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TMI Blog2021 (1) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... lso ought to have allowed the expenditure incurred on demolition, hence, we set aside the order of the ld. CIT(A) and allow the appeal of the assessee on this issue. Cost of construction and indexed cost of acquisition for construction of the building - AO disallowed the indexed cost of construction merely because the assessee could not furnish the evidences - HELD THAT:- Since the construction of the building was completed in 1994-95 and sold in 2013-14, naturally assessee would not be in a position to furnish the evidences, because of longevity of time and therefore the issue needs to be considered on the basis of evidence available. In the instant case, for existence of building the assessee has furnished the municipal tax receipts and also admitted the sale of scrap of building which was taxed by the AO in the assessment. Thus, we do not find any justification for rejecting the claim of the assessee with regard to indexed cost of construction, hence, we set aside the orders of the lower authorities and allow the indexed cost of acquisition of the building. Accordingly, appeal of the assessee is allowed on this issue. Capital gain on sale of land and flats - LTCG and ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/2020 21/09/2020 for the Assessment Years 2013-14 2015-16. ITA No. 216/VIZ/2020 A.Y.2013-14 2. All the grounds of appeal are related to the assessment of capital gains and the deduction of indexed cost of construction of the building and the rejection of assessee s claim with regard to demolition charges. 3. Brief facts of the case are that the assessee during the previous year relevant to the A.Y. 2013-14 filed her return of income admitting total income of ₹ 5,99,350/-. Subsequently, the AO has issued the notice u/sec. 147 and in response to which the assessee filed her return of income on 16/04/2018 admitting the same income which was admitted originally i.e. ₹ 5,99,350/- The case was taken up for scrutiny and the information was called for from the assessee. During the course of assessment proceedings, the AO had observed that assessee offered long term capital gain on sale of land of 212 sq.yds. at ₹ 3,53,271/- as under:- Schedule-1 (Asset Building) Schedule-2 (Site 212 sq. yds) Date of transfer 04/04/2012 Date of transfer 04/04/2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has demolished the said building and sold 212 sq.yds. of the vacant land and claimed the cost of construction of ₹ 22.00 lakhs which was incurred in 1994-95 and the indexed cost of acquisition at ₹ 72,37,066/- from the sale consideration of ₹ 76,32,000/- and accordingly admitted the capital gains. The AO though taxed receipt of sale of scrap relating to the demolished building, disallowed the expenditure incurred for demolition of the building and also the indexed cost of acquisition of the said building. The assessee in support of existence of the building submitted the house tax paid receipts in page No.31 of the paper book and submitted that she had constructed the building in 1994-95 and was enjoying the property and paying the property taxes therefore requested to allow the indexed cost of construction. The ld.AR further submitted that the building was constructed in 1994-95 and it is not possible to keep the records for such a long time. He further argued that under no provision of the act the assessee is obliged to keep construction accounts for such a long time. The ld.AR further submitted that the AO having taxed the sale of scrap of the buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was a house which was in existence prior to sale of the site. The AO disallowed the indexed cost of construction merely because the assessee could not furnish the evidences. Since the construction of the building was completed in 1994-95 and sold in 2013-14, naturally assessee would not be in a position to furnish the evidences, because of longevity of time and therefore the issue needs to be considered on the basis of evidence available. In the instant case, for existence of building the assessee has furnished the municipal tax receipts and also admitted the sale of scrap of building which was taxed by the AO in the assessment. Thus, we do not find any justification for rejecting the claim of the assessee with regard to indexed cost of construction, hence, we set aside the orders of the lower authorities and allow the indexed cost of acquisition of the building. Accordingly, appeal of the assessee is allowed on this issue. ITA No.217/VIZ/2020 A.Y. 2015-16 9. All the grounds in this appeal for the A.Y. 215-16 are related to taxing the sale of land and flats. The assessee claimed the entire sale consideration under the long term capital gain and thus the AO taxed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly computed the short term capital gain. The computation of long term/short term capital gain by the AO is given in page No.4 as under:- Revised Computation of Long Term Capital Gain Amount Amount. Sale consideration towards land of ₹ 623 sq.yds. of 7 flats @ 35,000/- per sq.yds. 2,18,05,00 Less: Indexed cost of acquisition of land (14329 x 1024)/100 1,46,729 Net LTCG 2,16,58,271 Less: Exemption u/sec. 54 (i) u/s. 54EC bonds (ii) u/s. 54 construction of residential house (Investment of ₹ 73,24,818) 50,00,000 72,75,528 1,22,75,528 Taxable Long Term Capital Gain 93,82,743 Computation of STCG (Towards sale of build-up area of 19950 sft. Amount. Amount Sale consideration towards sale of 7 flats consistin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding value at ₹ 1,284/- per sq.ft. hence requested to adopt the value of the land at ₹ 60,000/- per sq.ft. and building value at ₹ 1,284/- per sq.ft. as estimated by the Registered valuer and compute the short term capital gain and long term capital gain accordingly. 14. On the other hand, the Ld.DR supported the orders of the authorities below. 15. We have heard both the parties and perused the material placed on record. There is no dispute that sale of land constitutes long term capital gain and sale of flats constitute short term capital gain. Since the flats were in possession of the assessee for less than 36 months, as the assessee constructed the building in the A.Y. 2014-15, for which agreement was entered on 12/02/2013. There was not much time gap between the construction of the building and sale of flats. Hence the AO rightly assessed the sale of flats under short term capital gains and the land under Long term capital gains. 15.1 The next issue is with regard to apportionment of sale consideration towards the land and flats. The cost of construction was ₹ 3,25,80,000/- for 9 flats consisting of 2850 sq.ft. each flat. Thus, total cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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