities was Rs. 8,77,500/-, and accordingly the sale consideration was taken in view of the deeming fiction of Sec. 50C and Short Term Capital Gains was determined. The matter had travelled upto the Tribunal from which stage this issue was set aside to the file of the Assessing Officer for making a reference to the Valuation Officer so as to determine the FMV of the property. In pursuance thereof, Valuation report was obtained and the FMV of the property was determined at Rs. 6,35,794/-, leaving only a marginal difference of Rs. 35,794/-. Now, in the second round of proceedings, assessee has taken a new plea that a deduction from the cost ....