TaxTMI 
TaxTMI 
2020 (7) TMI 148
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....vement to the extent of Rs. 1,41.77.065/- oil facts and circumstances of the case. 4. The Revenue has erred in denying the Appellants claim of indexed cost of construction and improvement solely for the reason that the Appellant was not [it position to furnish primary records like bills/ vouchers, which pertained 10 to 12 years prior to the relevant assessment sear. Furthermore, the Appellant has established occurrence of unforeseen events i.e. floods based oil documentary evidences) which was completely beyond his control, in the sold industrial premise, that led to damage and destruction of accounting records and documents dating back several years. Claim for cost of improvements' for the property was based upon reliable records like earlier years' audited financial statements and tax records that were aailable at the auditor's premises which survived the floods. 5. The Revenue is not justified in denying the exemption under section 54G of the Act to the extent of Rs. 69,90,935/- on the facts and circumstances of the case. 6. The Revenue ought to have appreciated that the exemption provision under section 54G of the ct is a beneficial provis....
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.... sustainable, so long as the investment is made in accordance with clause (2) of section 54G. 13. The only requirement prescribed by the statute under clause (b) of subsection (I) of Section 54G w.r.t to acquisition of land is that it should be 'acquired for the purposes of his business in the said area' (i.e. other than urban area). The statute does not prescribe commencement of industrial production as a pre-condition for availing exemption under Sec 54G. Accordingly, the AO and CIT(A) both have misinterpreted the requirements for eligibility of exemption under Sec 54G which is liable to be set aside and relief shall be allowed to the Appellant. 14. Without prejudice to Appellant's actual claim for cost of improvements, on the presumption that the Appellant is entitled for exemption under Sec 54G, it is sufficient to demonstrate only a fraction of (less than one fifth) cost of improvements because exemption Linder Sec 54G, will have positive effect of offsetting any disallowance of cost of improvements upto the extent of investment made by the Appellant to acquire the new industrial land. 15. The Appellant craves before the Honourable Tribun....
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....tent of Rs. 1,41,77,065/- stating that he did not furnish any proof to substantiate cost of improvement on the sold property, Ld.AO also denied claim under section 54G to the extent of Rs. 69,90,935/- stating that, assessee had not used new land for industrial purpose. 3. Aggrieved by additions made by Ld.AO, assessee preferred appeal before Ld.CIT(A) 6. 3.1. Ld.CIT(A) held that, assessee sold only vacant plot of land with no construction thereon. He thus wholly denied benefit of allowance of cost of construction or improvements. Ld.CIT(A) also determined that there was no transfer of 'industrial undertaking', which entitles assessee to claim benefit of exemption under section 54G. He thus upheld the view of Ld.AO. and fully denied exemption claim by assessee under section 54G. 4. Aggrieved by order of Ld.CIT(A), assessee is in appeal before us now. 4.1. LdAR submitted that all grounds relates to denial of claim u/s.54G and denial of indexation of cost of improvement. 4.2. Grounds1-2 are general in nature. 4.3. Grounds 3,4,9-11 have been raised by assessee challenging denial of indexation to cost of acquisition and cost of improvement to the extent of Rs. 1,41....
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....q.ft of building with RCC roof, 1197 sq.ft buildings with AC sheet roof existed and valuation report by SPR Associates dated 06.12.2012 at page 16, mentions construction of 500sq.ft building with AC sheet was constructed during 2005-06. Ld.Sr,DR submitted that all these valuation reports placed in paper book has not been subjected to verification. He submitted that assessee has not been able to establish any kind of further construction/improvement being done worth Rs. 1,41,59,410/-, subsequent to the purchase of the land. He submitted that nothing is placed on record by way of any evidence to support the quantum of construction claimed by assessee. He this supported the observations made by authorities below. 4.4.1. In rejoinder, Ld.AR submitted that, due to heavy rains and flooding during 2013, May, records pertaining to his business were lost and assessee had to incur huge expenses towards cleaning of the mess caused due to calamity. He placed reliance on page 34 -37 of the same in support of hi contention, being claim made to Insurance company. 4.5. We have perused submissions advanced by both sides in light of records placed before us. Admittedly, we reject observatio....
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.... It has been submitted by Ld.AR that, both these reasoning by authorities below is not the requirement to be satisfied by assessee as per section 54G of the Act. Referring to section 54G (1) of the Act, Ld.AR submitted that full value of capital gains was invested within period of 3 years from the date of sale of original asset by assessee. It has been submitted that authorities below do not dispute that assessee purchased another industrial unit outside Bangalore urban limits for consideration of Rs. 1,70,00,000/-. Ld.AR in section 54G(1), emphasised on; "......transfer of capital asset being, machinery or plant or building or land or any rights in the building or land previously used for the purpose of business of industrial undertaking...... " 5.2. Ld.AR thus submitted that assessee has complied with the requirement of section 54G and therefore benefit cannot be denied. 5.3. Ld.Sr.DR placed reliance upon orders passed by authorities below. 5.4. We have perused submissions advanced by both sides in light of records placed before us. A reading of section 54G(1) makes it clear that assessee is given a window of 3 years after the date on which transfer has taken....