TaxTMI 
TaxTMI 
2016 (4) TMI 1355
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....ion claimed by assessee u/s 54F is arbitrary, whimsical, capricious, perverse and against the law and facts of the case. The order of ld. CIT (A) in this regard deserves to be set aside and addition made by the ld AO by disallowing the deduction u/s 54F deserves to be deleted. 2. On the facts and in the circumstances of the case and in law the ld. CIT (A) erred in sustaining the addition of Rs. 2,24,863/- (Rs. 2,04,78,163/- minus Rs. 2,02,53,300/-) under section 50C of Income-tax Act, 1961 on the b asis of value adopted by the Valuation Officer at Rs. 2,04,78,163/- as against the declared value in registered sale deed Rs. 2,02,53,300/-." In the revenue's appeal following ground is raised :- "Whether on the facts and in the circumstances of the case and in law the ld. CIT (Appeals) has erred in restricting the addition to Rs. 2,24,863/- as against Rs. 1,07,89,217/- made by the AO u/s 50C of the Act." Ground No. 2 of the assessee & Ground No. 1 of the Revenue : 2. The assessee has filed the return of income on 31.03.2012 declaring total income of Rs. 87,61,900/-. The case was taken up for scrutiny assessment and notice was issued on 13.09.2012. However, a n....
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....sidential house. 5. Copy of registered sale deed is enclosed as per point No. 1 of this letter." The AO without awaiting for the Valuation Report of the Valuation Officer had passed the assessment order on 13.03.2014 and held that the assessee has under reported the sale consideration by Rs. 1,07,89,217/-. The reasons given for not awaiting and not considering the report of the valuation officer is mentioned in para 4.5 of the assessment order which is reproduced herein below for the sake of convenience :- "4.5. It is again important to mention here that even if the valuation officer valued the property below the value taken by the stamp duty authority, still in this particular case the value adopted by the valuation officer can not be taken for calculating the capital gain purpose on the following grounds :- - The property under consideration sold by the assessee were land for commercial shops. - There is no construction on the commercial land as per registered deed and it is just a bare land. - The stamp duty authority valued the commercial land property at Rs. 3,10,42,517/- where as the assessee taken the value at Rs. 2,02,53,300/-....
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....is issue under the head Capital Gains while the balance addition is directed to be deleted. The above grounds are allowed." 4. Now the revenue has challenged the order passed by ld. CIT (A) on the ground mentioned herein above and sought to contend that the order passed by the AO is required to be upheld. 4.1. Whereas the assessee has challenged the addition of Rs. 2,24,863/- on the ground that the capital gains as calculated by ld. CIT (A) was incorrect. 4.2. We have heard rival contentions of the parties and have gone through the record. Section 50C provides as under :- "Section 50C. Special provision for full value of consideration in certain cases : (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessed or assessable by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessed or assessable shall, for the purposes of section 48, be deemed to be ....
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....ection 69B or the value of any bullion, jewellery or other valuable article referred to in section 69A or section 69B is required to be made section 69B or fair market value of any property referred to in sub-section (2) of section 56 is required to be made, the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. (2) The Valuation Officer to whom a reference is made under sub-section (1) shall, for the purposes of dealing with such reference, have all the powers that he has under section 38A of the Wealth-tax Act, 1957 (27 of 1957). (3) On receipt of the report from the Valuation Officer, the Assessing Officer may, after giving the assessee an opportunity of being heard, take into account such report in making such assessment or reassessment : Provided that nothing contained in this section shall apply in respect of an assessment made on or before the 30th day of September, 2004, and where such assessment has become final and conclusive on or before that date, except in cases where a reassessment is required to be made in accordance with the provisions of section 153A. Explanation In t....
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....e has furnished the reply as under :- "- The total area of land purchased by the assessee was around 37000 sq. ft. (4090 sq. mtr) and the assessee had shown construction area of 1504 sq. ft only. - The bills submitted by the assessee for construction were not proper. They are just computer printout without any details of work done and all such bills were paid in cash only that too less than 20,000/- - The year under consideration is FY 2010-11 (AY 2011-12) and the last date for filing ROI was 31.07.2011 i.e. the assessee had to invest before this date for claiming deduction u/s 54F in FY 2010- 11. It is noticed that the assessee actually purchased this land via registered deed on date 28.3.13. Although the assessee claimed that the property was already purchased and acquired through kaccha soda/agreement vide dated 2.6.2011 (copy submitted) and thereafter the agreement was registered on 28.3.13." The AO was not satisfied with the reply furnished by the assessee and, therefore, the AO has disallowed the deduction and added back the amount of Rs. 83,54,434/- to the income of the assessee. 6. Feeling aggrieved by the order, the assessee has filed appea....
