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TMI Blog2007 (1) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in bifurcating the profit or gain arising from the sale of incomplete house in June, 1982, into long-term capital gain with reference to the acquisition of the plot and short-term capital gain with reference to the construction of a super structure made on the plot when the asset sold was one, i.e., incomplete house, and there was only one sale transaction ?" 2. It would be necessary to make a brief reference of facts as emerge from the order of the Tribunal, where the only issue debated was that the capital gain computed by the Income-tax Officer ("the ITO"), should have been treated as long-term gains as contemplated by section 54F of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee had purchased the land from Shakti Co-operative House Building Society, vide sale deed registered on October 27, 1970, although the Tribunal had also recorded that the sale was against shares of Daya Singh, the son of Jarnail Singh and the transfer was made effective from June 1, 1978. In respect of the date of construction, the Tribunal has noticed that the Municipal Corporation, Ludhiana, sent a notice to the assessee on March 2, 1977, pointing out that his house was not being constructed according to the approved site plans and, therefore, he had contravened section 195A of the Municipal Act, 1911, which led to the prima facie conclusion that construction had started as early as 1977. In that regard some receipts were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qua the building there is some corresponding decline also because of depreciation. At any rate, there would not be much rise in the price of material during the three years immediately preceding the sale because the total cost of construction has been estimated by the Income-tax Officer at Rs. 50,000. The Income-tax Officer has mainly relied upon the fact that a loan of Rs. 18,000 was sanctioned in August, 1980. Therefore, the construction must have been done by the assessee after 1980. It is difficult to give the exact date of construction but keeping in view the all over fact and circumstances, we would estimate that the assessee may have spent about half the amount, i.e., Rs. 25,000 during the three years immediately preceding the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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