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2021 (6) TMI 421
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....e Tax (Appeals) XXVI , New Delhi dated 25th of September 2014 for assessment year 2010 - 11 raising following grounds of appeal:- i. on the facts and in the circumstances of the case, the appellate authority has erred in accepting the substituted fair market value of immovable property situated at 19, Kautilya Marg, New Delhi with Rs. 7,70,160/- as at 1 April 1981 instead of Rs. 7,710,000/- based on the valuation report by an approved valuer and relied upon by the appellant. ii. On the facts and in the circumstances of the case, the appellate authority has erred in not allowing assessee's claim u/s 54 of the act for Rs. 37,913,760/- in respect of investment in residential flat in Mumbai. 3. In ITA number 6726/Del/2014, the learned Asst Commissioner of Income Tax, Circle - 53 (1), New Delhi [ The Ld AO ] is also aggrieved with the order of the Commissioner of income tax (Appeals) -XXVI, New Delhi [ The LD CIT (A) ] dated 25 September 2014 for assessment year 2010 - 11 on following counts raising grounds as under:- 1) On the facts and circumstances of the case, the CIT (A) has erred in allowing the claim of Rs. 1 crore u/s 54EC of The Income Tax Act, 196....
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....ication itself. 7. The learned CIT DR vehemently opposed the admission of the additional ground of appeal stating that assessee should not have raised this ground of appeal at this stage when neither before the learned assessing officer or before the learned CIT - A, it has been raised. He further stated that it is not a legal ground and when there can be two views on a particular issue; such ground cannot be raised under the pretext of a legal ground. Therefore, according to him, it should not be admitted at all at this stage. 8. We have carefully considered the rival contention and perused the application of the assessee wherein now assessee has raised an additional ground of appeal challenging the reopening of the assessment. We find that the present assessment order for assessment year 2010 - 11 has emanated from the reopening of the assessment made by the learned assessing officer. When, reopening is challenged, nothing else is required to be seen except the reasons recorded by the learned assessing officer, application of mind and prima Facie view. Further, when reopening of the assessment is challenged, it goes to the root of the matter. Once, if reopening is quashed, ....
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....eated the cost of acquisition of assets being fair Market value as on 1 April 1981 and indexed cost of acquisition of Rs. 48,727,200 which based on the valuation report of the property as at 1/4/1981 at Rs. 7,710,000. Assessee further claimed indexation benefit with respect to the certain expenditure of Rs. 2,639,321 and of Rs. 211,260 of registration charges incurred in financial year 2006 - 07. 12. The assessee reduced there from investment in residential flat at Mumbai purchased in September 2007 out of the advance received amounting to Rs. 3,77,65,215/- . Assessee further made an investment in construction of a residential unit at 19 Kautilya Marg, New Delhi [As per agreement with the builder] and claimed deduction of Rs. 1.70 Crore. He claimed deduction of purchase of these two properties u/s 54 of the act. 13. Further assessee made investment of Rs. 50 Lakhs in Rural Electrification Corp capital gain bonds on 24th of February 2009, out of the advanced received in F Y 2008-09. He further invested Rs. 50 Lakhs in National Highway Authorities bonds on 9 December 2009 in F y 2009-10. Thus, he claimed deduction u/s 54 EC of the Act of Rs. 1 Crore being investments in b....
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....ion u/s 54 is allowable for only one property. In view of this, the assessee has claimed excess deduction u/s 54, which is liable to be withdrawn and taxed. In view of this, I have reason to believe that income as mentioned above has escaped assessment and accordingly proceedings u/s 147 of the income tax act, 1961 initiated. Notice u/s 148 of the income tax act, 1961 is being issued." 16. Reasons Recorded were attached with the notice u/s 148 of the act. Assessee submitted a letter dated 7 March 2012 stating that the return filed by the assessee on 26th of July 2010 may kindly be treated as return having been filed in compliance to notice u/s 148 of the act. The learned assessing officer noted from computation of the capital gain shown by the assessee. Further, the assessee on 11/10/2012 furnished the details of the whole transaction and the justification for claim of deduction u/s 54 and 54EC of the income tax act. 17. During reassessment proceedings, assessee submitted that the assessee entered into a collaboration agreement on 29th of April 2006 in financial year 2006 - 07, pertaining to assessment year 2007 - 08. Assessee entered into a collaboration agreement o....
