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2013 (8) TMI 182 - ITAT HYDERABADDeduction towards self- supervision allowed in the hands of the assessee - whether assessee eligible for the same when the assessee has not supervised the construction? - Held that:- There is no merit in the revenue's appeal as the building is constructed by a builder and the assessee obtained 60% share in the said building constructed, in lieu of surrender of the land for development. Therefore, whatever is cost incurred by the builder can only be the basis for arriving at the capital gains. Further, whenever the matter was referred to the DVO, allowed 7.5% towards self-supervision to the builder and arrived at the entire value of the building. There is no dispute with reference to the estimation made by the DVO, which is more or less the same as the cost incurred by the builder, as returned by the assessee. It is not the assessee's building which is being valued, but the building constructed by the developer in which assessee got 60% share. Since the building was constructed on the land given by the assessee, naturally the cost of the building has to be estimated in the hands of the M/s. Lumbini Constructions alone and proportionate share of the assessee therein, will have to be considered as price for surrendering the land. As informed that no action has been taken in the hands of M/s. Lumbini Constructions no merit in the Revenue's appeal. Capital gains - assessment arise in the year in which the assessee entered into agreement or in which the assessee took possession of the developed property - Held that:- CIT(A) considered the term 'transfer' with respect to capital asset under S.2(47) and also provisions of S.53A of Transfer of Property Act, held that there is only one transaction which took place with reference to the capital gains and that is the sale of 40% of the land in the financial year relevant to assessment year 2007-08 and the sale consideration in respect thereof was worked out at Rs.6.30 crores at Rs.997 per sq. ft. towards 63226 sq. ft. of built up area surrendered in the building constructed. Therefore, the CIT(A) held that there is no transfer which took place in assessment year 2004-05 and capital gains arose only in assessment year 2007-08. This order of the CIT(A) was accepted by the Revenue, and there is no second appeal. Since the order of the CIT(A) became final for assessment year 2007-08, respectfully following the same, CIT(A) deleted the addition made in this year. Since the order of the CIT(A) for assessment year 2007-08, giving rise to the reopening of the assessment for the assessment year 2004-05, has become final, there is no merit in the Revenue's contentions for contesting the impugned order of the CIT(A) for this assessment year, in which simply the findings of the CIT(A) for assessment year 2007-08, which attained finality, are followed.
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