TaxTMI 
TaxTMI 
2016 (4) TMI 1355
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....msical, 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 notice under section 142(1) along with questionnaire was issued o....
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....is 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/-. - The assessee accepted the value taken by the Stamp Duty Authority and never challenge the value of the property ....
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.... 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 the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-section (1), where- ....
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....on (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 this section, "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). From the conjoint reading of the above two provisions, it is abundantly clear like a day light that once the A....
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....r 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 appeal before ld. CIT (A). The ld. CIT (A) had considered the submissions made by the assessee. However, ld. CIT (A) was not impressed with the submission and, therefore, the ld. CIT (A) has sustained the order passed by the AO. The finding of the ld. CIT (A) are men....
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.... 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 appertinere, "to appertain". Appurtenance is a term for what belongs to and goes with something else, with the appurtenance being less significant than what it belongs to. In a legal context, an appurtenance could for instance refer to a back-yard that goes with the adjoining house. The idea being expressed is that the back-yard "belong....
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....ctioned 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 :- Asstt. CIT vs. Om Prakash Goyal (2012) 53 SOT 158 (Jpr.) CIT vs. Dr. R. Balaji (2014) 222 Taxman 305 (Karn.) CIT vs. Sambandam Udaykumar (2012) 345 ITR 389 (Karn.) ITO vs. Smt. B.S.Shantikumari (2014) 62 SOT 53 (Bang.)(Trib.) CIT vs. Ajit Singh Khajanchi (2007) 163 Taxman 426 (M.P) Sanjeev Lal vs. CIT (2014) 365 ITR 369 (SC) CIT vs.....
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....ne 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 property", other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. ....
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....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. 2) The agreement is also not registered under the Registration Act. The agreement provides that the sale of the land has been taken place as mentioned as under :- 3) The entire sale consideration of Rs. 1,15,00,000/- was paid in cash to Shri Khiv Singh. 4) The title document of Shri Khiv Singh being the owner are not brought on record. 5) The GPA was executed by Shri Naurat Singh brother of Shri Khiv Singh on 25.3.2013. 6) The sale deed executed on 29th March, 2013 stipulate....
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....e 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 purchased the new asset by virtue of registered sale deed on 29.03.2013 after getting the General Power of Attorney from the brother of the seller, namely, Shri Khiv Singh dated 25.3.2013, therefore, the new asset (agricultural land) was purchased by the assessee beyond the period of 2 years. Thus the benefit of section 54F cannot be acceded to the assessee. In view thereof, the ground of the assessee is required to be decided against the assessee and in favour of the revenue. Besides this, the assessee has also claimed that the pro....