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2018 (6) TMI 1651 - AT - Income TaxDetermining the LTCG as per the deeming provisions of Sec. 50C - as per assessee reserve price of the property was to be taken as that which was applicable on 27.08.2009 i.e the date on which the agreement to sell was executed - HELD THAT - As is discernible from the records, the requisite conditions envisaged in the provisos to Sec. 50C appears to have been satisfied by the assessee viz. (i). that, the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the property are not the same; and (ii). that, part of the sale consideration as claimed by the assessee was received by the assessee by way of account payee cheques, on and before the date of the agreement for transfer. However, at the same time, we also cannot remain oblivious of the fact that the agreement to sell , dated 27.08.2009 was never filed by the assessee in the course of the proceedings before the lower authorities, and was in fact furnished for the very first time before us. Matter requires to be restored to the file of the A.O, who shall remain at a liberty to verify the veracity of the agreement to sell , dated 27.08.2009, as well as the claim raised by the assessee on the basis of the same to bring its case within the realm of the provisos to Sec. 50C. In case, the A.O is satisfied with the genuineness of the agreement to sell , and the claim raised by the assessee on the basis of the same are found to be in order, then, he shall redetermine the LTCG in the hands of the assessee u/s 50C in terms of our aforesaid observations. Entitlement for claim of deduction under Sec. 54F in respect of an investment that was made by him towards purchase of a property, vide a registered agreement dated 10.07.2013 - HELD THAT - The said claim was never raised by the assessee before the lower authorities. The assessee in support of his aforesaid entitlement towards deduction under Sec.54F had placed on record the copy of the purchase deed , dated 10.07.2013. Admittedly, an A.O in the backdrop of the judgment of the Hon ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT 2006 (3) TMI 75 - SUPREME COURT is not vested with any powers to entertain a claim for deduction/relief raised by the assessee, except for those raised either in his original return of income or through a revised return. However, we are of the considered view that as observed by the Hon ble High Court of Bombay in the case of CIT Vs. Pruthvi Broker and Share Holders Ltd 2012 (7) TMI 158 - BOMBAY HIGH COURT no such restriction is placed on the appellate authorities for entertaining an additional claim of the assessee. Accordingly, we restore the matter to the file of the A.O, with a direction to him to consider the said claim of the assessee in the course of the set aside proceedings. Needless to say, the A.O shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee, who shall remain at a liberty to substantiate his aforesaid claim of deduction on the basis of supporting documentary evidence. Not allowing deduction of the cost of acquisition of the property while computing the LTCG on the sale of the property under consideration - HELD THAT - We find ourselves to be in agreement with the said contention. Admittedly, the assessee had failed to place on record the copy of the purchase deed which would had supported the cost of acquisition of the property under consideration. It is the claim of the assessee that the property under consideration was an ancestral property that was acquired by him alongwith the other four co-owners prior to 01.04.1981. Accordingly, the assessee has before us relied on a Valuation report of a government approved valuer, as per which the Fair Market Value of the property under consideration on 01.04.1981 u/s 55(2)(b)(ii) is stated to be ₹ 1,68,807/-. As the said valuation report , dated 18.02.2018 was not filed with the A.O in the course of the assessment proceedings, therefore, we restore the issue as regards determination of the cost of acquisition of the property to his file. The A.O shall in the course of the set aside proceedings remain at a liberty to verify the cost of acquisition of the property under consideration - Assessee shall be afforded a reasonable opportunity of being heard and therein substantiate his aforesaid claim in the course of the set aside proceedings. - Appeal of the assessee is allowed for statistical purposes
Issues Involved:
1. Treatment of ?2,67,740 as income from other sources instead of agricultural income. 2. Treatment of ?3,84,33,378 as gain on sale of ancestral agricultural land. 3. Consideration of agricultural land as a capital asset under Sec 2(14) of the Income Tax Act, 1961. 4. Calculation of capital gain on sale of agricultural/ND land in AY 2014-15 instead of AY 2010-11. 5. Non-referral of the matter to the Valuation Officer. 6. Consideration of market value as per Sec. 50C for AY 2014-15 instead of AY 2010-11. 7. Deduction under Sec 54 for purchase of residential house. Issue-wise Detailed Analysis: 1. Treatment of ?2,67,740 as Income from Other Sources: The assessee did not press this ground during the appeal, and hence, it was dismissed as not pressed. 2. Treatment of ?3,84,33,378 as Gain on Sale of Ancestral Agricultural Land: The AO treated the sale proceeds of ?3,84,33,378 from the sale of urban agricultural land as long-term capital gain (LTCG) under Sec. 50C, as the assessee failed to provide the purchase deed and claimed the land was ancestral. The CIT(A) upheld this decision, concluding the land was urban agricultural land and not rural agricultural land, thus making it a capital asset under Sec 2(14). 3. Consideration of Agricultural Land as Capital Asset: The CIT(A) confirmed the land was within a sub-urban district with a population of 93,32,481 according to the 2011 census, hence it was considered a capital asset under Sec 2(14). The assessee did not press this ground in the appeal, and it was dismissed as not pressed. 4. Calculation of Capital Gain in AY 2014-15 Instead of AY 2010-11: The assessee claimed the sale agreement was executed on 27.08.2009, and thus the capital gain should be calculated for AY 2010-11. The Tribunal noted the agreement to sell dated 27.08.2009 and the subsequent sale deed dated 28.06.2013. The Tribunal found merit in the assessee's claim that the reserve price for computing deemed capital gain under Sec. 50C should be based on the date of the agreement to sell. The matter was remanded to the AO to verify the agreement to sell and recompute the LTCG accordingly. 5. Non-referral to the Valuation Officer: The Tribunal did not find specific arguments on this issue but implied that the AO should consider the valuation as per the agreement to sell date if verified. 6. Consideration of Market Value as per Sec. 50C for AY 2014-15 Instead of AY 2010-11: The Tribunal agreed that the reserve price for the purpose of computing deemed capital gain under Sec. 50C should be based on the date of the agreement to sell, i.e., 27.08.2009, if the agreement is verified. The matter was remanded to the AO for verification and recomputation. 7. Deduction under Sec 54 for Purchase of Residential House: The assessee claimed deduction under Sec 54 for the purchase of a residential house. The Tribunal noted that this claim was not raised before the lower authorities. However, it directed the AO to consider this claim during the set-aside proceedings, allowing the assessee to substantiate the claim with supporting documents. Conclusion: The Tribunal allowed the appeal for statistical purposes, remanding the matter to the AO to verify the agreement to sell dated 27.08.2009, consider the appropriate valuation date for computing LTCG under Sec. 50C, and to consider the assessee's claim for deduction under Sec 54F. The AO was directed to provide a reasonable opportunity for the assessee to present supporting evidence.
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