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TMI Blog2006 (7) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... of land as Rs. 12,000 as on 1981 arbitrarily without any evidence for comparison with the appellant s property instead of Rs. 25,000 per cent claimed by the appellant. ( ii )The Commissioner of Income-tax (Appeals)-II omitted to give direction to the Assessing Authority for allowing deduction under section 54 instead of deduction under section 54F considering the sale of residential building and land appurtenant thereto. ( iii )The Commissioner of Income-tax (Appeals)-II favoured in her order for fixing the Annual Letting Value of the 2nd flat which was incomplete and vacant during the assessment year 1997-98 as Rs. 2,000 per month which is against law. 2.1 The facts of this case can be stated as follows: The assessee entered into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer has given reference of the said sale transaction which as per the Assessing Officer was close to the property sold by the assessee. In the opinion of the Assessing Officer, the fair market value adopted by the assessee for computation of capital gain at Rs. 25,000 per one cent was much inflated, hence the Assessing Officer has adopted the rate of Rs. 4,000 per one cent which was a moderate rate in the opinion of the Assessing Officer. The Assessing Officer, therefore, worked out the indexed cost by adopting Rs. 4,000 per one cent at Rs. 2,98,900 and worked out the long-term capital gain at Rs. 17,01,100. As far as exemption under section 54, is concerned, the Assessing Officer was of the opinion that the long-term capital gain wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in para 2, subjective reserve prices (below which the appellant was not willing to part with/sell his property) in the instant case Rs. 25,000 per one cent cannot be the basis to arrive at the "reasonable cost". The market value of the same property - 15 years later to 1981, i.e., appellant s date of sale in November, 1996 - is around Rs. 85,000 per cent. Working backwards from 1996, the cost could never have been as high as Rs. 25,000 per one cent. Besides land in Vanchiyoor village itself closer to the heart of the city, with all facilities of schools, hospitals, commercial facilities, markets, theatres, shopping centres etc. did not cost more than Rs. 10,000 per one cent in 1981. Hence the Assessing Officer s contention that the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer is directed to re-compute the capital gains adopting Rs. 12,000 per one cent as cost as on 1-4-1981." 4. As far as the allowable exemption under section 54 is concerned, this ground was not taken by the assessee before the CIT (Appeals) but is taken before us. As far as income under the head "Income from house property" is concerned, the assessee has made a grievance before the CIT (Appeals) that the calculation of the notional rent in respect of non-occupied flat was against law and the Assessing Officer omitted to give statutory deduction allowable under section 24 of the Act. On this issue of allowable deduction, the CIT (Appeals) directed the Assessing Officer to grant eligible deduction, but as far as annual letting valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the CIT (Appeals), we find that much more reasonable approach has been adopted by the CIT (Appeals) and, in fact, in our opinion, the claim of the assessee itself appears to be arbitrary. We do not desire to interfere with the order of the CIT (Appeals) on this issue. We, therefore, confirm the order of the CIT (Appeals) and ground No. ( i ) stands rejected. 6. The next issue is in respect of the applicability of section 54 in place of section 54F for claiming exemption. The assessee has agitated this issue before the Assessing Officer and Assessing Officer rejected the assessee s claim that the assessee is eligible for exemption under section 54, but allowed the exemption under section 54F. The assessee has not taken this ground b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption if he made the investment by way of construction or by way of outright purchase in the residential house to the extent as per conditions laid down in that section. In our opinion, there is a basic difference in respect of the nature of the capital asset transferred. As far as section 54 is concerned, the applicability of section 54 is restricted to the capital asset which is building or land appurtenant thereto and which is used for residential purpose, but as far as section 54F is concerned, it is applicable to any capital asset. The contention of the assessee is that the property which was transferred by him was having a house therein and hence, the assessee is eligible to claim exemption under section 54. We have gone through the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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