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....d have been disclosed by the assessee in the return filed for assessment year 2007 - 08, and also the long-term capital gain arising on this conversion should have been shown in the return filed u/s 139 (1) of the act. He further stated that in the revised computation submitted by the assessee there are other issue of indexed cost of acquisition as well as the claim of deduction u/s 54 and Section 54EC of the Act. He also rejected the contention of the assessee that the capital gain should have been taxed in assessment year 2007 - 08. AO further stated that assessee himself is not sure in which year he would like to offer the taxability of the capital gain arising on the sale of the above property. However as the assessee has stated revised computation , for taxability of the above sum for assessment year 2007 - 08, he initiated the proceedings u/s 147 of the act for assessment year 2007 - 08 on protective basis considering that the transaction has arisen in financial year 2006 - 07 as the year in which the capital gain has actually resulted. 19. Ld AO noted that though the assessee has entered into collaboration agreement on 29th of April 2006 however, the assessee has claimed ....
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....entions of the assessee and adopted the market value of the land as on 1/4/1981 taking rate of Rs. 2000 per square meter of 1293.478 m² of land at Rs. 2,586,956 which was indexed to Rs. 1,63,49,561/-. For value of the construction, the learned assessing officer was of the view that the registered valuer has adopted the rate of Rs. 80 per square feet and such rate has been added after including the extra cost of superior work etc. He noted that the assessee has entered into collaboration agreement in April 2006, and construction of new property was completed by the end of March 2010, whereas the registered valuer has valued the property as on 19/7/2010, on which date the said construction was not in existence, since the same was demolished in 2006 - 07 for construction of new property, therefore, registered valuer has not even seen the old property on the date of valuation, which was not in existence then. He therefore took the construction cost at Rs. 770,162/- and determined the total indexed construction cost of Rs. 4,867,423/-. Therefore, according to learned AO, the total indexed cost of land and construction was only Rs. 2,46,88,211/- out of which 50% has been sold. Th....
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....quired out of capital gain accruing on sale of the residential property and therefore the claim of the assessee should be allowed for both the properties. The learned assessing officer held that the claim of the assessee u/s 54 of the act can be allowed only for 'a' residential house property and further the two properties are not adjacent to each other and are not a single dwelling unit, as one flat is situated at Mumbai and the another said residential house constructed by the assessee is situated in Delhi. He relied on the decision of the honourable Bombay High Court in 185 ITR 499 wherein it has been held that the exemptions allowable only against one of the house property. Therefore he rejected the claim of the exemption u/s 54 of the income tax act in respect of second property [ flat at Mumbai], however he allowed deduction u/s 54 with respect to the property constructed at 19 Kautilya Marg for Rs. 1,70,00,000/- . 25. With respect to the claim of deduction u/s 54EC of the act, the learned assessing officer noted that assessee has made investment of Rs. 50 lakhs each on 24th of February 2009 and on 9 December 2009, which were made out of the advance consideration receiv....
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....dential house property at Delhi, the learned CIT - A held that amendment to Section 54 of the act with effect from 1/4/2015 contending that appellant case is covered by this amendment and appellant's claim is justified with respect to both the properties, he held that the amendment is clarificatory in nature and does not help the case of the appellant. Therefore, he upheld disallowance of deduction of Rs. 37,193,760 u/s 54 of the act for Mumbai flat. 28. With respect to deduction u/s 54EC of the act, he held that spirit of Section 54EC would get defeated in case the interpretation as mentioned in the CBDT circular number 359 applicable for the Section 54D is not imported here for the Section 54EC as both the sections read similarly on this score. He noted that the assessee has demonstrated that investment of Rs. 50 lakhs each in REC capital gain bonds and National Highway authority capital gain bonds on 24/2/2009 and 9/12/2009 respectively have been made out of advance receipts. Therefore, he held that learned assessing officer is not justified in disallowing the claim of deduction of Rs. 1 crore u/s 54EC. Therefore, he deleted the above disallowance. Issue in Appeal 29. T....
