SMT.ANILAKUMARI G S,TRIVANDRUM vs. THE ITO, TRIVANDRUM

The solitary issue argued was with regard to the computation of short term capital gains.

Briefly stated the facts of the case are as follows: The assessee during the relevant year had sold land and building on 09.05.2008 for a total consideration of Rs.33,50,000. Out of the total consideration, the share of building and land was valued at Rs.26,10,000 and Rs.4,60,000, respectively. The land was treated as a long term

The dispute raised in this appeal is with regard to the computation of short term capital gains on the amount received as cost for the building. The assessee had constructed a house. The Corporation had allotted door number on 29.11.2004, the date which was treated as the date of completion of house property. Since the house property was sold within three years of construction, the property was treated as short term capital asset and accordingly short term capital gains was calculated on the sale of house property. For the construction of the house, the assessee had claimed to have spent Rs.25,50,000. The said amount is stated to be housing loan availed amounting to Rs.15 lakh, another Rs.9 lakh said to have been received from assessee’s husband and further a sum of Rs.1,68,250 which the assessee claims that her husband had taken gold loan. It was submitted that the above amounts were utilized for house construction. After examining the evidences submitted by the assessee, the Assessing Officer treated the cost of construction of house property at Rs.18 lakh and arrived at short term capital gain of Rs.8,10,000 (26,10,000 – 18,00,000).

Aggrieved by the order of the CIT(A), the assessee has preferred this appeal before the Tribunal. The learned Counsel for the assessee has filed a brief written submission, which reads as follows:-

The learned Departmental Representative, on the other hand, strongly relied on the findings / conclusions of the Income-tax authorities.

I have considered the rival submissions and perused the material on record. As per the building permission, the area of construction is around 381.088 sq.mt. (around 3,800 sq.ft.). The Assessing Officer had granted the cost of construction at Rs.18 lakh, which worked out roughly to Rs.475 per sq.ft. The assessee ought to have proved that she had incurred the cost of Rs.25,50,000 as disclosed by her. I noticed that the assessee did not appear before the first appellate authority. On specifically asked, the authorized representative submitted that it was a mistake on his part having not filed written request for adjournment of the case before the first appellate authority. It was submitted that orally he had sought for the adjournment of the case, however, due to miscommunication, the appeal being old case, was heard ex parte by the CIT(A) and disposed off. In the interest of justice and equity, I am of the view that the matter needs to be considered afresh by the Assessing Officer. The assessee has produced evidence before the A.O. to prove that the residential building of approximately 3,800 sq.ft. was constructed and cost incurred on the same is Rs.25.50 lakhs. As a last chance, I grant the assessee an opportunity to

In the result, the appeal filed by the assessee is allowed for statistical purposes.