2010 (8) TMI 1023 - AT - Income Tax

Summary

Issues Involved:
1. Territorial jurisdiction of the Assessing Authority.
2. Sustenance of various disallowances and additions in computing long-term capital gains.
3. Cost of acquisition as on 01.04.1981.
4. Charge of interest u/s. 234A, 234B, and 234C of the Act.

Summary:

1. Territorial Jurisdiction of the Assessing Authority:
The assessee challenged the territorial jurisdiction, asserting that it lies with Range-3, Jodhpur, while the notice u/s. 143(2) was issued by Range-2, Jodhpur. The Assessing Officer rejected this objection, noting that the assessee filed the return with Range-2 and did not raise any jurisdictional objections within the prescribed period u/s. 124(3)(a). The Tribunal found no merit in the assessee's appeal, stating that the matter of jurisdiction u/s. 124 is not appealable before the Tribunal and the objection was raised beyond the stipulated time.

2. Sustenance of Various Disallowances and Additions in Computing Long-Term Capital Gains:
The assessee declared the sale of a residential house and claimed various deductions u/s. 54 and 54EC. The Assessing Officer accepted the deduction for the purchase of a new house but rejected the deduction for improvement costs and investment in REC Bonds, citing that the investment was made beyond the six-month period from the date of transfer. The Tribunal upheld the Assessing Officer's decision, referencing the date of execution of the sale deed as the date of transfer and confirming that the investment in REC Bonds was beyond the stipulated period.

3. Cost of Acquisition as on 01.04.1981:
The assessee took the cost of acquisition based on valuation reports from two approved valuers. The Assessing Officer, finding no basis for the land rates in the reports, calculated the market value based on a sale instance in the same locality. The Tribunal found that the Assessing Officer was not competent to comment on technical matters and should have referred to the Departmental Valuation Officer. The Tribunal directed the Assessing Officer to adopt the cost as per the second valuation report of the approved valuer and work out the indexed cost accordingly.

4. Charge of Interest u/s. 234A, 234B, and 234C of the Act:
The charge of interest being consequential in nature required no independent adjudication.

Conclusion:
The appeal by the assessee was allowed in part, with specific directions to adopt the cost of acquisition as per the second valuation report for computing the indexed cost. The other grounds raised by the assessee were rejected. The order was pronounced in the open court on 06.08.2010.