9911796707
TMI Blog2023 (11) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1961 (hereinafter referred to as the "Act"), dated 29.12.2009 for AY 2007-08. 2. Assessee has raised following grounds of appeal: "1. That on the facts and circumstances of the case the Ld. C.I.T (A) erred in treating the Land belonging to the Appellant as Depreciable Assets and directing to treat the Gain/Loss arising out of sale proceed of the said Land as Short Term Capital Gain /Loss. 2 That the Ld. C.I.T (A) has failed to establish the facts that no Depreciation was claimed and allowed on the Land belonging to the Appellant which could be verified from the Audited Accounts as well as Income Tax records. 3 That the order passed by the Ld. C.I.T. (A) relying on the judgments which are not applicable in the case of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and/or discarded [Net]". On the basis of the Audited Accounts for the year ended 31.03.2004 the Appellant had computed Long-Term Capital Loss of Rs. 56,26,708/- on sale of the said land for the Assessment Year 2004-05 after deducting Index Cost of Acquisition from sales consideration. But on the basis of remarks passed by the Auditor in his Notes on Accounts, the A.O. had disallowed the Appellant's claim of Long-Term Capital Loss in the Assessment Year 2004-05 and he had considered the same in the Assessment Year 2007-08 treating the part of the sales proceeds received as Advance against sale of the land. In the Appeal the action of the A.O. was confirmed. As there was no monetary loss and the claim of LTCL of the Appellant would be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 64,82,370/ only [Rs. 5,92,26,559/- as computed by the A.O. less Rs. 6,57,08,929/-] as against LTCG of Rs. 6,07,611/- computed by the A.O. The Fair Market Value of Land as on 01.04.1981 at Rs. 1,26,60,680/- was based on Approved Valuer's Report which was submitted before the A.O. during the course of assessment proceedings. The A.O. while computing the LTCG on sale of land to Shri Ram Truth House Management Pvt. Ltd had straight way deducted the figure of Rs. 3,51,51,080/- being the amount of Deductions as appearing under the Head "Land" in the FIXED ASSETS SCHEDULE "G" from the sales proceeds of Rs. 5,50,00,000/- to arrive at the LTCG figure of Rs. 1,98,48,920/- which is contrary to law. While adopting the said figure the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , an appeal was preferred before the ld. CIT (A)-20, Kolkata. Ld. CIT(A) dismissed the appeal with a direction to the Ld. A.O. to treat the Capital Gain worked out by him as Short Term Capital Gain by applying the provision of Section 50 of the Act. 6. Before us, Ld. Counsel has referred to the audited financial statement of AY 2004-05 as well as for the year under consideration to demonstrate how the disclosure was made therein by the statutory auditors. He referred to Note No. 12(d) contained in Schedule 'K' on Significant Accounting Policies and Notes on Account, forming part of the audited Balance Sheet and Profit & Loss Statement, which read as under: "(d) The Company has entered into an agreement with a party for sale of land measu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct set of facts corroborated by documentary evidence placed on record. The computation so furnished in this respect is reproduced as under: 9. We fail to understand on the conclusion drawn by Ld. CIT(A) of treating land as depreciable assets and subjecting it to capital gain u/s. 50 of the Acton the premise that land was traded by the assessee as a business asset as reflected in the Balance Sheet of the assessee. The issue contested by the assessee was that Ld. AO was not correct in computing the long term capital gain on sale of land as against the long term capital loss reported by the assessee by taking indexation benefit on the cost of acquisition. Ld. CIT(A) has altogether digressed from the issue and taken a stand unwarranted o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of Ld. CIT(A) since he has altogether digressed from the issue raised by the assessee before him and had taken a stand unwarranted on the facts of the case. 9.3. The issue contested by the assessee before the ld. CIT(A) was that ld. AO was not correct in computing the long term capital gain on sale of land as against the long term capital loss reported by the assessee by taking indexation benefit on the cost of acquisition. In this respect, ld. Counsel of the assessee has furnished all the relevant details duly corroborated by documentary evidence, placed on record. A computation of long term capital loss on sale of land by taking into consideration the correct set of facts is reproduced above. According to the same, long term ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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