9911796707
TMI Blog2014 (6) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... stated in brief. The assessee is assessed in the status of Association of Persons (hereinafter "AOP"). The members of AOP are Shri A.V.Abdul Rahiman and Shri A.V. Nazar. It filed its return of income for the year under consideration declaring a loss of Rs.5,417/- and it was processed u/s. 143(1) of the Act on 04-03-2006. Subsequently, the Assessing officer noticed that the assessee has computed Short term capital gain by taking the Written Down Value of assets as Rs.20,87,710/-. However, the Written Down Value of assets as per the return of income relating to 2004-05, i.e., pertaining to immediately preceding year, was Rs. 8,69,538/- only. Hence, the Assessing officer took the view that there is escapement of income and accordingly re-opene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short term capital gains are stated in brief:- (a) The property, which was sold during the year under consideration, consisted of land and four-storey building and it was purchased by Ahri A.V. Nazar and A.V. Abdul Rahiman Haji during the years relevant to the assessment years 1992-93 an 1993-94 through six conveyance deeds for a total consideration of Rs. 12,44,300/-. (b) The ground floor was consisting of shop rooms and the remaining three floors were used as lodging house. (c) The entire building was managed through AOP and returns of income were also filed by the AOP. (d) The assessee has claimed depreciation on the value of building. (e) The above said property was sold for a consideration of Rs.32,50,000/- through six conveyance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the AO was not right in rejecting deduction of cost of improvement, referred above, and also in not considering the unabsorbed depreciation. The assessee also furnished working of Short term Capital Gain determining a loss of Rs.2,43,373/-. 6.1 The assessee further submitted that the asset sold by the assessee consisted of land and building and no separate values were assigned to land / building. The assessee placed reliance on the decisions rendered by Hon'ble Madras High Court in the case of ACIT Vs. Raka Food Products (2005)(277 ITR 261) and also in the case of CIT Vs. Union Company (Motors) Ltd (2006)(283 ITR 445), wherein it was held that the land and building need not be considered separately and the entire amount of cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt years AY 2003-04 and 2004-05 and hence held that the assessee could not have incurred any expense on improvement in AY 2003-04 and 2004-05, while successfully running the lodge. Further, it is pertinent to note that the assessee had claimed the expenses on improvement only in the revised returns of income filed for AY 2003-04 and 2004-05 and the said returns have been ignored by the AO. With regard to the claim of investment made by the members of AOP as per the requirements of sec. 54, the AO submitted that the same is not relevant in the assessee's case. 6.3 The ld CIT(A) held that (a) the AO was correct in adopting the WDV as per the Balance sheet at Rs.8,69,538/-, as the assessee had declared the sale consideration at Rs.22,50,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n shown at WDV. We have already noticed that the AO, in the remand report, has stated that the assessee has not accounted for the value of Ground Floor in the books of the assessee AOP. Hence, the Balance sheet furnished at page 12 of the paper book contradicts the above said observations made by the AO in his remand report. There is a possibility that the Balance sheet filed with the original return of income did not include the value of Ground Floor and the Balance sheet filed along with the revised return of income might have included the value of Ground Floor. However, these facts need verification. We have already noticed that the assessing officer has ignored the revised return on the reasoning that it was not filed in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside to the file of the AO. 7.5 According to Ld A.R, the sale consideration of Rs.32,50,000/- or as the case may be Rs.22,50,000/- includes the value of land also. Accordingly, it was submitted that the sale value of land has also been assessed as Short term Capital gain. According to Ld A.R, the value of land was not brought into the books of assessee AOP and the gain arising on sale of land is assessable as Long term Capital gains in the hands of Shri A.V. Nazar and Shri A.V. Abdurahiman. However, we find that these facts are not emanating from the discussions made by the AO / Ld CIT(A). If the submissions made by Ld A.R are found to be factually correct, then it may not be proper to assessee the sale value pertaining to land in the ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
