TaxTMI 
TaxTMI 
2025 (12) TMI 1648
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....pporting the cost of acquisition or cost of improvement of the property. The Ld. AO has given a finding that the benefit of indexation cannot be allowed for any depreciable asset, being the factory building in this case. Thereafter, the Ld. AO considered only the cost of land as cost of acquisition and recomputed the capital gains. Furthermore, a second portion of the same plot of land was also sold as agricultural land but the Ld. AO is seen to have denied this claim on the ground that the assessee did not give any proof of agricultural activity being conducted on the said land. Thus, the facts that emerge are that the assessee sold two portions from a plot of land measuring 5 acres. The first portion comprising 1.51 acres also had a factory building on it and the second part comprising 3.49 acres was claimed to be agricultural land. Thereafter, the Ld. AO added long term capital gains at Rs. 1,82,30,107/- for one parcel of land and Rs. 1,04,55,911/- for the second parcel. 1.1 Aggrieved with this order, the assessee approached the ld. CIT(A) where he could succeed on both counts. Regarding the sale of 1.51 acres of land (with factory building), it has been mentioned in the impu....
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....Page 91] issued by the Government. Based on this, the appellant had sent a letter dated 27.04.2007 to PICUP drawing attention to the fact that the said area did not fall in the areas certified for industrial use." 1.2 Aggrieved with this action of Ld. CIT(A) the Revenue has approached the ITAT with the following grounds: "1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,82,30,107/- made under the head Long Term Capital Gain. 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) was correct in allowing the indexation on the depreciable asset while calculating the capital gain by the assessee. 3. The Ld. CIT(A) has erred in deleting the addition of Rs. 1,04,55,911/- made under the head Long Term Capital Gain. 4. Whether on the facts and circumstances of the case, the Ld.CIT(A) was correct in taking two different view on the same asset which was purchased and sold at once, treating the one piece of land as commercial land while the other as Agriculture land. 5. Whether on the facts and circumstances of the case, the Ld.CIT(A) was correct in ignoring the fact that as....
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.... while PICUP had possession over the said land and building, there was large scale encroachment, making the area look like a dwelling unit. It was clarified by the Ld. AR that due to this fact the Revenue officials of the district were requested to term the land pertaining to the factory building to be classified as non-agricultural. However, the remaining land was classified as agricultural by the district revenue authorities. Regarding the remaining 3.49 acres, the same was classified as "agricultural land". It was the submission that once the said land was classified as agricultural by the revenue authorities then there was no reason why the land could be treated as anything else. The Ld. AR relied on the following cases: i) Borhet T. Company Ltd. reported in 138 ITR 783 (Kol.). Through this case law it was averred that agricultural operational need not be carried out and only the land should be capable of sustaining agriculture for the same to be identified as being agricultural in nature. ii) Hindustan Industrial Resources Limited reported in 335 ITR 77 (Del.). Through this case law it was argued that the classification of the land of the District Collector w....
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....ions of sections 48 and 49 shall be subject to the following modifications :- (1) where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result of the transfer of any other capita asset falling within the block of assets during the previous year, exceeds the aggregate of the following amounts, namely: - (i) expenditure incurred wholly and exclusively in connection with such transfer or transfers; (ii) the written down value of the block of assets at the beginning of the previous year; and (iii) the actual cost of any asset falling within the block of assets acquired during the previous year, such excess shall be deemed to be the capital gains arising from the transfer of short-term capital assets; (2) where any block of assets ceases to exist as such, for the reason that all the assets in that block are transferred during the previous year, the cost of acquisition of the block of assets shall be the written down value of the block of assets at the beginning of the previous year, as increased by the actual cost of ....