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TMI Blog2020 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... as legal angle and arrived at a just conclusion, which cannot be said to be incorrect or unjustified. In view of the above, our interference is not called for on this issue. It is upheld. Ground no.1 of Revenue is thus dismissed. Addition invoking provisions of section 56(2)(vii)(b) - difference between the value adopted by the stamp valuation authority, and purchase consideration shown by the assessee - HELD THAT:- After considering comparable instance furnished by the assessee and also remand report submitted by the AO, the Ld.CIT(A) found that the rate for the transactions in the area registered subsequent to that of the assessee s transaction should have been at higher rates as per normal circumstances, and therefore, there is no possibility of payment in cash in excess of purchase price shown by the assessee. It was also recorded by the CIT(A) that comparable cases furnished by the assessee has not been disputed by the AO in his remand report, and therefore, no case has been made out by the AO on this count. Secondly, it has been observed by the Ld.CIT(A) that when the assessee disputed the value of the property as per the stamp valuation authority, which was consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... li together with other co-owners for a consideration of ₹ 5,35,00,000/- by registered sale deed dated 17.1.2014. The assessee was having 50% share in that property, which came to ₹ 2,67,50,000/- on which capital gain is liable for taxation. The assessee has sought deduction in respect of cost of improvement of ₹ 1,60,09,128/-. The Ld.AO sought explanation for this improvement cost from the assessee. The claim of the assessee was on two counts. Firstly, it was explained by the assessee that the expenditure incurred by the assessee was between 1982 to 1993 and the assessee being an agriculturist was not required to maintain books of accounts and other records and that too for a period of about 23 to 34 years. These expenditure was incurred towards filling of pits which developed during excavation of sand for manufacturing of bricks and digging bore-well and pits for storing rain water, and also construction of cattle sheds and storage houses. Since this expenditure was incurred three decades back, no details could be traceable or lost due to time eclipse. Secondly, assessee submitted that even otherwise also, the claim of the assessee was allowable as per the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .com 395 (Guj.). - ACIT VS Jogindersingh (ITA No. 2942/DELHI/2011) ITAT, Delhi - Anmol Colour India Pvt. Ltd. Vs. ITO 31 SOT 18 (JP) 121 ITJ 269: ITAT, Jaipur. - CIT Vs. Khanpur Cool Syndicate (1964) 53 ITR 225 (SC): As far as facts of the case are concerned, the appellant had sold agricultural land and incurred expenditure on account of cost of improvement on agriculture land which was not accepted by the AO. The appellant could not furnish evidences of improvement for land which happen three decades ago. Therefore, valuation made by the registered valuer of the appellant showing the value of said agriculture land on 01/04/1981 at ₹ 10,11,600/- and improvement cost Rs..9,55,560/- in 1982 was not accepted by the AO. In response to such proposition, the appellant submitted alternative contention such as the deduction u/s.54B should be allowed. The deduction u/s.54B was also not allowed by the AO for following reasons: a) The registration of purchase of new agricultural land dated 28.11.2013 happens to be before the sale of original agricultural land for which sale has been registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-wise investment into new agricultural land which is as under: Date of Cheque as per sale deed of Ambli land Cheque No Name of the buyer who paid the amount to the appellant Actual date of credit of cheques in the bank a/c Amount reed Date of Cheque as per purchase deed of Telav land Cheque No Name of the seller to whom A' paid purchase consideration Actual date of debit of cheque in the bank a/c Amount Paid TDS u/s 194IA Chaturbhai Ambalal Patel 89167 30/09/13 131101 Januben 31/10/13 100000 TDS u/s 194IA Jay Chaturbhai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26/12/13 5527530 29/11/13 168422 Rafiyuddin 31/12/13 5566668 19/12/13 Hinal Chaturbhai Patel 26/12/13 5527430 29/11/13 168407 Husnaben 31/12/13 5566666 Total 26749994 Total 27000000 The substance of the matter is important in this case and the fact proved above shows that the appellant has utilized sales consideration of old land for purchase of new agricultural land. Since appellant had prima facie complied with requirements of section 54B, deduction u/s.