Sri. Chandrashekar Veerabhadraiah, Bengaluru Income Tax Officer, Circle- 6(2)(4), Bengaluru

This Income Tax Appellate Tribunal case involves an appeal by Shri Chandrashekar Veerabhadraiah against the Income Tax Officer. The core issues are the correct computation of long-term capital gains on a property sale, specifically whether the entire sale consideration should be treated as capital gain. The appellant argues that the indexed cost of acquisition, based on the property's fair market value on 01/04/1981, should be deducted. Additionally, the appeal challenges the rejection of an exemption claim under Section 54F of the Act, asserting that funds from the sale were used to construct a residential house, supported by evidence.

IN THE INCOME TAX APPELLATE TRIBUNAL
“B’’ BENCH: BANGALORE

BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND
SMT. BEENA PILLAI, JUDICIAL MEMBER
ITA No.2293/Bang/2019
Assessment Year: 2015-16

Shri. Chandrashekar Veerabhadraiah,
No.54, Ramachandrapura, Jalahalli
Post, Bangalore – 560 013.
PAN NO : AEBPV 1717 Q
APPELLANT 

Vs.

ITO,
Circle – 6[2][4],
Bangalore.
RESPONDENT

Appellant by : Shri. V. Srinivasan, Advocate
Respondent by : Shri. Priyadarshi Mishra, JCIT(DR)(ITAT)
Date of Hearing : 01.12.2020
Date of Pronouncement : 07.12.2020

O R D E R

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

This appeal is by the assessee directed against the Order of CIT(A) dated 11.07.2015. The assessee raised the following grounds:

1. The orders of the authorities below in so far as they areagainst the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. The learned CIT[A] is not justified in upholding the computationof long term capital gains at Rs. 1,73,90,462/- being the entire gross consideration received by the appellant on the sale of property withoutappreciating that the entire consideration cannot be treated as capitalgains under the facts and in the circumstances of the appellant's case.

2.1 The learned CIT[A] ought to have appreciated that theindexed cost of acquisition for the property sold by the appellantought to have been determined and allowed while computing capitalgains and in as much as the property sold by the appellant was heldbefore 01/04/1981, the fair market value of the property on01/04/1981 ought to have been adopted as the cost of acquisition andindexed cost thereon ought to have been allowed as a deduction underthe facts and in the circumstances of the appellant's case.

3. Without prejudice to the above, the learned CIT[A] is not justified in upholding the rejection of the exemption claimed by the appellant u/s.54F of the Act, under the facts and in the circumstances of the appellant's case.

3.1 The learned CIT[A] ought to have appreciated that theappellant had constructed a residential house from out of the saleproceeds and in support of the same, the appellant had producedevidence in the shape of a valuation report for cost ofconstruction, Municipal tax paid, BESCOM and water supplyconnection evidence to show the completion of construction andtherefore, the disallowance of exemption u/s. 54F of the Act was contrary to law and facts of the appellant's case.

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