Ramatas Revathi Vs ITO (ITAT Chennai)
The Chennai ITAT held that an assessee cannot be denied the statutory benefit of indexation on the cost of construction merely on technical grounds when the relevant details are already available in the registered sale deed and its annexures. In this case, the assessee had sold a property comprising land and a building and claimed indexed cost of acquisition and construction while computing long-term capital loss. Although the Assessing Officer treated the entire sale consideration of ₹1.05 crore as short-term capital gains due to alleged lack of supporting evidence, the Tribunal noted that the Department had itself obtained the sale deed from the Sub-Registrar during proceedings under Section 148A. Since Annexure 1-A to the sale deed contained particulars regarding the building’s age and value, the Tribunal ruled that these details could not be treated as additional evidence. Accordingly, it directed recomputation of capital gains after allowing indexation on both land and construction costs.
Core Issue. Whether the assessee was entitled to indexation of the cost of construction while computing capital gains on sale of property comprising land and building, when the construction details were already available in the registered sale deed and its annexure.
