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TMI Blog2015 (4) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... e orders of the authorities below, material available on record and the decisions relied upon. 3. The facts in brief are that the assessee had inherited the property at Greater Kailash, New Delhi in 2003 from his mother who had bought this in the year 1974. The assessee thereafter entered into a collaboration agreement with a builder on 10.2.2004 as per which the assessee was to retain ground floor out of the building made by the builder and in addition to that builder also paid Rs. 21 lacs to the assessee. As per the said agreement, the builder retained with him the basement, first floor, second floor along with terrace rights. The builder constructed all the floors at his own expenses. The construction of the ground floor was completed in the year 2006. On 07.12.2006, the ground floor property was sold by the assessee for Rs. 50 lacs as against the declared sales consideration of Rs. 56 lacs vide a sale deed. The Assessing Officer required the assessee to reconcile the difference in the sales consideration and also show-caused as to why the entire consideration of Rs. 50 lacs together with Rs. 21 lacs if not yet offered for taxation, may not be taken as the value of the total co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. He submitted that under the facts and circumstances of the case, sales price of ground floor for Rs. 50 lacs should be apportioned between land and super structure. Sale of proportionate land of ground floor should be treated as long term capital gain since the assessee had inherited this land from his mother who had purchased this land on 28.1.1974. He submitted that the cost incurred by the builder for construction of the ground floor is the Revenue of the assessee in the assessment year 2004-05 for the purpose of calculation of capital gain on proportionate share of land. Similarly this cost of construction should be treated as cost for the purpose of calculation of capital gain on the sale of super structure of ground floor in the assessment year 2007-08. He submitted that as per the law, the index cost of proportion land for ground floor should be allowed as cost for the purpose of calculation of the capital gain on proportionate land for assessment year 2007-08. He thus claimed that the Learned CIT(Appeals) has rightly given benefit of deduction under sec. 54EC of the Act to the assessee. He submitted further that there is no violation of Rule 46A of the I.T. Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the financial year 2003-04. 8. It appears from the record that the construction of the ground floor was completed in the year 2006 and it was sold by the assessee on 7.12.2006, the resultant gain arising on this sale was shown by the assessee as long term capital gain and the assessee claimed section 54EC benefit by making investment of Rs. 20 lacs. The submissions of the assessee remained that the impugned asset sold by the assessee in this year was consisting of land as well as building. It was submitted that even if the assertion of the Assessing Officer that building was short term capital asset is taken as correct for the sake of argument, though denied vehemently, the proportionate land on which the ground floor was constructed was undisputedly held by the assessee for more than 36 months and, therefore, in any case, the impugned land was a long term capital assets and any amount of gain arising thereupon would be long term capital gain. As per sec. 2(42A) - Explanation i(i)(b) for determining the period for which the asset is held by the assessee where the capital assets becomes the property of the assessee by way of inheritance/succession, there shall be included the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided, indivisible and impartible land share underneath the building measuring 400 Sq yard. Therefore I hold that the assessee did not transfer the proportionate share of land of ground floor in 2004 to the builder. The assessee has sold the ground floor in 2006 for Rs. 50,00,000 vide sale deed dt 7-12-06. This was duly constructed ground floor along with proportionate share of land. Relying on the following judgements I hold that the sale price of Rs. 50,00,000 should be divided between sale price of land and sale price of superstructure. . . . . . . . . . - - - - - - - - - - For division of sale price of Rs. 50,00,000 between sale of proportionate land and sale of superstructure I accept the assessee's contention which are part of this order and hold that sale price for proportionate share of land should be taken at Rs. 29,83,079 and sale price of building should be taken as 20,16,921. The assessee has inherited this plot of land in 2003 from his mother, who had bought this in the year 1974. Therefore by applying the provisions of section 49(1)(iii)(a) the cost of acquisition of the asset shall be deemed to be cost for which previous owner of the property acquired it, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bequeathing the property to his wife and the assessee's son in equal shares. The assessee's mother expired on 21.2.2000 leaving behind a will bequeathing her 50% share in the property to the assessee. The assessee sold the property during the assessment year 2005-06 and declared long term capital gain after considering the date of acquisition of the property for the purpose of calculating the capital gains to be prior to 01.04.1981. The Assessing Officer, however, held that the actual date of acquisition must be considered for calculating the capital gain. Further he held that the date on which the assessee inherited the property to be the relevant date and accordingly recomputed the capital gain. The question raised in the appeal preferred by the Revenue in the Hon'ble High Court was as to whether on the facts and circumstances of the case the ITAT was right in directing the Assessing Officer to calculate the long term capital gain without appreciating that sec. 2(42A) of the Act - Explanation I only determines the holding period of an asset for the purpose of short term capital gains and has no application to long term capital gain for the assessee to get the benefit of index ..... X X X X Extracts X X X X X X X X Extracts X X X X
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