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....ssing officer cannot be the reason to believe for reopening of the assessment. ii. With respect to the second reason, ld AR stated that assessee has claimed deduction of Rs. 3 77,60,218 with respect to the flat in Mumbai and further deduction of Rs. 1,70,00,000 with respect to the deduction of construction cost of property in Delhi. He submitted that the learned assessing officer has stated that it is allowable only for one property whereas such restriction has come with effect from 1/4/2015. He stated that assessing officer has given a deduction of Rs. 1.70 crores, however; he has not given a deduction of purchase of Mumbai Flat. He referred to the amendment with effect from 1/4/2015 stating that "a residential house" has now been amended as "one residential house". He therefore stated that prior to 1/4/2015, the assessee is eligible for deduction u/s 54 of the income tax act. He submitted that the issue is also covered in favour of the assessee by the decision of Honorable Karnataka High court Commissioner of Income-tax v. D. Ananda Basappa* [2009] 180 Taxman 4 (Karnataka)/[2009] 309 ITR 329 (Kar) [2009] 180 Taxman 4 (Karnataka) and G.Chinnadur....
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....t at all relevant when the returns are merely processed u/s 143 (1) of the act. He further referred to the additional ground raised by the assessee and stated that in the grounds of appeal the assessee has only stated that statutory precondition of having any tangible material has not been referred in the reasons of reopening. He submitted that therefore the claim of the assessee that reopening of the assessment is invalid should fail on this count only. 32. He further referred to the various decisions cited by the learned authorised representative and stated that all the decisions cited by the learned authorised representative are after recording of the reasons and at the time of recording of the reasons there were no decisions available in favour of the assessee and therefore there were no two opinions. 33. He therefore submitted that there is no fault in the reopened assessment. He therefore stated that the reopening of the assessment made by the learned assessing officer is proper. He specifically referred to the decision of the honourable Bombay High Court in case of Indian Hume Pipe Co. Ltd.[2011] 16 taxmann.com 190 (Bom.). He further relied upon the decision of the ....
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....ourt as in that case it was held that only the principle relating to the change of opinion is not applicable where there is no assessment u/s 143 (3) of the income tax act was not made. He therefore submitted that even otherwise assessee is not claiming that there is a change of opinion. However, assessee is strongly claiming that there is No "reason to believe" for reopening of the assessment in absence of tangible material. He further referred to the various decision of the honourable Delhi High Court to support his case on this issue of reopening. Arguments of assessee on Merits of Addition/disallowance 38. Coming back to the merits of the case the learned authorised representative referred to the ground number [1] of the appeal and stated that the issue is squarely covered in favour of the assessee by the decision of the coordinate bench in ITA number 2041/del/2016 for assessment year 2011 - 12 in case of Ved Kumari Subhash Chander dated 26th of August 2019 wherein also the dispute of taking the fair market value has once 1/4/1981 which was based on the valuation report obtained by the assessee from registered valuer was challenged by the learned assessing officer with re....
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....which is combined in any manner. He submitted that assessee has purchased one flat in Mumbai and constructed another property in Delhi how that can be considered as a one residential unit. He submitted that none these decisions cited by the learned authorised representative deals with this issue that a property situated into distant cities can be allowed as a deduction u/s 54 of the income tax act. Rejoinder by Assessee 42. In the rejoinder, the learned authorised representative with respect to the adoption of land rate submitted that land rates have been adopted by the learned assessing officer on the whims and fancies and is not supported by any material. He further referred to the several judicial precedents that the learned assessing officer should have referred the matter to the learned departmental valuation officer and he is not the person who can step into the shoes of the valuer. On the second issue that whether assessee is entitled for deduction u/s 54 of more than one house, he submitted that issue squarely covered in favour of the assessee. Analysis, Reasons and Decision 43. We have carefully considered the rival contentions and perused the orders of the lower ....
