Computation of LTCG under the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL
“A” BENCH : BANGALORE

BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND
SHRI B. R. BASKARAN, ACCOUNTANT MEMBER

ITA No.1162/Bang/2019
Assessment Year : 2013-14

Shri. Pradeep Varma,
No.80/1, 1st Floor,
West Park Road, 18th Cross,
Malleshwaram,
Bengaluru – 560 055.
PAN : ADMPP 4606 N
APPELLANT 

Vs. 

The Assistant Commission of
 Income Tax,
Circle – 2(2)(1),
Bengaluru.
RESPONDENT

Assessee by : Shri. R. E. Balasubramanyam, CA
Revenue by : Shri. Kannan Narayanan, JCIT

Date of hearing : 23.06.2021
Date of Pronouncement : 30.06.2021

O R D E R

Per N. V. Vasudevan, Vice President

This is an appeal by the assessee against the order dated 25.03.2019 of CIT(A)-2, Bengaluru, relating to Assessment Year 2013-14.

2. The assessee is an individual. The assessee sold a property at Indiranagar, Bengaluru, for a sum of Rs.3.60 Crores. The Assessee claimed expenses in connection with transfer in the form of brokerage at a sum of Rs.8,08,560/-. The assessee also claimed deduction u/s.54 of the Act on the ground that the assessee invested in purchase of new residential property at Gurgaon. Since the assessee did not file any evidence with regard to purchase of new property, the AO did not allow the claim of the assessee for deduction under section 54 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The AO added a sum of Rs.3.60 Crores and also brokerage of Rs.8,08,560/- as capital gain. It is relevant to pointed out that assessment was concluded by the AO under section 144 of the Act (best judgment assessment), since the assessee did not participate in the proceedings.

3. Before CIT(A), the assessee claimed cost of acquisition as a deduction in computing long term capital gain. The CIT(A) called for a remand report from the AO. In the Assessment report, the AO submitted (i) with regard to deduction u/s.54 of the Act, no evidence was claimed and hence the same cannot be allowed; (ii) with regard to deduction on account of brokerage paid, the Assessee filed evidence in the form of receipt of the broker and the AO accepted the same and was of the view that the said deduction should be allowed. (iii) With regard to cost of acquisition of the property, the AO submitted that the assessee purchased the scheduled property via sale deed dated 10/07/2002 for Rs. 33,60,000/ but in the computation for the AY 2013-14 he had claimed cost of acquisition as follow and indexed it accordingly. 

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