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TMI Blog2018 (4) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment agreement was entered, on which date capital gains on transfer of land was also brought to tax by the AO. Therefore, the rights under the agreement, having been crystalised, the sale of any flat would become Long Term Capital Gain. Not only that, as already discussed in the earlier appeal, for the cost of acquisition as on 01-04-1981, the land value as on 01-04-1981 has been directed to be taken at ₹ 900/- per Sq. Yd. Consequently, the sale of undivided share of land would be calculated taking ₹ 900/-per Sq. Yd., as the value as on 01-04-1981 and giving ‘cost of indexation’ benefit as per the rules. Even the cost of apartment would be 1/3rd of the cost adopted for transfer of 50% of the land. The value adopted in AY. 2006-07 should be adopted as cost of value and that should be considered while computing the capital gain on the sale of one flat in the impugned year. AO is directed accordingly and assessee’s grounds on this are considered allowed. - 1091/Hyd/17 And 1092/Hyd/17 - - - Dated:- 18-4-2018 - SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Shri K.A. Sai Prasad, AR For The Revenue : Shri A.G.V. Prasad, DR ORDER These tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an additional ground regarding exemption u/s. 54 or 54F. The applicant submitted that the capital gain arose on 20.05.2008 and 25.08.2009 when the flats were sold. Since the flats were not handed over and not were sold during the relevant financial year, the question of exemption u/s. 54F does not arise. Hence, the ground is not existed . 4. I have considered the rival contentions and perused the orders of the authorities and written submissions placed before the Ld.CIT(A) by assessee. As far as the transfer of property by way of development agreement is concerned, I am of the opinion that there arises capital gains but the capital gains arises only on 163.5 Sq. Yds. This should be corrected. Apart from that, the cost of acquisition was taken at ₹ 200/- per Sq. Yd., without any rationale. The Co-ordinate Bench in the case of ACIT Vs. Shri O.V. Ramana Reddy HUF, in ITA No. 1670/Hyd/2011 and C.O. No. 2/Hyd/2012, dt. 25-10-2013 has considered similar fair market value of land and held that rate can be adopted at ₹ 900/- per Sq. Yd. The Co-ordinate Bench decision is as under: 13. We have heard the contentions of the parties and perused the material on record. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether 'a residential house' stated in S.54/S.54F for allowing deduction means a single residential house or one consisting of multiple units. As for the facts involved herein, the assessee has received five flats in different floors of the same building. The Assessing Officer restricted the deduction to one such unit/flat, whereas the assessee claimed deduction for all the flats received in terms of development agreement. Therefore, the question to be decided is whether a 'residential house' would include multiple flats/residential units as well. This issue was decided by the Hon'ble High Court of Maras In Its decision In CIT V/s. Smt. V.R.Karpagam (supra), wherein the amendment brought to 5.54 and 54F was also considered and held as under- 8. We have heard the learned Standing counsel appealing for the Revenue at length and perused the materials placed before this Court and the decision relied on by the Tribunal in the case of CIT V. Smt. K.G.Rukminiamma reported in 331 ITR 211. We find that the relevant provision is this case is Section 54F of the Income Tax Act, which reads as follows: 54F. Capital gain on transfer of certain capital assets not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .04.2015. 10. The above-said amendment to Section 54F of the Income Tax Act, which will come into effect only from 01.04.2015, makes it very clear that the benefit of Section 54F of the Income Tax Act will be applicable to constructed, one residential house in India and that clarifies the situation in the present case; i.e, post amendment, viz., from 01.04.2015, the benefit of Section 54F will be applicable to one residential house in India. Prior to the said amendment, it is clear that a residential house would include multiple flats/residential units as in the present case where the assessee has got five residential flats. We may also mention here that all the Authorities below have clearly understood that the agreement signed by the assessee with M/s.Mount Housing Infrastructure Ltd., is that the assessee will receive 43.75% of the built-up area after development, which is construed as one block, which maybe one or more flats. In that view of the matter what was before the Assessing Officer is only equivalent of 56.25% of land transferred, equivalent to 43.75% of built up area received by the assessee. This built up area got translated into five flats. Hence, we are of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions raised by the Revenue in this appeal cannot be accepted . 5.1. Respectfully following the same, I am of the opinion that assessee is entitled for deduction u/s. 54F on all the three flats. Therefore, AO is directed to allow the amount and rework out the capital gains accordingly. Grounds are considered allowed. AY. 2010-11: 6. Brief facts pertaining to this assessment year are that, AO reopened the assessment on the reason that assessee has sold away two flats during the year. AO in the order, calculated Long Term Capital Gain on sale of undivided share of land and Short Term Capital Gain on sale of structure of flats, thereby determining total income at ₹ 27,64,164/-. It was contended before the Ld.CIT(A) that out of the three flats received, assessee has sold away two flats before his death in the year 2009 and only one apartment, Flat No. 103 was sold in the impugned assessment year (whereas Flat No. 203 was sold in AY. 2009-10 being the date on 20-05-2008). The details were furnished to the CIT(A) [even though are available with AO], who after considering the assessee s submissions has accepted that only capital gains on sale of Flat No. 103 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding the cost of the land in 1981 in Chikkadpally was ₹ 2,500/- per sq. yard. Lastly, the Assessing Officer has taken the cost of land per sq .yd at ₹ 160/- as compared to the value taken by the Assessing Officer in the AY 2006-07. I direct the Assessing Officer to recalculate the capital gains taking a consistent value of land for this year also, since in the earlier year the Assessing Officer has taken ₹ 200/- per sq. yd. as cost of acquisition for calculating the capital gains. I direct the Assessing Officer to take the same value to the present assessment year for calculating the capital gains. The working and addition made by the Assessing Officer is partly upheld . 7.1. After considering the rival contentions and perusing the orders, I am of the opinion that assessee became entitled to three flats, when the development agreement was entered, on which date capital gains on transfer of land was also brought to tax by the AO. Therefore, the rights under the agreement, having been crystalised, the sale of any flat would become Long Term Capital Gain. Not only that, as already discussed in the earlier appeal, for the cost of acquisition as on 01-04- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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