TaxTMI 
TaxTMI 
2008 (4) TMI 308
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....n of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the order of the Assessing Officer computing taxable gain at Rs. 6,60,000 for the assessment year 1989-90 ?" 3. The brief facts of this case as they appear from the paper book are that the assessee in the period relevant to the assessment year 1989-90 owned a house at Jorbagh, New Delhi. He sold the ground floor of that house for a consideration of Rs. 30,00,000. The cost of construction of the ground floor was shown to be Rs. 1,25,000 and the expense for brokerage were claimed at Rs. 45,000. Thus, the transaction resulted in a capital gains of Rs.28,30,000. The assessee also purchased a residential house for a considerat....
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....pital gains Less : Invested in purchase of flat Less : Invested in purchase of IDBI bonds Less : Deductions under section 48(2) Rs. 1,25,000 45,000 Rs. 30,00,000 1,70,000 28,30,000 9,00,000 19,30,000 6,00,000 13,30,000 6,70,000 6,60,000 5. The assessee challenged the above computation before the Commissioner of Income-tax (Appeals) who considered in details the relevant provisions and concluded that first deductions under section 48 of the Act are to be made and then the provisions of sections 53 and 54 of the Act are to be applied. She accordingly accepted the claim of the assessee. 6. The Revenue then brought the issue in appeal before the Appellate ....
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....t the scheme of sections 45 and 48 of the Act clearly makes it a case that deductions under sections 54 and 54E of the Act shall be made in the beginning of the computation. 9. Capital gains have been made chargeable to income-tax under section 45 of the Act. Section 45(1) of the Act provides : "Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections 53, 54, 54B, 54D, 54E, 54F, 54G and 54H, be chargeable to income-tax under the head 'capital gains', and shall be deemed to be the income of the previous year in which the transfer took place." 10. Section 48 of the Act refers to the mode of computation and deduction for the income chargeable under th....
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..... (ii) in respect of long-term capital gain so arrived at relating to capital assets,- (A) in the case of a company, thirty per cent. of the amount of such gain in excess of ten thousand rupees ; (B) in any other case, sixty per cent. of the amount of such gain in excess of ten thousand rupees ;" 11. The Explanation to section 53 of the Act provides : "In this section and in sections 54, 54B, 54D, 54E, 54F and 54G references to capital gain shall be construed as references to the amount of capital gains as computed under clause (a) of sub-section (1) of section 48." 12. In CIT v. V. V. George [1997] 227 ITR 893, the Kerala High Court held that (page 897) : "Capital gains' basically relate to a situation of transfer of a....
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....t should be given effect to before giving effect to the pro-visions of section 54E of the Act. 15. The deductions specified under sub-section (2) of section 48 of the Act is with reference to the gross capital gains calculated under clause (a) of sub-section (1) only. Nowhere in the Act is it specified that this deduction is subject and restricted to the deductions to be allowed under sections 53 and 54 of the Act. 16. This is so in order that the assessee would get the full benefit of the deduction on the gross capital gains as otherwise, the deduction would be allowed only after the capital gains have been computed as per section 48 of the Act, i.e., both sub-sections (1) and (2). 17. However, no such Explanation or proviso is gi....