The Tax Publishers2020 TaxPub(DT) 4673 (Bang-Trib)

INCOME TAX ACT, 1961

Section 50D

Where section 50D is applicable because the consideration to be received by the assessee is 50% of super built up area in the form of commercial complex, etc., to be constructed by the builder and stand of assessee deserved to be accepted as per which assessee had computed the long-term capital gain by adopting guidance value of the land at Rs.3,200 per sq. ft. transferred by the assessee to the builder.

Capital gains - Computation of - Assessee computed the capital gain by adopting guidence value -

It was the case of assessee that for computing long-term capital gain (LTCG) in respect of the sale of land given for joint development, Guidance value of the land @ Rs.3,200 per sq. ft. on the date of Joint Development Agreement should be adopted and the assessee has filed the return of income by declaring LTCG on this basis. However, AO obtained information under section 133(6) from the developers regarding cost of construction by the developer and as per Letter, developer intimated to AO that cost of Rs.1575 per sq. ft. was incurred by developer and AO computed the capital gain on this basis. Held: Section 50D is applicable because the consideration to be received by the assessee is 50% of super built-up area in the form of commercial complex, etc., to be constructed by builder and such cost of construction to be constructed in future cannot be determined in year of transfer and hence, under these facts, section 50D is applicable. Therefore, the stand of assessee deserved to be accepted as per which assessee had computed the long-term capital gain by adopting guidance value of land at Rs.3,200 per sq. ft. transferred by assessee to builder and stand of AO was not acceptable.

Relied:Asstt. CIT v. Shankar Vittal Motor Co. [TS-5405-ITAT-2016 (Bangalore), Asstt. CIT v. Sarojini M Kushe [TS-5660-ITAT-2016(Bangalore)] and G.S. Sathyanarayan Gupta v. ITO ITA No.1323/Bang/2016 dated 17-10-2016.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14



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