The Calcutta Bench of the ITAT in 79ITD192 ( 1992) held that the land is an independent and identifiable capital asset and it continues to remain as an identifiable capital asset even after construction of the building. In this case, the Bench approved the capital gains calculations separately for land and building after splitting up the sale consideration for the land and building.
The bench followed 236 ITR 51 (Madras) 201 ITR 442 (Rajasthan) and 335ITR60 ( Bombay) which decisions are followed till recently by the benches of the Tribunal in 109 taxmann.com 50 (2019). The Supreme Court is yet to stamp its seal on them.
The Gujarat High Court in 416 ITR 63 further held that no question of law arises in this subject