TaxTMI 
TaxTMI 
2026 (7) TMI 1313
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....ogether for hearing. 3. Ld. Counsel for the assessee's, at the outset itself stated that all the four assessee's before me, were co-owners of a property which had been sold during the year, and all the four of them had returned capital gains earned on the same to tax in the return of income filed for the impugned year. The property being a very old property, acquired before 01.04.1981, its fair market value as on 01.04.1981 was estimated for the purpose of determining the cost of acquisition of the said property, as provided in law. Further all the assessee's having undertaken construction on the said property, the cost of construction also was considered for reduction from the consideration received by the property for determining the capital gain earned on sale of the property. Both the cost of acquisition and the cost of construction/improvement were increased by the rate of indexation provided as per law. And the amounts so arrived were reduced from consideration received and the balance amount shown as capital gain earned by the assessee's. All the four assessee's had invested the capital gains earned, in a property purchased subsequently, and had accordingly claimed deduct....
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....esulting addition of Rs. 11,850/ on account of LTCG. Kindly direct to take Cost of Acquisition Rs. 6,250/- (Indexed Cost of Acquisition Rs. 39,500/-) as claimed by the appellant for calculation of LTCG. 2. That under facts and circumstances of the case Ld. A.O. has taken Cost of Improvement Rs. 26,250/- (after Indexation Rs. 1,10,600/-) instead of claimed by appellant Rs. 50,000/- (after Indexation Rs. 2,10,667/-) arbitrarily, without having any basis & the Ld. CIT (Appeals) has confirmed the same, resulting addition of Rs. 1,00,067/ on account of LTCG. Kindly direct to take Cost of Improvement Rs. 50,000/- (Indexed Cost of Improvement Rs. 2,10,667/-) as claimed by the appellant for calculation of LTCG. 3. That under facts and circumstances of the case Ld. A.O. has erred in denying the deduction of Section 54F treating the investment in purchase of new house is after the prescribed time u/s. 54F(4) of the Act and the same is confirmed by the CIT (Appeals). Kindly allow the deduction u/s. 54F of the Act to the appellant. 4. That the appellant craves permission to add to or amend to any of the above grounds of appeal or to withdraw any of them. ITA....
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....CIT (Appeals) has confirmed the same, resulting addition of Rs. 1,00,067/- on account of LTCG. Kindly direct to take Cost of Improvement Rs. 50,000/- (Indexed Cost of Improvement Rs. 2,10,667/-) as claimed by the appellant for calculation of LTCG. 3. That under facts and circumstances of the case Ld. A.O. has erred in denying the deduction of Section 54F treating the investment in purchase of new house is after the prescribed time u/s. 54F(4) of the Act and the same is confirmed by the CIT (Appeals). Kindly allow the deduction u/s. 54F of the Act to the appellant. 4. That the appellant craves permission to add to or amend to any of the above grounds of appeal or to withdraw any of them. ITA No.1143/JPR/2025 1. That under facts and circumstances of the case Ld. A.O. has taken Cost of Acquisition (F.M.V 01.04.1981) Rs. 4,375/- (after Indexation Rs. 27,650/-) instead of Cost of Acquisition claimed by appellant Rs. 6,250/- (after Indexation Rs. 39,500/-) arbitrarily, without having any basis & the Ld. CIT (Appeals) has confirmed the same, resulting addition of Rs. 11,850/ on account of LTCG. Kindly direct to take Cost of Acquisition Rs. 6,250/- (Inde....
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....ned as not to be considered for the purposes of sending notices to them. 11. Considering the averments of the ld. Counsel for the assessee's as above, I consider it a fit case for condoning the delay in filing of the present appeals. The assesses, I find, have adduced sufficient cause for the delay, having demonstrated the fact of being unaware of the passing of the appellate order since all the communications by the Ld. CIT(A) was on the wrong addresses of the assessee's. The delay in filing of all the appeals before me of 195 days, 561 days, 472 days and 749 days respectively, is accordingly, condoned. 12. Taking up now the appeals for adjudication. It was a common ground that, with respect to the issue of the addition made on account of adjustment made by the AO to the cost of acquisition and cost of improvement of the asset sold, the reasoning with the AO for doing so in all the cases was the same. Drawing my attention to the facts in the case of Mohammad Shakir in ITA No.1134/JPR/2025, ld. Counsel for the assessee pointed out from the assessment order that the assessee had sold an immovable property situated at House No.3063,New Colony, M.I. Road, Jaipur, in the impugned....
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....ion area of both floors was nearly 1400 Sq. Feet and construction cost @150/- per Sq Feet in F.Y. 1987-88 comes to Rs. 2,10,000/-. Hence, assessee's 1/8th share is Rs. 26,250/- Therefore, the capital gain in this case is worked out as under:- Assessee's share of fair market value of sale consideration of Rs.6,42,150/- Less- Index Cost- F.Y. 1981-82 4375/100*632 Rs.27,650/- Construction Cost F.Y. 1987-88 26250/150*632 Rs.1,10,600,/- Rs.1,38,250/- Rs.5,03,900/- 15. Ld. Counsel for the assessee contended that, the AO has estimated the cost of acquisition as well as the cost of construction of the property without giving any basis for the estimation. He pointed out that the AO has given no basis for taking the cost of acquisition at Rs. 500 per square yards, neither has he given any basis for computing the cost of construction at Rs. 150 per square yards. Though, he admitted that even the assessee had given no basis or documentary evidences in support of his claim of cost of purchase and cost of construction. 16. Ld. DR was unable to controvert the contention of the ld. Counsel for the assessee as ab....
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....he assessee's contended that, it is settled law now, that if the assessee had purchased the new asset within the time specified as per law, i.e. within two years from the date of sale of the original asset, then merely because the assessee did not deposit the unutilized amount in the intervening period in the specified bank account, would not disentitledhim to claim of deduction u/s 54F of the Act. That the requirement of deposit of capital gain in the Capital Gain account Scheme in Bank was held by courts to be only a procedural requirement and as long as the substantive requirement of investment being made in the new property within the time specified in law is fulfilled the assessee is entitled to claim exemption/deduction u/s 54F of the Act.My attention was drawn to the following decisions in this regard:- o CIT vs K. Rama Chandra Rao (2015) 277 CTR 522 (Kar) o Venkata Dilip Kumar vs CIT (2019) 419 ITR 298 (Mad) 21. Ld. DR however, supported the order of the Authorities below, contending that the assessee had violated the conditions of Section 54F of the Act, and therefore was not entitled to claim deduction u/s 54F of the Act. He was however, unable to dra....