DCIT Vs Tirupati Niryat Pvt. Ltd (ITAT Kolkata)
Income Tax Appellate Tribunal (ITAT), Kolkata Bench, has dismissed an appeal filed by the Deputy Commissioner of Income Tax (DCIT) against Tirupati Niryat Pvt. Ltd. for the Assessment Year 2012-13. The case primarily involved a dispute over long-term capital gains calculation under Section 50C of the Income Tax Act, 1961, and disallowance of expenditure under Section 14A.
Background of the Case:
Tirupati Niryat Pvt. Ltd., engaged in real estate and jute products, filed its return for AY 2012-13 declaring a nil income and a carried forward loss of Rs. 1,56,15,948/-. The case was selected for scrutiny. During the assessment, the Assessing Officer (AO) noted that the assessee had sold land and building but did not pay capital gains tax, arguing that the sale value of the building was deducted from the block of fixed assets. The AO, however, considered the building a capital asset and applied long-term capital gains tax.
The AO determined the market value of the assessee’s one-fourth share in the property, as per the Stamp Duty Authority, to be Rs. 3,35,54,108/-. After adjusting for the indexed cost, the AO computed a Long-Term Capital Gain of Rs. 1,91,83,329/- and added this amount to the assessee’s total income. Additionally, the AO disallowed Rs. 75,186/- under Section 14A, invoking CBDT Circular No. 5/2014 and Rule 8D, as the assessee had made investments but not disallowed any expenses.
