TaxTMI 
TaxTMI 
2022 (3) TMI 133
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....ts own was bound to process the return by adjusting the apparent error in the return. iv. The CIT(A) has nowhere stated that the claim in incorrect and hence not allowable. Where on merits the assessee is entitled to the claim, the same cannot be defeated on hypertechnical grounds. v. In any case, in as much as the assessment had been taken up for scrutiny, all issues are opened up. Grounds w.r.t. computation of capital gains vi. The CIT(A) failed to understand the nature of the transaction involving transfer of UDS and purchase of constructed flats in return. vii. The CIT(A) erred in holding that the sum of Rs. 2.25 crores formed the sale consideration in the hands of the "owners" i.e. the appellant, appellant's father and the appellant's wife, when the said sum was solely to the account of, and payable by the developer only to the appellant's father. viii. The said Rs. 2.25 crores was rightly offered to tax by the appellant's father and same as also accepted by the department; taxing the same in the hand's of the appellant would be double taxation. ix. The CIT(A) erred in giving a lesser deduction u/s.54, when the appellant was entitled to the fu....
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....y Srinivas (assessee's father) and one flat at 1st Floor allotted and registered in favour of Dr.E.S.Krishnamoorthy (assessee) and another Flat at 4th Floor to Mrs. Gayathri Krishnamoorthy (assessee's wife). All three joint owners of the property individually filed their return of income by offering their respective share of capital gains in their hands. 5. During the course of assessment proceedings, the AO on the basis of information furnished by the assessee and also information received from the developer M/s.Coromandel Engg. Co. Ltd., u/s.133(6) of the Act, noticed that the land owners have received a sum of Rs. 2.25 Crs. Non-refundable deposit from the developer besides two flats each measuring 4092 sq.ft in lieu of 50% undivided share of the land sold to the developer. Therefore, he opined that cost of two flats received by the assessee in lieu of transfer of 50% of UDS in favour of developer and non-refundable deposit of Rs. 2.25 Crs. should be considered as full value of consideration received as a result of transfer of property. Therefore, re-computed long term capital gains derived from transfer of property by the assessee by taking into account total cost of constructi....
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.... Less: Indexed cost of acquisition 42.5% of the Fair Market Value property of Rs. 4,00,000/- as on 01.04.1981 as claimed by you = 1,70,000/- = 1,70,000 x 785/551 (u/s.48(iii)) Rs. 2,42,200 Rs. 2,43,31,746 Less: Deduction u/s.54 Cost of two flats as worked out = 3,53,21,050 Reinvestment worked out at 42.5% Rs. 1,50,11,446 Taxable capital gain Rs. 93,20,300 The assessee was issued with a show cause notice dated 10.03.2015, why the above LTCG should not be taxed in his hands. It was duly served on the assessee. The assessee was requested to file explanations, objections, if any, to the proposed assessment of LTCG on or before 16.03.2015. The assessee, till date, has not filed any objections hence it is observed that he has no objections to the proposed assessment. As such the Long Term Capital Gain is assessed at Rs. 93,20,300/- in his case. (Addition: LTCG Rs. 93,20,300/-) CREDIT CARD PAYMENTS The credit card statement of accounts in respect of credit card payments made through RBS and Standard Chartered Bank, for an amount of Rs. 7,15,893/-during the financial year relevant to Assessment year may be fur....
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.... statement therein, he may furnish revised return at any time before the end of the relevant AY or before completion of the assessment, whichever is earlier. In this case, the original return was not filed under Sub-Sec.(1) or Sub-Sec.(4) and thus, the belated return filed by the assessee is an invalid return. Therefore, the AO is not bound to consider invalid return. Hence, we are of the considered view that there is no error in the reasons given by the AO in not considering the revised return filed by the assessee for rectifying the mistake in claim of depreciation. Accordingly, we reject the ground taken by the assessee. 9. The next issue that came up for our consideration from Ground Nos.6-9 of assessee's appeal is computation of long term capital gains derived from transfer of property in pursuant to JDA. The fact with regard to impugned dispute are that the JDA between the assessee and his wife & his father with M/s.Coromandel Engg. Co. Ltd., is not in dispute. As per the JDA between the parties, the developer has agreed to construct 4 flats and also agreed to share 50% of the constructed area along with payment of Rs. 2.25 Crs., non-refundable deposit to the land owners. In....
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....ring the said information to the assessee. Therefore, he argued that the lower authorities exceeded their jurisdiction within the scope of Sec.48 of the Act in re-computation of the long term capital gains. The Ld.AR further submitted that the AO in computation of long term capital gains, has arrived at the full value of consideration at Rs. 5,78,21,050/- which included nonrefundable security deposit received by the assessee's father directly from the developer, even though, the assessee's father had offered cash component to tax in his return filed for the relevant assessment year. In this regard, he has filed revised computation of long term capital gains in Page No.9 of the Paper Book and requested that the same may be considered in the interest of justice. 11. The Ld.AR further submitted that the AO had also erred in adopting indexed cost of acquisition of the UDS of land at 42.5% without appreciating the fact that the assessee is having only 17.5% of UDS in land, because the remaining 50% of UDS in land has been transferred to developer. The Ld.AR further submitted that the AO also erred in determining the amount of investment in new asset to claim the benefit of exemption u/....
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....ecified share in the property and as a natural corollary, full value of consideration received as a result of transfer of property in pursuant to JDA should be considered in the hands of three co-owners according to their share in the property. Since, the assessee has 42.5% share in the property, the AO is right in considering 42.5% of consideration in the hands of the assessee for the purpose of computation of long term capital gains as a result of transfer of property in pursuant to JDA. The arguments of the assessee that, he had received consideration separately, as specified in the JDA, we find that receipt of entire non-refundable deposit by the assessee's father and one flat each by the assessee and his wife is an internal arrangement and which is nothing to do with computation of capital gains by adopting respective share of full value of consideration. As per law, when a property transferred, consideration received or accrued as a result of transfer should be taken into account according to their share in the property, but not as per the internal arrangement between the parties. Hence, the arguments of the assessee is rejected. 14. Having held so, let us come to computatio....
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.... developer and the remaining 50% of the UDS is with the land owners. Therefore, when 50% UDS only has been transferred in favour of the developer, then the cost of acquisition in respect of 50% UDS should be considered for the purpose of determining the cost of acquisition in the hands of the assessee. Therefore, 50% of the FMV of the property comes to Rs. 2 lakhs. Out of which, the assessee's share at 42.5%, works out to Rs. 85,000/-. Therefore, the AO should adopt Rs. 85,000/- cost of acquisition in the hands of the assessee and further, should allow the benefit of indexation from the year 01.04.1981, because as per the provisions of Sec.49(1) read with Explanation (iii) below sec.48 of the Act, when a property is owned by the assessee by anyone of the modes specified therein, then the benefit of indexation should be allowed from the date when the previous owner held the asset. In this case, the assessee has inherited property from his grandfather by one of the mode specified u/s.49(1) of the Act and thus, he is entitled benefit of indexation from the date his grandfather held the property i.e. from the year 1962. Since, base year is 1981-82 for computing the benefit of cost of a....