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TMI Blog1980 (7) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... 968-69 Rs. 16,000 1969-70 Rs. 50,774 1970-71 Rs. 5,787 . Rs. 72,561 The amount aggregating to Rs. 5,787 was withdrawn by the assessee during the period ranging from 6th Nov., 1968 to 2nd April, 1969. The case of the assessee is that these payments were made for the work which was earlier completed. The assessee entered into a settlement with M/s Murli Investment Co. Private Limited regarding the sale of the bungalow in Aug., 1969, when it was completed. Pursuant to the settlement, the prospective buyer advanced Rs. 10,000 on 11th Sept., 1969 to the assessee. Agreement to sell for the incomplete bungalow was executed in Dec., 1969 and then the possession was delivered by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,18,845 The ITO treated the capital gain as short term capital gain as the asset i.e. the bungalow, in his opinion, came into existence in the shape in which it was sold within two years from the date of sale. Aggrieved, the assessee went up in appeal to the CIT(A). Before him, the valuation of the property and the point of short term capital gain were agitated. On the point of valuation, the CIT(A) found that the ITO was not right in estimating the value of the property at Rs. 1,98,350. Whereas, he did not interfere with the valuation of land as determined by the ITO at Rs. 45,700, he did not agree with the valuation of the construction as estimated by the ITO. Following the Valuation Officer's report, the ITO e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land and the building should be treated as separate assets. It is contended that whatever capital gain arose in this case that has arisen on the sale of the land as well as on the sale of construction. Shri Ranka, the ld. counsel for the assessee, therefore, urges that for the purpose of computation of the capital gain the land and the building should be considered separately. He submits that the land was purchased in 1962 and, therefore, this asset came into existence much before two years from the date of sale and, therefore, it should be treated a long term capital gain. It is also argued that the major portion of the construction was raised by the assessee before two years from the date of sale and, therefore, that is also eligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cceeded in appeal before the AAC, approached the Tribunal in appeal and then the Tribunal took the view that there was nothing in the context of s. 2(14) of the IT Act, which requires the consideration of whole property comprising of the land and building as one composite whole. The Tribunal found that the building having been sold soon-after its construction could not have given rise to the capital gain but whatever capital gain arose that was on the sale of land. The capital gain being attributed to the sale of land, the Tribunal found that the capital gain was to be treated as long term capital gain. We respectfully follow the decision of Delhi Bench `A'. The facts of the case of the assessee and the facts of the case, which was before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une, 1970 (registered in August, 1970), the CIT(A) found that the building as it was at the time of sale did not come into existence prior to the period of two years from the date of sale. We quite agree with this finding of the CIT(A) and, therefore, the capital gains arising from the sale of building cannot be treated to be the long term capital gains. 5. This finishes up the appeal of the assessee. 6. Next, we take up the appeal of the Revenue. The contention of the Revenue is that the CIT(A) committed an error in reducing the estimate of the Valuation Officer from Rs. 1,93,350 to Rs. 1,30,000 without hearing him. It is not denied by Shri Ranka that the statute requires the ITO and the Appellate Authority to give a hearing to the Val ..... X X X X Extracts X X X X X X X X Extracts X X X X
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