Question And Answer
Subject: LTCG deposit closure is questioned by the assessing officer why construction cost not included for registration
Answered by:
Tags: ,
Date: September 5, 2021
Query asked by

guidance value of an apartment which was booked with the builder during 2008, and took the possession in 2010. during the registration process, the builder registered under karnataka registration act the uds land portion cost ( based on guidance value) as per the agreement where as the construction cost of the apartment not included for registration purposes. it was practice generally followed by the builders for all the owners who so ever booked the property.

During the relevant F.Y 2015 – 16  the assessee has sold house property for a consideration of Rs.1.00  crores as per sale deed document.

The resale transaction value has been declared in the return of AY 2016-17 in the appropriate page and col.shown under the head income from capital gain in the return

The only reason for disallowing the above amounts proposed by A.O. is to the effect that the assessee failed to registered the construction agreement value for the newly builtup apartment building

Registration act differs from state to state.

In this case the apartment booked during construction time, it’s not like that we are land owners and entered JDA joint development agreement for construction of apartment.

In our case the assessing questioning the year of registration 2010, now why construction should not be registered in registration act which is different act to income tax act or any other laws

The registration act comes state levy and it’s not central act

Year 2010 is of retrospective periods where any new laws or regulations act amendments can not be applied for prior periods in 2015 year of resold thereafter assessment years investigating periods and the period until this litigation settled

Construction cost is the money spent out of money saved which was earned as income of salary which has been taxed in the previous years and taxes were paid on those salary income earnings returns filed etc and the income tax authorities cannot charge taxes on the expenses of construction cost incurred or paid out.

When income tax authorities to access the income and to access the expenditures incurred in any manner investment in property or business etc etc …

File Uploaded: Click here to Download
Answer given by

The issue raised in the query being factual , it may be difficult to answer the query. The assessee is right, the Assessing Officer cannot question why the construction is not included in the Registration document . If the assessee is able to demonstrate that the amount was spent on construction , the Assessing Officer cannot deny the exemption .

Disclaimer: This article is only for general information and is not intended to provide legal advice. Readers desiring legal advice should consult with an experienced professional to understand the current law and how it may apply to the facts of their case. Neither the author nor and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this article nor for any actions taken in reliance thereon. No part of this document should be distributed or copied (except for personal, non-commercial use) without express written permission of

Leave a Reply

Your email address will not be published. Required fields are marked *