SHRI. GURUPRASAD R,BANGALORE vs. ITO-WARD-3(2)(1), BANGALORE

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ITA 1652/BANG/2016Status: DisposedITAT Bangalore23 February 2017AY 2009-104 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO erred by not considering the cost of construction along with the cost of land. When both costs were considered, there was no capital gain on the sale of the property.

What were the facts?

The assessee sold a property and the AO treated the sale proceeds as short-term capital gain. The AO considered only the purchase cost of the land and disregarded the construction cost.

What were the issues?

Whether the cost of construction should be included in the cost of acquisition for calculating capital gains on the sale of a property.

Which sections of the Income-tax Act were involved?

Section 45,Section 48

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC - B ” BENCH : BANGALORE

Before: SHRI A.K. GARODIA

For Appellant: Smt. Sheetal, Advocate
For Respondent: Shri A.R.V. Sreenivasan, JCIT (DR)
Hearing: 16.02.2017Pronounced: 23.02.2017

per agreement of Rs.20 lakhs, Rs.18,45,040 was actually paid and therefore there is no capital gain on the sale of this land for Rs.13,54,000.

5.

The ld. DR of revenue supported the orders of authorities below.

6.

I have considered the rival submissions. I find that the sale value has been taken by the AO for the flat at Rs.13.54 lakhs but he has considered the cost of acquisition for transfer of undivided share in land only and has disregarded the cost of construction. When the cost of construction is also considered, there is no capital gain on sale of this property and therefore, I delete the addition made by the AO and confirmed by the ld. CIT(Appeals).

7.

In the result, the appeal of assessee is allowed.

Pronounced in the open court on this 23rd day of February, 2017.

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