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2021 (4) TMI 1005 - AT - Income TaxCapital Gains chargeable to tax - Land transferred in favour of M/s. Sai Gokul Builders in the scheme of JDA - non consider the cost of construction of 7 flats while computing the capital gain from the sale - HELD THAT:- In this case, the A.O. denied the cost of construction incurred on 7 flats while computing the capital gain on the reason that assessee has not incurred this expenditure but it was incurred by developer. However, it has to be noted that the assessee has considered cost of these 7 flats as a consideration while computing the capital gain on entering into JDA. Once the assessee includes the cost of these 7 flats as sale consideration while determining capital gain on entering into JDA, the corresponding benefit shall be given on sale of these 7 flats. Now the issue is only with regard to the sale consideration adopted by assessee towards these 7 flats while offering the capital gain. The A.O. cannot overlook the computation of capital gain offered by assessee on entering into the JDA. Once the assessee adopted the cost of these 7 flats for the purpose of offering the capital gain, same to be considered as cost of construction on sale of these 7 flats - This has been supported by the order ofSMT. JEEVA VADIVELU, VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6 (1) , BANGALORE. [2012 (9) TMI 961 - ITAT BANGALORE] Being so, we direct the A.O. to consider the cost of construction of 7 flats while computing the capital gain from the sale of these 7 flats. This ground of assessee is allowed. Determining the value of land transferred to Sai Gokul Builders under JDA at ₹ 800/- p. sq.ft. instead of ₹ 500/- p.sq.ft. as guidance value notified by the Government of Karnataka - As carefully gone through the market guidance value published by the Government of Karnataka w.e.f. 19.4.2017 as per which, the impugned property bearing No.40B/3 & 40B Sai Gokula Builders situated at Hoodi’s village, Bengaluru, East Taluk (erstwhile South Taluk), Mahadevapura, CMC Limits, Ward No.12, K.R. Puram Main Road, Hubli, Bengaluru and it is also noted that the property was converted for non-agricultural residential purposes vide sanction order ALN-SR-1175/1981-82 issued by the Tahsildar, South Taluk, situated at Hoodi’s village, Bengaluru, East Taluk (erstwhile South Taluk), Mahadevapura, CMC Limits, Ward No.12, K.R. Puram Main Road, Hubli, Bengaluru. As such notified value was ₹ 550/- per sq.ft. which can be seen from entry No.19 As such in our opinion, the value to be adopted at ₹ 550/- per sq.ft. instead of ₹ 800/- p.sq.ft valued by the A.O. This ground of assessee is allowed.
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