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2023 (9) TMI 682 - ITAT CHENNAIComputation of long term capital gain and indexation of the same - Determination of cost of Acquistion / construction - A.O noted that the assessee has not filed any evidence or proof for expenses and hence, the A.O denied the claim of exemption - HELD THAT:- As total cost of construction/cost of improvement was declared by the assessee at Rs. 10,00,000/-. We admit that there exists building as per sale deed which is valued by stamp duty authority at Rs. 3.78 Cr. Hence, we cannot doubt the expenses of building as claimed by the assessee. We find the claim of the assessee of Rs. 10,00,000/- invested in cost of construction/cost of improvement as originally claimed and we allow the same. Capital gain on property acquired by way of inheritance - A.O has to determine the fair market value as on 01.04.2001 and thereafter, he has to allow indexation benefit to the assessee in term of Section 48, second Proviso and Explanation (iii) of the Act. We direct the A.O to adopt the cost of acquisition as fair market value in the present case of the assessee as on 01.04.2001 as the assessee has adopted this fair market value at Rs. 1,360/- per Sq. ft. and for this, the assessee has taken the basis. The indexation benefit from 01.04.2001 is available to the assessee in view of Section 2(42A) more particularly Explanation 1(b) Thus we direct the A.O to adopt the guideline value on as 01.04.2001 as the cost of acquisition and thereby, given index benefit accordingly. Indexation benefit - We direct the A.O to allow the indexation benefit to the cost of improvement as on the date of 01.04.2001 in term of the decision given above by taking the cost of construction/cost of improvement at Rs. 10,00,000/- and taking fair market value as on 01.04.2001 of the same and allow index accordingly. We direct the A.O accordingly. Denial of claim of tax exemption u/s. 54 - assessee invested a sum in the purchase of house property - As per the project completion certificate this property which is beyond stipulated time of 3 years as mandated in the Act - HELD THAT:- We noted that as per project completion certificate, this property was handed over as on 01.04.2022 which is admittedly beyond three years from the date of sale, but assessee’s contention was that this delay in getting completion certificate and handed over of possession of plot is attributable due to Covid-19 related lockdown and restrictions. As assessee has made payments to the builder in 2018 & 2019 only and the receipts are enclosed, we are of the view that the assessee has complied with the provisions of the Act and hence, he is entitled for the claim exemptions u/s. 54 of the Act.
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