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2021 (4) TMI 99 - AT - Income TaxCapital gain computation - Maintainability of revenue appeal - valuation to DVO for determining the value of property - computing long term capital gain u/s 50C - appeal by Revenue is against the findings of CIT(A) in directing the AO to consider fair market value of the property as determined by the DVO on the date of agreement of sale - HELD THAT - We find that the tax effect involved in the present appeal by the Revenue is less than the monetary limit specified by CBDT Circular No. 17 of 2019 dated 03.03.2019 for filing of appeals before the Tribunal. Therefore, without adverting to the merits of issue raised in appeal, this appeal by the Revenue is dismissed on account of low tax effect. Not allowing the deduction of cost of improvement - The contention of the assessee before CIT(A) was that Municipal Corporation of greater Mumbai has constructed a Nalla Wall on the land of the assessee and had raised a bill of ₹ 46,12,155/- in February, 2002. The assessee instead of making payment of ₹ 46 lacs to the BMC transferred the said liability with interest to the purchaser and the credit for the said amount was given to the purchaser. Thus, the assessee claimed the benefit of indexed cost of improvement for construction of Nalla Wall on the plot of the assessee - CIT(A) has rejected the contention of the assessee by observing that the assessee has not brought on record any document to show that this cost was paid by the assessee. The benefit of indexed cost of improvement can only be claimed where the cost has been actually incurred by the assessee till the date of sale. We concur with the findings of the CIT(A). Accordingly, we uphold the same. The ground raised by the assessee is without any merit, hence, dismissed.
Issues:
1. Service of notice through email deemed valid under Sec 282(1)(c) read with rule 127 of IT Rules. 2. Determination of fair market value for computing long term capital gain. 3. Disallowance of cost of improvement claimed by the assessee. Issue 1: The judgment deals with the validity of serving notice through email under Sec 282(1)(c) read with rule 127 of the IT Rules. The appellant failed to receive notices sent via Registered Post, but the notice sent through email was successfully delivered to the provided email ID. The tribunal deemed the notice served through email as valid due to the appellant's failure to update their address. It was noted that despite the notice being served, the appellant did not appear, indicating a lack of interest in prosecuting the appeal. Issue 2: Regarding the determination of fair market value for computing long term capital gain, the AO initially used the value assessed by the Stamp Valuation Authority. The appellant contended that the value should be determined as of the date of the sale agreement, not the date of conveyance. The CIT(A) directed the AO to refer the valuation to the DVO for determining the property value as of the sale agreement date. The tribunal dismissed the Revenue's appeal due to low tax effect, without delving into the merits of the issue. Issue 3: The third issue pertains to the disallowance of the cost of improvement claimed by the assessee. The appellant claimed &8377; 46 lakhs as the cost of improvement for a Nalla Wall constructed by the Municipal Corporation. However, the CIT(A) rejected this claim as the appellant failed to provide evidence of payment. The tribunal concurred with the CIT(A)'s findings, stating that indexed cost of improvement can only be claimed if the cost was actually incurred by the assessee. Consequently, the ground raised by the assessee was deemed without merit, and the appeal was dismissed. In conclusion, the judgment addresses the validity of serving notice through email, the determination of fair market value for calculating capital gain, and the disallowance of claimed cost of improvement. The tribunal upheld the service of notice through email, dismissed the Revenue's appeal due to low tax effect, and rejected the cost of improvement claim by the assessee for lack of evidence of payment.
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