TMI Blog2014 (5) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... n it - Central Board of Direct Taxes Circular No. 471*, dated October 15, 1986, deals with investment in flats under the self-financing scheme of the Delhi Development Authority - The Board has stated in the circular that when an allotment letter is issued to an allottee under this scheme on payment of the first instalment of the cost of construction, the allotment is final unless it is cancelled - The Board has directed that such an allotment of a flat under this scheme should be treated as a case of construction for the purpose of capital gains – thus, the order of the FAA upheld – Decided against Revenue. Reference made to DVO - Valuation of property u/s 50C(2) of the Act – Held that:- FAA was of the view that the assessee had already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for the galas and the same was neither in possession of the assessee nor was put to use for the purpose of business during the relevant Financial Year therefore it cannot form part of the Block of Assets for the relevant Financial Year for the purpose of capital gain. 3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the reference to the DVO for the valuation of the property in Section 50C(2) of the I. T. Act is discretionary as the word used in the Act is may and not shall and the AO is not duty bound to refer the matter to the DVO as held by the Ld. CIT(A). 4) For these and other reasons it is submitted that the order of the CIT(A) may be set aside and that of the AO r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss sale proceeds were taxable as the income of the assessee for the year under consideration. He further held that the assessee had not disputed the value adopted by the stamp authorities in any appeal, that value of the property could be taken could be adopted at Rs. 48, 47, 850/-, as per the provisions of section 50C of the Act. In view of the above facts amount of Rs. 47, 69, 046/- was treated as Short term capital gain u/s. 50 of the Act and was taxed as income of the assessee for the year under appeal , by the AO. 3. In the appellate proceedings, First Appellate Authority(FAA)held that a reading of section 43 clause (c) indicated that the written down value had to be adjusted by the actual cost of any asset falling within the block ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had paid Rs. 40 lacs, that formalities of registration were over during the year under appeal, that assessee had acquired the asset, that for the purpose of section under consideration there was no difference between purchaser and acquirer of the asset, that use of the asset was not an essential condition for availing the benefits of provisions of section 50 unlike the provisions of section 32. He referred to page no. 29, 31 and 35 of the paper book. He relied upon the decision of Mrs Hilla J. B. Wadia (216 ITR 376) delivered by the Hon ble Bombay High Court, he also referred to the order of M/s Lalbhai Kalidas and Co. Ltd. (ITA No. 5832/Mum/2011-AY 2007-08 dated 08. 11. 2013. We have heard the rival submissions and perused the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession is only a formality. The Board has directed that such an allotment of a flat under this scheme should be treated as a case of construction for the purpose of capital gains. In the case of Lalbhai Kalidas Co. Ltd. (supra), to which one of us was the party, similar view has been taken by the Tribunal. Respectfully following the above decisions, we uphold the order of the FAA. Ground nos. 1 2 are decided against the AO. 5. Ground No. 3 is about reference to be made to the District Valuation Officer (DVO) for the valuation of property as per the provisions of section 50C(2) of the Act. In the appellate proceedings, after considering the submissions of the assessee , FAA held that he had made an alternative claim, that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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