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TMI Blog2023 (3) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... od, the house was damaged. The inspector, when visited the site he could not ascertain the construction, therefore, gave a report that there was no proof of construction of building. Even when the DVO visited the site, he could not identify the construction. Therefore, he had reached to a conclusion that there was no construction. If you go by various evidences filed by the assessee, it is difficult to reject the claim of the assessee that she had constructed a house property at Nirambur Village, Thirukazhukundram Taluk, Kancheepuram District. If you go by findings recorded by the AO and the Ld. CIT(A), there is no dispute that the claim of the assessee is incorrect, because the assessee could not adduce proper evidence. Facts are con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim u/s 54 are bogus. 3. The Commissioner of Income Tax (Appeals) failed to appreciate that the documents attached as annexure to the assessment order, like, copy of construction agreement, quantities of civil works, cash vouchers issued by Mr.K.M.Rajan - contractor, etc. perse, indicated construction and denial of claim u/s 54 was unsustainable in law as well as on facts. 4. The Commissioner of Income Tax (Appeals) further failed to appreciate that the Assessing Officer, having made a reference to Valuation Cell u/s SSA on 04.12.2018 with a view to ascertaining the fair market value of a capital asset for the purposes of this chapter , it was neither open to the Commissioner of Income Tax (Appeals) nor the Assessing Officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 54 of the Act, for Rs. 2,26,69,255/-. The AO, called upon the assessee to file necessary details of computation of long term capital gains and claim of deduction u/s. 54 of the Act. In response, the assessee submitted that she had entered into an agreement for purchase of flat at Vasanthi Avante in Bangalore and paid advance of Rs. 20 lakhs. There was a difference between the appellant and the builder, and thus, the flat was not handed over to the assessee. Therefore, the assessee has constructed a new residential house at Nirambur Village, Thirukazhukundram Taluk, Kancheepuram District and claimed deduction u/s. 54 of the Act. The AO, on the basis of information furnished by the assessee and also on the basis of independent evidence co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nirambur Village, Thirukazhukundram Taluk, Kancheepuram District, on the basis of inspector report which was obtained during the course of assessment proceedings after more than three years from the date of construction of house property. He further submitted that although, the AO has referred valuation of building to the DVO, but the DVO did not submit his report before completion of assessment proceedings. Therefore, the conclusion reached by the AO on the basis of inspector report is incorrect. 5. The Ld. DR, on the other hand supporting the order of the CIT(A) submitted that, the AO as well as the Ld. CIT(A) brought out clear facts to the effect that the assessee has initially made a claim of deduction u/s. 54 of the Act, in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of flats at Bangalore and when the AO questioned, she replied that because of difference with builders, the transfer could not be completed and thus, she had constructed a new residential house property at Nirambur Village, Thirukazhukundram Taluk, Kancheepuram District. The AO disregarded claim of the assessee on various grounds including non-availability of source for construction of house property, and absence of necessary evidence. The AO had reached to above conclusion on the basis of report of inspector of Income-tax, non-appearance of Contractor Mr. K.M. Rajan and also failed to prove source for construction of house property. According to the AO, the assessee has utilized consideration received for transfer of original asset for som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential house property, whereas the authority claims that there is no proof of new construction. Therefore, we are of the considered view that the matter needs reexamination from the Assessing Officer. Thus, we set aside the order passed by the CIT(A) and restore the issue back to the file of the AO and direct the AO to re-examine the claim of the assessee in light of various averments including evidence filed by the assessee. The AO may also take necessary report from the DVO, if necessary to ascertain fair market value of residential building constructed by the assessee and decide the issue in accordance with law. 8. In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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