Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 1234 - AT - Income TaxReopening of assessment - reasons to believe - Held that:- In the light of the fact that assessee has not filed any return of income, there was every reason to believe that there was escapement of income chargeable to tax in terms of Explanation 2(a) to section 147. It is not disputed before me that the deposits in the bank account referred to by the AO in the reasons recorded would be above the limit of income which is not chargeable to tax. Thus uphold the validity of initiation of proceedings u/s. 148 of the Act. Capital gain on sale of property - belonging of property to assessee or a firm of partnership - Held that:- The sale deed under which the property was sold clearly shows that both the assessees were owners of the property. The assessee having sold the property as belonging to them and having received the sale consideration on their own account cannot be permitted to plead that they were not the owners of the property. U/s. 45 of the Act, long term capital gain arising on transfer of a capital asset is liable to tax in the hands of the transferor. Since the transferors of the property were assessees, capital gain is to be taxed in their hands. Thus the plea of the assessees that property belongs to the firm cannot be accepted in the income-tax proceedings. As far as dispute with regard to FMV as on 1.4.1981 is concerned, it is of the view that the claim of the assessee that FMV of the land is ₹ 1,10,000 is not supported by any evidence; whereas the AO has based his conclusion based on a Gazette Notification of 1999 giving the value of the properties in the vicinity of the area, where the property of the assessee is situated. No merit in the submissions of the assessee on this issue. Claim for deduction on account of brokerage - There is no evidence filed by the assessee to substantiate its claim that it paid brokerage and therefore the claim made by the assessee is rejected. Cost of construction of the property - AO has adopted cost of construction of the building by estimating the same at ₹ 11,20,000 - Held that:- The only credible evidence available is the evidence of the Chartered Engineer towards value of the property for the purpose of availing loan by the assessee from KSFC. This report gives the year of construction as 2000 to 2001 February, whereas the assessee claims that it had carried out construction between the period 05.10.2001 and Nov. 2003. The assessee has himself claimed indexation only from the year 2003 for the purpose of computing long term capital gain. This has been apparently done based on the bill of J.J. Construction, Mysore. It would be just and appropriate to adopt the cost of construction as given in the registered engineer’s report at ₹ 18 lakhs. Since the assessee has claimed indexation benefit only from 2003, the same is directed to be allowed only from 2003. The AO is accordingly directed to compute the long term capital gain.
|