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2020 (11) TMI 610 - AT - Income TaxComputation of capital gain tax - computing the inflation cost of the asset - Computing the cost of acquisition of property in terms of section 49 - HELD THAT - In the case of Bhatkal Ramarao Prakash 2019 (2) TMI 1059 - ITAT BANGALORE for computing the inflation cost of the asset, the date to be reckoned from the date of allotment of the property to the assessee and not the date on which possession certificate issued to the assessee. Further, a judgement relied by CIT in the case of CIT Vs. Balbir Singh Maini 2017 (10) TMI 323 - SUPREME COURT have no application and it was delivered on different context with reference to section 2(47)(v) of the Act and the judgement of Hon ble High Court relied by the assessee s counsel in the case of A. Suresh Rao cited 2014 (1) TMI 1585 - KARNATAKA HIGH COURT is a direct judgement applicable to the facts of the case. Being so, we have no hesitation in reversing the finding of the Ld. CIT(A) on this issue and direct the A.O. to consider the date of allotment of property i.e. 20.5.1986 for the purpose of determining the cost of inflation of the assets, while computing the cost of acquisition of property in terms of section 49 of the Act. This ground of the assessee is allowed. Non-granting cost of improvement, while computing the capital gain - HELD THAT - There is no iota of evidence that there is an existing building in the impugned land. The only contention of the assessee is that assessee declared income from said property under the head income from house property in earlier assessment years. However, there was no evidence to show that there is a building therein - declaring income in the return of income from Siddharth Nagar Property does not suggest that there is a building in the impugned property. Since the assessee has not furnished any revenue record to show that there is a building or evidence regarding power connections or water connections, in the absence of this evidence, it has to be noted that there is no building in the scheduled property and the assessee is not entitled for any benefit of cost of improvement. This ground of appeal of assessee is allowed. Non giving due credit towards TCS as per 26AS - HELD THAT - CIT(A) given a direction to the A.O. to give TCS credit to the assessee after due verification. Accordingly, the assessee shall produce the necessary evidence with regard to the TCS credit and the A.O. shall consider the same and give due credit as reflected in form 26AS. This ground of the assessee is allowed.
Issues Involved:
1. Determination of the date of acquisition for the purpose of calculating the cost inflation index. 2. Entitlement to the cost of improvement in the computation of capital gains. 3. Credit for Tax Collected at Source (TCS) as per Form 26AS. Issue-wise Detailed Analysis: 1. Determination of the Date of Acquisition for Cost Inflation Index Calculation: The primary issue was whether the date of allotment or the date of possession should be considered for calculating the cost inflation index. The appellant argued that the date of allotment (20.05.1986) should be considered, as the entire consideration was paid by 29.05.1986, and the appellant held the property de facto from that date. The Assessing Officer (AO) and the CIT(A) considered the date of possession (23.06.1998) for this purpose. The Tribunal referred to various judgments, including those of the Karnataka High Court and the CBDT Circular No. 471, which clarified that the allottee gets the title to the property on the issuance of the allotment letter and the payment of installments is only a follow-up action. The Tribunal concluded that the date of allotment should be considered for computing the cost inflation index, thus reversing the CIT(A)'s decision. 2. Entitlement to the Cost of Improvement in the Computation of Capital Gains: The appellant claimed a cost of improvement of ?3,00,000 for the construction of a building on the property, which was not allowed by the CIT(A). The Tribunal noted that there was no evidence, such as revenue records or utility connections, to show the existence of a building on the property. The mere declaration of income from the property under the head "income from house property" in earlier assessment years was not sufficient to establish the existence of a building. Therefore, the Tribunal upheld the CIT(A)'s decision that the appellant was not entitled to the cost of improvement. 3. Credit for Tax Collected at Source (TCS) as per Form 26AS: The appellant contended that the CIT(A) should have specifically directed the AO to give credit for TCS of ?18,165 as claimed in the return. The Tribunal noted that the CIT(A) had directed the AO to give TCS credit after due verification. The Tribunal instructed the appellant to produce the necessary evidence regarding the TCS credit, and the AO was directed to give due credit as reflected in Form 26AS. Conclusion: The appeal was partly allowed for statistical purposes. The Tribunal directed the AO to consider the date of allotment for determining the cost inflation index, upheld the denial of the cost of improvement due to lack of evidence, and instructed the AO to verify and give due credit for TCS as per Form 26AS.
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