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TMI Blog2017 (7) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... n the materials on record. Appeal of the assessee is allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... ration as per sale deed : Rs.2,77,10,000 Less: Indexed cost of land : Rs.4,83,817 Expenses on legal & brokerage: Rs.13,24,753 ₹ 18,08,570 Long term capital gains Rs.2,59,01,430 5. On appeal, the learned Commissioner of Income Tax (Appeals) also without obtaining the DVO Report confirmed the order of the learned Assessing Officer by observing as under:- "4. Perusal of the sale deed obtained by the ITO, XIV(3), Chennai, from Sub- Registrar, Anna Nagar, Chennai regarding the property sold reveals that the property was sold for a consideration of ₹ 2,10,00,000/- whereas market value of the property was ₹ 2, 77,10,000/-. But the computation of capital gains by the assessee reveals that ₹ 2,10,00,000/- only was taken into account by the assessee. The AO was of the opinion that sec.50C(l) of the Act was applicable to the facts of the case and informed the assessee accordingly. As the assessee objected, the AO referred the valuation of the capital asset to the valuation officer who informed the assessee in his letter dated 04.12.2012 proposing to estimate the value of the property at ₹ 2,77,10,000/-. After taking into account the arguments of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by Corporation of Chennai for a sum of Rs.l1,56,130/- which was claimed by the assessee as deduction in computing capital gains. The assessee also enclosed a copy of cheque for ₹ 11,56,130/- in favour of Commissioner, Corporation of Chennai for perusal. Close scrutiny of letter issued by the Corporation of Chennai to the assessee reveals the following details: CMDA Development Charges ₹ 9,000 Building License fees ₹ 4,000 Demolition fees ₹ 47,000 Open space reservation charges 10,65,000 Scrutiny fees ₹ 130 Regularisation charges ₹ 31,000 Total Rs.11,56,130 4.3 But it was not explained as to how the above payment related to the transfer of the property in question either before the AO or before the undersigned. Instead it was contended that the property that was transferred consists of two categories i.e. commercial and school and they have to be valued differently. It was also contended that the assessee paid to Chennai Corporation ₹ 11,55,130/- for demolition and ₹ 19,00,000/- for construction of school and both the expenses are incurred in connection with the transfer of property. It was also claimed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government aided school of which the assessee is the correspondent lost the land on which part of the school was functioning. The vacated portion of the land was sold for a huge sum of ₹ 2.10 crores whereas the alleged amount spent by the assessee in return was ₹ 30,55,130/- (Rs.ll,55,130 + ₹ 19,00,000). Perusal of deed of settlement dated 13.02.2007 made by the settler Mrs. J. Vijayalakshmi in favour of the assessee reveals that the late husband of the settler established a school in the said premises and managed the same. Some part of the said premises was given to the assessee by the above settlement deed. The settled portion of the land was sold by the assessee which resulted in the capital gains. The land that was allotted to the purpose of school was taken back by the assessee and sold to the third party. To manage the whole transaction the assessee arranged the affairs in such a way that he expended some expenditure on construction in Plot B in order to free plot A which is sold. This is purely manipulation and not expenditure incurred in connection with the transfer of property. 4.6 Regarding disallowance of ₹ 1,00,000/- on legal expenses, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration. The learned Authorized Representative further requested that with respect to the other issues raised in the appeal also may be remitted back to the file of the Ld.A.O for fresh consideration thereby providing the assessee with one more opportunity of being heard since on the earlier occasion the assessment was hurriedly completed due to paucity of time as the assessment was time barring. 7. The learned Departmental Representative on the other hand vehemently opposed to the submissions of the learned Authorized Representative and requested for confirming the orders of the Revenue authorities, however could not confront to the submissions of the Ld.A.R. 8. We have heard the rival submissions and carefully perused the materials on record. From the facts of the case it is apparent that the learned Assessing Officer and the learned Commissioner of Income Tax (Appeals) did not comply with the provisions of section 50C(2) of the Act. Further, no opportunity was given to the assessee to establish the correct market value of the land sold by him. It also appears that the assessment was done hurriedly due to paucity of time since the assessment was time barring. Therefore, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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