Venugopal Naidu Pushparaj Vs ITO (ITAT Bangalore)
Conclusion: Once assessee adopted the cost of these 7 flats received under JDA for the purpose of offering the capital gain, same to be considered as cost of construction from the sale consideration of flats received from the developer under the agreement.
Held: AO initiated re-assessment proceedings on the ground that capital gains chargeable to tax was escaped assessment in respect of the Land transferred in favour of M/s. Sai Gokul Builders in the scheme of JDA dtd: 28-01-2008. AO held that assessee had made a new claim on account of cost of construction of the 7 flats amounting to Rs. 86,10,000/- out of the total consideration of Rs. 1,20,67,000/-and the same was disallowed by AO on the ground that the cost of construction as claimed was not incurred by assessee, but it was incurred by the Builder. It was held that assessee had considered cost of these 7 flats as a consideration while computing the capital gain on entering into JDA. Once the assessee included the cost of these 7 flats as sale consideration while determining capital gain on entering into JDA, the corresponding benefit should be given on sale of these 7 flats. Now the issue was only with regard to the sale consideration adopted by assessee towards these 7 flats while offering the capital gain. AO could not overlook the computation of capital gain offered by assessee on entering into the JDA. Once assessee adopted the cost of these 7 flats for the purpose of offering the capital gain, same to be considered as cost of construction on sale of these 7 flats.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against order of the CIT(A) dated 30.6.2017. The assessee has raised the following grounds of appeal:
1. The impugned Appellate order dated 30-06-2017 passed by the Learned CIT(A), is opposed to law, facts and circumstances of the case.
2. The Ld. CIT(A) has erred in holding that the Appellant is not entitled for cost of construction of the 7 flats sold on the ground that the Appellant has not incurred any expenditure for construction of the flats without appreciating the fact that the Built-up area received was in lieu of the land transferred in favour of the Developer.
3. The Ld. CIT(A) has erred in holding that the land transferred in the Scheme of JDA to M!s. Sai Gokul Builders was liable for capital gains at the rate of Rs. 800!- per sq.ft as against Rs. 500!- per sq.ft as per the Guidance Value notified by Government of Karnataka.
4. The Appellant craves leave to add, alter, amend and delete any of the grounds at the time of hearing.
2. The facts of the case are that the Assessee had filed the original return of income for the Asst Year 2008-09 on 30-10-2008. declaring income of Rs. 55,81,323/- without claiming the cost of Construction of the 7 Flats sold. The return of income so filed was processed u/s. 143(1) of the act. dated 18-02-20 10. Subsequently, the AO initiated re-assessment proceedings by issue of a notice u/s. 148 of the Act. dated 11-02-2013 and called for the return of income. The Re-Assessment Proceedings were initiated on the ground that the Capital Gains chargeable to tax was escaped Assessment in respect of the Land transferred in favour of M/s. Sai Gokul Builders in the scheme of JDA dtd: 28-01-2008. In response to the said notice the Assessee has filed a return of income on 26-12- 2013 declaring income of Rs. 15.49.445/- as under:-
Comments are closed.