TMI Blog2012 (1) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2004-05 was filed on 31.3.2005, declaring a loss of ₹ 47,660 and long term capital gains of ₹ 3,92,050. As against this, the assessing officer completed the assessment on a taxable income of ₹ 23,93,607, after making certain additions/disallowances, including in relation to the capital gains disclosed by the assessee. During the year under consideration, the assessee sold land situated at situated at Station Road, Nizamabad measuring 320.62 sq. yards, for a consideration of ₹ 21,00,051. As per the sale deed only land was transferred whereas in the statement of computation of long-term capital gains, the indexed cost of a building exiting before the transfer of the land was deducted and the tax was paid only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence the addition has been rightly made by the assessing officer under that head. Even with respect to expenses claimed by the assessee against income from other sources, the CIT(A) confirmed the disallowance made by the assessing officer. 4. Aggrieved, assessee is in appeal before us and has raised the following grounds 1. The appellant submits that the learned Commissioner of Income-tax(Appeals) erred both on law and on facts of the case in sustaining the additions/disallowances. 2. The appellant submits that the transaction being transfer of a capital asset being building and land the indexed cost of building ought to have been allowed in computing Capital Gains and the sale proceeds of building received from contractor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is on assessment record. 8. The appellant submits that the learned first appellate authority erred in observing that earning of interest on capital entails such a massive amount of travelling and expenditure , when it has been categorically recorded that the appellant has worked for the firm on full time basis. 9. On the basis of the above and further grounds that may be permitted to be raised in the course of the appellate proceedings the appellant prays that a. The amount for S.5 lacs received from the contractor be treated as full value of consideration received on transfer of building and accordingly brought under the head capital gains b. The indexed cost of building of ₹ 22,08,000 be allowed as deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence in respect of the same had been filed by the assessee before the assessing officer and therefore, such expenditure should have been allowed under the head business income itself. 7. The Learned Departmental Representative, on the other hand, relied on the orders of the lower authorities 8. We heard the parties. It is evident from the facts of the case and material on record that the assessee has demolished the building existing on the land in question as on the date of sale agreement, before the transfer of the land was effected. In a similar case, dealing with the aspect of treatment to be given to the cost of superstructure while computing the capital gains on transfer of land, coordinate bench of the Tribunal in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the superstructure on the land was also transferred by the assessee to the promoter and the cost of construction thereof was to be allowed to the assessee while computing his capital gains. Respectfully following the above decision of coordinate bench of the Tribunal, we hold that the indexed cost of the building which existed as on the date of sale of the building, has to be deducted while computing the capital gains. We accordingly set aside the orders of the lower authorities on this issue, and direct the assessing officer to recompute the capital gains. 9. As for the disallowance of expenditure of ₹ 1,38,112, in view of the pleading of the assessee before us that it should have been allowed under the head business ..... X X X X Extracts X X X X X X X X Extracts X X X X
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