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TMI Blog2014 (2) TMI 1415X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 142A of the Act for determining the value of any investment can only be done with reference to S.69, S.69B, S.69A or for the purpose of fair market value of any property under S.56(2). In the given facts of the case, these provisions are not applicable, nor can be invoked by the AO. What Revenue is contesting can be appropriate if the reference was made in the hands of the builder, who may claim the cost of acquisition to ascertain the investment in the building, but in the assessee s case, who adopted the actual cost of construction for arriving at the sale consideration, these provisions do not apply. This is what the learned CIT(A) has decided. Therefore, we do not see any reason in the ground raised by the Revenue. Accordingly, the grounds are rejected, and the Revenue s appeal stands dismissed. Deduction u/s 54 - proportionate capital gains on each house - HELD THAT:- While calculating the exemption on each of the flats eligible for each of the houses, the AO is directed to take into consideration, the capital gains arising on each of the house. As seen from the development agreement, the assessee is having a house having land of 940 sq. yards; another two houses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is contesting in the cross-objection the denial of certain benefits by the learned CIT(A) in the order. 2. Briefly stated, facts are that the assessee is an individual and filed return of income admitting total income of Rs.29,80,485, calculating capital gains, after claiming deduction under S.54 on the transfer of property through a development agreement. The assessee was exclusive owner of House No.12-2-827 having land area of 940 sq. yards and House No.12-2-827/38 having land of 78 sq. yards. He alongwith his wife are joint owners of H. No. 12-2-827/A/2 having undivided interest in land area of 222 sq. yards and H.No.12-2-827/A/2/1 having undivided interest in land area of 222 sq. yards. Assessee s wife is the exclusive owner of H.No.12-2-827/37 having land area of 180 square yards. Out of the total land of 1642 sq. yards, 1325 sq. yards of land was transferred under a development agreement by both the owners, after excluding 44 sq. yards surrendered to Municipal Corporation of Hyderabad, and 273 sq. yards retained by the land owners. Out of the 1325 sq. yards, assessee s share of land was 1110 sq. yards, while 215 sq. yards belonged to his wife. As per the developmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under S.54. In support, assessee gave detailed submissions and also stated that two flats have been combined into one flat and requested the CIT(A) for ordering verification of the same. The learned CIT(A) ordered the Assessing Officer to enquiry and obtained the report on the same. 6. While accepting the assessee s contentions about power of Assessing Officer to refer to valuation cell, terrace rights, claim of exemption under S.54 on each of the residential units, the learned CIT(A) upheld the action of the Assessing Officer in adopting 50% of sale proceeds on the half flat sold; and rejected the contention on the rent free accommodation valuation. Many of the errors committed by the learned Assessing Officer in adopting area of land as well as valuation have been corrected by the learned CIT(A) in the order. 7. Revenue is not aggrieved by any of the issues which are considered by the learned CIT(A), except on the powers of the Assessing Officer in referring to the valuation cell. The assessee, however, is aggrieved in the cross objections on the issue of restriction of deduction under S.54 on a total area of Rs.8757 sq. ft. covering five flats to 6997 sq. ft and valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, these provisions do not apply. This is what the learned CIT(A) has decided. Therefore, we do not see any reason in the ground raised by the Revenue. Accordingly, the grounds are rejected, and the Revenue s appeal stands dismissed. 9. Coming to the cross-objection of the assessee, the assessee has raised three grounds on two issues. As briefly stated, the assessee has claimed exemption under S.54 on four flats (five flats made into four flats by combining two flats into one). As briefly stated, the Assessing Officer allowed deduction in respect of only one flat stating that the assessee is entitled only for one residential house as exemption under S.54. The learned CIT(A) vide para 11 discussed the issue and held that the assessee is entitled to exemption in respect of four of the residential houses, received as consideration from the developer. However, while deciding the ground pertaining to the assessee s claim that two flats had been merged into one, while factually accepting that the assessee has merged two flats, viz. 501 and 505 into one, rejected the contention of the assessee, stating that from the computation of income filed, assessee had claimed exemption under S. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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