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....e, the assessee has filed his return of income for assessment year 2010 - 11 on 26th of July 2010. The notice u/s 148 of the act was issued on 1st March 2012 along with the reasons recorded. In the present case there is no assessment made u/s 143 (3) of the act. Therefore even in the cases where no assessment order is passed, and return is processed by intimation u/s 143 (1) of the act, , the only condition that is required to be satisfied is for issue of reopening notice is "reason to believe" that income chargeable to tax has escaped assessment. Therefore, it is required to be seen that whether there is reason to believe with the assessing officer for reopening of the present assessment by issue of notice u/s 147 of the income tax act or not. Such is also the mandate of the decision of the honourable Supreme Court in case of Asst Commissioner of income tax versus Rajesh Jhaveri stockbrokers private limited (2007) 291 ITR 500 (SC) and Deputy Commissioner Of Income Tax Versus Zuari EState Development And Investment Company Ltd (2015) 373 ITR 661 (SC). It can also not be a case that the assessing officer can reopen the assessment for whatever reason is preposterous. Further merel....
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.... Rs. 50 lakhs u/s 54EC of the act. At the time of recording of the reasons, to reopen an assessment, the learned assessing officer is required to form only prima Facie opinion about escapement of income. It is required to be understood that he is not making an assessment but taking a first baby step for making the assessment by forming a reasonable belief that whether the claim of the assessee should be tested in reassessment proceedings are not. It may happen that at the time of forming of reassessment, based on the explanation and judicial precedence available he may take a view that there is no escaped income, which is to be assessed. That is at assessment stage and not the stage of reopening of assessment. In view of this on this score, we do not find any infirmity in the action of the learned assessing officer that reason escapement of income by claiming deduction of Rs. 1 crore u/s 54EC of the act. 48. Similarly the second reasons recorded is with respect to whether the assessee is eligible for deduction u/s 54 of the income tax act with respect to "a house property" meaning thereby only one house property or more than one house property purchased by the assessee within th....
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....e Finance Act, 1999. It read thus: "143 (1) (a) Where a return has been made under Section 139, or in response to a notice under sub-Section (1) of Section 142 - (i) if any tax or interest is found due on the basis of such return, after adjustment of any tax deducted at source, any advance tax paid and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-Section (2), an intimation shall be sent to the Assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under Section 156 and all the provisions of this Act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the Assessee: Provided that in computing the tax or interest payable by, or refundable to, the Assessee, the following adjustments shall be made in the income or loss declared in the return, namely- (i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accou....
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....f Section 142 - (i) if any tax or interest is found due on the basis of such return, after adjustment of any tax deducted at source, any advance tax paid, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-Section (2), an intimation shall be sent to the Assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under Section 156 and all the provisions of this Act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the Assessee and an intimation to this effect shall be sent to the Assessee: Provided that except as otherwise provided in this sub-section, the acknowledgment of the return shall be deemed to be an intimation under this sub-section where either no sum if payable by the Assessee or no refund is due to him: Provided further that no intimation under this sub-section shall be sent after the expiry of two years from the end of the assessment year in which the income was first assessable." 23. Here again the word used is 'intimation'. The first p....
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....ext the expressions are used. Assessment is used as meaning sometimes 'the computation of income', sometimes 'the determination of the amount of tax payable' and sometimes 'the whole procedure laid down in the Act for imposing liability upon the tax payer'. In the scheme of things, as noted above, the intimation under Section 143 (1) (a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they stood at different points of time. Under Section 143 (1) (a) as it stood prior to 1st April 1989, the Assessing Officer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of passing of an assessment order has been dispensed with the instead an intimation is required to be sent. Various circulars sent by the Central Board of Direct Taxes spell out the intent of the Legislature, i.e., to minimize the Departmental work to scrutinize each and every return and to concentrate on selective scrutiny of returns. These aspects were highlighted by one of us (D.K. Jain, J.) in Apogee International Limited v. Union of India (1996) 220 ITR 24....