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Also, the Hon'ble Gujarat High Court has held that, departure from the words or the rule is legitimate only in such cases where literal construction may result in depriving certain existing works of all meaning or to avoid any part of the statute becoming meaningless or otiose. The Hon'ble Supreme Court in the case of CIT vs S Tejasingh 35 ITR 408, has laid down a cardinal principal that the course will have to reject the construction which will defeat the plain intention of legislature, even though, there may be some inexactitude in the language used. It is a well settled doctrine of interpretation of statute that a purposive construction of an enactment is one which gives effect to the legislative purpose by- (a) Following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose, or (b) Applying a strained meaning where the literal meaning is not in accordance with the legislative purpose. The Hon'ble Supreme Court has also laid down the cardinal principal in the case of Harshad Shantilal Mehta vs Custodian 231 ITR 871, 886 that; the Courts must look to the object wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) Appellant's contention that the AO has not adversely commented on the fulfillment of conditions to avail benefit u/s.54B, is found to be correct. It is noticed that the AO has more emphasized on the ratio in the case of Goetz (India) Ltd. vs. CIT 284 ITR 323 (SC) to deny the benefit on technical ground. Having held that the appellant has complied with the conditions to avail the benefit u/s.54B, now I come to the technical aspect raised by the AO while denying the benefit u/s.54B. The appellant submitted that heavy reliance on the decision in the case of Goetz (India) Ltd. vs. CIT 284 ITR 323 (SC) by the Assessing Officer was misplaced and without appreciating the applicable position of law for the year under consideration and without taking into account settled position of law explained by the Courts time to time. It was emphasized that the Assessing Officer ought to have appreciated that assessment year involved before the Hon'ble Supreme Court was 1995-96 when language appearing in section 143(3) was .....determine the sum payable by him . In the relevant assessment year the Assessing Officer was not empowered to assess income below th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an assessee is entitled to raise before appellate authorities additional grounds in terms of additional claims not made in return filed by it - Held, yes - Assessee-company claimed deduction under section 43B in respect of payment of SEBI fees of ₹ 20 lakhs paid - Subsequently assessee, in course of assessment proceedings before Assessing Officer, made a fresh claim for deduction of₹ 40 lakhs stating that it had made another payment of SEBI fees of ₹ 40 lakhs on 9-5-2003 which pertained to provisions made for financial year 2001-02 and should be allowed on payment basis - Both appellate authorities had themselves considered additional claim and allowed it - Both orders expressly directed Assessing Officer to allow deduction of ₹ 40 lakhs under section 43B - Whether since error in not claiming deduction in return of income was inadvertent and without any malafide intention as there was nothing on record that militated against said finding, impugned additional claim of assessee was to be allowed - Held, yes [In favour of assessee] The facts of the case of the appellant are similar to the one decided by the hon'ble High Court of Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides, that assessee made such claim even during the remand proceedings as well as a revised claim was made by the assessee before the AO. The Ld.CIT(A) observed that simply because the assessee has not filed a valid revised return, that would not be a ground for rejection of such claim. In order to understand legitimacy of the investment, the Ld.CIT(A) analysised fund flow statement filed by the assessee, which has been noticed by the Ld.CIT(A) at page no.19 of the impugned order. On date wise analysis of the same, the Ld.CIT(A) has come to the conclusion that assessee has utilised sales consideration of old land for purchase of new agriculture land, and prima facie complied with requirements of section 54B, and therefore, purchase price i.e. investment in new land of ₹ 2,70,00,000 being more than the sale consideration received of ₹ 2,67,50,000/-, there would not be any necessity to furnish evidence to prove cost of improvement. The Ld.CIT(A) observed that there was no bar on the appellate authorities to entertain claim of the assessee in the course of appellate proceedings, which the AO denied on account of non-filing of revised return. While holding so, the Ld.CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the claim of the said Subhnaben on the said property, the claim of the assessee cannot be entertained, and therefore he made an addition of ₹ 77,86,500/- being the difference between the value adopted by the stamp valuation authority, and purchase consideration shown by the assessee by invoking provisions of section 56(2)(vii)(b). Against this addition, the assessee went in appeal before the Ld.first appellate authority. It was submitted by the assessee before the Ld.CIT(A) that no comparable instance was brought to the notice of the assessee to support the claim that jantri rate adopted by the AO was fair market value of the land purchased. The Ld.AO ought to have referred the matter to the DVO for determining fair market value of the property, if the purchase value shown by the assessee was not acceptable to the AO. The assessee has also furnished three comparable instances belonged to nearby area to demonstrate that the value shown by the assessee close to the market rate. The Ld.CIT(A) has noticed those comparable instances submitted by the assessee in his order on page no.28 and found that the rate for the transaction in that area subsequent to the assessee s tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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