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TMI Blog2016 (2) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... 50C of the Act are not at all applicable. The assessment of the Long Term Capital Gain and confirmation by the ld. CIT(A) was therefore, being contrary to the provisions of law and facts be deleted in full. Alternatively and without prejudice to above, 2.2 Rs. 9,25,497/-: The ld. CIT(A) further erred in law as well as on the facts of the case in confirming the adoption of the full value of sales consideration u/s 50C of the Act at Rs. 11,40,453/- which was contrary to the provisions of law and facts on record. The ld. CIT(A) also erred in rejecting the objections made before him u/s 50C(2) of the Act and having coterminous powers with the AO, the ld. CIT(A) could and should have acted thereupon. Hence, value as declared by the appellant at Rs. 1,05,000/- be considered even assuming it is held that Sec.45 of the Act is applicable in the present case. The addition of the balance Rs. 9,25,497/- [Rs.10,30,497/- less Rs. 1,05,000/- ] be deleted. Alternatively and without prejudice to above, 2.3.1 Rs. 10,30,497/-: The ld. CIT(A) further erred in law as well as on the facts of the case in not admitting the legal ground relating to the claim of deduction u/s 54F of the Act. Even assumi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a settlement was reached between the seller and purchaser to cancel the subjected transactions and restore the ownership of the plot to the seller as held before 16.04.2007. As per assessee, another document rebutting back the ownership over the said plot from purchaser to the assessee was executed and got registered on 23.02.2008, and thereby the assessee pleaded that there was no transfer of property on 16.04.2007 and hence section 45 could not be applied and assessee was not required to disclose any gain. 3.1. The above contention of the assessee was not accepted by the AO for the reason that on execution of sale deed dated 16.04.2007 the title of the property was legally vested on the purchaser, and there is no provision for any cancellation of such registered sale deed. The later acquisition of the same property by the assessee on a later date is another transaction for different consideration and under different terms. Therefore, the AO held that it cannot be said there was no transfer of the said property on 16.04.2007 and that provisions of section 45 or section 50C of the Act are not attracted. The AO after considering the explanations of the assessee held that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital loss in this case. The assessee has no any capital gains in this case, therefore, there arises no question of any computation. Moreover this transaction of sale, in fact, was cancelled by the parties and there being no transfer, there is no question of capital gain." In reply dated 06.12.2010, the assessee has submitted as under :- " In continuation of our earlier letter dated 30.11.2010 as regards the matter relating to capital gain, it is further submitted that the transaction of sale dated 16.04.2007, in fact and in law was cancelled by the parties vide a separate cancellation deed executed on dated 13.11.2007. It is submitted that the buyer, after entering into the transaction, came to know that the subjected plot of land was situated in Prithviraj Nagar Scheme. The repeated news in the paper it turned out that the said area was highly disputed, was under acquisition and exposed to continuous litigation before the Hon'ble Rajasthan High Court. Consequent to this, most of the transaction of purchase/sale in all the colonies/societies falling in Prithviraj Nagar were suspended by the property dealers and parties (Other than some exceptional cases). He found that no va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions provided under sec. 50C of the Act. It was further contended that the authorities below has rightly calculated the capital gain by invoking section 50C after applying DLC rate. 5.3. We have considered the rival submissions made by the parties before us and also perused the written submissions and paper book filed by the assessee. Firstly, we shall be deciding the issue whether the transfer in the eyes of law has taken place by the execution of registered sale deed dated 16.04.2007 by the assessee or not. The undisputed fact is that the assessee vide registered sale deed dated 16.04.2007 has transferred the title as well as the possession of the property bearing no. 27 to Shri Praveen Kumar Jain son of Shri G.C. Jain resident of village Dhod, Tehsil and District Sikar for a consideration of Rs. 1,05,000/-. It is also not disputed that the DLC rate, as applicable to the transfer was for an amount of Rs. 11,40,453/-, though in the sale deed the consideration mentioned was Rs. 1,05,000/- which was paid in totality on 29.04.2006. Undisputedly, the possession of the property was handed over by the assessee to the purchaser at a time prior to the execution of sale deed dated 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.11.2010 and 06.12.2010, the assessee has failed to produce the original of the cancellation deed and has only produced copy of the cancellation document on 13.12.2010. In our view, if there was any cancellation document which has taken place, the original document would have been with the assessee, as the assessee would have been the sole beneficiary of said document . In our view, the alleged cancellation agreement between the assessee and the purchaser, if accepted, is a title document qua the assessee that will nullify the effect of the original sale deed as per the assessee (though this contention of nullifying the effect of registered document is highly disputable and debatable in view of provisions of Transfer of Property Act). But since the cancellation document as is alleged is the title document in favour of the assessee, therefore, the original document should have been in possession of the assessee, but the assessee has failed to produce the original document during the assessment proceedings, in our view, it goes against the assessee. Therefore, we have no hesitation to hold that the complete transfer in accordance with law has taken place on account of registered sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion was also given. It was mentioned in the sale deed in respect of possession as under :- On the basis of the above said position, after relying on the judgments in the case of CIT vs. Mormasji Mancharji Vaid (2001) 168 CTR 565 (Guj.)