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TMI Blog2020 (12) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of execution of agreement to sell being 21.02.2011. It is therefore prayed that the above action of the Id. CIT (A) be quashed and that the Id. AO be directed to consider the fair market value of the impugned land for the purpose of sec.50C of the Act on the date of execution of Notarized agreement to sell by the appellant which is also the date of payment of purchase consideration by the purchasers to the sellers and not on the date of execution of sale deed by the appellant. 2) The Id. Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the action of the Id. A.O. of passing the impugned order in complete defiance of principles of natural justice and fairness since neither the Id. A.O. nor the Id. DVO issued a draft copy of the valuation report to the appellant before finalizing the same so as to enable the appellant to offer his comments and objections on the proposed determination of fair market value of the property on the date of execution of sale deed by the Id. DVO through his valuation report. It is therefore prayed that the above action of the Id. CIT (A) be quashed and that the resultant addition made on the basis of above refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 7) The above grounds of appeal are independent of each other and that each ground of appeal is without prejudice to the other ground or grounds of Grounds of Appeal. 8) The Appellant craves leave to add, amend, alter, delete, substitute or modify any or all of the grounds or Grounds of Appeal." 2. Brief facts of the case with regards to the grounds of appeal raised by the assessee are that the assessee is an individual. The assessee filed his Return of Income for the assessment year 2012-13 on 29.11.2012 declaring income of Rs. 2.82 crore. The case was selected for scrutiny and the assessment was completed under section 143(3) of the Act on 31.03.2015. 3. During the assessment, the Assessing Officer (AO) noted that the assessee sold agricultural land for a consideration of Rs. 11.98 crore on which stamp duty of Rs. 81.21 lakhs was paid. The sale deed of the land was registered on 05.10.2011. The assessee was shareholder of 50% of the land. The Assessing Officer noted that the stamp duty was paid on more than the actual sale consideration shown on the document. In order to verify the facts, the AO issued notice under section 133(6) of the Act to the Sub- Registrar concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to sale. At the prevalent time, the Jantri Rate was Rs. 7200/- per sqr mt only. And in case market price at the Jantri Rate is taken the price would come to Rs. 1.95 crore. While the assessee sold at Rs. 5.99 Crore which is three times more than the prevailing Jantri Rate. 4. The contention of the assessee was not accepted by the AO by simply holding that assessee has nothing to say other than what was stated in submission filed on 19.01.2015 disputing the area of land and the rate of stamp value authority. The AO noted that Valuation Report of Valuation Officer was received wherein he valued the property at Rs. 13.58 crore [entire area]. On the basis of report of valuer, the AO made addition of Rs. 80,07,059/- [50% of difference of sale consideration]. On appeal before the ld. CIT(A), the action of the AO was affirmed. 5. The AO also noted that the assessee claimed to have earned capital gain on sale of aforesaid plot of land. The assessee in the computation of income claimed deduction under section 54F of Rs. 14,98,727/- by investing the amount of capital gain in purchase of Flat No.206, 2nd Floor, Raj Abhishek City Homes, Sachin Palsana Road, Surat. On perusal of balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee submits that he is not pressing the Ground No. 2, 3, 4 and 5. Considering the submission of the ld. AR of the assessee, Ground No's. 2, 3, 4 and 5 are dismissed being not pressed. 8. Ground No.1 relates to adopting the valuation of land on the basis of valuation of District Valuation Officer (DVO). The AR of the assessee submits that assessee was Co-owner of land having 50% share therein. The assessee sold that piece of land along with his Co-owner vide agreement dated 21.02.2011. The copy of agreement to sale along with its true English Translation is placed on record. On the date of execution of agreement to sale, the purchaser made part payment of consideration by way of account payee cheque of Rs. 2.50 lakhs each to both the Co-owners i.e. assessee and the his Co-owner. The ld. AR for the assessee invited our attention to para 6 of agreement to sale, referring that parties agreed that in no circumstances the seller shall demand any increase in the sale consideration. The AR for the assessee explained that Jantri rate of land as per Stamp Valuation Authority, on the date of execution of agreement on 21.02.2011 was Rs. 7200/- per sq.mtr. The sale deed was registered on 16. 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 50C has retrospective effect. 10. On the other hand, the ld. Senior Departmental Representative (Sr. DR) for the Revenue supported the order of the ld. CIT(A). The Sr. DR for the revenue submits assessee himself during the assessment proceedings requested to consider the report of DVO. The AO has rightly adopted the value assed by the DVO. The reliance made by the assessee in Dharamshibhai Sonani (supra) is not applicable as the facts of that case are different, in the said case, the assessee received consideration on the basis of registered sale agreement. In the present case, there is no registered document. The Sr. DR for the revenue prayed for affirming the additions made by Lower Authorities. 11. We have considered the rival submissions of the parties and have gone through the orders of the authorities below. There is no dispute about the sale of land by the assessee. Further, there is no dispute that initial agreement to sale was executed on 21.02.2011. The Lower Authorities have not brought any material on record to dispute that on the date of execution of agreement to sale the assessee and his Co-owner has not received part consideration through account payee cheque. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view the there is no estoppel against the law. Further, the revenue cannot the benefit of ignorance of assessee, if otherwise the assessee is entitled for the benefit of First and Second Proviso of section 50C. In view of the factual and legal discussion, we are of the view that Stamp Duty Valuation as on 21.02.2012 has to be considered for the purpose of section 50C of the Act. Since we have accepted the primary contention of the AR of the assessee, therefore, discussion on the area of land / plot will become academic. In the result, Ground No.1 of the assessee is allowed. 14. Ground No.6 relates to disallowance of deduction under section 54F of the Act. The ld. AR of the assessee submits that the Lower Authorities rejected the claim of the assessee under section 54F of the Act on the ground that assessee owned more than one residential house other than new residential house on the date of transfer of original asset. The ld. AR for the assessee submits that on the date of transfer of land the assessee was having only one residential property in occupation of assessee. Therefore, the claim of exemption under section 54F of the Act is allowable. The ld. AR for assessee submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as accepted that during the year assessee has only one residential property for self-occupation and made addition on account of notional rent @ Rs. 24000/- per month with regards to Raj Abhishek City Homes, Sachin Palsana Road. The AO has not made any other addition on account of notional rent in respect of any other property. The ld. AR for the assessee prayed for allowing exemption under section 54F of the Act. 19. On the other hand, the Sr. DR for the Revenue submits that assessee himself has shown in his balance sheet more than one property. No other evidence except making submission that Ashirwad Palace flat is used for commercial purpose. Similarly for other properties, the assessee himself has shown various properties in his balance sheet, thus, the exemption claimed assessee under section 54F were rightly disallowed. 20. We have considered the rival submission of the parties and perused the orders of the Lower Authorities. We have also deliberated on various case laws and relied by the ld. AR of the assessee. The AO made disallowance of claim under section 54F of the Act by taking view that assessee owned more than one residential house on the date of sale of asset, capit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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