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....uld not be agricultural, the plan of the house should be approved by the Government Authorities or that, there should be a permanent water and electricity connection. It is also not necessary that the property should be registered or that construction of the house should be made on the entire land and no part of the land can be left vacant. 4.5.1. While the above contentions of the appellant are correct; these contentions do not flow from the facts of this case, as discussed below- 4.5.2. It has been held in the case of Narendra Mohan Uniyal (supra) that - "When the land is purchased and building is contructed thereon, it is not necessary that such construction should be on the entire plot of land, meaning thereby a part of the land which is appurtenant to the building and on which no construction is made, there is no denial of exemption on such investment." In other words, a residential house, within the meaning of section 54F can include a part of the land which is appurtenant to the building on which no construction is made. Here, it is essential to understand the meaning of the word - 'appurtenant'. The word ultimately derives from Latin appe....
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....is ground is dismissed." 7. Now the assessee is before us. 7.1. The ld. A/R for the assessee has reiterated that the authorities below have failed to appreciate that under section 54F there is no restriction to construct residential house on the agricultural land. It was further submitted that there is no requirement of getting the plan sanctioned from the local authority. Further, it was mentioned that there was no provision for getting the permanent electricity connection. Lastly it was contended that it is for the assessee to decide the size of accommodation required by him and the revenue is not right in its rights to command the assessee to construct the house in a particular manner. It was also submitted that after the sale of the land on 31.1.2011, the sale agreement of the agricultural land was entered on 9.6.2011 with Shri Khiv Singh and thereafter the sale deed was executed on 28th March, 2013 and the construction was raised as per the Valuation Report. The valuation report was submitted on 16.1.2014. On the basis of the above and on the basis of the following judgments, it was submitted that the benefit of sec. 54F is required to be given to the assessee :- ....
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....ouse, other than the new asset, on the date of transfer of the original asset ; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset ; or(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset ; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property". Explanation For the purposes of this section,- "net consideration", in relation to the transfer of a capital asset means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house ....
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....rom the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of subsection (1), exceeds, (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and(ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid." It is the admitted case that sale of unauthorized commercial land was effected on 31.1.2011 and the agreement to sale for purchase of agriculture land was executed between Shri Khiv Singh and the assessee on 2.6.2011 of the land bearing Khasra No. 1262 at village Muhana admeasuring 1.99 hector and 0.37 hector. On examination of the agreement dated 2.6.2011 and other documents, we noticed the following:- 1) The agreement is not properly stamped as per the Stamp Duty Act.....
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....ance or to defend possession under section 53A of TP Act. If they are entered before this day, they may be relied upon to apply for regularization of allotments/leases by Development Authorities. We make it clear that if the documents relating to 'SA/GPA/WILL transactions' has been accepted acted upon by DDA or other developmental authorities or by the Municipal or revenue authorities to effect mutation, they need not be disturbed, merely on account of this decision. In view thereof also the agreement dated 2.6.2011 cannot be relied upon by the assessee to claim the purchase of capital asset within the statutory time limit provided by section 54F. Moreover there is no independent document or evidence to support the transfer of capital asset in favour of the assessee on 2.6.2011 or thereafter but before the registration of the sale deed dated 29.3.2013. 7.4. Since we have already held that there is no transfer or purpose of the property in pursuant to the agreement dated 2.6.2011, therefore, the assessee in our view has not been able to prove that he has purchased new asset within the period of two years after the date of transfer of original asset. Since the assessee has purc....
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....,000 sq. ft. . The character of remaining property was continued to be the agricultural in nature. In view thereof ground no. 1 is dismissed. 8. In the result, appeals of revenue and Assessee are dismissed. Order pronounced in the open court on 27/04/2016. ============= Document 1 “यह कि हमें अपनी पारिवारिक आवशà¥à¤¯à¤•à¤¤à¤¾à¤“ं की पूरà¥à¤¤à¤¿ के लिये रूपयों की आवशà¥à¤¯à¤•à¤¤à¤¾ होने के कारण हमने गà¥à¤°à¤¾à¤® मà¥à¤¹à¤¾à¤¨à¤¾, पटवार हलà¥à¤•à¤¾ मà¥à¤¹à¤¾à¤¨à¤¾, तहसील सांगानेर जिला जयपà¥à¤° में कृषि à¤à¥‚मि à¤....