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TMI Blog2012 (12) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... x a person on the basis of the deemed income for the purpose of capital gain tax. - Decided in favor of assessee. Determination of cost of acquisition of inherited property - Fair Market value (FMV as on 1/4/1981) - held that:- the valuation done by an empaneled registered valuer of the Income Tax Department would certainly take precedence over Nabhi's Guide to House Tax. The valuation done by the registered valuer is with regard to the specific property and takes into account its various advantages and disadvantages all of which influence the valuation of the property. As against the above, the Nabhi's Guide to House Tax is generalized guide and does not take into account the peculiar features of the property being valued. Moreover, the determination of the fair market value as on 1/4/1991 is a question of fact which has been examined by both the Commissioner of Income Tax (Appeals) as well as the Tribunal and both have concluded that the fair market value as estimated by the registered valuer at Rs.47.74 lacs as on 1/4/1981 is acceptable. - Decided in favor of assessee. Exemption u/s 54 - purchase of two flats - inter connected by internal stair case. - held that:- two fla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year 1999 which is the year when the assessee inherited the property and became the owner and not from 1974? e) Whether the Tribunal was justified in confirming the decision of Commissioner of Income Tax (Appeals) in allowing the exemption u/s. 54 for investment in two new flats viz. 416A and 516A by treating the same as one single unit ignoring the fact that the assessee purchased two different flats in the same society and converted them into one duplex flat? f) Whether the Tribunal was justified in treating the two flats viz. 416A and 516A purchased by the assessee as one singular unit for the purpose of deduction under Section 54 and not as two separate and distinct units? 3) Regarding Question -(a) : (a) The respondent is an individual deriving income from salary, house property and other sources. For the Assessment Year 2006-07, the respondent filed return of income declaring a total income of Rs.2.25 crores and inter alia disclosed a long term capital gain from the sale of property at 3/35, Shanti Niketan, New Delhi. (New Delhi Property). The respondent and his brother had inherited New Delhi property from their mother in accordance with her Will dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing officer that the assessee should have received Rs.7 crores as sale consideration. The assessment can only be on the actual amount received by the assessee, the respondent assessee has sold his share in the New Delhi property at Rs.6 crores only and that alone can be the sale consideration. (f) We find no fault with the order of the Tribunal. Both CIT(Appeals) as well as Tribunal have on consideration of all the facts involved, concluded as a finding of fact that the appellant had received only Rs.6 crores for the sale of his rights in the New Delhi property and the same had been offered to tax. There is no provision to tax a person on the basis of the deemed income for the purpose of capital gain tax. This finding of the Tribunal as well as CIT(Appeals) has taken into consideration the Memorandum of Understanding reached between the brothers as well as the sale document dated 14/10/2005 which not only referred the Memorandum of Understanding but also shows that Rs.6 crores is the consideration received by respondent for sale of his interest in the New Delhi property. In view of the above, we find that no substantial question of law arises with regard to questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal held that Nabhi's Guide to House Tax cannot be substituted for the valuation of the New Delhi property done by an empaneled valuer of the Income Tax Department for the purpose of valuation of the property. The Tribunal upheld the finding of the Commissioner of Income Tax (Appeals) that the valuation of a property differs depending upon its size, location, road frontage, corner plot etc. even in respect of two properties situated in the same locality. (d) No fault can be found with the order of the Tribunal upholding the order of the Commissioner of Income Tax (Appeals) that the valuation done by an empaneled registered valuer of the Income Tax Department would certainly take precedence over Nabhi's Guide to House Tax. The valuation done by the registered valuer is with regard to the specific property and takes into account its various advantages and disadvantages all of which influence the valuation of the property. As against the above, the Nabhi's Guide to House Tax is generalized guide and does not take into account the peculiar features of the property being valued. Moreover, the determination of the fair market value as on 1/4/1991 is a question of fact which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had not joined the said two flat internally after acquiring the flats. The flats were inter connected by the previous owner only and therefore, the fact that there were two different flats was immaterial as Section 54 grants exemption to a residential house and unit. The Commissioner of Income Tax (Appeals) had reached a finding of fact was that two flats were joined into one single flat before the respondent became its owner and was one residential house. (c) On an appeal filed by the revenue, the Tribunal by its order dated 30/4/2010 upheld the findings of Commissioner of Income Tax (Appeals) dated 4/5/2009. The Tribunal also followed the Special Bench decision of the Tribunal in the matter of Mrs. Sushila M. Jhaveri 292 ITR (AT) 1 to hold that where two flats bearing Nos. 416A and 516A had only one entrance, one kitchen and common passage it has to be considered as one residential house and the respondent was entitled to exemption for the aggregate consideration of Rs.3 crores under Section 54 of the Act. (d) We find no fault with the order of the Tribunal which has upheld the finding of fact of the Commissioner of Income Tax (Appeals) to the effect though ..... X X X X Extracts X X X X X X X X Extracts X X X X
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