Benefit of indexed cost of acquisition available based on payments dates

Bhupinder Singh Julka Vs ACIT (ITAT Delhi)

ITAT Delhi held that held that benefit of indexed cost of acquisition should be available to assessee based on payments made. Accordingly, AO directed to re-compute gain.

Facts- The assessee is a non-resident Indian. The case was selected for scrutiny and notice u/s. 143(2) of the Act, was issued and duly served upon the assessee. In response thereto, the assessee company filed the requisite details to the Assessing Officer.

Thereafter, AO after considering the submission of the assessee passed a draft Assessment Order u/s. 144C of the Act on 28.09.2021 thereby, he proposed to make an addition of INR 3,37,202/- in respect of the Short Term Capital Gain and a sum of INR 24,86,030/- treating the compensation received as income from the other sources. The assessee filed his objection before the DRP who vide order dated 11.05.2022, disposed off the objection and directed AO to verify regarding transfer of the property.

In pursuance of directions of DRP, AO proceeded to frame the final assessment order. During the course of Assessment proceeding, AO noticed that the assessee had disclosed in his return of income a sum of INR 4,56,070/-under head income from House Property and INR 81,317/- under head income from other sources. In his computation of income, the assessee had declared long term capital loss of INR 81,42,760/-. Therefore, the AO show caused the assessee to explain and furnish the requisite details to substantiate the basis of sale consideration of INR 1,09,00,000/- how it was arrived at. The explanation as offered by the assessee was not found acceptable by the Assessing Authority, on the basis that the assessee in its computation of income declared total sale consideration of his unit No. 03-012A in Digital Greens at Gurgaon as on 19.02.2018 at INR 1,33,86,030/-. The said property was booked in year 2007 and its payment was made on various dates starting from 2007-08 to the Assessment Year. Its final payment of INR 3,88,746/- was made on 23.02.2018 thus, the effective date of purchase of the property was taken as on 23.02.2018. Thus, the Assessing Officer made addition of INR 3,37,202/- on account of Short Term Capital Gain.

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