TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 689
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...., that she claimed exemption u/s. 54F of the Act for entire capital gain on the basis of investment in land acquired for CIDCO and expenses were construction of house on the said land, that she had shown investment of Rs. 1. 92 crores. Taxable LTCG was worked out as under :- Sale consideration Rs. 1, 89, 96, 590/- Less: Selling expenses Rs. 9, 04, 370/- Rs. 1, 80, 92, 220/- Less: Index cost of acquisition Rs. 99, 06, 368/- Rs. 81, 55, 852/- Exemption u/s. F Rs. 81, 85, 852/- Long Term Capital Gain Rs. Nil He further found that the office premises was originally owned by the mother of the assessee, that she had executed a will on 23. 8. 1985 which was registered on 6. 11. 1997 before the Bombay High Court and probate was obtained by the beneficiaries, that as per the Will a discretionary trust was to be created consisting of three persons namely Jayesh V. Bhagwati(JVB), Smita V. Bhagwati(SVB) and Paresh V. Bhagwati(PVB), that assessee alongwith her brothers acquired the right in the office premises on their mother's death, that PVB, also passed away in 18. 6. 2006, that JVB issued a no objection letter to the Co-op. Society and requested it to transfer o....
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....ccupation certificate stating that construction was not over. She held that the construction work remained incomplete or could not be completed within the stipulated time. Therefore, exemption claimed by assessee u/s. 54F, amounting to Rs. 1. 02 crores, was denied and the sum in question was added to her total income. 3. Aggrieved by order of AO, the assessee preferred an appeal before the First Appellate Authority(FAA). Before him, the assessee argued that AO had failed to appreciate that the method of computation of items of wealth as per Schedule -III of the Wealth tax Act were entirely different from the concept of FMV as prescribed by the Act, that the AO had disregarded all the decisions of the Tribunal filed before him in support of adoption of FMV as per Act rather than adopting the method of valuation of WT, that she had inherited the office premises from her mother, that FMV of the asset was to be taken in terms of section 55(2)(b)(ii)of the Act, that there was no justification for not taking the FMV of the asset as on 01. 04. 1981. 3. 1. After considering the submissions of the assessee and the assessment order, the FAA held that the assessee had claimed FMV of Rs. 17.....
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....contractor for the construction of the house, that the total payment made up to 31/03/2011, amounted to Rs. 31. 62 lakhs apart from the amount invested in the land. Finally, he directed the AO to allow the claim of the assessee in respect of the benefit of the exemption claim u/s. 54F of the Act. 4. During the course of hearing before us, the Departmental Representative (DR) argued that there was no difference between the act and the provisions of the Wealth tax act as far as the FMV was concerned, that AO did not have sufficient material to decide the FMV, that in the variation report sale instances were not given, that the valuation report was not proper, that the AO had rightly considered the Wealth tax value. The Authorised Representative(AR) contended that the AO did not find any fault with the valuation report, that provisions of the Wealth tax Act and Rule 1D of the WT Act could not be applied to determine the FMV. He relied upon the case of Madhu Tyagi. 4. 1. With regard to the second ground, the DR relied upon the order of the AO and the assessee supported the order of the FAA. 5. We have heard the rival submissions and perused the material. We find that the basic diffe....
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....I are totally different from the Fair Market Value. This is particularly true for flats and apartments rented out in large metropolitan cities (e. g. , Marine Drive, Mumbai). Thus, we hold that the "value" as per Wealth-tax Act is different from "Fair market value" under the Incometax Act. The Hon';ble Andhra Pradesh High Court, in the case of Smt. Indira Bai (supra) held that the value shown in the wealth-tax assessment would not constitute estoppel for the purpose of computing capital gains under the Income-tax Act. 53. Hyderabad Bench ';A'; of ITAT in its order dated 26-12-2002 in I. T. A. No. 19/Hyd. /2002 in the case of Smt. Vijaya Lakshmi V. Gadgil (supra) held in paragraph 28 of the order as follows : ". . . . the value returned for wealth-tax purposes is not, to our mind, conclusive of the matter mainly because that was a valuation made under a different statutory rule, even though the assessee had not indicated as to how exactly the value of Rs. 4 lakhs was arrived at and in terms of which statutory rule. At any rate, if there had been any under statement for wealth-tax purposes, that is a separate matter and it cannot be held as conclusive in the income-....
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....Appeal No. 1654 of 1988, dated 26- 3-1992], held that "When the rates in the Basic Value Register have been fixed on area-wise, without any scientific data, the values mentioned in the Basic Value Register cannot be treated as comparable values of market value at the relevant time". In this case, the value given by the Sub-Registrar is supported by registered sale documents. The letter dated 7-3-2000 bearing No. 493 is based on scientific data and thus that case does not come to the rescue of the Revenue. Simply rejecting a claim without a counter exercise does not give the desired result. Reference to Valuation Cell was a good option, which was not done. Thus, the only evidence that can be relied upon by this Bench is the instance of sale filed by the assessee by way of three sale deeds that had been executed at that time, in the adjoining areas, and the view of the Sub-Registrar, Chennai especially when we have held that the values under the Wealth-tax Act cannot be adopted for the purposes of arriving at the fair market value for the purpose of computing capital gain under the Income-tax Act. Only the aforesaid value can, therefore, be adopted as fair market value as on 1-4- 198....
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....). . . . . . . . admittedly the assessees had purchased the land by investing the capital gains and had constructed residential houses. Circular No. 667 dated October 18, 1993 ([1993] 204 ITR (St. ) 103), did not stipulate that the construction would have to be completed in order to have the benefit under section 54F of the Act. In order to get the benefit under section 54F of the Act, the assessee need not complete the construction of the house and occupy it ; it was enough if the assessee established the investment of the entire net con-sideration within the stipulated period. " Following the above, we are of the opinion that there is no need to disturb the order of FAA. Upholding his order, Ground No. 2 is dismissed. CO/11/Mum/2014: 6. The solitary Ground, raised in the CO, is about claim made during appellate proceedings about STCG. Before FAA, it was claimed that the STCG on sale of property ought to be exempted as a transaction between the blood relatives i. e. the assessee and her brother and therefore, it was exempt u/s. 56(2) of the Act, that the AO had erroneously taxed the sum of Rs. 33. 45 lakhs as STCG, that the decision of AO was against ratio of judgement of H....