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2014 (12) TMI 603 - AT - Income TaxValidity of adoption of valuation report facts relating to the valuer not furnished any instance of sale to justify the estimation of the cost verified or not value and indexation of property as on 01/04/1981 to be taken or not - Held that - CIT(A) rightly held that the revised return has been filed within the limitation period and, therefore, is a valid return - AO has also not given any reason as to why the valuation adopted as on 01.4.1981 by the registered valuer is not acceptable the AO is rightly directed to take the value of the property as on 01.4.1981, which option has been exercised by the assessee, at the value taken by the registered valuer and to also take the indexation of the value of the property as on 01.4.1981, as determined in the registered valuer s report and to re-compute the capital gains on the property as well as appellant s share in the property as per the registered valuer s report Decided against revenue. Validity of assessment u/s 143(3) bar of limitation Held that - The original return of income became no-est - The period of limitation of issuance of notice has therefore to be calculated from the date of filing of the revised return of income - the CIT(A) has taken as if the original return was filed u/s.139(1) of the Act but the contention of the assessee is that the original return was filed u/s. 139(4) of the Act and such return cannot be revised u/s.139(5) of the Act assessee rightly relied upon CIT vs. Panorama Builders (P.) Ltd. 2005 (4) TMI 50 - GUJARAT High Court wherein it has been held that the section 292BB does not apply to issuance of notice, neither it cures the defect or enlarges statutory period where a mandatory notice under section 143(2) is required to be issued within limitation fixed under the Act - assessee contended that the return was filed u/s.139(4) of the Act as the same neither was furnished during the period prescribed u/s.139(1) nor was furnished in pursuance of the notice issued u/s.142(1) of the Act - It is also not coming out from the record whether any notice u/s.142(1) of the Act was issued in pursuance thereof the assessee furnished the return which was later on revised vide revised return dated 24/10/2008 thus, the matter is remitted back to the CIT(A) for fresh adjudication Decided in favour of assessee. Claim of investment made in residential house on 25/08/2006 u/s 54 Held that - CIT(A) has not given any finding with regard to the investment made in flat - For deciding the issue regarding entitlement for deduction u/s.54/54F of the Act, the CIT(A) has given finding only on the investment made in the REC bonds the matter is remitted back to the CIT(A). Disallowance of claim made u/s.54EC of the Act on the ground that the investment was made belatedly Held that - As decided in Commissioner of Income Tax, Central III Versus M/s. Cello Plast 2012 (8) TMI 527 - BOMBAY HIGH COURT a person is entitled to invest in the bonds upto the last available date - If that be so, it must follow that the extension ought to be granted at least for the period prior to the expiry of six months when the bonds were not available and upto the date on which they were ultimately made available - an assessee would be entitled to a reasonable extension which must then be decided, depending upon the facts of each case thus, the order of the CIT(A) is set aside and the matter is remitted back for adjudication Decided in favour of assessee.
Issues Involved:
1. Adoption of Valuation Report 2. Validity of Notice and Assessment Proceedings 3. Disallowance of Deduction under Sections 54 and 54EC 4. Charging of Interest under Sections 234A, 234B, and 234C Issue-Wise Detailed Analysis: 1. Adoption of Valuation Report: The Revenue contended that the CIT(A) erred in adopting the valuation report without verifying the valuer's justification and directed the AO to take the value and indexation of the property as on 01/04/1981. The Revenue argued that the AO was justified in using the stamp duty valuation due to discrepancies in the assessee's valuations. The assessee countered that the revised valuation was done by a Registered Valuer based on a site visit, making it more accurate. The Tribunal upheld the CIT(A)'s decision, finding no valid reason from the AO to reject the Registered Valuer's report, thus rejecting the Revenue's grounds. 2. Validity of Notice and Assessment Proceedings: The assessee challenged the validity of the assessment order, arguing it was barred by limitation due to the notice under section 143(2) being issued beyond the prescribed time. The CIT(A) dismissed this claim, considering the revised return filed within the limitation period. The Tribunal noted that the original return was filed under section 139(4) and could not be revised under section 139(5), citing the Rajasthan High Court's judgment in Vimalchand vs. CIT. The Tribunal restored this issue to the CIT(A) for re-examination, emphasizing the need to verify whether the original return was filed under section 139(4) and if any notice under section 142(1) was issued. 3. Disallowance of Deduction under Sections 54 and 54EC: The CIT(A) denied the assessee's claim for deduction under section 54EC, stating the investment in REC bonds was knowingly deferred beyond the six-month period. The Tribunal referenced the Bombay High Court's judgment in CIT vs. Cello Plast, which allowed for reasonable extensions when bonds were unavailable. The Tribunal directed the CIT(A) to reconsider the issue in light of this judgment. Regarding the deduction under sections 54/54F, the Tribunal noted the CIT(A) did not address the investment in a residential house and remanded this issue for fresh consideration. 4. Charging of Interest under Sections 234A, 234B, and 234C: The CIT(A) upheld the charging of interest under sections 234A, 234B, and 234C. The Tribunal did not provide an independent adjudication on this matter, noting it was consequential in nature. Conclusion: The Tribunal dismissed the Revenue's appeal and partly allowed the assessee's cross-objection for statistical purposes, remanding specific issues back to the CIT(A) for fresh consideration. The order was pronounced on 12th December 2014 at Ahmedabad.
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