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2018 (5) TMI 36 - ITAT CHENNAIAddition made towards long term capital gains - Nature of property sold - Held that:- It is clear that the mortgaged property sold, in discharge of the mortgage created by the assessee himself, belonging to the assessee and the price realized there-form belonged to the assessee and capital gain is very much warranted on the full price [less admissible deduction]. Availing loan itself is consideration and in this case, constructive benefit was very well accrued to the assessee when the loan was availed by MBPPL, which was owned partly by the assessee. Accordingly, we set aside the order of the ld. CIT(A) on this issue and restored that of the Assessing Officer. - Decided against revenue Eligibility to claim cost of improvement for the purpose of computation of long term capital gains - Held that:- To admit any claim of expenditure, the assessee is required to furnish bills/ vouchers. However, the ld. Counsel for the assessee has submitted that due to passage of time, the assessee could not produce the bills/vouchers, etc. for the expenditure incurred towards cost of improvement. While executing the mortgage deed in favour of the bank as collateral security, the assessee should have furnished valuation of the property of land and building, against which the bank has sanctioned loan of ₹.1,75,00,000/- to MBPPL. Accordingly, in the absence of evidence for cost of improvement and the fact that cannot be ignored that without spending monies, the assessee could not have raised the building of 7,745 sq.ft., we direct the Assessing Officer to verify the valuation report as the assessee might have submitted at the time of executing the collateral security in favour of the bank and decide the issue afresh after allowing an opportunity of being heard to the assessee. Thus, the ground raised by the Revenue is allowed for statistical purposes. Disallowing the capital loss resulting out of sale of shares of MBPPL - Held that:- CIT(A) has not accepted the valuation adopted by the assessee. The assessee is one of the directors in M/s. Minbimbangal Productions Pvt. Ltd. along with his wife Smt. Geetha Kailasam. The beneficial owners of shares holding not less than 10% of the voting power during the previous year relevant to the assessment year are Smt. Geetha Kailasam [58.13%], B. Prasanna, [brother 9.27%] and Pushpa Kandasamy, [sister 10.24%]. The company in which the assessee is a director, is a private limited company in which public are not substantially interested. The shareholders are only assessee’s family members and more of a family concern. We find that the shares are not quoted, listed or sold through any authorized stock exchange. Thus, we are also of the same opinion that the sale of shares in the value of ₹.10/- as low as a price at ₹.0.10 per share is nothing but a transaction to avoid taxation of capital gain. In view of the facts and circumstances, the objection raised by the assessee stands dismissed.
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