TaxTMI 
TaxTMI 
2022 (5) TMI 1383
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....Income Tax Appellate Tribunal, Varanasi (hereinafter called "the tribunal"), reads as under : "1. That in any view of the matter addition of Rs. 13,99,840/- under the head 'Capital Gain' made by the assessing officer and his action as confirmed by the Commissioner of Income Tax (Appeal) is highly, unjustified, incorrect and the appellant is liable to get benefit for investment made in the construction of another property while determining the 'Capital Gain'. 2. That in any view of the matter in respect of business activity, regular books of account have been maintained and in the books receipt from all sources and expenditures under various heads were found correct as the same are recorded and supported by the Vouchers but while computing the income, the expenditures incurred in construction of property was not properly considered as a result entire working of 'Capital Gain' as done by the two Lower Authorities is defective and declared, Capital Gain is liable to be accepted in the facts and circumstances of the case. 3. That in any view of the matter the appellant explained to the Lower Authorities about the investment made in constructio....
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....11.11.2021 and again written request was received from the counsel of the assessee that certain details were further required to be filed and again prayers were made to the Division Bench to adjourn the hearing, the DB was again pleased to adjourn the hearing. Again this appeal came up for hearing before the Division Bench on 25.01.2022 and counsel of the assessee again requested vide written letter dated 22.1.22 for adjournment and the Division Bench was pleased to adjourn the hearing to 22.03.2022. Again this appeal came up hearing before the Division Bench on 22.03.2022 and none appeared on behalf of the assessee before the Bench, but written request dated 21.3.22 was made by ld. Counsel of the assessee to adjourn the hearing, as in the view of the ld. Counsel for the assessee certain details were still required to be filed in this matter, and again the Division Bench was pleased to adjourn the hearing to 13.04.2022, with the direction that now this is the last opportunity provided to the assessee. Then this appeal again came up for hearing on 20.04.2022 and again none appeared on behalf of the assessee but written request dated 19.04.2022 was made by ld. Counsel for the assesse....
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....d amount of Rs. 3,00,000/-. The assessee during assessment proceedings submitted that the assessee is not having any evidence to substantiate expenses of Rs. 3,00,000/- on boundary wall and filing of soil, as the matter is more than six years old. The AO did not granted any benefit with respect to this expenditure of Rs. 3,00,000/- claimed by the assessee. Further, the assessee also claimed to have spent an amount of Rs.26.00 lacs on construction of 4000 sq. feet area as per the bills submitted by the contractor Shri Aditya Maloo of Varanasi, and the assessee has claimed to have sold one part of the house of which the area comes to 2150 square feet which was claimed to have been sold by the assessee in the financial year 2013-14(ay: 2014-15), on 22.10.2013. The AO observed that government circle rate for payment of stamp duty, of the portion of plot of land consisting of 1075 square feet sold is Rs. 11,98,920/-. The AO further observed that the government circle rate for stamp duty purposes, of house building (excluding land) consisting of 2150 square feet (2 floors) which was sold by the assessee, comes to Rs. 27,97,340/-. The total government circle rate for stamp duty purposes, ....
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....building/house was constructed on the plot of land in financial year 2013-14 and also sold on financial year 2013-14. The ld. CIT(A) relied upon following decisions of Hon'ble High Courts, wherein it was held that if the land and constructed residential house thereon is sold, then in the case if the land is held for more than 36 months the capital gains arising therefrom shall be long term capital gains, and if the building constructed thereon is short term asset, then short term capital gains arising therefrom shall be brought to tax. Further, the deduction u/s 54 of the 1961 Act can only be allowed on the long term capital gains earned by the assessee. The ld. CIT(A) relied upon the following decisions of the Hon'ble High Court, as detailed hereunder:- a) C.N.Ananthram v. ACIT in ITA no. 1012/2008(Kar. HC) b) CIT v. Dr. D L RamachandraRao 236 ITR 51(Mds.) c) CIT v. Vimal Chand Golecha 201 ITR 442(Raj.) d) CIT v. C.R.Subramanian 242 ITR 342(Kar.) Thus, the ld. CIT(A) upheld the assessment order passed by the AO, and held that benefit of deduction u/s 54 cannot be allowed on short term capital gains arising from sale of building/house(excludin....
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....uction. We have observed that no evidence whatsoever is filed by assessee with respect to construction of boundary wall and filing of soil, and merely it is stated before the AO that matter being old, no details are available. Thus, in view of this issue being conceded before ld. CIT(A) and no evidence whatsoever on record, plea of the assessee cannot be accepted. Further, the assessee also claimed to have spent an amount of Rs. 26.00 lacs on construction of 4000 sq. feet area as per the bills submitted by the contractor Shri Aditya Maloo of Varanasi( bill is reproduced by ld. CIT(A) in its appellate order), and the assessee has claimed to sold one part of the house of which the area comes to 2150 square feet along with land admeasuring 99.91 square meters (1075 square feet) which was claimed to have been sold by the assessee in the financial year 2013-14, on 22.10.2013 for an aggregate value of Rs. 40,00,000. The AO observed that government circle rate of portion of plot of land consisting of 1075 square feet sold is Rs. 11,98,920/-. The AO further observed that the government circle rate of house building (excluding land) consisting of 2150 square feet (2 floors) which was sold b....
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....stood sold in financial year 2013-14. So far as sale of land is concerned the AO computed long term capital gains on sale of land and also allowed deduction u/s 54 of the 1961 Act, for investment made by the assessee in the new residential property. The dispute between rival parties is concerning denial of deduction u/s 54 of the 1961 Act on the short term capital gains arisen from sale of constructed area (building /house excluding land) which was constructed in the financial year 2013-14 and also sold in the same year. The counsel for the assessee admitted before ld. CIT(A) as is emanating from para 4 of ld. CIT(A) order is that the only dispute between rival parties is with respect to claim of deduction u/s 54. The ld. CIT(A) affirmed the assessment order of the AO, and denied the deduction u/s 54 on the short term capital gains earned on the sale of house (excluding land ), as the residential house was constructed in financial year 2013-14(ay: 2014-15) and sold in financial year 2013-14 (ay:2014-15) itself. The ld. CIT(A) relied upon the following judgments and orders of Hon'ble High Courts, as under: a) Judgment and order of Hon'ble Karnataka High Court in the case of....
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.... India, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- *** *** ***" The Long term capital asset and short term capital assets are defined in Section 2(42A), which reads as under: "2(42A) "short term capital asset" means a capital asset held by an assessee for not more than thirty six months immediately preceding the date of its transfer: **** **** ****" The Long term capital asset is defined 2(29AA) of the 1961 Act, means a capital asset which is not a short term capital asset. The long term capital gains is defined in Section 2(29B) means capital gains arising from the transfer of long-term capital asset, while short term capital gains means gains arising from the transfer of short-term capital asset. In taxing statute, if the language is clear, plain and simple, there is no scope for indentment, and it is well settled that taxing statute are to be strictly construed. The assessee has held land for more th....