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2016 (7) TMI 1186 - AT - Income TaxCapital gains computation - whether on actual amount received or on the deemed amount accrued to the assessee - Held that:- . AO without disputing the fact that the actual cost of consideration of the property in question was ₹ 5,00,000/- computed the capital gains on the basis of circle rate which were at ₹ 16,43,000/-. Ld. CIT (A) has also perpetuated the error committed by the AO which is not sustainable in the eyes of law. We are of the view that on the basis of actual sale consideration of ₹ 5,00,000/- received by the assessee, the long term capital gain came to be ₹ 2,93,211/-. So in view of the decisions rendered by the Hon’ble jurisdictional High Court in case cited as Smt. Nilofer I Singh (2008 (8) TMI 165 - DELHI HIGH COURT ), we are of the considered view that lower revenue authorities have erred in computing the capital gain in the instant case on the basis of deemed cost of consideration u/s 50C whereas AO was statutorily required to compute the capital gain as per provisions contained u/s 48 of the Act on the basis of actual cost of consideration received by the assessee. Whether lower revenue authorities have erred in computing the capital gain by ignoring the fact that the assessee has invested entire capital gain in specified bonds as per section 54EC? - Held tht:- AO as well as CIT (A) have erred in computing the capital gain in this case to the tune of ₹ 11,36,211/- by computing the capital gain on the basis of deemed cost of consideration as against actual cost of consideration required u/s 48 of the Act and have also lost sight of the fact that assessee has invested the entire capital in specified bonds as per provisions contained u/s 54EC of the Act. So, we answer the aforesaid question in favour of the assessee. - Decided in favour of assessee.
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