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....application in view of the conceptual difference between Section 143 (1) and Section 143 (3) of the Act. 24.6 The ratio of the decision in Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra) is that the sending of an intimation by the AO to an Assessee in terms of Section 143 (1) of the Act is not treated to be an 'assessment' made by the AO. After 1st April 1989 there was no need for AO to pass an assessment order if he had decided to accept the return and this was in line with the legislative intent of minimizing the departmental work of scrutinizing each and every return and instead concentrate on selective scrutiny of returns. Importantly it was pointed out that "there being no assessment under Section 143 (1) (a), the question of change of opinion, as contended, does not arise." 25. It appears that the above distinction drawn between the object of provision of Section 143 (1) and Section 143 (3) of the Act was overlooked in some of the decisions of the High Courts, including this Court. Decision in Orient Craft Ltd. 26.1 In Orient Craft Ltd. (supra), the question that arose for consideration was whether the reopening of the assessment mad....
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....t income has escaped assessment equally applied to an intimation under Section 143 (1) of the Act. In that context, the Court proceeded to hold that: "Section 147 makes no distinction between an order passed under Section 143 (3) and the intimation issued under Section 143 (1). Therefore, it is not permissible to adopt different standards while interpreting the word 'reason to believe' vis-a-vis Section 143 (1) and Section 143 (3)." 26.5 The Court in Orient Craft Ltd. (supra) proceeded to hold as under: "We are unable to appreciate what permits the Revenue to assume that somehow the same rigorous standards which are applicable in the interpretation of the expression when it is applied to the reopening of an assessment earlier made under Section 143 (3) cannot apply where only an intimation was issued earlier under Section 143 (1). It would in effect place an Assessee in whose case the return was processed under Section 143 (1) in a more vulnerable position than an Assessee in whose case there was a full-fledged scrutiny assessment made under Section 143 (3). Whether the return is put to scrutiny or is accepted without demur is not a matter which i....
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.... so, it is further open to the Assessee to challenge the reasons recorded under Section 148 (2) on the ground that they do not meet the standards set in the various judicial pronouncements." 26.7 The above lengthy discussion of the decision in Orient Craft Ltd. (supra) becomes necessary since it was a case where reopening of the assessment was stated to be done pursuant to the initial return being processed under Section 143 (1) of the Act and an intimation sent to the Assessee in acceptance of such return. Secondly, this was a decision where the earlier decision in Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra) was discussed at length and it was concluded that even for the purpose of reopening the assessment where the initial return had been accepted by sending an intimation to the Assessee under Section 143 (1) of the Act, the AO would, for the purposes of reopening the assessment under Section 147/148 of the Act still have to record reasons to believe that the income chargeable to tax has escaped assessment. Thirdly, the Court in Orient Craft Ltd. (supra) also discussed the entire case law as per the reason to believe including the decision in Kelvinator of Ind....
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....he same approach was adopted in the decision in CIT v. Atul Kumar Swami [2014] 362 ITR 693/52 taxmann.com 47 (Delhi) where again the initial return was accepted by sending to the Assessee an intimation under Section 143 (1) of the Act. This was for the AY 1999- 2000. On 9th January 2002 the return was sought to be reopened under Section 147 of the Act but the reasons for so doing did not refer to any tangible material which the AO had come across subsequent to the filing of the return. The Court this time relied on the decision in Kelvinator of India (supra) and held that a valid reopening of the assessment has to be based only on tangible material to justify the conclusion that there was escapement of income. There was no discussion of the decision in Orient Craft Ltd. (supra) which in turn discussed the decision in Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra). 30. In Tupperware India (P.) Ltd. (supra) the return of income was processed under Section 143 (1) of the Act at the returned amount. The return was for the AY 2003-04. It was sought to be urged that the AO had reasons to believe that the amount had escaped assessment after having examined the a....
