TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 700
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....1981 of the asset sold, thereby ignoring the binding decision of the Hon'ble Bombay High Court in the case of CIT vs. Puja Prints (2014) 360 ITR 697 and other decisions which were brought to the notice of the Ld. CIT(A). 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to adopt the fair market value as on 01.04.1981 of the asset sold as determined by the DVO and there by ignoring the valuation report issued by the assessee by the registered valuer. 5. On the facts and circumstances of the case and in law, the order of the Ld. CIT(A) enhancing the assessment on account of rental income for alternate accommodation of Rs. 2,60,000/- is bad in law. 6. On the facts and circumstances of the case and in law, the Id. CIT(A) erred in enhancing the assessment holding that the rent received for alternate accommodation of Rs. 2,60,000/- is eligible to tax. 7. On the facts and circumstances of the case and in Law, the Learned CIT(A) erred in holding that the levy of interest u/s 234B and 234C are consequential in nature. 8. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the action of A.O. of initi....
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....revised the workings and immediately paid the differential tax of Rs. 39,68,885. Accordingly, in her letter dated 22.3.2013, she fairly informed the AO about the error. 5. However, on receipt of the copy of valuation report from the registered valuer, it was noticed that the FMV of the entire property, as on 1.4.1981, was Rs. 82,40,000/- and thus the original long term capital gains computation, wherein the cost of acquisition (FMV) for the assessee was taken at Rs. 41,20,000/- (Rs.82,40,000/- / 50% share of the assessee) and loss computed at Rs. 6,97,200/- was the correct computation. Hence, along with a copy of said valuation report, vide letter dated 25.3.2013, above fact was explained to the AO with a request that the revised computation filed along with the letter dated 22.3.2013 be ignored and pass assessment order appropriately and credit be granted for all taxes paid. All the above submissions were duly accepted by the AO and no further queries / clarifications were sought by the AO on this issue. 6. However, after considering the assessee's reply, the A.O. declined claim of deduction U/s 54/54F of the Act in respect of second flat as the assessee has purchased two units....
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....e understood in a sense that the building should be of a residential nature and the word 'a' should not be understood to indicate a singular number. Revenue's Special Leave Petition before the Hon'ble Apex Court against the judgment of B. Ananda Basappa (Supra) has been dismissed by the Supreme Court." 10. Further reliance was also placed by the ld AR of the assessee on the decision of Hon'ble Delhi High Court in the case of CIT Vs. Gita Duggal in ITA No. 1237/2011 and submitted that the decision relied by the Assessing Officer in the case of K.C. Kaushik vs. P.B. Rane, ITO (supra) were distinguishable on facts in so far as there was successive sales and purchases of residential flats. 11. After going through the various judicial pronouncements with regards to the assessee's eligibility for claim of exemption in respect of more than one units acquired by the assessee out of the capital gains, we found that for the purpose of claiming deduction u/s 54/54F, there is no such requirement that, two units constituting of one residential house property, should not have separate main doors or they should be adjoined together or there should be inside staircase between two units....
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....tial units as in the present case where the assessee has got five residential flats. We may also mention here that all the Authorities below have clearly understood that the agreement signed by the assessee with M/s. Mount Housing Infrastructure Ltd., is that the assessee will receive 43.75% of the built- up area after development, which is construed as one block, which may be one or more flats. In that view of the matter what was before the Assessing Officer is only equivalent of 56.25% of land transferred, equivalent to 43.75% of built up area received by the assessee. This built up area got translated into five flats. Hence, we are of the opinion that the transaction in this case was not with regard to the number of flats but with regard to the percentage of the built up area, vis-a-vis, the Undivided Share of Land." The circular issued by the Board clarifying the intent of the amendment effective AY 2015-16 reads as under: 20. Capital gains exemption in case of investment in a residential house property 20.1 The provisions contained in sub-section (1) of section 54 of the Income-tax Act, before its amendment by the Act, inter alia, provided that where capital gain arises....
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....u/s. 54/54F is available on purchase of more than one residential unit also and that it has accepted the interpretation of the courts in this regard. 14. The relevant assessment year under consideration is 2010-11 which is prior to the A.Y. 2015-16 wherein an amendment has been brought by the Finance Act, 2014. Accordingly, the Assessing Officer was not justified in declining the claim of exemption to the assessee in respect to two units of the house property allotted by the developer to the assessee. Accordingly, the Assessing Officer is directed to allow exemption in respect of both the units. We order accordingly. 15. In this appeal, the assessee is also aggrieved by the action of the ld. CIT(A) for referring the matter back to the DVO for determination of fair market value as on 01/4/1981. 16. We have heard the rival contentions and found that the Assessing Officer had accepted the valuation report of the registered valuer determining the Assessee's half share of FMV as on 1.4.1981 at Rs. 41,20,000 (and the indexed cost of acquisition at Rs. 2,59,97,200), which was submitted by the Assessee during the course of assessment and hence the issue regarding the determination of t....
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....value; not in the case when in his opinion value claimed by assessee is higher than actual fair market value?, we observe that the erstwhile section 55A which is applicable for the year under consideration empowers the AO to refer valuation of property to the DVO only in case when AO is of opinion that the fair market value as claimed by the assessee in accordance with the registered valuer is less than its actual fair market value. In other words, prior to the amendment made vide Finance Act 2012, AO can refer the valuation only when in his opinion the value as claimed by the assessee is less than fair market value, not in the case when in his opinion value claimed by assessee is higher than actual fair market value. Relevant extract of section 55A as applicable for Assessment Year 2010-11 as under: 55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer- (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion that the value s....
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.... is not acceptable. This is for the reason that Section 55A(b)of the Act very clearly states that it would apply in any other case i.e. a case not covered by Section 55A(a) of the Act. In this case, it is an undisputable position that the issue is covered by Section 55A(a) of the Act. Therefore, resort cannot be had to the residuary clause provided in Section 55A(b)(ii) of the Act. In view of the above, the CBDT Circular dated 25 November 1972 can have no application in the face of the clear position in law. This is so as the understanding of the statutory provisions by the revenue as found in Circular issued by the CBDT is not binding upon the assessee and it is open to an assessee to contend to the contrary." 20. Thus, we found that the above decision of the Hon'ble Jurisdictional High Court is squarely applied to the assessee's case. Respectfully following the decision of the Hon'ble Jurisdictional High Court which is binding on us, we hold that the assessee's case is covered by Section 55A(b)(ii) is bad in law, especially when this aspect was also dealt with in the above decision. 21. We further observe that the above position was reiterated by the Hon'ble court, in Rallis In....