2024 (8) TMI 419

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....A r.w.s. 143(3) of the Act on 31- 12-2009. The deceased assessee is represented by her legal heir. The sole grievance of the assessee is confirmation of certain addition of Long-Term Capital Gains (LTCG) 2. This is second round of appeal. The Ld. AR has placed on record sequence of events. It emerges that the assessee was searched u/s 132 on 16-05-2007. The Ld. AO framed an assessment u/s 153A r.w.s. 143(3) on 31-12-2009. During search, a sworn statement was recorded from assessee wherein she admitted to have received cash of Rs. 2 Crores from one Shri Duraipandian on 15-05-2007. She also revealed utilization of said cash. However, the same is not subject matter of appeal before us. It transpired that the assessee was doing real estate b....

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....erty. There was no nexus between the loan and capital asset. Accordingly, the claim was denied. 5. The assessee sought rectification of the order u/s 154 which were disposed-off vide order dated 14-06-2023. The assessee submitted that comprehensive written submissions as well as additional grounds were not considered. These grounds include the alternative ground that the development and sale of plot was assessee's business venture and therefore, interest component of one-time settlement with the bank was to be allowed u/s 36(1)(iii). In the rectification order dated 14-06-2023, Ld. CIT(A) noted that though the assessee was purchaser of the property, there was no evidence that the property was purchased out of loan. Further, the aforesaid....

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.... towards loan and interest dues. The entire consideration was retained by the bank and nothing came to assessee. The assessee sold 5.29 grounds only the sale proceeds of which reached the assessee. It was the submission of the assessee that loan was borrowed to acquire the property and the entire sale proceeds were utilized to repay interest and nothing came to the assessee and therefore, there would not be any capital gains in the hands of the assessee. The assessee also submitted that in such a case, interest component would be allowable in the computations of capital gains as per the decision of Hon'ble Karnataka High Court in the case of CIT vs. Sri Hariram Hotels P Ltd (188 Taxman 170) as well as the decision of Hon'ble High Court of D....