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TMI Blog2007 (1) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The judgment of the court was delivered by M. M. Kumar J.— On the application filed by the Revenue before the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh ("the ITAT"), being R. A. No. 432/Chandi/88 in I. T. A. No. 245/Chandi/87, in respect of the assessment year 1983-84, the Income-tax Appellate Tribunal was persuaded to refer the following question of law for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in bifurcating the profit or gain arising from the sale of incomplete house in June, 1982, into long-term capital gain with reference to the acquisition of the plot and short-term capital gain with reference to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sset cannot be linked with the acquisition of the plot and, therefore, a new asset had come into existence after August, 1980, which was sold in June, 1982. He concluded that the sale of the property in June, 1982, would result in to short-term capital gain. 3. On appeal, the Commissioner of Income-tax (Appeals) upheld the order of the Assessing Officer and the assessee approached the Tribunal. 4. The Tribunal recorded the findings that the assessee had purchased the land from Shakti Co-operative House Building Society, vide sale deed registered on October 27, 1970, although the Tribunal had also recorded that the sale was against shares of Daya Singh, the son of Jarnail Singh and the transfer was made effective from June 1, 1978. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the framers of the Act was to tax the actual profits earned on the sale of the asset. It is a matter of common knowledge that due to the general rise in consumer price index in the last several years, there has been a phenomenal rise in the market price of plots at Ludhiana. In fact the rise in the price of property is more to the price of the land which is now in shortage. Of course, there is also rise in the cost of material but qua the building there is some corresponding decline also because of depreciation. At any rate, there would not be much rise in the price of material during the three years immediately preceding the sale because the total cost of construction has been estimated by the Income-tax Officer at Rs. 50,000. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the incomplete house have been considered to be short-term gains and all the balance profit earned by him on the sale of the building is to be considered as a long-term capital gain. Even otherwise, we find that the Tribunal has taken a balanced view by bifurcating the profit or gain arising out of the sale of incomplete house in June, 1982, into long-term capital gain by keeping in view the date of acquisition of the plot and short-term capital gain by keeping in view the construction of a super-structure made on the plot. Therefore, we find that no question of law would arise, especially when the Revenue has virtually conceded that the order of the Tribunal did not materially affect the Revenue. 6. Accordingly, the reference sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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