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TMI Blog2024 (12) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... tr. cannot be held as correct. In the interest of justice, the matter is, therefore, set aside to the file of the Jurisdictional AO with a direction to refer the matter to the DVO to find out the correct market value of the property as on 01.04.1981. The report of the DVO should be confronted to the assessee and the objection, if any, of the assessee in this respect should also be taken into account, before arriving at the correct value of the property as on 01.04.1981. The ground taken by the assessee is allowed for statistical purposes. Deduction u/s.54F - denial of deduction as house was located on a small portion of the total land area - CIT(A) confirming the disallowance u/s.54F on the ground that the new property purchased on 09.05.2018 was beyond the two years time limit from the date of sale of original property - HELD THAT:- There is no built up residential house on the land purchased by the assessee. Further, no evidence of house tax payment by the seller has been brought on record. Since, the assessee has failed to establish that it had purchased any residential house, the deduction u/s.54F of the Act was rightly denied by the AO. In fact, the AO had been generous in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sits in the bank account is confirmed. The ground taken by the assessee is allowed in part. - Shri T.R. Senthil Kumar, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member For the Appellant : Shri Rajendera K Shah, A.R. For the Respondent : Shri Rignesh Das, Sr. DR ORDER PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short the CIT(A) ), dated 05.01.2024 for the Assessment Year 2017-18. 2. The brief facts of the case are that the return of income for A.Y. 2017-18 was filed on 30.03.2018 declaring income of Rs.20,89,430/-. The case selected for limited scrutiny to examine the capital gain/loss on sale of property and cash deposits made during demonetization period. In the course of assessment, the AO found that the assessee had sold agricultural land along with his two brothers, on which capital gain was disclosed in the return. It was found that the cost of acquisition of the land was worked out by the assessee @ Rs.70/- per sq. mtr. as on 01.04.1981 on the basis of report of the approved valuer. The AO rejected the report of the valuer and worked out the cost of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the decision of AO restricting the deduction u/s 54F to Rs.17,27,460/- against the claim of the assessee of Rs. 1,47,32,378/- and while doing so the AO has not considered the cost of 718 sq. mt. of Rs. 2,33,07,140/- though the land appurtenant to house is forming part of total investment as a residence house as per evidence on record. The order of CIT(A) NFAC should be set aside and impugned addition by AO may please be ordered to be deleted. 3. The learned CIT(A) NFAC has erred in treating investment date of new property as on 09/05/2018 in spite of investment date is 26/07/2017, as per Banakhat considering the said documents ITO has allowed claimed u/s 54F of Rs. 17,27,460/-. 4. The learned CIT(A) NFAC has erred in confirming the decision of AO in rejecting the claim of agriculture income inter alia making addition u/s 69A of Rs. 24,48,000/- and taxing the same u/s 115BBE, inspite of all the documents and evidences of earning the agriculture income clearly brought on record. The order of CIT(A) NFAC should be set aside and impugned addition by AO may please be ordered to be deleted. 5. The learned CIT(A) NFAC has erred in denying opportunity of being heard through videoconferen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Revenue there was a wide variation in the rate as per the four methods adopted by the approved valuer, which made his report unreliable. The assessee had adopted a conservative rate of Rs.70/- per sq.mtr. as on 01.04.1981, which was less than the minimum value determined by the approved valuer. If the AO was not satisfied with the report of the approved valuer and the rate as adopted by the assessee, he should have referred the matter to the DVO to find out the correct value of the property as on 01.04.1981. The AO being not an expert, his suo motto adopting the value of the property at Rs.6.20/- per sq.mtr. cannot be held as correct. In the interest of justice, the matter is, therefore, set aside to the file of the Jurisdictional AO with a direction to refer the matter to the DVO to find out the correct market value of the property as on 01.04.1981. The report of the DVO should be confronted to the assessee and the objection, if any, of the assessee in this respect should also be taken into account, before arriving at the correct value of the property as on 01.04.1981. The ground taken by the assessee is allowed for statistical purposes. 8. The next two grounds pertain to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly considered the rival submissions. The copy of the sale deed of the purchase of the new property has been brought on record. It is found therefrom that the seller Shri Bhupendrabhai Chandulal Parikh and the assessee were joint owners of Sub-plot No.8 with area of 1681.39 sq.mtr. in Jayendra Park Co-operative Housing Society Limited. The assessee had constructed a residential house of approx. 515.713 sq.mtr. on one half portion of this Sub-plot No.8 after obtaining approval from Ahmedabad Municipal Corporation in May 2012. The other half portion which was with the seller, was approved for usage of construction of residential purpose by AMC in July 2014. Accordingly, the seller had constructed a structure of 27 sq.mtr. on total land area of 840.70 sq.mtr. This second portion of the construction along with the land has now been acquired by the assessee in respect of which deduction u/s.54F of the Act has been claimed. 11. As per the provision of Section 54F of the Act, the deduction is allowable on purchase of residential house. The sale deed dated 09th May, 2018, through which this property was purchased by the assessee, doesn t refer to purchase of any residential house. The prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce. The assessee has filed a copy of commencement letter (Raja Chitti) dated 13th May, 2014 of Ahmedabad Municipal Corporation in respect of residential construction on this property, which is reproduced below: 13. It is found from this approval that the occupier name appearing in this commencement letter was Prashantbhai C. Parikh Bhupendrabhai Chandulal Parikh jointly . Therefore, the construction carried out on the land area of 27 sq. mtr. cannot be held as belonging to the seller exclusively. This construction was in joint ownership of the two co-owners of sub-plot no.-8. Thus, even this open construction of 27 sq. mtr was not fully acquired by the assessee as he himself was the co-owner of the property. The reliance placed by the assessee on the decision of Hon ble Karnataka High Court in the case of Shri M. A. Patel (supra) is also found to be misplaced. In that case, 4 built up residential houses were in existence on land area of 19.06 acres. In the present case, however, there is no built up residential house on the land purchased by the assessee. Further, no evidence of house tax payment by the seller has been brought on record. Since, the assessee has failed to establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alances as well as the cash derived out of agricultural income, most of which were in old high denomination notes, the cash was deposited in the bank account post demonetization. Therefore, the AO was not correct in treating the cash deposits as unexplained. 17. Per contra, Shri Rignesh Das, the Ld. Sr. DR has drawn our attention to the cash account filed by the assessee in the paper book and submitted that in spite of huge cash balance as available with the assessee, there were periodic withdrawals of the cash from bank account, which was not explained. Further that the rational for keeping such huge cash in the house, when the assessee was maintaining bank account, was also not been explained by the assessee. The Ld. Sr. DR submitted that the source of cash, particularly the deposits made in the bank account after demonetization, were unexplained and, therefore, the AO had rightly made the addition. 18. We have carefully considered the rival submissions. The AO had treated the entire cash deposits in the bank account of Rs.24,48,000/- as unexplained, which cannot be held as correct. There is no denial to the fact that the assessee was deriving agricultural income in cash. The net ..... X X X X Extracts X X X X X X X X Extracts X X X X
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