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TMI Blog2022 (7) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted area @ Rs. 300 per sq ft without appreciating the fact that the AO has adopted the value as per SRO records, applying the provisions of section 50C which is mandatory when the value adopted by SRO is higher than the actual consideration received by the assessee? - HELD THAT:- We note from the material available on record that the assessee has relinquished her right over 50% of the land to M/s. Datta Constructions and has received a constructed area of 8704 sft including the common areas from M/s. Datta Constructions as per the sale-cum-development agreement. The deemed consideration for relinquishing of the land flows from the cost of construction of the building admeasuring 8704 sft, given by M/s. Datta Constructions to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case are that the assessee received a residential house in Vijayawada from her husband Late Sri Ivaturi Sivaprasad as per Regd Will dt 17/11/1977. The assessee filed her return of income for the AY 2006-07 on 6/2/2008 declaring a total income of Rs. 11,93,700/-. The assessment was subsequently reopened U/s. 147 of the Act and statutory notices U/s. 143(2) and 142(1) were issued and served on the assessee. The assessee through her Authorized Representative (AR) filed written submissions before the AO. Considering the submissions made by the assessee s AR, the Assessing Officer assessed the total income at Rs. 63,92,929/-. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the CIT(A), Vijayawada. The Ld. CIT(A), Vij ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the provisions of section 48 of the IT act, as per which the full value of consideration received on transfer of capital asset (undivided proportionate area of land, constructed area of the flat and common area of the building are also transferred by the assessee as mentioned in the registered sale deed) is to be taken into account for computing the capital gains. 3. The Ld. CIT(A) erred in directing to adopt the rate of constructed area @ Rs. 300 per sq ft without appreciating the fact that the AO has adopted the value as per SRO records, applying the provisions of section 50C of the IT Act, which is mandatory when the value adopted by SRO is higher than the actual consideration received by the assessee. 4. The Ld. CIT(A) ough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of construction is not a correct proposition. The Ld. AR also argued that as per the SRO value of Rs. 400 per sft towards cost of construction in accordance with the provisions of section 50C of the Act is for the completed building and not for the incomplete building. The Ld. AR therefore prayed that the order of the Ld.CIT(A) on this ground shall be sustained. The Ld. AR further submitted that the land cost included in the computation of capital gains at Rs. 533 per sft shall be deleted. The Ld. DR forcibly argued that the AO has rightly concluded the computation of cost of construction at Rs. 400 per sft as per the letter No. Nil, dated 11/11/2009 addressed to the Revenue Audit Party by the Registration and Stamps Department. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall not be included in the deemed consideration. Further, it is noted that M/s. Datta Constructions has delivered an incomplete building which was not disputed by the Revenue. Since the building was semi finished with only RCC roof and walls, the cost of construction could not be considered at the value of Rs.400 per sft as given by the Registration and Stamps Department. We are of the considered view that the rate of Rs. 400 per sft is for the completed building and not for the semi-finished building. In view of the discussion above, we find no infirmity in the order of the Ld. CIT(A) wherein he has rightly considered the cost of construction @ Rs. 300 per sft which works out to 75% of the SRO value and hence no interference is required. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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