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....s issued on 4th December 1996 under Section 143 read with Section 147 of the Act seeking to reopen the assessment for AY 1991-92. 32.4 The Bombay High Court allowed the writ petition challenging the reopening of the assessment and held that there was no transfer of any property in terms of Section 2 (47) of the Act. It was further held that "there was no material for the Assessing Officer to have reason to believe that the agreement to sell had been entered into in the assessment year 1990-91". 32.5 In the appeal by the Revenue, the Supreme Court reversed the decision of the Bombay High Court by relying on the decision in Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra). The Supreme Court found that the contention of the Revenue to the effect that there was no question of 'change of opinion' since the original return was accepted under Section 143 (1) of the Act, was not even addressed by the High Court. 32.6 To be fair to the Bombay High Court, the decision in Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra) was delivered more than four years after its decision and therefore, there was no occasion for the Bombay High Court to have followed that rulin....
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...." 34. Recently in Olwin Tiles (India) (P.) Ltd. v. Dy. CIT[2016] 66 taxmann.com 8/237 Taxman 342 (Guj.), the Gujarat High Court dealt with the case where the initial return was processed under Section 143 (1) of the Act, and later notice was issued under Section 148 of the Act seeking to reopen the assessment of the Assessee for the said AY 2011- 12. The Court took note of the decision Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra) and negatived the plea of the Assessee that "the Assessing Officer, when recording his reason to believe that income chargeable to tax has escaped assessment, could not have relied on the original assessment records and he must have some material outside or extraneous to the records to enable him to form such a belief. Being a case which was originally accepted under Section 143 (1) of the Act without scrutiny, the only requirement to be fulfilled for issuing notice for reopening was that the Assessing Officer must have reason to believe that income chargeable to tax had escaped assessment." The Court however did not refer to the decision of the Supreme Court in Zuari Estate Development & Investment Co. Ltd. (supra). Summary of the lega....
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....erial that provides the nexus or link to the formation of such belief. In a case where the initial return is processed under Section 143 (1) of the Act and an intimation is sent to the Assessee, the reopening of such assessment no doubt requires the AO to form reasons to believe that income has escaped assessment, but such reasons do not require any fresh tangible material . 35.7 In other words, where reopening is sought of an assessment in a situation where the initial return is processed under Section 143 (1) of the Act, the AO can form reasons to believe that income has escaped assessment by examining the very return and/or the documents accompanying the return. It is not necessary in such a case for the AO to come across some fresh tangible material to form 'reasons to believe' that income has escaped assessment. 35.8 In the assessment proceedings pursuant to such reopening, it will be open to the Assessee to contest the reopening on the ground that there was either no reason to believe or that the alleged reason to believe is not relevant for the formation of the belief that income chargeable to tax has escaped assessment. 35.9 The decisions ....
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.... premises and therefore he adopted the land rate at 11,127.75 per square meter as on 1/4/1981. Ld AO rejected the valuation by the authorised valuer for the reason that the base taken by the registered valuer is admittedly an auction rate of Vasant Vihar plot in 1985, which is after four years of the base year i.e. 1981. He was also of the view that the value of the property cannot be estimated based on Pin code numbers. He also took view that rate applied by the learned valuer has not been proved by any documentary evidence. He also held that there is no similarity between the properties sold as well as the comparable property rates taken of vasant Vihar property. He took that the notified rate of the land by LDO as on 31/3/1981 of Rs. 600 per square yard and with effect from 1/4/1981; the same was Rs. 2000 per square meter. Therefore, he considered the land rate at Rs. 2000 per square meter against Rs. 11,127.75 per square meter adopted by the valuer. On careful consideration of the various arguments raised by both the parties, we fully agree with the contention raised by the learned authorised representative that valuation is a technical matter and learned assessing officer cann....
