Surendra Singh Vs ITO (ITAT Jabalpur)
The ITAT Jabalpur disposed of cross appeals filed by the assessee and the Revenue against the order of the Commissioner of Income-tax (Appeals) for Assessment Year 2015-16. The dispute concerned the assessment of long-term capital gains arising from the sale of two immovable properties, determination of fair market value (FMV), computation of sale consideration, the year of taxability of the capital gains, and eligibility for exemption under Section 54 of the Income-tax Act, 1961.
The assessee had declared nil long-term capital gains after claiming exemption under Section 54 of ₹2,59,54,878. During scrutiny, the Assessing Officer rejected both the assessee’s computation of the cost/indexed cost of acquisition and the sale consideration adopted for computing capital gains. Based on the District Valuation Officer’s (DVO) valuation, the Assessing Officer recomputed the long-term capital gain at ₹14,60,27,824 and restricted the Section 54 exemption to ₹60,78,000 relating to purchase of a flat, denying exemption claimed for construction of another house. The Commissioner (Appeals) partly allowed the appeal by averaging the competing valuations for cost of acquisition, adopting the actual sale consideration mentioned in the registered sale deeds instead of the DVO valuation, and sustaining denial of exemption relating to construction of the second house. Both parties appealed before the Tribunal.
