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2018 (4) TMI 994 - AT - Income TaxCalculation of capital gain - cost of acquisition - indexed cost of acquisition - Held that:- Since the property sold is in the vicinity, direct the AO to adopt ₹ 900/- per Sq. Yd as cost of land as on 01-04-1981 and deduct ‘indexed cost of acquisition’ thereon to arrive at the Long Term Capital Gain on transfer of 50% of the land in Plot No. 67, admeasuring 327 Sq. Yds. Entitled for deduction u/s. 54F - Multiple units - whether a 'residential house' would include multiple flats/residential units as well? - Held that:- As decided in ITO Vs. Late K. Jaipal, L/R. of Smt. K. Manjula [2015 (11) TMI 1443 - ITAT HYDERABAD] merely because a residential house consists of several independent residential units, deduction under S.54/S.54F could not disallowed. Assessee is entitled for deduction u/s. 54F on all the three flats. Therefore, AO is directed to allow the amount and rework out the capital gains accordingly. Grounds are considered allowed. Working of capital gain - Held that:- Assessee became entitled to three flats, when the development agreement was entered, on which date capital gains on transfer of land was also brought to tax by the AO. Therefore, the rights under the agreement, having been crystalised, the sale of any flat would become Long Term Capital Gain. Not only that, as already discussed in the earlier appeal, for the cost of acquisition as on 01-04-1981, the land value as on 01-04-1981 has been directed to be taken at ₹ 900/- per Sq. Yd. Consequently, the sale of undivided share of land would be calculated taking ₹ 900/-per Sq. Yd., as the value as on 01-04-1981 and giving ‘cost of indexation’ benefit as per the rules. Even the cost of apartment would be 1/3rd of the cost adopted for transfer of 50% of the land. The value adopted in AY. 2006-07 should be adopted as cost of value and that should be considered while computing the capital gain on the sale of one flat in the impugned year. AO is directed accordingly and assessee’s grounds on this are considered allowed.
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