2020 (10) TMI 1043

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....42,350. The case of the assessee was selected for scrutiny assessment under CASS for the reason that there was cash deposit in co-operative bank and mismatch in income/capital gain on sale of land & building and interest income. In the course of scrutiny assessment proceedings, the AO confronted the assessee with the fact that there were cash deposits of Rs. 20,46,000 in the assessee's bank account with The Janatha Co-op. Bank. The assessee explained the source of deposit of cash in bank account as from and out of sale proceeds of a property during the previous year and the sum so received was deposited in the bank account. It was also explained that the capital gain on sale of property was not exigible to capital gains tax because the ....

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....ecified bank account within the due date for filing return of income as contemplated u/s. 54(2) of the Act. Thus, income under the head 'capital gain' was determined by the AO at Rs. 32,56,650 + 25,55,911. 4. Aggrieved, the assessee filed appeal before the CIT(Appeals). The assessee sought to file report of registered valuer to show the cost of construction of the capital asset. The assessee also sought to file evidence to show that within a period of 3 years from the date of transfer of capital asset, the assessee had put up construction of residential house and therefore the requirement of deposit of the unutilized capital gain in a specified bank account did not arise for consideration. In this regard, the assessee placed reli....

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....sition cost Rs. 3,29,794/- Indexed Cost of construction(as allowed by AO) Rs. 32,56,650/- Capital Gain Rs. 12,12,556/- 6. The CIT(Appeals) also held that the sum of Rs. 46 lakhs which was the full value of consideration received on transfer should be taxed as income from other sources. This direction had some tax implication because the long term capital gain is taxed @ 20%; whereas the income under the head 'income from other sources' is taxed under the maximum marginal rate. Aggrieved by the order of CIT(A), the assessee has preferred the present appeal before the Tribunal. 7. There are basically three issues that need to be decided viz., - (i) What is the cost of construction of capital asset that wa....