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TMI Blog2016 (8) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... Sreenivasa Rao, Sr.DR ORDER Per H. S. Sidhu, JM Assessee has filed this Appeal against the Order dated 28.2.2014 passed by the Ld. Commissioner of Income Tax (Appeals)-XXII, New Delhi pertaining to assessment year 2009-10 on the following grounds:- 1. As per on the facts and circumstances of the case the Ld CIT-(Appeals) has erred in not holding the Assessment Order passed u/s 143(3) of the Income tax act 1961 as null and void even when the due processing of the case u/s 143(1) and serving the intimation to the appellant has not been done in case of refund as per the law prevailing at the time of passing the Order. 2. As per on the facts and circumstances of the case the CIT-(Appeals) has erred in confirming the addition of ₹ 2716388/-under the head capital gains made by the assessing officer on the basis of deeming provisions u/s 50C of the income tax act 1961, and has not considered the circle rate prevailing at the time of agreement to sell entered by the appellant on 4-8-2007. 3 As per on the facts and circumstances of the case of the Assessing Officer has erred to pass the order on 29.12.2011 without affording any opportunity to the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 27,16,668/- on account of capital gain by applying provisions of section 50C of the Act on the basis of circle rate at the time of execution of sale deed. Accordingly, he completed the assessment at an income of ₹ 34,07,860/- after making other additions vide his order dated 29.12.2011 passed u/s. 143(3) of the I.T. Act, 1961. 3. Against the order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 28.2.2014 has dismissed the appeal of the assessee by confirming the addition made by the AO and enhanced the income by disallowing the deduction u/s. 54B amounting to ₹ 75,00,300/-. 4. Aggrieved with the order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 5. During the course of hearing Ld. Counsel of the assessee stated that AO accepted the claim of deduction u/s. 54B but made the addition of ₹ 27,16,668/- on account of capital gain by applying provisions of section 50C of the Act on the basis of circle rate at the time of execution of sale deed. He further stated that AO was of the view that the circle rate prevailing at the time of sale deed shall be taken into consideration while computing capital and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) - CIT vs. Dr. Ps Pasricha (Bombay High Court) ITA No. 1825 of 2009 - ITO vs. KC Gopalan (2000) 162 CTR 566 (Ker). In view of the above submissions, the Assessee s counsel has stated that the investment in agriculture land has to be made out of sale proceeds and as such the assessee is eligible to claim deduction u/s. 54B for purchase of lands even presuming that payment for purchase of land was not made out of receipt of sale proceeds on sale of asset and stated that entire investment being out of sale consideration of property in accordance with provisions of section 54B, there is no justification for restricting claim of exemption u/s. 54B of the Act. 6. On the other hand Ld. DR relied upon the order of the Ld. CIT(A) authorities below. He submitted that addition of ₹ 27,16,368/- was made on the basis of Stamp Duty Valuation. He further stated that AO has allowed excess deduction which has been rightly restricted to only ₹ 6,05,000/- by the Ld. CIT(A), hence, he requested that the order of the Ld. CIT(A) may be upheld. 7. I have heard both the parties and perused the records especially the orders of the Revenue authorities. With regard to addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer was completed in terms of section 2(47) by giving possession of property on date of sale agreement, but registration was delayed on bona fide reasons and execution of sale deed was only a legal formality, stamp duty value on date of sale agreement and not on date of registration was required to be adopted for computing capital gains - Held, yes [Para 19] [In favour of assessee] After perusing the aforesaid findings of the Tribunal, I am of the considered view that the issue in dispute is squarely covered by the aforesaid decision of the Tribunal, as per which Circle rate prevailing at the time of agreement to sell has to be considered for applying the provisions of section 50C. Respectfully following the precedent as aforesaid, the addition of ₹ 27,16,368/- by misconstruing the provisions of Section 50C is deleted. 7.1 With regard to ground relating to enhancement of addition by Ld. CIT(A) by restricting the claim of deduction u/s. 54B to the extent of ₹ 6,05,000/- as against claim allowed by the AO at ₹ 81,05,300/- is concerned, I find that the only ground on the basis of which claim was restricted is that payment for purchase of agriculture lan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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