(FB) and Chaturbhuj Dwarkadas Kapadia vs. CIT (2003) 180 CTR 107 (Bom), and Jasbir Singh Sarkaria, in re (2007) 212 CTR 107 (AAR), it was submitted that no capital gain liability arose in A.Y. 2008-09. The ld. D/R for the Revenue has submitted that the judgments referred herein above as well as the provisions of law are not attracted and has submitted that the liability arose in the AY. 2008-09. We have heard rival contentions and perused the material on record. In our view, it is undisputed fact that the entire sale consideration was paid on 29th April, 2006 i.e. in the A.Y. 2007-08 in cash. However, we are not in agreement with the submissions made by the ld. A/R that the possession was also handed over on 29th April, 2006. The averment mentioned in the sale deed clearly stipulates that the possession was given prior to the registration of the sale deed. The exact date of handing over of the possession has not been mentioned in sale deed. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 545F is allowable on the investment made in construction of residential house and not on the mere purchase of plot of land. Appellant has not furnished any evidence of construction made on the said plot. Neither any construction plan approved by the municipal authorities nor any bills/vouchers of construction material and wages were produced. In fact, the appellant himself claimed that construction activity was banned in the area by the Hon'ble Rajasthan High Court. Therefore, on merits also, appellant is not eligible for deduction u/s 54F of the Act." The ld. A/R has drawn our attention to the written submissions filed by him before ld. CIT (A) to the following effect :- "2.2.1 Alternatively and without prejudice to above, it is further submitted that the appellant was also eligible to the exemption granted u/s 54F of the Act in as much as the appellant not only purchased the plot but also constructed a residential unit (partly) within the stipulated period. Sec.54F of the Act provides that "(1) [Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al investment of Rs. 5.50 Lacs (approx.) was made within permissible period under law. In that view of the matter, the appellant was fully entitled to the exemption u/s 54F of the Act and hence, there was no liability of capital gain tax. " The ld. A/R has also relied upon the following judgments : Smt. Shashi Varma vs. CIT (1999) 152 CTR (MP) 227 CIT vs. Sardarmal Kothari (2008) 217 CTR (Mad) 414 Mrs. Seetha Subramanian vs. ACIT (1996) 56 TTJ (Mad) 417 Smt. Rajneet Sandhu vs DCIT (2010) 133 TTJ (Chd)(UO) 64 Smt. Usha Vaid vs ITO in ITA No. 98/(Asr)/2011 Gyan Chand Batra vs ITO (2010) 133 TTJ 482 (JP) 7.1. We have heard rival contentions and perused the material on record. The AO while deciding the issue has recorded that " Consequently another document rebutting back the ownership over the said plot from purchaser to the assessee was executed and got registered on 23.02.2008". The perusal of the document dated 23.02.2008 clearly shows that the document is Vikray Patra (sale deed) executed by Shri Praveen Kumar Jain in favour of Shri Hardayal Singh in respect of the plot no. 27 allotted by Meenawala Grah Nirman Sahakari Samiti to the assessee on 3rd June, 1996. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the claim of the assessee for incurring Rs. 2,50,000/- for construction of the property, we do not agree with the contention of the assessee as there is a clear cut prohibition by the Hon'ble Rajasthan High Court prohibiting any kind of building activities/construction activities. If we allow the incurring of expenditures on construction, it will be violating the orders passed by the Hon'ble High Court. In any case, no document in support of the construction raised by the assessee has been produced before the authorities below and before us to show that the amount of Rs. 2,50,000/- has been spent by him on the construction. As a result, the ground of the assessee is partly allowed and the AO is directed to give benefit of Rs. 3,00,000/- under the provisions of sec. 54F for the purpose of calculating the long term capital gain and further apply the same parameters for the purposes of section 54F as had been applied under for section 50C. Ground no 2.2 : 8. Regarding this ground, the assessee has submitted as under :- " The AO considered the deemed sale consideration at Rs. 11,40,453/- u/s 50C, ignoring the actual sale consideration of Rs. 1,05,000/- although detailed objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the registration authority for stamp duty purpose, as laid down in Sec. 50C of the Act. The only exception is that where assessee claims before the AO that value assessed by stamp valuation authority exceeds the fair market value, AO may refer the valuation of the asset to a Valuation Officer. No such claim was made by the appellant before the AO. Hence, provisions of sec. 50C(2) are not applicable in this case. Appellant also did not dispute the valuation of property by the stamp duty authority before any higher authority or court as envisaged in Sec. 50C(2)(b) of the Act. It shows that appellant agreed with the valuation of property by the stamp duty authority and the same was the market price of property. It is also pertinent to mention here that the market value of the plot was assessed at higher figure of Rs. 13,46,928/- by the stamp valuation authority in the subsequent sale deed dated 23.02.2008. Hence, market value of the said plot can not be taken at Rs. 1,05,000/-. The ground raised by the appellant is accordingly dismissed." 8.1. We have heard rival contentions and perused the material on record. In our view, the order passed by the ld. CIT (A) is well founded and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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