2017 (1) TMI 1263 - AT - Income Tax

Capital gain computation - cost of acquisition of the asset sold as on 01.04.1981 - AO s action in referring valuation issue of the very capital asset in question as not sustainable u/s.55A - Held that - The very cost of acquisition of the capital asset in question as on 01.04.1981 has to be adopted in all co-owners cases instead of the particular appellant hereinabove. We can t adopt different cost of acquisition qua the very capital asset. We thus follow the same reasoning herein as well to delete the impugned long term gain addition. All these assessees accordingly succeed in their first common substantive ground. Seeking to claim Section 54F deduction - CIT(A) observes that since the latter two assessees have reinvested their sale consideration money / long term capital gains in the names of their mother and brother, they are not entitled to claim the said deduction on this score alone - Held that - We reiterate the Section 54F of the Act is in the nature of a deduction provision in a taxing statute to be liberally constitute. There is no such stipulation that the said re-investment of sale consideration/long term capital gains in question is to be made only in the names of vendor assessees. Both the parties are very fair in forming the bench that the hon ble jurisdictional high court has not adjudicated the impugned issue. We thus quote decisions of CIT vs. Kamal Wahal 2013 (1) TMI 401 - DELHI HIGH COURT and CIT vs. Ravinder Kumar Arora (2011 (9) TMI 343 - DELHI HIGH COURT) to conclude that the above deduction provision neither provides for purchase of new residential house either in the concerned assessee s own name or exclusively in his name. The latter two assessees deduction claim u/s.54F of the Act is accordingly held allowable. Their corresponding substantive ground stands accepted.

Summary

Issues:
1. Delay in filing appeals and condonation petitions.
2. Cost of acquisition of the asset sold as on 01.04.1981.
3. Claim of Section 54F deduction for reinvestment of sale consideration.

Issue 1: Delay in filing appeals and condonation petitions:
- The appeals filed by the assessees suffered from a delay in filing, with reasons cited for the delay.
- The assessees filed condonation petitions explaining the delay due to various circumstances.
- The Tribunal found the reasons provided by the assessees to be just and reasonable for condoning the delay.
- The appeals were taken up for hearing on merits after the delay was condoned.

Issue 2: Cost of acquisition of the asset sold as on 01.04.1981:
- The common issue in all three cases was the cost of acquisition of a plot of land sold by the assessees.
- The assessees adopted a specific cost of acquisition as per a Government Approved Valuer's report.
- The Assessing Officer, however, relied on a different valuation to determine the cost of acquisition, resulting in long term capital gain assessments.
- The CIT(A) confirmed the Assessing Officer's decision based on the valuation report.
- The Tribunal considered a similar case where the valuation issue was reversed by CIT(A)-V, Ahmedabad, based on the provisions of Section 55A of the Income Tax Act.
- The Tribunal, following legal precedents, held that the reference to the Departmental Valuation Officer was not valid as the value claimed by the assessee was higher than the fair market value.
- The Tribunal rejected the Assessing Officer's action and deleted the addition made based on the incorrect valuation, allowing the assessees' appeal on this ground.

Issue 3: Claim of Section 54F deduction for reinvestment of sale consideration:
- The latter two assessees sought a Section 54F deduction for reinvesting their sale consideration in the names of their mother and brother.
- The CIT(A) denied the deduction based on the reinvestment not being in the names of the vendor assessees.
- The Tribunal held that Section 54F allows for a liberal interpretation for deductions in taxing statutes.
- Referring to relevant court decisions, the Tribunal concluded that there is no requirement for reinvestment to be made only in the vendor assessees' names.
- The deduction claim under Section 54F was deemed allowable for the latter two assessees, and their substantive ground was accepted.
- All three assessees succeeded in their respective appeals, with the Tribunal ruling in their favor on the issues raised.

This detailed analysis of the judgment covers the delay in filing appeals, the cost of acquisition determination, and the eligibility for Section 54F deduction, providing a comprehensive overview of the Tribunal's findings and decisions.