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TMI Blog2011 (7) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 1963 whereby it pleaded that ld. CIT(Appeals) having not dealt with its objection regarding Assessing Officer not following procedure laid down under Section 50C(2) of the Act, the matter has to be restored back to the A.O. 3. Short facts apropos are that assessee had sold an immovable property at door No.109, Usman Road, T. Nagar, Chennai-17, on 26.1.2005, for a consideration of ` 1.25 Crores. Assessee using the proceeds, purchased a building No.61 (new No.111), Dr. Radhakrishnan Salai, Mylapore, Chennai-4 along with his son Shri M.V. Jayaprakash. The said acquisition was for 50% undivided share of two grounds and 1129 sq. ft. constructed area thereon. In his return of income, assessee had worked out long term capital gains on the sale of the property at ` 99,83,223/- and claimed exemption under Section 54 of the Act on such amount for the purchase of the property made by him. Assessing Officer was of the opinion that benefit of Section 54 could not be given to the assessee since, according to him, the asset purchased was not a residential house, but a commercial complex. He reached this conclusion based on the purchase deed executed on 21.2.2005 in favour of assessee. A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose, the building would not loose its character of residential property. Vis- -vis inclusion of name of the assessee s son in the document, explanation of the assessee was that what was invested was only his capital gains and the name of the assessee s son was included for family security purposes. As per the assessee, in the purchase deed, the word commercial complex was inadvertently used. Vis- -vis computation of capital gains for properties sold, argument of the assessee was that guideline value of the Sub-Registrar would not represent the market value of the property and reliance was placed on the decision of Hon'ble jurisdictional High Court in the case of Smt. Thulasimani Ammal v. CIT (158 CTR 5) in this regard. 5. After considering the submission of the assessee, ld. CIT(Appeals) came to a conclusion that CMDA s plan clearly showed that the original approval was given for construction of residential house. As per ld. CIT(Appeals), just because the building was used for commercial purposes, it would not mean that it was not a residential house. Ld. CIT(Appeals) noted that Circular of the Board dated 20.9.1973 would only go to show that use of a premises for commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given only for purchase of residential property and therefore, ld. CIT(Appeals) went in error in going by the plan approval of CMDA and granting the assessee exemption under Section 54 of the Act. Further, as per learned D.R., the purchase of the asset was done by the assessee along with his son and therefore, assessee could not claim benefit of Section 54 of the Act on such joint purchase. Reliance was placed on the decision of Hon'ble Punjab Haryana High Court in the case of Dr. A.S. Atwal v. CIT (277 ITR 462), decision of Hon'ble Bombay High Court in the case of Prakash v. ITO (312 ITR 40) and decision of Hyderabad Bench of this Tribunal in the case of ITO v. Smt. Rohini Reddy [313 ITR (AT) 346]. 7. Per contra, learned A.R. submitted that the CMDA approval was for a residential complex and not for commercial complex. According to him, kitchens were converted only to accommodate the tenants since the tenants were not willing to take the property on rent for residential use. Learned A.R. pointed out that the assessee had purchased only with an intention of acquiring a residential property and this intention of the assessee was corroborated by the CMDA approval. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was demolished and a commercial complex was constructed on the land by Dev Apartments in consideration of the Vendors transferring 50% of the undivided share in the land to the nominees of Dev Apartments against Dev Apartments parting with 50% of the built up area in the said complex in favour of them. WHEREAS the Vendors are thus now the owners of 50% of undivided share in the land described in the Schedule hereunder together with the proportionate built up area therein, having already sold the remaining 50% share in the land and in the built up area to the nominees of Dev Apartments under different Sale Deeds executed on their behalf by their Agent, P.G. Venugopal, son of late Gangappa Naicker, having office at No.7/2, 1st Main Road, Kasthuri Bai Nagar, Adyar, Chennai 600 020, appointed under Power of Attorney dt. 26.08.1994, regd. as Doct. No.236/1994 at the office of the Sub-Registrar, Triplicane, Chennai 600 005. What has been sold to the assessee by the vendors, as mentioned in Conveyance Deed pages 5 and 6, are reproduced hereunder:- (a) Basement front 694.37 sq.ft. F1 (b) Ground floor front 617.48 sq.ft. F3 (c) Second Floor full 2406.68 sq.ft. F7 F8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gains or this cannot be considered as a basis. No doubt, the assessee has given a computation of what could be the capital gains if the guideline value was adopted, but, nevertheless, it remains a fact that adoption of guideline for fixing the full value of consideration on transfer of his asset was disputed. There was also another letter filed on 31st December, 2007 which specifically requested the A.O. to refer the case to Valuation Cell for arriving at the market value of the property sold. No doubt, the assessment order though dated 28th December, 2007, has been signed by the A.O. on the last page only on 31.12.2007. So, when the assessee filed his objection to the valuation, there was a distinct probability that he had not received the assessment order. In fact, learned A.R. pointed out that assessment order was received only on 28.1.2008. Therefore, when these two letters of the assessee, one filed on 20th December, 2007 which was well before the date of assessment and other letter dated 31st December, 2007 which was filed on the date of signing of the assessment order, are read together, it would clearly show that the assessee had objection in adopting the value taken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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