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TMI Blog2017 (10) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate from the Chairman of the Municipal Committee, Parshad of the Municipal Committee and neighbours of the assessee were also filed. The ld. CIT(A) has granted relief to the assessee after considering all these evidences and he has also observed that even if the property sold is taken as an agricultural land then also the assessee is entitled for benefit U/s 54F of the Act. In the light of these findings and observations of the ld. CIT(A), we hold that the ld. CIT(A) has rightly deleted the addition. - Decided against revenue Claim of expenses incurred on sale of property - Held that:- We hold that the assessee has paid brokerage expenses of ₹ 8.00 lacs, which approximately 2% of the sale consideration, which appears to be reasonable. This brokerage was paid to three persons and the payments were made by cheques which are verifiable from the bank statement of the assessee. Considering all these facts, we find no fault in the order of the ld. CIT(A) and we sustain the same on this ground. Accordingly, this ground of revenue’s appeal stands dismissed. Deduction of construction and improvement of property - Held that:- The assessee has submitted a valuation report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deleting the addition of ₹ 87.75 lacs on account of deduction claimed by the assessee U/s 54 of the Act, which was disallowed by the Assessing Officer. 3 6. The ld. CIT(A) has granted relief to the assessee by holding as under:- 5.3 I have perused the assessment order as well as submissions made by the appellant. Following facts have emerged; 1. That the assessee has filed return of income for AY 2014-15 declaring total income of ₹ 3,02,58,580/-. 2. That during the year under consideration the assessee has sold property situated at Village- Khanpur, Tehsil- Tijara for a total consideration of ₹ 4.5 crores. 3. That the assessee has declared long term capital gain of ₹ 3,00,41,869/- on sale of the above mentioned property. 4. That the assessee has further claimed an exemption of ₹ 87,75,000/- u/s 54 of the IT Act on account of investment in a residential property. 5. That the AO has contended that the said property is an agricultural land and sale deed as well as inspector s report has shown that no residential property was there on the land in question. Therefore, the AO has rejected the assessee s claim of dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at High Court and Hon ble Supreme Court has held as under: - where it was decided that The value of stock shown in the books of accounts is genuine or not in reference to stock statement submitted to bank has been considered by the Tribunal and considering the fact discussed by Tribunal that Stock shown in books is genuine as supported by books of accounts , we see no reason to hold that the findings of tribunal is perverse . Consequently, the appeal stand dismissed at the admission stage. Further Hon ble Supreme Court -SLP (2008) 307 ITR (ST) 3 has dismissed SLP by revenue against said order In this case appeal by Revenue was dismissed by the Gujarat High Court where tribunal has deleted the addition under section 69 B on account of the difference between the closing stock furnished to bank for avail ins of credit facility and that disclosed in the books of accounts furnished before the Income tax authorities. As per the above judgment, it is imperative to see which of the declaration made by the appellant is correct? Accordingly, the evidences produced by the appellant during the appellate proceedings and during the assessment proceedings have been consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under subsection (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- ( i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and ( ii) the assessee shall be entitled to withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t available then alternately, deduction u/s 54F would be available. The AO cannot deny deduction u/s 54 and section 54F both. If a residential property is proved to be there then section 54 of the Act is applicable and if there is no residential property then deduction u/s 54F of the Act would be available. As, there is no dispute about investment of the sale proceed by the assessee in a residential property. Therefore, it is my considered view that on the basis of plethora of evidences produced both during assessment proceeding as well as during appellate proceeding, the appellant is eligible for deduction u/s 54 of the Act. Accordingly, the appellant is eligible for deduction u/s 54 of the Act. Accordingly, the ground of the appeal on this issue is partly allowed. 7. While pleading on behalf of the revenue, the ld DR has relied on the order of the Assessing Officer and pleaded that the order of the ld. CIT(A) deserves to be set aside. 8. On the other hand, the ld AR of the assessee has submitted that the ld. CIT(A) has granted relief to the assessee after considering all the relevant facts and circumstances of the case. The Assessing Officer denied the benefit to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural. The assessee submitted a valuation report wherein one storied house having boundary wall was mentioned. The valuer has also taken photographs which were also produced during hearing, which are placed at page No. 32 of the paper book. The electric connection and the LPG connection in assessee s name and her sons name respectively also establish that there was a construction on this land and which was being utilized as residence. Necessary evidence placed at page Nos. 33 to 40 of the paper book. The ration cards were also on this address. The Aaadhar card of the assessee as well as her husband was also of this address. PAN was also allotted on this address. Even the income tax notices issued by the Assessing Officer were served on this address, which are placed at pages No.41 to 49 of the paper book. The property was on rent for ₹ 35,000/- per month for certain period for which necessary evidence is placed at page No. 51 to 52 of the paper book, which is a rent agreement. A certificate from the Chairman of the Municipal Committee, Parshad of the Municipal Committee and neighbours of the assessee were also filed, which is placed at page No. 52 to 62 of the paper book. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of brokerage paid of ₹ 8,00,000/- while calculating the taxable income under the head capital gain. Accordingly, the appellant ground of appeal on this issue is allowed. 11. Now the revenue is in appeal before the ITAT. The ld DR has relied on the order of the Assessing Officer. On the contrary, the ld AR of the assessee has vehemently supported the order of the ld. CIT(A). 12. After hearing both the sides on this issue, we hold that the assessee has paid brokerage expenses of ₹ 8.00 lacs, which approximately 2% of the sale consideration, which appears to be reasonable. This brokerage was paid to three persons and the payments were made by cheques which are verifiable from the bank statement of the assessee. Considering all these facts, we find no fault in the order of the ld. CIT(A) and we sustain the same on this ground. Accordingly, this ground of revenue s appeal stands dismissed. 13. In the ground No. 3, the issue involved is allowing benefit of the claim of ₹ 39,43,196/- disallowed by the A.O. while computing capital gain indexed cost of construction of house and its improvement. The ld. CIT(A) has granted relief to the assessee by holding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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