TMI Blog2022 (8) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... the construction cost to the extent of Rs.49.95 Lacs could not be held to be justified. Accordingly, we direct Ld. AO to allow full construction cost of Rs.74.09 Lacs as paid to the contractor. So far as cost of Rs.40.88 Lacs stated to be incurred by the assessee is concerned, upon perusal of ledger as placed on record, it could be seen that the assessee has paid the construction cost of Rs.5.18 Lacs through banking channel whereas the remaining amount of Rs.35.67 Lacs has been paid in small trenches for various construction work which is evident from the narrations appended with each of the entry. In such a case, the denial of deduction of the same is not justified. The Ld. AO is directed to allow this cost. It could be seen that the assessee has not claimed any deduction on sale of property which is situated at Kolathur and in fact, the computations have resulted into capital loss for assessee on sale of this property. Therefore, the sale consideration of this property was not to be considered while computing proportionate deduction u/s 54 / 54F. We order so. The Ld. AO is directed to re-compute assessee s income. Assessee appeal partly allowed. - ITA No.3093/Chny/2018 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s because the formula prescribed in section 54F will become defunct when applied in case of capital loss. 2) The learned CIT(Appeals) has erred in not upholding the lack of jurisdiction of Assessing Officer (AO) in the case of limited scrutiny cases to scrutinize areas not specified in the scrutiny notice without following the requirements/procedures as specified in Board Instruction no. 5/2016 dated 14.07.2016. The AO s action in disallowing House Rent Allowance Exemption when the limited scrutiny notice is for i) Cash Deposit and ii) Deduction claimed under the Head Capital Gains is ultra vires of section 133(3) in view of above Board Instruction. 3) The appellant craves leave to add, amend, modify, rescind or alter any ground of appeal. As evident, the assessee is primarily aggrieved by computation of capital gains and denial of full deduction u/s 54/54F. 2. The Ld. AR advanced arguments assailing the additions sustained in the impugned order which has been controverted by Ld. Sr. DR. Having heard rival submissions and after perusal of case records, our adjudication would be as under. Assessment Proceedings 3. The facts qua the issue are that the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50C (It is Confirmed as stamp duty @ 7% is calculated on this value by the Registering Authority) 14,112,000 4,290,000 Indexed Cost Of Acquisition 1,456,322 4,739,573 (copies purchases deeds have already been submitted during I Appellate/Remand Proceedings and upheld) (718080*939/463) (3190000*939/632) Long Term Capital Gain (Confirmed during Appellate /Remand Proceedings 12,655,678 (-) 449,573 Exemption u/s 54F (Applicable only for Property 1) Purchase of Land at Madipakkam copies purchases deeds have already been submitted during I Appellate/Remand Proceedings and upheld) 6,300,000 (A) Ignored for further calculation as it is capital loss Stamp Duty-11-09-2013 (Evidenced in copy of purchase deed already submitted during I appellate/Remand Proceedings and upheld) 441,000 (B) Registration fee (Evidenced in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llur = Rs. 1,41,12,000/- Less: The indexation cost of acquisition of Lands at Thiurvallur = Rs. 14,56,322/- The LTCG on sale of Lands at Thiurvallur = Rs. 1,26,55,678/- Total net sale consideration of property (vacant land) at Kolathur = Rs. 42,90,000/- Less: The index cost of acquisition = Rs. 47,39,573/- The Long-term Capital Loss = Rs. 4,49,573/- The LTCG on sale of Lands at Thiurvallur = Rs. 1,26,55,678/- Less: The Long-term Capital Loss on sale of property at Kolathur = Rs. 4,49,573/- Total LTCG for the A.Y. 2014-15 = Rs. 1,22,06,105/- Net Sale consideration on sale of Lands at Thiurvallur = Rs. 1,41,12,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s claim since the assessee had paid the amount through banking channels under a construction agreement, a fact which stood confirmed by the contractor. In such a case, restricting the construction cost to the extent of Rs.49.95 Lacs could not be held to be justified. Accordingly, we direct Ld. AO to allow full construction cost of Rs.74.09 Lacs as paid to the contractor. 8. So far as cost of Rs.40.88 Lacs stated to be incurred by the assessee is concerned, upon perusal of ledger as placed on record, it could be seen that the assessee has paid the construction cost of Rs.5.18 Lacs through banking channel whereas the remaining amount of Rs.35.67 Lacs has been paid in small trenches for various construction work which is evident from the narrations appended with each of the entry. In such a case, the denial of deduction of the same is not justified. The Ld. AO is directed to allow this cost. 9. Upon perusal of tabulation as given in para-5, it could be seen that the assessee has not claimed any deduction on sale of property which is situated at Kolathur and in fact, the computations have resulted into capital loss for assessee on sale of this property. Therefore, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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