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TMI Blog2010 (8) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... orized representative both attended the hearing on 07.08.2009 and total 9 notices were issued during the period 30.07.2008 to 13.10.2009, but no objection regarding the jurisdiction of Assessing authority was raised by the assessee. The assessee, however, raised such objections for the first time on 13.10.2009 and subsequently vide letter filed on 22.10.2009 and as such, the objection of jurisdiction cannot be entertained, having been raised beyond the period of one month from the date of issuance and service of notice u/s. 143(2) on 30.07.2008, as contemplated u/s. 124(3)(a) of the Act. The ld. CIT(A) confirmed the decision reached by the Assessing Officer. 3. The ld. Counsel, Shri Amit Kothari contends that since the territorial jurisdiction over the assessee s case lies with Assessing Officer Range-3, the order passed by the Assessing Officer, Range-2, Jodhpur is bad in law having been passed without jurisdiction. Filing of return in Range-2 is not decisive of the actual jurisdiction particularly when the assessee had consistently filed the returns for other years in Range-3. 4. The ld. Departmental Representative, Shri Narendra Gour contends that there is no documentary e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration charges of ₹ 6,77,700/- and claimed deduction u/s. 54 of the Act. He also claimed to have invested ₹ 4,78,000/- towards the improvement, additions and alterations made to the new house purchased and claimed deduction of this amount u/s. 54. The assessee is also shown to have claimed deduction u/s. 54EC of the Act of ₹ 33,00,000/- on account of investment in REC Bonds. He, therefore, made following deductions for working out the capital gains as under : (i). Deduction u/s. 54 on account of investment In purchase of new residential house 87,77,700/- (ii). Deduction u/s. 54 on account of investment In improvement, additions and alterations of New house. 4,78,000/- (iii). Deduction U/s. 54EC on account of investment In REC bonds. 33,00,000/- The ld. Assessing Officer accepted the claim of assessee made u/s. 54 of the Act on account of investment in purchase of new residential house at ₹ 87,77,700/-. He, however, rejected the claim of deduction of ₹ 4,78,000/- made as improvement cost of new house on the reasoning that deduction is not allowable if existing house is extended or any investment is made on modification or renovation of exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Departmental Representative, repudiating the contentions of assessee, contends that since the investment in REC bonds made by assessee was beyond the period of six months from the date of transfer of property, he was not eligible for deduction u/s. 54EC of the Act, as the sale deed stood executed on 19.08.2006 when the assessee and witnesses signed the deed and payments stood received by this date. Reliance is placed on the decision of Hon ble Gujrat High Court in the case of CIT vs. Mormasji Mancharji Vaid, 250 ITR 542 (Guj.) 11. We have heard the rival submissions of both the parties and have gone through the record. The claim of assessee for exemption u/s. 54EC of the Act of ₹ 33,00,000/- is found not acceptable, as the assessee is found to have signed the conveyance deed on 19.08.2006 much prior to its actual registration on 20.09.2006 even though certain payments are shown to have been received and written in the conveyance deed which is after 19.08.2006, the date on which the assessee factually signed the conveyance deed. The date of signature, i.e., 19.08.06 has to be taken as date of execution, leading to transfer and going by that the investment in REC bond is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of building at ₹ 7,15,328/-. He explained that there were certain apparent errors of calculation in the report dated 16.01.06 wherein the land rate adopted as on 01.04.81 were based on the land rates as on 01.04.1973 prescribed by Rajasthan (L B) Tax Act and land rates of Shastri Nagar, Jodhpur as per UIT auction dated 22.1.1984. In his statement, Sri Goyal stated that the building rates were based on X-3 rates of State PWD, which are taken for determining the rent of the building for hire by Government. The ld. Assessing authority, therefore, after taking into account the instance of sale of property in the same locality calculated the market value of land property measuring 65706.56 sq. ft. at ₹ 2,10,260 at the rate of 3.20 per sq. ft. and that of building at ₹ 7,15,328/- totaling to ₹ 9,25,588/- as against ₹ 63,73,560/- declared by the assessee as on 01.04.1981. The Assessing Officer took indexed cost of property at ₹ 47,85,290/- as against ₹ 3,29,51,310/-. He, therefore, after deducting the investment of ₹ 87,77,700/- claimed as exempt u/s. 54 of the Act, from the sale consideration of property of ₹ 4,54,18,629/-, worked ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing authority cannot be equated with the property of assessee. Reliance is placed on the decision of Tribunal dated 26.12.2000 in the case of Shri Dalpat Singh vs. ITO in ITA Nos.1773 1774/JP/94 placed at paper book page 91 115, against which no second appeal was preferred by the Revenue. 16. The ld. Departmental Representative, on the other hand contends that there is no basis given in the valuer s reports for adopting the land rates as on 01.04.1981. No comparable cases from sub-Registrar were obtained by the approved valuers. The AO made enquiry and found that the sale instances of the same area. The approved valuer in his statement has admitted that X-3 rates are meant for rental valuation. The report of second valuer is also not proper, as only inferences have been drawn for the purpose of adopting the land rates. The approach of the Assessing Officer is logical, as he has taken into account the rates of the adjoining plot of the vicinity. The assessee cannot take advantage of location in the instant case. The assessee has concealed the facts which are apparent from record with regard to the cost of the previous owner/assessee, which in this case is ₹ 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty as on 1.4.81 on the basis of a solitary example, which in fact could not be applied to the circumstances and the facts of the assessee s case. We, therefore, direct the assessing officer to adopt the cost as on 01.04.1981 as per second valuation report of the approved valuer of Shri Arun Kumar Goyal and work out index cost accordingly for working out the income from capital gains. Ground of the assessee on this reasoning stands allowed. 19. Assessee s another plea that backward indexation needs to be applied in this case is not supported by any legal principle nor there is any such provision in the Act to make Assessing Officer obligatory under the statute to take backward inflation index. The Tribunal judgment in the case of Shri Dalpat Singh vs. ITO (supra) also is not applicable to the facts of the present case, as the Assessing Officer in that case himself has adopted backward inflation index for working out the cost and the Tribunal simply corrected the working. The assessee s plea is, therefore, rejected. 20. Ground No.7, challenging the charge of interest u/s. 234A, 234B and 234C of the Act, being consequential in nature, needs no independent adjudication. 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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