9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 1355 - AT - Income TaxCapital gain computation - addition u/s 50C - AO denying the benefit of Valuation Report to the assessee - AO without awaiting for the Valuation Report of the Valuation Officer had passed the assessment order on 13.03.2014 and held that the assessee has under reported the sale consideration - HELD THAT - The reference was made by the AO to the Valuation Officer on 22.1.2014. Therefore, the Valuation Officer has 6 months time as per section 142A(6) to submit the report to the Assessing Officer. However, despite that the AO insisted for submission of the report by 10th March 2014 and in fact, the report was received in the Office of the AO on 13th March, 2014. The AO, in our view, was duty bound to wait for the report of the Valuation Officer as per the mandate referred herein above and thereafter he is statutorily bound to grant opportunity of being heard to the assessee and consider the report of the Valuation Officer. In our view, the AO has brazenly violated the provisions of law and has committed serious error in denying the benefit of Valuation Report to the assessee. In view thereof, we have no option but to uphold the finding of the ld. CIT (A). In view of the above, the appeal of the revenue is required to be dismissed and is accordingly dismissed. Since we are upholding the valuation made by the Valuation Officer as well as the order passed by ld. CIT (A), therefore, the ground no. 2 of the assessee is also dismissed. Deduction u/s 54F - proof of purchase of new asset within the period of two years after the date of transfer of original asset - HELD THAT - It is the admitted case that sale of unauthorized commercial land was effected on 31.1.2011 and the agreement to sale for purchase of agriculture land was executed between Shri Khiv Singh and the assessee on 2.6.2011 of the land bearing Khasra No. 1262 at village Muhana admeasuring 1.99 hector and 0.37 hector. If Shri Khiv Singh and Shri Naurat Singh were the owners of the property, how the agreement can be executed solely by Shri Khiv Singh and how the entire sale consideration was received by Shri Khiv Singh on 2.6.2011 in the absence of any registered power of attorney in his favour executed by Shri Naurat Singh , prior to the agreement . Moreover, the agreement dated 2.6.2011 cannot be relied upon for any purpose in view of the provisions of section 17 read with section 19 of the Registration Act and Stamp Duty Act. The agreement dated 2.6.2011 cannot be relied upon by the assessee to claim the purchase of capital asset within the statutory time limit provided by section 54F. Moreover there is no independent document or evidence to support the transfer of capital asset in favour of the assessee on 2.6.2011 or thereafter but before the registration of the sale deed dated 29.3.2013. Since we have already held that there is no transfer or purpose of the property in pursuant to the agreement dated 2.6.2011, therefore, the assessee in our view has not been able to prove that he has purchased new asset within the period of two years after the date of transfer of original asset. Since the assessee has purchased the new asset by virtue of registered sale deed on 29.03.2013 after getting the General Power of Attorney from the brother of the seller, namely, Shri Khiv Singh dated 25.3.2013, therefore, the new asset (agricultural land) was purchased by the assessee beyond the period of 2 years. Thus the benefit of section 54F cannot be acceded to the assessee. In view thereof, the ground of the assessee is required to be decided against the assessee Moreover, if we look into the size of the agricultural land purchased by the assessee vide registered sale deed dated 29.3.2013, we find that the total size of the plot is 37,000 sq. ft. whereas the constructed portion of the entire complex was only 1553.50 sq. ft. (tin shed). Therefore, also the assessee cannot be given the benefit of section 54F within the meaning of law as the property purchased by him was an agricultural land and the house was constructed only of 1553.50 sq. ft. against the total size of land admeasuring 37,000 sq. ft. . The character of remaining property was continued to be the agricultural in nature. In view thereof ground no. 1 is dismissed.
Issues Involved:
1. Disallowance of deduction claimed under Section 54F of the Income Tax Act. 2. Addition under Section 50C of the Income Tax Act based on the value adopted by the Valuation Officer. Issue-wise Detailed Analysis: 1. Disallowance of Deduction Claimed Under Section 54F: The assessee claimed a deduction of ?83,54,434 under Section 54F of the Income Tax Act, asserting that the investment in a "new asset" was a residential house. The Assessing Officer (AO) disallowed this deduction, arguing that the land purchased was agricultural and not residential, the construction lacked necessary government approvals, and the bills for construction were improper and paid in cash. The AO also noted that the land was registered in the assessee's name beyond the statutory period specified under Section 54F(4). The Commissioner of Income Tax (Appeals) [CIT (A)] sustained the AO's decision, emphasizing that the constructed structure (a tin shed and a guard room) occupied only 4.2% of the total plot area, suggesting that the land was not appurtenant to the constructed structure but vice versa. The CIT (A) also highlighted that no prudent person would construct a residential house made of a tin shed for ?1.15 crore and noted that the structure was being used to tie animals, not as a residential house. The Tribunal upheld the CIT (A)'s findings, noting that the agreement to purchase the land was not properly stamped or registered, and the entire sale consideration was paid in cash without proper documentation. The Tribunal concluded that the assessee failed to prove the purchase of a new asset within the statutory period, and thus, the benefit of Section 54F could not be granted. 2. Addition Under Section 50C Based on Valuation Officer's Value: The assessee sold unauthorized commercial land for ?2,02,53,300, while the stamp valuation authority valued it at ?3,10,42,517. The AO, without waiting for the Valuation Officer's report, adopted the higher value and added ?1,07,89,217 to the assessee's income. The CIT (A) reduced this addition to ?2,24,863 based on the Valuation Officer's report, which valued the property at ?2,04,78,163. The Tribunal upheld the CIT (A)'s decision, emphasizing that the AO was duty-bound to consider the Valuation Officer's report, which was received on the same day the assessment order was passed. The Tribunal noted that the AO violated the provisions of law by not awaiting the Valuation Officer's report and not providing the assessee an opportunity to be heard. Consequently, the Tribunal dismissed the revenue's appeal and upheld the valuation made by the Valuation Officer. Conclusion: The Tribunal dismissed both the assessee's and the revenue's appeals, upholding the CIT (A)'s decisions on both issues. The Tribunal concluded that the assessee was not eligible for the deduction under Section 54F and that the addition under Section 50C should be based on the Valuation Officer's report. The order was pronounced in the open court on 27/04/2016.
|
