TaxTMI 
TaxTMI 
2021 (8) TMI 925
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....house and investment made in the residential house, accordingly the Appellant is eligible for the exemption u/s 54 of the Act. Rs. 39,975,318 4. Without prejudice the addition is excessive arbitrary and excessive and ought to be reduced substantially. General 5. The learned CIT(A) erred in upholding the interest under sec 234B of the Act Interest 6. For these and such other grounds that may be urged at the time of hearing the Appellant prays that the appeal may be allowed. General 3. The revenue has raised the following grounds:- "1. CIT(A) has erred on law and facts in adopting the value of land as on 1.4.1981 at Rs. 250 per Sq ft without providing a single instance of comparable sale whereas the Assessing Officer had taken the value of Rs. 100 per sq ft after considering three comparable sale instances obtained from the sub-registrar as per the assessment order. 2. (i) CIT(A) has erred on law and facts in determining the value for the surrender of land to the developer by the assessee and the co-owner, for the development of a housing project, because he considered a part (11475 sq ft) of the corresponding built up area of 23,409....
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....ation index to arrive at the total cost for determination of proportionate capital gains. The assessee computed the capital gain as follows:- Computation of Long Term Capital Gain Sale consideration for 6 flats agreed to be sold with net super built up area of 11934 sq.ft. 13,30,00,000 Built up area of flats retained by owners. 11475 sq ft @ Rs. 2500/- per sq.ft. 2,86,87,500 Total consideration 16,16,87,500 50% for each owner 8,08,43,750 Less: Indexed Cost of Acquisition on proposition of land area disposed off: 1. 6872.19 sq.ft. land area @ Rs. 500 per sq.ft. as on 01.04.1981 3,51,85,612 2. 2500 sq.ft. proportionate built up area @ Rs. 200 per sq.ft. as on 01.04.1981 51,20,000 3. Proportionate Built up area of additions made in F.Y. 2007-08 = Rs. 10,00,000 x 1024/51 18,58,439 4. Total expenses & cost of acquisition & improvement 4,21,64,052 Long Term Capital Gain 3,86,79,698 Less: Deduction u/s. 54 (i) Investment in New House property 3,99,75,318 (ii) Capital gain account scheme 1,25,00,000 Long term capital loss 1,37,95,620 6. The AO has computed....
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....7,291,952 Exemption claimed by the assessee Investment in House Property O 39,975,318 Amount invest in capital gain account P 12,500,000 Total utilization Q = Q+P 52,475,318 Total Exemption allowed and restricted to LTCG as computed Q>N 37,291,952 Short Term Capital Gain on Sale of apartments (built up area): Gross sale value received from developer on 11,934 sq.ft built up area as accepted by Assessee, on sale of built up area treated as ST capital assets R 133,000,000 Value of land 4191.75 Sq.ft treated as LT asset I 32,695,650 Sale value of apartments with built up area 11,934 sq.ft considered for STCG S = R-I 1,00,304,350 Assessee's share T = S/2 50,152,175 Cost of apartment @ Rs. 2500 per sq.ft for 11934 adopted for LTCG U 29,835,000 Assessee's share V = U/2 14,917,500 Short term capital gain subject to tax W = T-V 35,234,675 7. The AO while concluding the assessment did not accept the capital gains as computed by the assessee. He estimated the value as on 1.4.81 at Rs. 100 per sq ft. However he did not accept the cost of improvement alleging that there was l....
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.... 29,835,000 50% Share 14,917,500 Short Term Capital Gain - Revenue's appeal 9. First we will take up revenue's appeal for consideration. The first ground of the revenue is that the CIT(Appeals) adopted the value of land as on 1.4.1981 at Rs. 250/sq.ft. as against Rs. 100/sq.ft. by the AO. 10. The contention of the ld. DR is that adopting value of land as on 1.4.1981 at Rs. 250 / sq.ft. by the CIT(A) without providing a single instance of comparable sale is inappropriate, instead of taking the AO's valuation made @ Rs. 100 / sq.ft. The AO had considered 3 comparable sale instances obtained from Sub-Registrar. 11. The ld. AR strongly relied on the order of CIT(Appeals) and submitted that the Sub-Registrar's guidance value as on date is Rs. 8,500 / sq.ft. and going by reverse indexation method, the value of the same property would be Rs. 781.25 / sq.ft. as on 1.4.1981. Being so, the value adopted by the CIT(Appeals) @ Rs. 250 / sq.ft. is very reasonable and same is to be upheld. 12. We have heard both the parties and perused the material on record. The AO in this case brought on record comparable instances obtained from Sub-R....
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....6,87,500 which is wrong. According to the ld. DR, the value of 11475 sq.ft. of constructed area to be valued in line with the valuation of 11934 sq.ft. of constructed area and he prayed accordingly. 16. The ld. AR submitted that the JDA has to be read along with supplementary agreement to JDA which suggests that the assessee has transferred 75.72% proportionate share of undivided interest in land as against the original transfer of 51.85% of undivided share in land and assessee will retain only 24.28% of proportionate share of undivided interest in land [11475 sq.ft. of constructed area]. Being so, the value of 11475 sq.ft. undivided share in land to be valued at the cost incurred by the Developer. The same was followed by the CIT(Appeals) and there is no error in the computation. 17. We have heard both the parties and perused the material on record. In this case, the undivided share in land between the landlord and developer as per first JDA dated 30.10.2014 was 51.85% and 48.15% respectively. This was revised vide supplementary agreement dated 19.8.2015 i.e., developer 75.72% and landlord 24.28% and the assessee also received extra consideration of Rs. 13.30 crores vide agr....
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....f the assessee is with regard to denial of exemption u/s. 54 of the Act. In this case, originally the AO granted deduction u/s. 54 at Rs. 3,99,75,318. However, this was withdrawn by the CIT(Appeals) by placing reliance on the provisions of section 54F and observed that the assessee could not have more than one residential house. The CIT(Appeals) observed as follows:- "5.4. From the plain reading of the provision of section 54F(1) of the Act it is amply clear that the appellant should not own more than one residential house, other than the new asset, on the date of transfer of the original asset. In the present case under consideration the appellant has got four individual flats which have separate municipal receipts, separate tenants, and they are situated on different floors. Though the words 'constructed a residential' house have been substituted as constructed one residential house in India by Finance(No.2) Act, 2014 w.e.f.01/04/2015, prior to this amendment since there was an ambiguity as to whether a means many or,a,4ingle house and invested in India or elsewhere. However, in the appellant's case the claim of deduction u/s 54 of the Act stating that the in....
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.... capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date [constructed, one residential house in India], then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as t....