ITO Vs Govindappa Jayaram Doddiah (HUF) (ITAT Bangalore)
ITAT Bangalore held that CIT(A) rightly accepted the fair market value on the area allotted under occupancy certificate since AO without having any records, had added 14% on the area offered to tax, only for the reason that in the real estate parlance, the super built-up area of the premises is the saleable area.
Facts- The case of the assessee was selected under CASS for examining the capital gains and the claim of exemption u/s. 54 of the act. AO estimated the long term capital gain by disallowing the cost of improvement on the ground that the same are not capital in nature. Similarly, the AO in respect of the other property had arrived the capital gains by taking the area as super built-up area even though as per the occupation certificate issued by the authorities that the assessee has received a lesser area than the super built-up area and estimated capital gains on that basis. AO also made an addition on account of refundable security deposits paid by the developer to the assessee while entering the Joint Development Agreement as income of the assessee.
CIT(A) accepted the improvement cost as capital expenditure and also accepted the fair market value based on the area allotted under the occupation certificate but refused to accept that the refundable security deposit is not the income of the assessee. As against the said order in which CIT(A) has allowed the improvement cost as well as the area taken up for considering the fair market value, the revenue is in appeal before this Tribunal.
