The AO completed the reassessment proceedings and accepted the return filed by the assessee. The AO had examined the flat purchase agreement between the assessee and Mrs. Sangita Gupta (the original allottee of the flat by the builder)

 PCIT held that the A.O. had not verified the source of repayment of bank loan. The assessee explained that these aspects were duly enquired by the A.O. The assessee also pointed out that Mrs. Sangita Gupta had certificate from the builder that she had paid for the property, she being original allottee and the assessee, along with her wife, had purchased property from her by making payment of consideration through banking channels. The source of income of wife and repayment of loan were also duly explained. However, the PCIT rejected the contentions and set aside the assessment order and directed the A.O. to re-compute capital gains. On appeal  the Tribunal held that ‘cost of acquisition of the asset’ not only includes the sales consideration incorporated in sale deed or value of asset taken by registration authority for the purpose of stamp duty but also any amount paid to any intermediary under the preceding agreement to sell or any enforceable liability provided intermediary had a enforceable and transferable interest or an interest in the form of an encumbrance upon the asset and sale deed can be executed only on redemption of that interest. Therefore, The amount of consideration agreed in the agreement to sell between the original allottee and the assessee thus forms part of the cost of acquisition of asset.  The Tribunal held  that the order of the PCIT was not sustainable. (AY. 2012-13)