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..... We take support from the order of ITAT Chandigarh Bench in the case of Barjidner Singh Bhatti vs. ITO in ITA No. 1101/CHD/2014 wherein vide order dated 15.7.2015, the Bench had ruled in favour of the assessee by holding that if the Assessing Officer was not satisfied with the report of the registered valuer, he should have made a reference to the DVO and in absence of such a reference, the Assessing Officer should not have made his own calculation for the purpose of computation of capital gains. Reliance is also placed on the order of the ITAT, Lucknow Bench in the case of Adarsh Kumar Agrawal vs. ACIT in ITA No. 66/LKW/2014 wherein vide order dated 23.03.2014, it was held that where the assessee had submitted the valuation report of the registered valuer and the matter was not referred by the Assessing Officer to the DVO, the Assessing Officer has to accept the report of the registered valuer regarding the fair market value of the land as claimed by the assessee. ITAT Cochin Bench in the case of Mrs. Susamma Paulose Vs JCIT reported in 79 TTJ 573 (Coch.) on identical facts held as under: ".....A registered valuer is competent to value properties as per the prov....
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....being based on sound factual basis and the phenomenal development in that area could not be rejected by the AO without assigning any specific reasons. 5.2 In the case of CWT Vs Raghunath Singh Thakur (304 ITR 268 HP) the Hon'ble High Court of Himachal Pradesh held that if the Assessing Officer does not agree with the report regarding the valuer relied upon by the assessee, rejection of such valuer's report without making reference to the valuation, order is invalid and the report of the registered valuer shall be accepted. 5.4 The Hon'ble Bombay High Court in the case of C.I.T. vs. Raman Kumar Suri reported in (2013) 255 CTR 107 had held that the valuation done by the registered valuer is with regard to a specific property and the same takes into account its various advantages and disadvantages, all of which would influence the valuation of property. The Hon'ble Bombay High Court went on to hold that the valuation done by an empanelled registered valuer of the Income Tax Department would certainly take precedence over other indicators. 5.5 Therefore, respectfully following the aforesaid juridical precedents, we have no option but to accept the assesse....
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....es not inspire any confidence. In view of this, the decision relied upon by the learned authorised representative vehemently, we also set-aside this issue back to the file of the learned assessing officer but with a direction to refer the matter to the departmental valuation Officer for determining fair market value of the property as on 1/4/1981 and thereafter the assessing officer, based on that report, compute the fair market value of the property for indexation purposes accordingly. Assessee must be afforded an opportunity of hearing and assessee may support valuation by further evidences. In view of this Ground no 1 of the appeal is allowed with above directions. Decision and analysis of Deduction u/s 54 of the Act for more than one residential House 54. Now we come to the second ground of appeal . Claim of the assessee is that it has purchased one house in form a flat at Mumbai and another house at New Delhi. Both are residential houses. Section 54 talks about ' a Residential house', which does not mean that only one house, is allowed as deduction. Assessee's contentions are supported by the decisions of various high court and draw strength from the amendment made in....
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....#39; is used in Section 54 makes it evident that it is not the intention of the legislature to convey the meaning that it refers to a single residential house. It was also held that an asset newly acquired after sale of original asset can also be buildings or lands appurtenant thereto, which also should be residential house, therefore, the letter 'a' in the context it is used should not be construed as meaning singular, but the expression should be read in consonance with other words viz., buildings and lands. Accordingly, the contention raised by the revenue was rejected. Similar view was taken by a bench of this court in Khoobchand M. Makhijasupra, B. Srinivassupra and in the case of Smt. Jyothi K Mehtasupra. The Madras High Court while dealing with Section 54 of the Act as it stood prior to amendment by Finance Act No. 2/2014 in the case of Tilokchand & Sons supra took the similar view and held that the word 'a' would normally mean one but in some circumstances it may include within its ambit and scope some plural numbers also. The Delhi High Court also took the similar view in case of Gita Duggal supra. 13. It is well settled in law that an Ame....
