9911796707
TMI Blog2008 (4) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... giving deduction u/s 53 and 54 X X X X Extracts X X X X X X X X Extracts X X X X ..... Cost price Brokerage Less : Deduction under section 48 Less : Cost of flat purchased Less : Investment in IDBI bonds Rs. 1,25,000 45,000 Rs. 30,00,000 1,70,000 28,30,000 14,20,000 14,10,000 9,00,000 5,10,000 6,00,000 Nil" 4. The Assessing Officer, however, did not accept this and worked out the capital gains as under : Sale consideration Less : Cost as on 1-1-74 Brokerage Long-term capital gains Less : Invested in purchase of flat Less : Invested in purchase of IDBI bonds Less : Deductions under section 48(2) Rs. 1,25,000 45,000 Rs. 30,00,000 1,70,000 28,30,000 9,00,000 19,30,000 6,00,000 13,30,000 6,70,000 6,60,000 5. The assessee challenged the above computation before the Commissioner of Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to deduction under section 48(2) of the Act before giving the deduction under sections 53 and 54 of the Act. Learned counsel also cited CIT v. V. V. George [1997] 227 ITR 893 (Ker) in support of its contentions. 8. Learned counsel for the Revenue, on the other hand, supported the order of the Assessing Officer on the ground that the scheme of sections 45 and 48 of the Act clearly makes it a case that deductions under sections 54 and 54E of the Act shall be made in the beginning of the computation. 9. Capital gains have been made chargeable to income-tax under section 45 of the Act. Section 45(1) of the Act provides : "Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng buildings or lands or any rights in buildings or lands or gold, bullion or jewellery,- (A) in the case of a company, ten per cent. of the amount of such gain in excess of ten thousand rupees ; (B) in the case of any other assessee, fifty per cent. of the amount of such gain in excess of ten thousand rupees. (ii) in respect of long-term capital gain so arrived at relating to capital assets,- (A) in the case of a company, thirty per cent. of the amount of such gain in excess of ten thousand rupees ; (B) in any other case, sixty per cent. of the amount of such gain in excess of ten thousand rupees ;" 11. The Explanation to section 53 of the Act provides : "In this section and in sections 54, 54B, 54D, 54E, 54F and 54G references to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and in sections 54, 54B, 54D, 54E, 54F and 54G, references to capital gain shall be construed as references to the amount of capital gain as computed under clause (a) of sub-section (1) of section 48.' " Therefore, in computing capital gains the provisions of section 48(2) of the Act should be given effect to before giving effect to the pro-visions of section 54E of the Act. 15. The deductions specified under sub-section (2) of section 48 of the Act is with reference to the gross capital gains calculated under clause (a) of sub-section (1) only. Nowhere in the Act is it specified that this deduction is subject and restricted to the deductions to be allowed under sections 53 and 54 of the Act. 16. This is so in order that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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