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Facts
The assessee sold a property and declared a share of Rs. 24,00,000/-, but the assessing officer accepted the total sale consideration of Rs. 48,00,000/- and assigned the assessee's share as 50% (Rs. 24,00,000/-) instead of 5/12% (Rs. 20,00,000/-). The assessee demonstrated that his share was indeed 5/12% amounting to Rs. 20,00,000/-.
Held
The Tribunal held that the assessee's share in the property sale was Rs. 20,00,000/- (5/12%) and directed the AO to recompute the capital gains accordingly. It also directed the AO to consider a plausible construction cost of Rs. 1500/- per sq. ft. for the indexation cost.
Key Issues
Whether the assessee's share in the property sale was correctly determined, and if the construction cost used for indexation was appropriate.
Sections Cited
250, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 10.10.2024, impugned herein, passed by the Ld. Additional/Joint Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2011-12.
In the instant case, the assessing officer though accepted the sale consideration of Rs. 48,00,000/- in total by selling the property under consideration vide agreement dated 26.07.2010 by the assessee along with his brother, and accepted the share of the assessee as 50% to the tune of Rs. 24,00,000/- instead of 5/12% share amounting to Rs. 20,00,000/-.
The Assessee by drawing attention of this Court to the documents, such as agreement dated 26.07.2010 along with bank statement has demonstrated his share in the said property was only 5/12% and consequently he received amount of Rs. 20,00,000/- in total but not 24,00,000/- as determined by the Assessing Officer.
The Ld. DR also agreed with the contention and the documents submitted by the assessee.
5. Considering the peculiar facts and circumstances, the share of the assessee qua sale of property is determined to the tune of Rs. 20,00,000/- being 5/12% and consequently the AO is directed to consider the share of Assessee in property at Rs. 20,00,000/- and recompute the capital gain accordingly.
4. Coming to the index cost of acquisition to the tune of Rs. 4,58,595/-, the assessee, by drawing attention of this Court to page No. 19-20 which are handwritten, tried to demonstrate that the assessee has spent around Rs.5,85,000/- for construction of his house on a plot of 1500 sq.ft.. Even otherwise if the minimum cost is to be taken, then the amount of Rs. 5,85,000/- is on the lower side. The Assessee has also claimed the cost of acquisition to the tune of Rs. 35,63,170/- in total and share of Assessee at Rs. 16,75,736/- being 5/12% share in the said property, however, the same has been disallowed by the assessing officer. Admittedly the Assessee has constructed 1504 sq.ft. Area/house.
Though the Assessee failed to submit substantive documents before the authorities below as well as before this court, however, it cannot be sidelined that plausible construction cost @ 1500/- Rs per sq. ft., would be justifiable as also acceded to by the Ld. DR and therefore for proper and just decision of the case and substantive justice, this Court is of considered view that the AO should take probable cost of construction @ 1500/- Rs per sq. ft., and to re- consider the indexation cost as claimed by the Assessee and determine or recompute the tax liability or capital gain accordingly. Thus, the AO is directed accordingly.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced in the open court on 11.06.2025.