TaxTMI 
TaxTMI 
2021 (9) TMI 754
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....al had sold an immovable property for a consideration of Rs. 1.60 crores. After deducting index cost of acquisition, brokerage, stamp duty, cost of improvement, etc. the assessee offered Long Term Capital Gain (LTCG) of Rs. 43,38,125/- to tax. The immovable property sold during the relevant period was constructed on lease hold land. The indexed cost of property with the year 1998 as base the LTCG was computed as under: Sale consideration Rs. 1,60,00,000/- Less (-) index cost of acquisition Rs. 1,15,96,175/- Total Rs. 43,38,125/- The entire LTCG was invested in bonds by the assessee, hence, Nil tax was offered on said LTCG. In assessment proceedings, the AO disallowed: Lease rent capitalization Rs. 1,34,247/-, pay....
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....2007 and 20.12.2007 and Occupancy Certificate (OC) for the building was obtained on 04.06.2007. Though, there is no co-relation between water proofing and obtaining OC, however, proximity of the dates would show that water proofing of the building is the final part of construction activity. 3. The ld. AR submitted that in ground no.2 of appeal, the assessee has assailed the findings of CIT(A) in not allowing benefit of indexation of land cost from 31.03.1997, i.e. when the land was first held by the assessee. The land was allotted to the assessee on 10.12.1996 for which payment was made on 06.01.199. The assessee got right in land on payment of entire consideration. Registration of land was got done on 03.07.1998. The AO instead of grant....
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....ed that while computing cost of acquisition, the AO has excluded: 1. Lease rental payments - Rs. 1,34,247/- 2. Water proofing charges - Rs. 2,11,001/- 3. Vacant land tax and - Rs. 1,14,662/- 4. Property Tax. - Rs. 3,05,530/- Total Rs. 7,65,440/- 7. A perusal of assessment order reveals that the AO while computing cost of acquisition has included only one initial instalment of lease rental and the subsequent instalments paid have been excluded on the ground that the expenditure is in the nature of annual lease rent to be paid on the land and does not add to the value of asset. The Tribunal in the case of ITO Vs. Wadhwa & Associates Realtors Pvt. Ltd. (supra) after following the de....
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.... capital in nature. Payment of taxes is statutory obligation to be discharged as and when due. I find no merit in the submissions of assessee to include vacant land tax and property tax in the cost of acquisition. In the light of above observations, the ground no.1 of the appeal is partly allowed. 8. In ground no.2 of appeal, the issue is: Whether the benefit of indexation should be allowed to the assessee from the date of allotment of land or from the date the document was registered in the name of assessee? A perusal of letter dated 10.12.1996 from MHADA shows that Plot No.C-6 at Majiwade-II, Thane was offered to the assessee against tender dated 28.08.1996. The assessee was required to communicate acceptance of the offer and pay su....
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.... immovable property. The date on which such legal obligations are carried out would be the date when the asset was first held by assessee. In the present case it is the payment of consideration and acceptance of offer. 9. In the case of Nita A. Patel (supra), the issue before the Tribunal was relevant date for allowing the benefit of cost of acquisition. The Tribunal held that for the purpose of determining indexed cost on acquisition of property, the benefit of indexation should be allowed to the assessee from the date on which ownership rights in property were held by the assessee and not the physical ownership or physical possession. 10. Thus, the relevant date for providing the benefit of indexation is when the assessee had first ....