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TMI Blog2017 (10) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... Thok Maliyan, Ajmer for a consideration of Rs. 24,60,000/-. Subsequently, the Sub-Registrar- 1, Ajmer has adopted the value of the property at Rs. 96,03,000/-. Since the assessee has not disclosed the sale value adopted by the Sub-Registrar, the case was reopened by issuance of a notice u/s 148 dated 29.05.2013. During the course of assessment proceedings, the assessee submitted that it has invested the entire amount of the sale consideration amounting to Rs. 24,60,000/- in the capital gain account scheme for the purposes of purchasing a new house property, hence capital gains would be exempted u/s 54F and provisions of section 50C would not be applicable. However, the submissions of the assessee were not acceptable to the Assessing Officer. According to the Assessing officer, "the income which has been adopted by the stamp authorities is deemed to have been received. Section 50C has been specifically introduced with a view to prevent evasion of tax and under valuation of the transaction and it is in that context, section 45, section 48 and section 50 must be read. Therefore, the assessee was supposed to declare the correct sale consideration and according to the correct sale consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be computed on the basis of full value of consideration specified in the sale deed. Accordingly, the AO is directed to compute and allow deduction u/s 54F to the appellant by adopting the sum of Rs. 24,60,000/- as full value of the consideration (as specified in the sale deed) received or accrued to the appellant." 5. During the course of hearing, the ld. AR submitted that while computing the deduction u/s 54F, it is only and only the actual sale consideration received or accrued to the appellant which has to be considered while computing LTCG and not the sale consideration adopted or assessed by the Registering Authority for the purposes of stamp valuation as deemed u/s 50C of the Act for the following reasons: 5.1 Firstly, Sec. 45(1) provides that "any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54F, 54G and 54H, x x x x". Further Sec. 45(2) provides for the computation of the profits or gains arising from such transfer in accordance with Sec. 48 and for that purpose, the FMV of the asset shall be deemed to be the full value of consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevail over or to be given preference and priority as against a general provision as expressed in the legal maxim that "generalia specialibus non derogant", which means that when there is a conflict between a general and a special provision, the latter shall prevail. The said principle has been stated in Craies on Statute Law, 5th Edn. at p. 205, thus: "The rule is, that whenever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to effect only the other parts of the statute to which is may properly apply." In view of the above legal position, the controversy involved has to be decided in the light of special provision contained u/s 54F and not u/s 50C of the Act. Moreover, Sec. 48 r/w/s 50C do not start with a non-obstante clause and therefore do not have any overriding effect over the other provisions of the Act including Sec. 45 and/or Sec. 54F of the Act. 5.5 It was further submitted that the above issue is directly covered by the consistent view being taken by this Hon'ble Bench of IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion also arose in the context of Sec. 50 of the Act which provides that capital gain on the sale of depreciable assets has to be deemed as STCG. However, the Hon'ble Bombay HC in the case of CIT v/s Ace Builders (P) Ltd. 281 ITR 210 held that the fiction created u/s 50C is limited and shall apply only to the computation of capital gain and not to the exemption provisions. For allowing deduction u/s 54E, there will be no distinction between depreciable assets and non depreciable assets therefore, the fiction created for one provision cannot automatically apply to the other provisions. 5.7 In light of above, on the facts of the present case, it will be found that admittedly the investment in the new house at Rs. 24,63,610/- was much higher than the amount of the actual sale consideration of Rs. 24,60,000/- hence, assessee was held entitled to full deduction u/s 54F of the Act. 5.8 Referring to the Doctrine of impossibility of performance, it was further submitted by the ld AR that the law requires as assessee to invest the net sale consideration however, the inability of the assessee is that once he has not actually physically received the entire deemed consideration (here actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the facts of the present assessee's case yet however, the decision given by the court must always be read in the light of the questions admitted. This contention is clearly supported by the discussion made by the Hon'ble High Court in Para 5 onward wherein, after reproducing Sec 50C onward, the discussion and the decision revolved around the controversy involved u/s 50C r/w 48(2) only and not relating to Section 54F vis-à-vis 50C r/w 48(2). 6.2 Further, the Hon'ble High Court noted in the facts of that case that the opportunity granted u/s 50C, was not availed by that assessee. Whereas, in our case the buyer admittedly filed an appeal before the competent authority against the stamp duty valuation enhanced to Rs. 96.03 lakhs from originally assessed value of Rs. 24.60 lakhs. Kindly refer letter dated 07.08.2014 to the AO and 12.01.2015. Thus, S. 50C value was not disputed. Hence factual context was completely different. 6.3 There apart, in the present case, the assessee even filed a valuation report of a registered valuer approved by the Central government, who valued the subjected land sold at Rs. 21.83 lakhs only as against Rs. 96.03 lakhs evaluated by the stamp autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of extent of deduction under section 54F to the assessee. As per Revenue, the AO has rightly allowed the benefit of deduction u/s 54F to the assessee to the extent of actual investment of Rs. 24,60,000 in the new house property. Per contra, the contention of the assessee is that where the whole of the actual sale consideration of Rs. 24,60,000 has been invested in the new house property, the whole of the capital gains, even though worked out in terms of section 50C of the Act, would be eligible for deduction under section 54F of the Act and the assessee is not liable to pay any capital gains tax. 10. To appreciate the issue under consideration, we refer to the provisions of section 54F which reads as under: "54F. (1) Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the investment of the net consideration in respect of the original asset which has been transferred and where the net consideration is fully invested in the new asset, the whole of the capital gains shall not be charged under section 45 of the Act. The net consideration for the purposes of section 54F has been defined as the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. In other words, the consideration which is actually received or accrued as a result of transfer has to be invested in the new asset. In the instant case, undisputedly, the consideration which has accrued to the assessee as per the sale deed is Rs. 24,60,000 and the whole of the said consideration has been invested in the capital gains accounts scheme for purchase of the new house property which is again not been disputed by the Revenue. The consideration as determined under section 50C based on the stamp duty authority valuation is not a consideration which has been received by or has accrued to the assessee. Rather, it is a value which has been deemed as full va ..... 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