TaxTMI 
TaxTMI 
2021 (1) TMI 407
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..../sec. 147 and in response to which the assessee filed her return of income on 16/04/2018 admitting the same income which was admitted originally i.e. Rs. 5,99,350/- The case was taken up for scrutiny and the information was called for from the assessee. During the course of assessment proceedings, the AO had observed that assessee offered long term capital gain on sale of land of 212 sq.yds. at Rs. 3,53,271/- as under:- Schedule-1 (Asset - Building) Schedule-2 (Site 212 sq. yds) Date of transfer 04/04/2012 Date of transfer 04/04/2012 Sale of scrap Less: Demolition charges Net consideration received Rs. 3,00,000 Rs. 3,00,000 Rs. NIL Sale of consideration Rs. 76,32,000/- Less: Indexed Cost of construction (1994-95) Rs. 22,00,000 * 852/259 Rs. 72,37,066 Less: Indexed cost of acquisition (1981-82) Rs. 4890 * 852/100 Rs. 41,663 Taxable capital gain (-)Rs. 72,37,066 Taxable capital gain Rs. 75,90,337 Total capital gain offered to tax : Rs. 3,53,271/- [Rs. 75,90,337 - 72,37,066] 3.1 The AO disbelieved the demolition charges stated to have been incurred by the assessee and disallowed the expenditure incurred o....
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.... possible to keep the records for such a long time. He further argued that under no provision of the act the assessee is obliged to keep construction accounts for such a long time. The ld.AR further submitted that the AO having taxed the sale of scrap of the building ought not to have disallowed the demolition charges and the indexed cost of construction of the same building. Accordingly, ld.AR requested to allow the expenses claimed for demolition of the building as well as the indexed cost of acquisition from the computation of capital gains. 6. On the other hand, ld.DR vehemently supported the orders of the lower authorities. 7. We have heard both the parties and perused the material placed on record. In the instant case, the assessee has demolished building which was existing prior to the sale of the land. The assessee entered into an agreement of sale coupled with GPA dated 04/04/2012 with M/s. Balaji Construction Company Ltd. along with 4 others. The assessee has received the sum of Rs. 76,32,000/- towards the sale proceeds of her share of 212 sq.yds of site and therefrom claimed the indexed cost of acquisition of land and building which was constructed in the F.Y. 1994....
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.... No.217/VIZ/2020 A.Y. 2015-16 9. All the grounds in this appeal for the A.Y. 215-16 are related to taxing the sale of land and flats. The assessee claimed the entire sale consideration under the long term capital gain and thus the AO taxed the sale of land under long term capital gain and the flats under short term capital gain. The issue in dispute is apportionment of sale consideration towards the long term capital gain and short term capital gain. The assessee is an individual receiving interest income and capital gains. In the A.Y. 2015-16, the assessee filed her return of income admitting total income of Rs. 2,66,33,460/-. Subsequently, the return was processed u/sec. 143(1) and the case was selected for scrutiny and the assessment was completed u/sec. 143(3) by an order dated 14/12/2018. During the year under consideration, the assessee along with other persons entered into construction agreement on 12/02/2013 with M/s. Balaji Construction Company Ltd. to construct apartment in the larger extent of 2137 sq.yds.in plot Nos. HIG-24 &25 situated in Survey No.6 of Resapuvanipalem village, Seethammadhara North Extension Layout, Visakhapatnam. Out of the total site of 2137 sq....
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....3,25,80,000/9) x 7 2,53,40,000 Taxable Short Term Capital Gain 1,98,55,000 10. Against the order of the AO, the assessee went on appeal before the ld. CIT(A) and challenged the order of the AO stating that the entire sale consideration to be taxed as long term capital gain and also the land cost required to be taken at fair market value but not as per the SRO value. The Ld.AR argued that the AO erred in taxing the sale consideration at Rs. 4,51,95,000/- for 7 flats under short term capital gains and the same is unjustified. 11. Ld. CIT(A) after considering the objections of the assessee confirmed the order of the AO and held that AO rightly taxed the sale of land as long term capital gain and the sale of flats as short term capital gain. With regard to application of SRO value as sale consideration of land, the ld. CIT(A) did not find favour with the argument of the assessee and accordingly confirmed the order of the AO and dismissed the appeal of the assessee. 12. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before this Tribunal. 13. During appeal hearing, ld.AR argued that the assessee has constructed the flats durin....