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2022 (7) TMI 496 - ITAT VISAKHAPATNAMCapital gain computation - exclude the cost of land while calculating the sale consideration - inclusion of the cost of land relinquished by the assessee in the deemed sale consideration received by the assessee - determination of full value of consideration received on transfer of capital asset (undivided proportionate area of land, constructed area of the flat and common area of the building are also transferred by the assessee as mentioned in the registered sale deed) - whether CIT(A) erred in directing to adopt the rate of constructed area @ Rs. 300 per sq ft without appreciating the fact that the AO has adopted the value as per SRO records, applying the provisions of section 50C which is mandatory when the value adopted by SRO is higher than the actual consideration received by the assessee? - HELD THAT:- We note from the material available on record that the assessee has relinquished her right over 50% of the land to M/s. Datta Constructions and has received a constructed area of 8704 sft including the common areas from M/s. Datta Constructions as per the sale-cum-development agreement. The deemed consideration for relinquishing of the land flows from the cost of construction of the building admeasuring 8704 sft, given by M/s. Datta Constructions to the assessee and hence, the cost of land owned and relinquished by the assessee shall not be included in the deemed consideration. Further, it is noted that M/s. Datta Constructions has delivered an incomplete building which was not disputed by the Revenue. Since the building was semi finished with only RCC roof and walls, the cost of construction could not be considered at the value of Rs.400 per sft as given by the Registration and Stamps Department. We are of the considered view that the rate of Rs. 400 per sft is for the completed building and not for the semi-finished building. In view of the discussion above, we find no infirmity in the order of the Ld. CIT(A) wherein he has rightly considered the cost of construction @ Rs. 300 per sft which works out to 75% of the SRO value and hence no interference is required - Decided in favour of assessee.
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