2014 (11) TMI 1161

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....d the disallowances in respect of capital gains considering that the A.O. could not have been expected to allow deductors beyond the purview of sec.48 of the I.T. Act. 3. The CIT(A) failed to appreciate the legal constraints and thereby allowed the assessee's appeal on capital gains." 2. Briefly stated facts are that assessee is an individual, received an amount of Rs. 7,55,98,125 as sale consideration from sale of 1288 sq. yards of land and built-up area of 24 flats situated at Miyapur, Hyderabad. While calculating the long term capital gain, assessee claimed deduction from the sale consideration of the following amounts: (i) Infrastructure expenditure Rs. 24 lakhs (ii) Corpus Fund Rs. 06 lak....

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....ner i.e., the appellant to collect the charges from buyers and remit the same to the builder. In the agreement between the builder and the appellant, this clause is clearly stated in page nos. 2 and 3 of Annexure-II of the agreement dated 3rd November, 2005, which is as under : "......................That the First Party further agreed to pay the corpus fund and infrastructure amount and the difference amount for the teak wood used etc., will be paid to the Second Party before taking possession of the flats in various blocks as mentioned block wise. ........................................ ......................................... Agreed cost of infrastructure per flat Rs. 1,00,000 Corpus fund per flat Rs....

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....per. Since, these amounts are included in the sale consideration, assessee can certainly claim the amount in order to arrive at full value of consideration. Since, there is contractual obligation to pay the above amounts, Ld. CIT(A) is correct in allowing the amounts. Hon'ble A.P. High Court in the case of CIT vs. Manohar Rao, Managing Director 155 ITR 696 considered the scope of full value of consideration in a case and held that capital gain had to be computed by taking into account only the amount which was actually received by assessee. In that case, assessee owns 4.27 gts of land, had entered into an agreement to sell the land at Rs. 25,000 per acre. Subsequent to that, the land was acquired by Government and only an amount of Rs. 2,20....