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.... precedent. This underlying principle is often termed the ratio decided, that is to say, the general reasons given for the decision or the general grounds on which it is based, detached or abstracted from the specific peculiarities of the particular case which gives rise to the decision. [Also see: 'State of Haryana v. Ranbir @ Rana', [2006] 5 SCC 167 & 'Girnar Traders v. State of Maharashtra', [2007] 7 SCC 555]. 15. This Court as well as Madras and Delhi High Court have interpreted the expression 'a residential house' and have held that the aforesaid expression includes plural. The ratio of the decisions rendered by coordinate bench of this court are binding on us and we respectively agree with the view taken by this court while interpreting the expression 'a residential house'. Therefore, the contention of the revenue that the assessee is not entitled to benefit of exemption under Section 54(1) of the Act in the facts of the case does not deserve acceptance. In view of preceding analysis, the substantial question of law framed by this court is answered in favor of the assessee and against the revenue. In the result, the o....
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....ction referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45 ; (b) if the cost of the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45. Provided that the investment made on or after the 1st day of April, 2007 in the long-term specified asset by an assessee during any financial year does not exceed fifty lakh rupees." 7. On a plain reading of the above said provision, we are of the view that Section 54E....
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....id sub-section (1) so as to provide that the investment made by an assessee in the long-term specified asset, from capital gains arising from transfer of one or more original assets, during the financial year in which the original asset or assets are transferred and in the subsequent financial year does not exceed fifty lakh rupees. This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent years. Memorandum: Explaining the provisions in the Finance (No.2) Bill, 2014: Capital gains exemption on investment in Specified Bonds. The existing provisions contained in sub-section (1) of section 54EC of the Act provide that where capital gain arises from the transfer of a long-term capital asset and the assessee has, at any time within a period of six months, invested the whole or any part of capital gains in the long-term specified asset, out of the whole of the capital gain, shall not be charged to tax. The proviso to the said sub-section provides that the investment made in the long-term specified asset during any financial year shall not exceed fifty lakh rupees. Ho....
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....ference by this Court. The substantial questions of law are answered against the Revenue and these appeals are dismissed. No costs." 59. Therefore, on issue of deduction u/s 54 EC of the income tax act we find that issue is squarely covered in favour of the assessee by the above decision. 60. Even otherwise the tax effect involved in the appeal of the ld AO is below Rs. 50,00,000/- , therefore also it is not maintainable. 61. In view of this appeal of the learned assessing officer in ITA No 6726/ Del/2014 for AY 2010-11 is dismissed. 62. In view of this appeal of the assessee for assessment year 2010 - 11 is partly allowed and appeal of the learned assessing officer for the same assessment year is dismissed. Assessment year 2007-08 63. ITA. Number 5767/Del/2015 for assessment year 2007 - 08 filed by the assessee is against the order of The Learned Commissioner Of Income Tax (Appeals) - 18, New Delhi dated 3 September 2015 wherein assessment was made by The Asst Commissioner Of Income Tax, Circle - 53 (1), New Delhi u/s 147 read with Section 148 of the act on 2nd of March 2015 determining the total income of the assessee at Rs. 155,760,013/- and assessee preferred ....
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.... - 08 that is in the year when no sum was received by the assessee/appellant and no right in the property authorization were transferred in assessment year 2007 - 08 and thus, the said addition is in disregard of the judgment of the effects court in case of Laxmipati Singhania versus CIT reported in 73 ITR 291 and therefore, unsustainable. 3.3) That in doing so, the learned Commissioner of income tax (appeals) has gone wrong in not allowing the benefit of indexation of correct cost of acquisition and improvement and also for exemptions claimed with respect to investments made out of the sale proceeds in assessment year 2010 - 11 and as such, the addition so made is misconceived and misplaced in law and should be deleted. 3.4) That the learned Commissioner of income tax (appeals) has further grossly erred in relying on the judgments totally in applicable to the facts of the case of the appellant company. 4) That the learned Commissioner of income tax (appeals) has grossly erred in sustaining the assessment without providing to the assessee, and proper and meaningful opportunity of being heard, thereby violating the principles of natural justice and thus su....