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TMI Blog2018 (12) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed. - Decided in favour of assessee. Disallowance of claim U/s 54B - agriculture land purchased for ₹ 7 lakhs on 16.05.2012 in the name of the son is before the date of transfer of agriculture land sold by the assessee and that the expenditure of ₹ 10,11,000/- incurred on such land is not eligible for deduction - Held that:- Having regard to the facts and circumstances of the case when the assessee himself has declared the transfer of the land in question vide agreement dated 11/6/2013 then the earlier agreement dated 29/12/2011 cannot be considered as a relevant document for the purpose of transfer of the land in question. There is no dispute that the land for ₹ 7.00 lacs was purchased by the assessee vide agreement dated 16/5/2012 which is prior to the sale declared by the assessee vide agreement dated 11/6/2013. Consequently, the said purchase prior to the sale of the existing land would not be allowable for deduction U/s 54B of the Act. Disallowance of expenditure claimed by the assessee on improvement of the said land which is purchased vide agreement dated 05/7/2013 - Held that:- As far as the expenditure incurred by the assessee for improvement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the cost of construction at ₹ 37,03,630/- whereas the DVO has estimated the cost of construction at ₹ 32,74,800/-. Since the claim of assessee as well as the department is based on the estimated cost of construction determined by the respective valuers, therefore, it is a pure subject matter of estimate not based on actual expenditure incurred - when two separate estimates are the basis of claim of both the parties then to bring the controversy to an end we find it proper to estimate the cost of construction of the house as average of both the estimates made by the registered valuer as well as by the DVO. AO is directed to take the cost of construction of house as average of both the valuations done by the registered valuer and by the DVO. Hence, this ground of appeal is partly allowed. - ITA No. 940/JP/2018 - - - Dated:- 12-10-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P.C. Parwal (CA) For The Revenue : Shri Ram Singh (Addl.CIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 19/02/2018 of ld. CIT(A), Kota for the A.Y. 2014-15. 2. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant material on record we note that the assessee has explained the cause of delay in paragraphs No. 3 to 6 of the affidavit of the assessee as under: 3. That in respect of the agricultural land so sold by me a case was filed on 09.05.2016 in the court of SDO by Shri Chouthmal, grandson of Shri Raghunath about the title of this property from whom this land was purchased in 1965 by my father, Late Shri Jaganath. Therefore, during the period when the order passed by CIT(A) was received by me, I got involved in this Court case. 4. That this case was decided against me by the SDO Court vide order dated 4lh June, 2018. Therefore, I had to take immediate steps for stay and filing appeal against this order. Accordingly, I got involved to protect my title in this land and filed appeal on 11th June, 2018 before the Court of Revenue Appellate Authority, Kota for stay of the order of SDO Court. This case is still pending before the Revenue Appellate Authority, Kota. Because of all these litigations, the order received from the office of Commissioner (Appeals) slipped from my mind and I could not consult my legal counsel about the future course of action to be taken against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 10,11,000/- incurred on such land is not eligible for deduction. He has further erred in not considering the stamp duty expenses of ₹ 1,15,320/- incurred on purchase of such land in considering the claim of deduction u/s 54B. 3. The Ld. CIT(A) has erred on facts and in law in considering the cost of the property on which deduction u/s 54F is claimed at ₹ 38,21,640/- as against ₹ 45,65,000/- claimed by the assessee and thereby, restricting the claim of deduction u/s 54F at ₹ 20,07,687/- as against ₹ 27,39,676/- claimed by the assessee. 4. The assessee craves to amend, alter and modify any of the grounds of appeal. 5. The appropriate cost be awarded to the assessee. 7. Ground No. 1 of the appeal is regarding disallowance of indexed cost of improvement amounting to ₹ 6,75,930/- while computing the long term capital gain. The assessee sold the agricultural land for a consideration of ₹ 88.00 lacs vide sale agreement dated 11/6/2013 and subsequently a sale deed was executed on 22/09/2015. Since the stamp duty valuation was taken at ₹ 1,17,95,288/-, therefore, the full value consideration U/s 50C of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e area of the land and the contents of the receipt we find that the claim of expenditure incurred in the year 1984 for land levelling has been established by the assessee by production of the said receipt. Accordingly, the claim of the assessee deserves to be allowed. We direct the Assessing Officer to allow the claim of the assessee for indexed cost of improvement of land at ₹ 6,75,930/-. Hence, this ground of the assessee s appeal stands allowed. 11. Ground No. 2 of the appeal is regarding disallowance of claim U/s 54B of the Act to the extent of ₹ 18,26,320/-. The assessee claimed deduction U/s 54B of ₹ 48,43,320/- which includes purchase of agricultural land of ₹ 7.00 lacs on 16/5/2012 in the name of son and the expenditure on improvement of the said land of ₹ 10,11,000/- including the cost of construction of two rooms and further the stamp duty paid by the assessee in respect of another agricultural land purchased on 05/7/2013. The ld AR of the assessee has submitted that the ld. CIT(A) while deciding the claim of deduction U/s 54B of the Act has confirmed the disallowance in respect of the agricultural land purchased on 16/5/2012. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars after that date, purchased any other land for being used for agricultural purposes, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i ) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or ( ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced, by the amount of the capital gain.] [( 2) The amount of the capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the parties have entered into a second agreement which has ultimately culminated in execution of sale deed on 22/09/2015. It is not the case that the first agreement dated 29/12/2011 was the basis of the execution of sale deed. Even otherwise the assessee has declared the transfer of the land in question for the year under consideration and not in the year relevant to the first agreement dated 29/12/2011. Therefore, if the contention of the ld AR of the assessee is accepted then the transfer itself would take place from the date of first agreement and the entire case has to be reversed back. Thus, having regard to the facts and circumstances of the case when the assessee himself has declared the transfer of the land in question vide agreement dated 11/6/2013 then the earlier agreement dated 29/12/2011 cannot be considered as a relevant document for the purpose of transfer of the land in question. There is no dispute that the land for ₹ 7.00 lacs was purchased by the assessee vide agreement dated 16/5/2012 which is prior to the sale declared by the assessee vide agreement dated 11/6/2013. Consequently, the said purchase prior to the sale of the existing land would not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of deduction U/s 54F of the Act to ₹ 20,07,687/- as against ₹ 27,39,676/- claimed by the assessee. We have heard the ld. AR as well as the ld DR and considered the relevant material on record. The assessee purchased residential plot and then constructed a house. The assessee has claimed the cost of new house at ₹ 45,65,000/- and filed a copy of valuation of a registered valuer in support of his claim. The ld. CIT(A) referred the matter of valuation of cost of the property to the DVO who has determined the cost of property at ₹ 38,21,640/-. The ld. CIT(A) has adopted the cost of new house estimated by the DVO and consequently restricted the deduction U/s 54F of the Act to ₹ 20,07,687/- as against the deduction claimed by the assessee of ₹ 27,39,676/-. The ld AR has pointed out that the assessee has purchased plot of land for construction of house at ₹ 8.50 lacs as per the agreement dated 17/08/2013 and also filed an affidavit of the seller to confirm the purchase consideration of the land. He has further contended that the DVO has adopted DLC rate at ₹ 5,46,840/- ignoring the actual purchase consideration paid by the assessee. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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