Tribunal partially favors appellant: Section 50C, 54 deductions upheld.

The Tribunal partly allowed the appeal, favoring the appellant on the grounds of deemed sale consideration under Section 50C, deduction under Section 54 for multiple residential units, deletion of addition under Section 69, and correction of the indexed cost of acquisition.

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Issues Involved:
1. Adjudication by CIT(A) on only two grounds.
2. Misinterpretation of Section 50C(2) by CIT(A).
3. Restriction of deduction under Section 54 to one residential unit.
4. Addition under Section 69 for unexplained investments.
5. Incorrect adoption of indexed cost of acquisition.

Issue-wise Detailed Analysis:

1. Adjudication by CIT(A) on only two grounds:
The appellant contended that the CIT(A) erred by adjudicating only two grounds instead of three, as raised by the appellant. This issue was noted but not separately adjudicated as it was intertwined with other grounds.

2. Misinterpretation of Section 50C(2) by CIT(A):
The appellant argued that CIT(A) misinterpreted Section 50C(2) by adopting the stamp duty value of Rs. 1,59,31,035 as deemed sale consideration without awaiting the District Valuation Officer (DVO) report, which valued the property at Rs. 1,48,10,000. The Tribunal admitted an additional ground challenging the adoption of deemed sales consideration under Section 50C, considering the difference between actual consideration and stamp duty value was less than 10%. The Tribunal referenced various coordinate bench decisions, concluding that the actual sale consideration should be taken for computing capital gains. Thus, this ground was allowed in favor of the appellant.

3. Restriction of deduction under Section 54 to one residential unit:
The appellant contested the restriction of deduction under Section 54 to Rs. 15,48,136 for one residential unit instead of the total investment in two adjoining units. The Tribunal agreed with the appellant, citing judicial precedents that allowed deduction for investment in multiple residential units if they are adjacent. The Tribunal referenced the decisions of the Hon'ble Delhi High Court in CIT Vs. Gita Duggal and other High Courts, concluding that the appellant is entitled to deduction under Section 54 for both units. Hence, this ground was allowed.

4. Addition under Section 69 for unexplained investments:
The appellant challenged the addition of Rs. 50,000 under Section 69 for unexplained investments, arguing that the amount was withdrawn from the bank and kept at home for medical emergencies. The Tribunal found that the appellant had withdrawn Rs. 1,60,000 from the bank, out of which Rs. 1,00,000 was used for property investment. In the absence of evidence to the contrary, the Tribunal held that the source of funds was adequately explained and directed the deletion of the Rs. 50,000 addition. This ground was allowed.

5. Incorrect adoption of indexed cost of acquisition:
The appellant argued that the Assessing Officer (AO) incorrectly adopted the indexed cost of acquisition as Rs. 69,21,021 instead of Rs. 69,91,206. The Tribunal found no reason provided by the AO for this discrepancy and directed the AO to consider the correct indexed cost of Rs. 69,91,206 for computing capital gains. Thus, this ground was allowed.

Conclusion:
The Tribunal partly allowed the appeal, favoring the appellant on the grounds of deemed sale consideration under Section 50C, deduction under Section 54 for multiple residential units, deletion of addition under Section 69, and correction of the indexed cost of acquisition. The order was pronounced in the open court on 11/08/2021.

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