TaxTMI 
TaxTMI 
2023 (7) TMI 18
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..... 3. That on the facts and in the circumstances of the case the ld. CIT(A) erred in not considering the application for adjournment filed before him. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing. 5. The petitioner prayers for justice & relief." 3. During the course of hearing, the ld. AR of the assessee submitted that the penalty has been levied in respect of the deduction claimed u/s 54F of the Act was denied to the assessee and consequently thereto the income of long term capital gain was determined at Rs. 20,28,370/-. As the deduction was denied and the same was confirmed by the ld. CIT(A), the ld. AO levied penalty of Rs. 4,17,900/-. 3.1 The assessee preferred an appeal before the ld. CIT(A), Ajmer against the order of the levying the penalty. The said appeal of the assessee dismissed wherein the ld. CIT(A) has recorded following findings : "4.2 I have gone through the penalty order, statement of facts and grounds of appeal carefully. The penalty has been levied in respect of the addition of Rs. 20,28,370/- made by the AO under the head "Long Term Capital Gain". The appellant has not furnis....
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....rn on 31.03.2014 as per provisions of section 139(4) of the IT Act. It was also submitted that the intention of the assessee was to construct residential house and accordingly the assessee had made investment of Rs. 23,89,100/- whereas he has received actual sale consideration of Rs. 11,60,000/- on transfer of the property. However, the lower authorities denied the deduction under section 54F for the reason that the assessee has not deposited the sale consideration received on transfer of the property in capital gain account as per provisions of section 54F(4) of the Act. Therefore, in order to deal with the controversy in question, it is necessary to first of all deal with the provisions of section 54F of the Act which is reproduced below :- "54F. (1) Subject to the provisions of sub-s. (4), where, in the case of an assessee being an individual or an HUF, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (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....
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..... 48. Sec. 54F(1) says that capital gains is to be dealt with in accordance with the provisions of sub-ss. (a) and (b) of s. 54F(1)of the Act. In the instant case, the cost of new asset is not less than the net consideration thus the whole of the capital gains will not be charged even if the capital gains has been computed by adopting the value adopted by stamp registration authority. It is clearly mentioned in s. 54F(4) also that net consideration which is not appropriated towards the purchase of new asset then the same is to be taxed in case such net consideration not appropriated is not deposited in the capital gain account. It is not necessary that the new asset should be got registered before filing of the return. The requirement of law is that net consideration is required to be appropriated towards the purchase of the new asset. Thus deduction under s. 54F is clearly applicable. The Hon'ble ITAT, Chandigarh Bench in the case of Seema Sabharwal, ITA No. 272/Chd/2017 dated 05/02/2018 in which the Hon'ble Tribunal after considering decision of various High Courts including decision of Hon'ble Karnataka High Court on the identical facts has allowed the deduction u/....
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.... again not disputed by the Revenue. The consideration as determined under s. 50C based on the stamp duty authority valuation is not a consideration which has been received by or has accrued to the assessee. Rather, it is a value which has been deemed as full value of consideration for the limited purposes of determining the income chargeable as capital gains under s. 48. Therefore, the provisions of s. 54F(1)(a) are complied with by the assessee and he is eligible for deduction of the whole of the capital gains so computed under s. 45 r/w s. 48 and s. 50C. Therefore, the provisions of s. 50C(1) are not applicable to s. 54F for the purpose of determining the meaning of full value of consideration.-Gyanchand Batra vs. ITO (2010) 45 DTR (Jp)(Trib) 41 : (2010) 133 TTJ (Jp) 482, Prakash Karnawat vs. ITO (2012) 49 SOT 160 (Jp) and Nand Lal Sharma vs. ITO (2015) 122 DTR (Jp)(Trib) 404 : (2015) 172 TTJ (Jp) 412 followed; Gouli Mahadevappa vs. ITO & Anr. (2013) 259 CTR (Kar) 579: (2013) 88 DTR (Kar) 59 : (2013) 356 ITR 90 (Kar) distinguished." Thus in our view also the natural meaning of full value of consideration refers to consideration specified in the Sale Deed. In this regard, Hon'bl....
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....4F, 54G and 54H, are self-contained sections which also include the method of computation of the exemption. The manner in which the profits or gains arising out of the transfer of the capital asset are to be computed as mentioned in s. 48 which goes without saying that the charge is on the profits or gains so computed. While computing the profits or gains as per s. 48, the deeming provision embedded in s. 50C has to be given effect to. The charge is created on the enhanced profits or gains arrived at from the fiction of s. 50C. This aspect was justified by the Hon'ble Finance Minister in his Budget Speech that s. 50C will curb the menace of unaccounted income in the property transactions by presuming the sale consideration to be the value of the guideline value for registration in case it is stated lower than that value of registration. Thus when the assessee has invested entire actual sales consideration received by him in the purchase and construction of new house accordance with the provision of section 54F(1) thereafter the provision of section 50C has not been applicable in light of following judicial decisions. a] The Hon'ble ITAT Jaipur Bench in the case of Gyan ....