Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2010 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (12) TMI 232 - AT - Income TaxCapital Gain - Regarding adoption of valuation of land as on 1.4.1981 for computation of capital gain - The DVO has submitted the valuation report dated 17.2.2006 wherein the land in question has been valued at 45 per sq. ft - Accordingly, the cost of acquisition of land as on 1.4.1981 was adopted by A.O. at ₹ 25,50,261 as against ₹ 63,29,520 estimated by the registered valuer of the assessee - It has been submitted that the provisions of section 55A(b) cannot be applied when the assessee has submitted the registered valuer s report - The provisions of section 55A manifest that for the purpose of computation of income from capital gain the AO has jurisdiction to take the expert opinion for ascertaining the FMV of the capital asset - Therefore, from the language of the section 55A and particularly sub-clause (ii) of clause (b) no such condition expressly or impliedly provided that no reference can be made if the claim of the assessee is supported by the valuation report of registered valuer - Once, an opinion has been expressed by the AO while referring the valuation to the DVO then the conditions provided u/s 55A(b)(ii) are satisfied - It would thus be seen that in India, as in England, where the test of admissibility of evidence lies in relevancy, unless there is an express or necessarily implied prohibition in the Constitution or other law evidence obtained as a result of illegal search or seizure is not liable to be shut out - The appeals must also fail and are dismissed with costs Regarding deduction u/s 54 - Certain decisions of the Tribunal relied on by the learned counsel for the assessee wherein exemption was allowed in respect of investments in two adjacent or continuous units converted into one residential house by having common passage/stair case, common kitchen, etc intended to be used as single house for the residential of the family - It is held that exemption under sections 54 and 54F of the Act would be allowable in respect of one residential house only - In the case in hand, the assessee-HUF purchased three flats - Special Bench was constituted in the case of Sushila M Jhaveri reported in (2007 -TMI - 59614 - ITAT BOMBAY) Held that allow the deduction only in respect of one flat as per the choice of the assessee Regarding the levy of interest u/s 234C - the assessee has not raised the issue of interest u/s 234C before the CIT(A) and accordingly, the CIT(A) has not decided the issue of charging of interest u/s 234C - In absence of any application or petition by the assessee for raising the issue, the same cannot be admitted as afresh at this stage - In the result, appeal of the revenue is partly allowed and cross-objection of the assessee is partly allowed for statistical purpose
Issues Involved:
1. Adoption of valuation of land as on 1.4.1981 for computation of capital gain. 2. Deduction under Section 54 of the Income Tax Act. 3. Addition of Rs. 28,11,820 in the hands of HUF instead of three individuals. 4. Levy of interest under Section 234C. Detailed Analysis: 1. Adoption of Valuation of Land as on 1.4.1981 for Computation of Capital Gain: The primary issue revolves around the valuation of land sold by the assessee in 2003. The assessee adopted the cost of acquisition based on a registered valuer's report, while the Assessing Officer (AO) referred the matter to the District Valuation Officer (DVO), who provided a lower valuation. The CIT(A) held that the AO had no jurisdiction to refer the matter to the DVO. The Tribunal noted that the AO has the jurisdiction under Section 55A(b)(ii) to refer the valuation to the DVO if he believes it is necessary to ascertain the fair market value (FMV). The Tribunal concluded that the AO's reference to the DVO was valid and that the valuation report of the DVO is a relevant and admissible piece of evidence. The issue was remanded back to the AO for re-examination, considering both the registered valuer's and DVO's reports. 2. Deduction under Section 54 of the Income Tax Act: The assessee claimed deduction under Section 54 for three flats received from the developer. The AO denied the deduction, stating that the flats were not acquired within the stipulated time frame. The CIT(A) allowed the deduction. The Tribunal observed that the assessee acquired the right to the flats at the time of the development agreement and paid the consideration by transferring the property to the developer. However, the Tribunal noted that exemption under Section 54 is allowable only for one residential house, following the Special Bench decision in Sushila M. Jhaveri. The Tribunal set aside the CIT(A)'s order and allowed the deduction for only one flat, as per the assessee's choice. 3. Addition of Rs. 28,11,820 in the Hands of HUF Instead of Three Individuals: The issue pertains to the compensation received by the assessee's family members for temporary accommodation provided by the developer during the construction period. The AO added this amount as income in the hands of the HUF. The CIT(A) confirmed this addition. The Tribunal upheld the lower authorities' decision, stating that the accommodation was provided to the family members as co-parceners of the HUF and not in their individual capacities. The compensation, therefore, was rightly added to the HUF's income. 4. Levy of Interest under Section 234C: The assessee contested the levy of interest under Section 234C, arguing that the possession of the property was handed over only on 27.03.2004, not at the time of the agreement in December 2003. The Tribunal noted that the issue was not raised before the CIT(A) and, therefore, does not emanate from the impugned order. Consequently, the Tribunal rejected this ground. Conclusion: The Tribunal partly allowed the revenue's appeal and partly allowed the assessee's cross-objection for statistical purposes, providing a detailed analysis and remanding certain issues back to the AO for re-examination.
|