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2020 (12) TMI 172 - AT - Income TaxCapital gain computation - application of provision of section 50C - adopting the valuation of land on the basis of valuation of District Valuation Officer (DVO) - assessee also made request for referring the matter to the valuation officer for arising on correct value of the land sold - AO made reference to the Valuation Officer for determining the fair value of the land sold by assessee - assessee submits that assessee was Co-owner of land having 50% share therein - HELD THAT - As perused the first and second proviso attached with section 50C of the Act and we do not find any distinction of registered or unregistered agreement fixing the amount of consideration. Therefore, the submission of Sr. DR has no force. CIT(A) affirmed the action of AO by taking view that the assessee himself asked to adopt the value of DVO. In our view the there is no estoppel against the law. Further, the revenue cannot the benefit of ignorance of assessee, if otherwise the assessee is entitled for the benefit of First and Second Proviso of section 50C. In view of the factual and legal discussion, we are of the view that Stamp Duty Valuation as on 21.02.2012 has to be considered for the purpose of section 50C of the Act. Since we have accepted the primary contention of the AR of the assessee, therefore, discussion on the area of land / plot will become academic. In the result, Ground No.1 of the assessee is allowed. Disallowance of deduction under section 54F - Lower Authorities rejected the claim of the assessee on the ground that assessee owned more than one residential house other than new residential house on the date of transfer of original asset - HELD THAT - In the present case, the assessee failed to substantiate by cogent evidences that Ashirwad Palace Flat is being used for commercial purpose. Similarly, in Sanjeev Puri Vs DCIT 2016 (8) TMI 907 - ITAT DELHI the assessee in the said case was using one of the properties for professional office. Thus, both the case laws relied by the AR is not helpful to assessee. In our view the assessee was having more than one residential property besides Muktanand Co.op Housing Society, when the capital gain invested for purchase of new residential property in Raj Abhishek City Homes. The assessee was having more than one residential property, when the capital gain was invested for purchase of another residential house, therefore discussion on status of other properties for the purpose of considering the claim of deduction u/s 54F of the Act have become academic. - Ground of assessee is dismissed.
Issues Involved:
1. Adoption of valuation date for land under Section 50C. 2. Defiance of natural justice principles regarding the valuation report. 3. Incorrect area of land considered for valuation. 4. Valuation rate higher than the jantri rate. 5. Ignoring objections against the valuation. 6. Disallowance of deduction under Section 54F. Detailed Analysis: Issue 1: Adoption of Valuation Date for Land under Section 50C The assessee contested the adoption of the valuation report by the District Valuation Officer (DVO) based on the date of the sale deed execution (16.06.2011) instead of the date of the agreement to sell (21.02.2011). The assessee argued that the sale consideration was determined and paid on the agreement date, and the jantri rate was significantly lower at that time. The Tribunal acknowledged that the First and Second Proviso to Section 50C, introduced by the Finance Act, 2016, should apply retrospectively. These provisions allow the consideration of the stamp duty value on the date of the agreement if part consideration is received by account payee cheque. The Tribunal ruled in favor of the assessee, stating that the stamp duty valuation as of 21.02.2011 should be considered. Issue 2: Defiance of Natural Justice Principles The assessee claimed that the valuation report was finalized without providing a draft copy for comments and objections, violating the principles of natural justice. However, this ground was not pressed by the assessee during the hearing, and thus, it was dismissed. Issue 3: Incorrect Area of Land Considered for Valuation The assessee argued that the valuation was based on an incorrect area of 7,500 sq. meters instead of the actual 5,423 sq. meters. This ground was also not pressed by the assessee during the hearing and was dismissed. Issue 4: Valuation Rate Higher than the Jantri Rate The assessee contended that the DVO's valuation rate was higher than the jantri rate prevalent on the sale deed execution date. This ground was not pressed by the assessee and was dismissed. Issue 5: Ignoring Objections Against the Valuation The assessee claimed that valid objections against the DVO's valuation were ignored. This ground was not pressed by the assessee and was dismissed. Issue 6: Disallowance of Deduction under Section 54F The assessee’s claim for deduction under Section 54F was disallowed on the grounds of owning more than one residential house. The assessee argued that certain properties were used for commercial purposes or were under construction. The Tribunal examined each property: - Ashirwad Palace Flat: Claimed to be used for commercial purposes, but no evidence was provided. The Tribunal did not accept this contention. - Avadh Lake City Property: Under construction during the relevant period, supported by photographs. - 43 Mahadev Nagar Society Flat: Jointly owned with the wife, argued to be considered in the wife’s name. - Muktananda Co-operative Housing Society Flat: Admitted as a residential property. - Raj Abhishek City Homes: The new residential property for which the exemption was claimed. The Tribunal concluded that the assessee owned more than one residential property, thus disallowing the Section 54F deduction. The Tribunal dismissed Ground No.6 of the assessee. Conclusion: The appeal was partly allowed. The Tribunal ruled in favor of the assessee on the valuation date issue under Section 50C but upheld the disallowance of the Section 54F deduction due to the ownership of multiple residential properties. The other grounds were dismissed as they were not pressed.
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