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TMI Blog2016 (8) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... IGARH ). In that matter, the Tribunal has held that there was no merit in the plea of Revenue authority that exemption u/s. 54F of the Act can be denied to an assessee on the ground that construction of the house had not been completed. It was further held that the requirement of section 54/54F was that the assessee should have either purchased a residential house being a new asset within a stipulated period or should have constructed a residential unit within 3 years from the date of transfer. - ITA/6709/Mum/2012, CO/11/Mum/2014 - - - Dated:- 12-8-2016 - Shri Rajendra, Accountant Member And C. N. Prasad, Judicial Member Revenue by : Shri Sanjeev Kashyap-DR Assessee by : Shri Bhupendra Shah ORDER Per Rajendra, AM Challenging the order dated 21. 8. 12 of CIT(A)-29 the Assessing Officer (A. O. ) and the assessee have filed appeal/cross objection for the year under consideration. Assessee, an individual, is deriving income from salary, capital gain and other sources. She filed her return of income 28. 07. 2009 declaring income of ₹ 9. 52 lakhs the AO completed assessment u/s. 143(3)of the Act, on 27. 11. 12, determining her income at ₹ 1. 82 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Soc. , that JVB surrendered his share with - out receiving any monetary benefit, that on 25. 01. 2008, he sold half share in the premises to the assessee for ₹ 33. 45 lakhs. He observed that there was no legal document and the share was transferred without registering with any Government agency, that transfer could not be treated as valid, that JVB remained the legal owner of the estate of PVB, that as per the provisions of Transfer Property Act, immovable property could not be transferred by addressing a simple letter to the Co. op Soc. , that the Co. -op. Housing Soc. was not an authority to take decision on such type of transfers, that the property Office No. 601 was an impartible asset, that the property in question was an undivided unit that each of the beneficiaries was holding 1/3rd share in the office premises, that after death of PVB remaining members became entitled to half portion of the property, that it was surprising that JVB surrendered his ownwership right inherited from his brother without any consideration, the exercise was done with an intention to avoid tax liability in the hands of the assessee. 2. 1. The AO also found that assessee had claimed deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the valuation report of the registered valuer submitted by the assessee, that he had wrongly adopted the Wealth tax value. He directed the AO to adopt the FMV of ₹ 17. 02 lakhs as on 01/04/81 as per the valuation report of the valuer, dated 11/09/2008 instead of the Wealth tax value given in the probate, amounting to ₹ 75, 156/-. Finally, he allowed the appeal filed by the assessee. 3. 2. With regard to the second issue, the FAA held that the AO had disallowed the exemption u/s. 54F of the Act by assuming that the residential house was not constructed by ignoring the fact that the assessee had time period of three years for completing the construction of the house, that the section did not prescribe the completion of the construction of the residential house, that the thrust was on the investment of the consideration received on sale of original asset and the start of construction of a new residential unit, that the assessee had invested the consideration received on sale of original asset in the purchase of the plot of land and had started construction, that she had complied with the provisions of section 54F of the Act, that that the dominant factor to be seen in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal issue and has held as under: 51. The next issue to be considered is as to whether the values adopted under the Wealth-tax Act have to be adopted under the Income-tax Act. 52. Rule 3 of Schedule III of the Wealth-tax Act, 1957 reads as follows : PART B IMMOVABLE PROPERTY Valuation of immovable property 3. Subject to the provisions of rules 4, 5, 6, 7 and 8, for the purposes of sub-section (1) of section 7, the value of any immovable property, being a building or land appurtenant thereto, or part thereof, shall be the amount arrived at by multiplying the net maintainable rent by the figure 12. 5 : . Section 55(2)(b)(i) of the Income-tax Act, 1961, read as follows : 55(2) For the purposes of sections 48 and 49, cost of acquisition , - (b) in relation to any other capital asset, - (i) where the capital asset became the property of the assessee before the 1st day of April, 1981, means the cost of acquisition of the asset to the assessee or the fair market value of the asset on the 1st day of April, 1981, at the option of the assessee; . The provisions of the Wealth-tax Act as seen above are not pari materia to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different from ';fair market value';. Therefore, the adoption by the Assessing Officer of the values arrived at under the Wealth-tax Act for the purpose of computing capital gains under the Income-tax Act is wrong in law. The decision of the Bangalore Bench of the Tribunal in the case of D. N. Prasanna Kumar (supra) is not applicable to the facts of the case as in that case there was no other value than the value declared under the Wealth-tax Act, available and the Registered Valuer';s valuation report was considered defective and not reliable, whereas in this case three instances of sale were cited. 54. On facts, the Assessing Officer has adopted the value declared by the assessees under the Wealth-tax Act. He has rejected the value as claimed by the assessees. He has also rejected the value given by the Sub-Registrar, Triplicane, Chennai. As already stated, on a careful consideration of each of the letters and correspondence obtained from the Sub-Registrar, it is clear that the Sub-Registrar has originally and finally stated that the value is ₹ 3, 87, 580 per ground. The instances of sale relied upon by the Sub-Registrar for arriving at this value as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhu Tyagi (19 SOT 612) the Tribunal has held that Wealth Tax cannot be imported for determining the FMV for LTCG purposes. In these circumstances we are of the opinion that the order of the FAA does not suffer from any legal or factual infirmity, so confirming his order we decide the First Ground of appeal, against the AO. 5. 2. We find that the assessee had invested the entire consideration received on sale of the office premises for purchasing the plot of land and construction of a residential unit. The AO has not contravened both the facts-his only objection was that the unit was not completed within the period of three years of the sale. Here, we would like to refer to the case of Smt. Rajneet Sandhu (133TTJ64). In that matter, the Tribunal has held that there was no merit in the plea of Revenue authority that exemption u/s. 54F of the Act can be denied to an assessee on the ground that construction of the house had not been completed. It was further held that the requirement of section 54/54F was that the assessee should have either purchased a residential house being a new asset within a stipulated period or should have constructed a residential unit within 3 years from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dismissed the ground raised by her. 6. 2. Before us, AR contended that it was a family arrangement, the matter was covered by case of Manjula J. Shah (355ITR474) of Hon'ble Bombay High Court. He also argued that FAA should have admitted the claim made by the assessee during the appellate proceedings. DR left the issue to the discretion of the Bench. 6. 3. We find that the FAA had disallowed the claim made by the assessee because she had not raised the issue before the AO and now she had fled a revised return. In our opinion after the judgment of Pruthvi Brokers(349 ITR 336)of the Hon'ble Bombay High Court, the appellate authorities can allow claim made before them for the first time, even if a revised return is not filed. Therefore, in the interest of justice we are remitting back the issue to the file of FAA for fresh adjudication, who would decide the issue after affording reason - able opportunity to the assessee. Effective Ground of appeal, raised by the assessee in the CO is decided in her favour, in part. As a result, appeal filed by AO is dismissed and CO is partly allowed. Order pronounced in the open court on 12th August, 2016. - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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