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TMI Blog2012 (9) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... hold the cost of construction be adopted at Rs.1,300/- while determining short term capital gain. Accordingly, appeal of the assessee is partly allowed. - I.T.A No.1081/Bang/2010 - - - Dated:- 29-6-2012 - SHRI. N. V. VASUDEVAN, AND SHRI. JASON P. BOAZ, JJ. Appellant by : Smt. Kavitha P, CA Respondent by : Smt. Susan Thomas Jose, JCIT O R D E R PER N. V. VASUDEVAN, JUDICIAL MEMBER : This is an appeal by the assessee against the order dated.30.06.2010 of the Commissioner of Income-tax (Appeals)-II, Bangalore, relating to AY 2007-08. The grounds of appeal raised by the assessee read as follows : i) The order of assessment passed by the Assessing Officer and the order passed by the Commissioner of Income-tax (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws. The assessee and one Shri. J. Aditya, were co-owners of a property at Sarakki, JP Nagar, Bangalore, measuring 13,515 sft. The aforesaid property was given for joint development by the assessee and Shri. J. Aditya to one M/s. B. S. R Developers P. Ltd., Chennai. As per the joint development agreement, the total number of flats that were to be built on the land was 16 numbers. Out of the 16 flats, five flats were to be given to the assessee and Shri. J. Aditya and the remaining eleven flats were to be retained by the developer. On the above transaction of joint development, long-term capital gains accrued to the assessee. The built-up area of 5 numbers of flats which were given to the share of the owners was 6020 sft, out of which the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Less : Cost of flats sold and the value of the flats received from Builders adopted for arriving the long term capital gain is taken as cost for arriving short term capital gain as above .. Rs.39,16,900 Short term capital gains chargeable to tax .. Rs.10,16,800 The assessee was aggrieved by the aforesaid computation of short term capital gain. 05. Before the Commissioner of Income-tax (Appeals) details of the built-up area of the flats and undivided share of the land sold by the assessee were given and the same was as follows : Flat No. Built-up area Undivided share in land Flat No.C Ground floor 1060 sft 470 sft Flat No.A1 First floor 1423 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) issued notice of enhancement to the assessee and held that in accordance with the principles laid down in several judicial pronouncements, when a capital asset comprising of land and building is sold, capital gains arising out of such transfer has to be bifurcated by attributing sale consideration as well as cost of acquisition to the land component and the building component separately. Thereafter the Commissioner of Income-tax (Appeals) proceeded to work out the long term capital gain and the short term capital gain on sale of the 4 flats by bifurcating the undivided share of land sold and the flat sold separately. The undivided share of land attributable to the 4 flats sold was considered as LTCG by the Assessing Officer as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head 'Long term Capital Gains'. Similarly, under the head 'Short Term Capital Gains' the Assessing Officer had calculated it at Rs.10,16,800/-; however, as computed in para 09 above, it was determined at Rs.18,78,450/-. As such, there was enhancement of income under the head 'Short Term Capital Gains' by Rs.8,61,650/-. 11. The short controversy which the learned representative for the assessee has pressed for adjudication before the Tribunal is with regard to adoption of cost of construction at Rs.900/- by the Commissioner of Income-tax (Appeals) while determining short term capital gain on sale of four flats. In this regard, our attention was drawn by the learned counsel for the assessee to the determination of long-term capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival submissions. We find that the Commissioner of Income-tax (Appeals) has given no reason as to why the cost of construction of the flats while computing short term capital gain is adopted at Rs.900/-. In this regard we find that the long term capital gain for the very same flats have been accepted by the Commissioner of Income-tax (Appeals) to have a cost of construction at Rs.1,300/-. There cannot be apparently any valid reason for the Commissioner of Income-tax (Appeals) to adopt cost of construction at Rs.900/- while computing short term capital gain. We, therefore, hold the cost of construction be adopted at Rs.1,300/- while determining short term capital gain. Accordingly, appeal of the assessee is partly allowed. 14. Order pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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