9911796707
TMI Blog2018 (10) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... imated the property at ₹ 50,40,000/- and the Departmental Valuation Officer estimated at ₹ 81,68,304/-, this Tribunal is of the considered opinion that estimation of value of the property after considering the infrastructure facilities and other factors as referred above, at ₹ 69,00,000/- would meet the ends of justice. Accordingly, the orders of both the authorities below are modified and the Assessing Officer is directed to take the sale consideration of the property at ₹ 69,00,000/- and thereafter compute the capital gain. Coming to development charges the assessee has produced the receipt from Shri K. Manikandan for filling up the land to the extent of ₹ 3,10,000/-. This Tribunal is of the considered opinion that when the assessee has produced the receipt for filling the land, the Assessing Officer is not justified in disallowing the claim of the assessee. The cost of filling of land has to be allowed while computing the capital gain. The payment of brokerage was also disallowed by the Assessing Officer. It is a fact that in the real estate business, the assessee has to pay 2% to 3% of sale consideration as brokerage for negotiating the price of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Appeals) -4, Chennai, for the assessment years 2011-12 and 2010-11. Therefore, we heard both the appeals together and disposing of the same by this common order. 2. Let s first take the assessee s appeal in I.T.A. No.3187/Chny/2016 for the assessment year 2011-12. 3. The only issue arises for consideration is with regard to valuation of property under Section 50C of the Income-tax Act, 1961 (in short 'the Act'). 4. Shri Anandd Babunath, the Ld. representative for the assessee, submitted that during the year under consideration, the assessee sold a property at Narayanapuram Varisai to the extent of 4800 sq.ft. As per the sale deed, according to the Ld. representative, the assessee received ₹ 50,00,000/- towards sale consideration. However, the Assessing Officer adopted the sale consideration under Section 50C of the Act at ₹ 90,20,000/-. According to the Ld. representative, the assessee, during the course of assessment proceeding, requested the Assessing Officer to refer the matter to the Departmental Valuation Officer. However, the Assessing Officer refused to do so and ultimately adopted the value under Section 50C of the Act at ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere are schools, hospital, market, etc. in the nearby area, he has not identified the distance between the said infrastructure facilities and the subject land. Moreover, according to the Ld. D.R., the Assessing Officer is bound to consider the guideline value or the value assessed by the Sub- Registrar for the purpose of collecting stamp duty. Since admittedly the property was valued at ₹ 90,20,000/-, according to the Ld. D.R., the Assessing Officer has rightly adopted the same. 8. Referring to the cost of levelling of land, the Ld. D.R. submitted that even though the assessee has produced a voucher from one Shri Manikandan, a copy of which is extracted by the Assessing Officer at page 13 of his order, the Ld. D.R. submitted that mere production of voucher is not sufficient to prove the expenditure said to be incurred by the assessee. Therefore, according to the Ld. D.R., the Assessing Officer has rightly disallowed the claim of the assessee to the extent of ₹ 3,10,000/-. Referring to the cost of brokerage to the extent of ₹ 3 lakhs, the Ld. D.R. submitted that the assessee has not furnished any details before the Assessing Officer for payment of brokerage, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and subsections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation 1 .- For the purposes of this section, Valuation Officer shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). Explanation 2. - For the purposes of this section, the expression assessable means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of stamp duty, then the Assessing Officer has no other way except to refer the matter to the Departmental Valuation Officer. 13. The word may appearing in Section 50C(2) of the Act does not give any discretion to the Assessing Officer when the assessee is requesting the Assessing Officer to refer the matter to the Departmental Valuation Officer. The scheme of the Income-tax Act, 1961 is to find out the fair market value of the property on the date of transfer and to compute the capital gain accordingly. When the assessee filed the report of the Approved / Registered Valuer and specifically requested to refer the matter to the Departmental Valuation Officer, this Tribunal is of the considered opinion that the Assessing Officer cannot so lightly refuse to refer the matter to the Departmental Valuation Officer. The valuation under Section 50C of the Act has to be made as per the provisions of Wealth Tax Act. The fair market value is nothing but a price that may be agreed between the willing purchaser and the willing seller. The fair market value is not a constant figure. It may fluctuate depending upon various factors, such as the area of the land, location of property, acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessee has produced the receipt for filling the land, the Assessing Officer is not justified in disallowing the claim of the assessee. Therefore, the cost of filling of land has to be allowed while computing the capital gain. Moreover, the payment of brokerage was also disallowed by the Assessing Officer. It is a fact that in the real estate business, the assessee has to pay 2% to 3% of sale consideration as brokerage for negotiating the price of the property to the prospective purchasers. Therefore, this Tribunal is of the considered opinion that 2% of the total sale consideration has to be allowed as brokerage charges. Accordingly, the Assessing Officer is directed to allow 2% of ₹ 69,00,000/- as brokerage while computing the capital gain. 16. In the result, the appeal of the assessee is allowed. 17. Now coming to assessee s appeal in I.T.A. No.756/Chny/2017. 18. Shri Anandd Babunath, the Ld. representative for the assessee, submitted that the assessee sold an immovable property at Flat No.16, Block No.3, Asiad Colony, Anna Nagar West, Chennai, for a consideration of ₹ 25,00,000/-. The assessee admitted long term capital gain of ₹ 1,09,844/-. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has not spent any money. Hence, the Assessing Officer has rightly disallowed the claim of the assessee. 21. We have considered the rival submissions on either side and perused the relevant material available on record. The assessee appears to have sold the property at ₹ 31,20,000/-. However, the assessee claimed before the Assessing Officer that it was sold for ₹ 25,00,000/-. The Assessing Officer, after verifying the copy of sale deed and other material, found that for sale of property, the assessee has paid brokerage of ₹ 1 lakh and also taken the indexed cost of acquisition at ₹ 4,20,156/- and after reducing the brokerage and indexed cost of acquisition, the Assessing Officer computed the long term capital gains at ₹ 25,99,844/-. The assessee has not disputed the computation made by the Assessing Officer with regard to long term capital gains at ₹ 25,99,844/-. The dispute is only with regard to exemption claimed by the assessee under Section 54F of the Act to the extent of ₹ 15,50,000/- and development charges of ₹ 3,20,000/-. The Assessing Officer disallowed the claim of exemption under Section 54F of the Act on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
