2026 (8) TMI 696

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....by the learned Income Tax Appellate Tribunal, Kochi Bench ('ITAT' for short). 2. Sri. Muraleedharan - learned counsel for the appellant, explained that the property involved was, in fact, mortgaged by his client equitably, to secure certain loan facilities availed of by another, from the South Indian Bank, ('Bank' for short). He conceded that the liability to the bank had escalated and that they consequently, brought the property to sale; finally to appropriate the entire sale consideration into the loan account. He asserted that, in such circumstances, his client did not obtain a single penny out of the sale consideration; and hence cannot be construed to have been benefited by any Capital Gain, to be mulcted with liability under the In....

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.... and the 'Bank' put the property to sale. The proceeds are stated to have been fully adjusted against the loan account. 6. The question, therefore, if the appellant would be liable to Capital Gain will solely depend upon if there was gain on the value of the property. 7. It is well settled, without requirement of expatiation, that when a property is sold for a price higher than it was acquired, it would attract Capital Gain thus to be exigible to income tax; and that for this, the formula involving the fair market value of the base year multiplied by the Cost Inflation Index (CII) stipulated in the Act would have to be applied. 8. The factum of the property having been sold in distress sale by the State or by any other authority, o....