TaxTMI 
TaxTMI 
2010 (10) TMI 1264
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.... the action of the Assessing Officer in making addition of Rs. 2,00,000/- for alleged unexplained receipts." 2. The facts of the case are that a search and seizure operation u/s. 132 of the Act was carried out at the residence of the assessee on 20-12-2004. During the course of search jewellary valuables and incriminating documents were found and seized. The value of jewellery, bonds and other valuables was worked out at Rs. 3,18,68,695/-. The assessee made a disclosure at Rs. 1.65 crores taking also into consideration the on-money received on sale of land at Athwal Ines Gate and other investments whose evidence were found in the search. The entire amount disclosed by the assessee was offered to tax in the returns of income filed in response to notice u/s. 153A(a) of the Act. Even though the assessee had offered to tax certain deposits made in the bank account and not shown in the books of accounts, but a credit of Rs. 32,000/- made by way of cash deposis in the financial year relevant to the assessment year 1999-00 was neither recorded in regular books nor declared u/s. 132(4). It was submitted by the assessee that he has sold the plots of the land on which bungalow of the asse....
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....the claim of deduction of the indexed cost of bungalow. 2. Even otherwise, on the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax(Appeals) has erred in confirming the action of the Assessing Officer in not separately computing capital loss on account of demolition of bungalow and adjusting it against long term capital gain on sale of plots." 9. The facts of the case are that the assessee had a bungalow at Athwa Gate, Surat which was claimed as received in inheritance. The ownership of bungalow is 50% in the name of Shri Kiritkumar Kantilal Shroff and 25% each in the name of his two sons - namely Shri Pratik Kiritkumr Shroff and Shri Samir Kiitkumar Shroff. The assessee sold out the land of the bungalow to Shri Kantibhai G Patel and Shri Tushar Ghelani. The sale deed was registered in the name of Kanthbhai G Patel and members of the family of Kanthbhai G Patel who subsequently developed land which is known as Jolly Plaza. The assessee divided this land into 22 plots being 11 plots on either side. The assessee had sold 11 plots in the financial year 2000-00 and remaining 11 plots in the financial year 2001-02. Enti....
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....purchaser available for the purchased a of the bungalow as such. Sale of scrap cannot be equal to sale of bungalow and therefore computation of capital gains/loss thereon cannot be done. The sale proceeds of scrap is separately assessed as income from other sources and not as part of sale proceeds of land and bungalow. In view of these, the assessee is not entitled to set off, of indexation of cost of bungalow against capital gains on sale of land. 13. Thus, according to Ld. SR-DR, since the income from the sale of scrap is not assessable under the head of capital gains, the assessee is not entitled to the benefit of computation of capital loss/profit for this source. 14. We have heard the rival submissions of the parties and perused the materials on record. In our considered view, the only issue, in brief, is that whether the scrap value of bungalow received by the assessee could be treated as sale of bungalow, as such. and therefore capital gain arising on sale of land would be adjusted against any gain or loss arising on sale of scrap of bungalow. It is undisputed fact that capital gains can be separately computed on land as well as on bungalow. The Hon'ble Bombay High Cou....
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....en if the extinguishment of asset is due to voluntarily act of the assessee, still the net effect is that asset finally came to an end. Once, it is so, right therein also got extinguished. Extinguishment of right in the building does not necessarily be in favour of a person. It could also be done voluntarily giving up a legal ownership in the property. Once the person demolishes building, it converts his right into building as a right in a scrap. What he gets in return of his building is scrap, though this is only voluntarily done, for getting greater benefit on sale of vacant land. Therefore once the scrap is sold to someone then consideration for sale of building is equivalent to consideration received on sale of scrap. There is a direct nexus of building and consideration of scrap, as in fact, at the end, it becomes consideration for building and transferee would be the purchaser of the scrap. Therefore, it is transaction of transfer of building, as there is an asset, a transfer, and transferee. Even otherwise, we are of the view that when builder made agreement with the assessee to purchase the land free of building, building stood as encumbrance. Accordingly, building was disp....
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.... 701 grams 4,55,650 3. Residence of Kirtibhai K Shroff 549.5 grams 5,79,015 4. Locker No. 9 with Sutex Co.op Bank in the name of Samir & Jhanvi Shroff 211 grams 1,83,980 5. Locker No. 215 with Sutex Coop. Bank in the name o Kirtibhai & Kiran Shroff 2576 grams 19,10,050 6. Locker No. 1-165 with Surat Dist. Co-op. Bank in the name of Samir & Jhanvi Shroff 180 grams 1,09,800 Total 4492.5 34,71,945 The assessee furnished explanation in respect of 2870.5 gm., of jewellery as under:- Sr. No. Name of the family member of whom it belonged. Jewellery shown in W.T. Return (Grams) 1. Shri Kiran K Shroff 700.05 2. Shri Pratik K Shroff 695.00 3. St. Alpnaben P Shroff 1070.45 4. Samir K Shroff 405.00 Total 2870.50 In addition to this, it was claimed that 722 gm. jewellery is covered by disclosure and another 900 gm. of jewellery belonged to various family members as per Board's Circular. The Assessing Officer noted that jewellery in respect of Shri Kiran K Shroff claimed at 700.05 gm is not correct. The correct figure is 216.09 gm. which is as per Wealth Tax Act return. F....