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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 ..... ner of Income-tax (Appeals) enhancing the income computed by the Assessing Officer are opposed to law and facts of the case. ii) The Assessing Officer erred in holding that the appellant had received from the Developer 5 flats in addition to consideration for transferring the rights in the land by the appellant. iii) The Commissioner of Income-tax (Appeals) erred in holding that the appellant had earned short term capital gains on sale of flats in addition to the long term capital gains declared by the appellant. iv) The Commissioner of Income-tax (Appeals) further erred in determining the short term capital gains from sale of flats since the profit, if any, arising from sale of flats accrued to the developer as business profit and not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sft, out of which the assessee's share was 3013 sft. The total area of the land given for joint development was 10,855 sft and the assessee's share out of the above was Rs.5,427 sft. The Assessing Officer computed long-term capital gain on the transfer by way of joint development, as follows : Built up area received by the assessee in lieu of surrendering undivided share of 5,427 sq.ft - 3,013 x 1,300 = Rs.39,18,900/- Builders undivided share of land is 5,427 sq.ft which is valued at Rs.80/- to arrive at the cost of land and indexation 5,427 x 80 = 4,34,160 x 519 = Rs.22,53,290/- 100 Long term capital gain chargeable to tax in respect of assessee's share Rs.16,63,610/- Long term capital gains Rs.16,63,610/- Less : Long term capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60 sft 06 The assessee pointed out that out of 5 flats 4 flats were sold during the previous year relevant to the AY 2007-08, the details of which are given below Name of the purchaser Date of agreement for sale Description of flats sold Sale consideration (50% appellant's share) Sanjiv Chug 18/5/2005 Flat No.C-2 II floor Rs.10,50,000 Rajesh Patel - Flat No.C Gr.floor Rs.10,80,000 Sumash Vishwaraj 28/3/2007 Flat No.A1 II floor Rs.14,01,850 Ashok Dandin 27/10/2007 Flat No.B; I floor Rs.14,01,850 Total Rs.49,33,700 It was submitted that the Assessing Officer had computed short-term capital gain as if all the 5 flats had been sold. The Assessee therefore challenged the computation of STCG by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,54,644 Long term capital gains chargeable to tax in respect of 50% share of land i.e. 50% of Rs.7,31,822/- 3,65,911 09. The short term capital gain on sale of 4 flats was treated as STCG, since all these flats were received from the builder during the previous year relevant to the AY 2007-08 and sold during the same year itself. The short term capital gains wass worked out as below : Sale consideration of 4 flats Rs.49,33,700 Less : Sale consideration of 1095 sft of land Rs. 8,20,550 Balance Rs.41,13,150 Less : Cost of construction of 4 flats [2483 sft x Rs.900)-2,48,388 x 900 Rs.22,34,700 Balance chargeable to short term capital gains tax since no cost of improvement or other expenses has been furnished Rs.18,78,450 10. Put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and indexed cost Rs.22,53,290 Long term capital gain chargeable to tax Rs.16,63,610" The learned representative drew our attention to the fact that the cost of construction while determining long term capital gain was accepted by the Commissioner of Income-tax (Appeals) at Rs.1,300/-. When the very same asset is sold, there is no reason to adopt the cost of construction at Rs.900/-. She accordingly prayed that the cost of construction of the four flats be adopted at Rs.1,300/- which will result in short -term capital gain determined at a lesser figure than what was determined by the Commissioner of Income-tax (Appeals). 12. The learned DR could not controvert or could not give any explanation as to why the Commissioner of Income-tax (A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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