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TMI Blog2016 (4) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be accrued in future in favour of assessee after receiving the possession of the property. Certainly that would also be subject to capital gains. Therefore, in our final conclusion valuation of the capital gain should be appropriate to adopt the FMV/asset as deemed consideration, but not cost of the construction. - Decided against revenue - I.T.A. No.989 /Bang/2014 - - - Dated:- 27-4-2016 - SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER For the Appellant : Dr.P.K. Srihari, Addl. CIT (D.R.) For the Respondent : Smt. Sheetal, Advocate ORDER Per Shri Vijay Pal Rao, J.M. : This appeal by the Revenue is directed against the order dt.26.5.2014 of Commissioner of Income Tax (Appeals), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sharing ratio was revised to 26.89% and 73.11% between the assessee and the developer respectively. During the scrutiny assessment, the Assessing Officer issued a show cause notice asking the assessee to show cause as to why capital gains in respect of 84 Cents of the property should not be computed by adopting the cost of construction as sale consideration. In response the assessee vide letter dt.10.3.2014 filed objections. The Assessing Officer issued a notice under Section 133(6) of the Income Tax Act, 1961 (in short 'the Act') to the developer M/s. R S Turnkey Contractors Pvt. Ltd. for furnishing cost of construction in respect of the property to be constructed. The developer vide its letter dt.11.3.2014 has stated that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on record. The learned DR argued that the portion of the constructed apartment that are to be assigned to the assessee has already been decided and crystallized and considering the scenario, it is only logical that the value of these apartment be considered as sale consideration. Further it was argued by the learned DR that assessee should only treat the cost of construction as sale consideration and not the market value of the asset because, the assessee is not selling the apartment and is only receiving them hence, the true value of asset is the cost of construction which is actually money spent in bringing the assets to life. The learned DR further relied on the judgment of the Coordinate Bench of the ITAT at Hyderabad in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31 is relevant for deciding the present controversy. We are of the view, because at the time of signing JDA the capital gain has to be computed only on the guidance value of the land. Even otherwise, if any capital gains to be accrued in future in favour of assessee after receiving the possession of the property. Certainly that would also be subject to capital gains. Therefore, in our final conclusion valuation of the capital gain should be appropriate to adopt the FMV/asset as deemed consideration, but not cost of the construction. With the above observation we dismiss the appeal of the revenue. It is clear to note that the co-ordinate bench of this Tribunal has followed the judgment of Hon'ble jurisdictional High Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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