Capital Gains Calculation: Tribunal Validates Assessee's Book Value and Rejects Revenue's Alternative Valuation Method

The ITAT adjudicated on long-term capital gains (LTCG) computation for immovable property sale, ruling in favor of the assessee. The tribunal held that the cost of acquisition recorded in the books of accounts should be considered for capital gains calculation, rejecting the revenue's alternative valuation. The AO was directed to recompute LTCG, distinguishing between long-term capital gain on land and short-term capital gain on building. Additionally, the tribunal determined that loan waiver from Bank of Ceylon cannot be taxed under section 41(1), citing precedent and section 43B restrictions. The assessee's appeal was substantially allowed, with the AO instructed to delete the disputed tax treatment and recalculate the capital gains accordingly. .....

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