TMI Blog2017 (10) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and the assessee shall be eligible for deduction in respect of the whole of the capital gains so computed under section 45 read with section 48 and section 50C of the Act. We are therefore of the considered view that the provision of section 50C(1) of the Act are not applicable to section 54F for the purpose of determining the meaning of full value of consideration. Appeal filed by the Revenue is dismissed. - ITA No. 11/JP/2016 - - - Dated:- 28-9-2017 - SH . KUL BHARAT, JM AND SH . VIKRAM SINGH YADAV, AM For The Revenue : Sh . Prithviraj Meena ( Addl . CIT ) For The Assessee : Sh . Hemang Gargieya ( Adv ) ORDER PER SH . VIKRAM SINGH YADAV, A . M . This is an appeal filed by the Revenue against the order of ld. CIT(A), Ajmer dated 19.10.2015 wherein the Revenue has taken the following grounds of appeal: 1 . Deleting the addition of Rs . 70,00,800 /- without appreciating the fact of the case that the AO has rightly taken the full value of consideration as per explicit provisions of section 50C of the Act and rightly allowed the benefit of deduction u / s 54F to the assessee to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the value adopted for stamp duty purposes is to be considered as full value of consideration for the limited purposes of computing the capital gains u/s 48. It was further submitted that provisions of section 50C are deeming provisions and artificial meaning of full value of the consideration has been given in section 50C for the purposes of capital gains u/s 48 and deeming fiction so created does not apply to other provisions of the Act including section 54F of the Act. It was submitted that for the purposes of section 54F, the full value of consideration means value at which the asset has actually been transferred and not notional value as defined u/s 50C of the Act. It was accordingly submitted that when the entire amount of sale consideration has been invested in the new house property, capital gains would be exempted u/s 54F and the provisions of section 50C would not be applicable. 4. The ld. CIT(A) referred to the definition of net consideration as defined in explanation to section 54F of the Act and also referred to the decision of the Co-ordinate Bench in case of Gyanchand Batra, Jaipur vs. Income Tax Officer, Jaipur (ITA No. 9/JP/2010) dated 13th August, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration when it comes to the computation of the deduction part, a different set of provisions have been inserted in the statute which are not to be governed by the earlier part of the Chapter IV-E. There cannot be any Capital Gain Tax, in a case covered by the aforesaid exception. 5.2 Secondly, Sec. 50C specifically mentions that for the purpose of Sec. 48 the value adopted or assessed for the purpose of stamp duty shall be deemed to be the full value of consideration received or accruing as a result of transfer. Meaning thereby, the deeming fiction created u/s 50C, is limited only to the extent and for the purpose of Sec. 48 and this deeming fiction cannot be extended or interpreted as meant for the purpose of other provisions of the Act (including Sec. 54/54F). Interpreting the provisions otherwise, shall render Sec. 54F or other similar provisions for that reason, as otiose/nugatory, which is not the intention of the legislature. 5.3 Thirdly, on the other hand, the term Net consideration is separately and specifically defined for the purpose of Sec. 54F, in the Explanation below Sec. 54F, which means the full value of sale consideration received or accruing as a result of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the words full value of consideration is to be applied only to s . 48 words full value of consideration as mentioned in other provisions of the Act are not governed by the meaning of these words as mention in s . 50C Hence, for ascertaining the full value of consideration as mentioned in different provisions except s . 48, consideration specified in sale deed has to be considered Thus, meaning of full value of consideration as referred to in Explanation to s . 54F ( 1 ) is not governed by the meaning of the words full value of consideration as mentioned in s . 50C In the instant case, the cost of new asset us not less than the net consideration Thus, whole of the capital gain is not chargeable to tax even if the capital gain is computed by taking the value adopted by the stamp registration authority Hence, the assessee is entitled for exemption under s . 54F . In case of Nandlal Sharma v/s ITO (2015) 122 DTR 404 (JP), it was held as under: Capital gains Exemption under s . 54 Full value of consideration vis - a - vis value adopted for stamp duty Sec . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossible for him to have complied with the law to ensure the deduction u/s 54F by investing a huge ₹ 96,03,000/-. It is only to the extent of the funds available with the assessee that he can be expected to invest. This way, it was impossible for the appellant to perform the act desired on his part. Thus, Doctrine of impossibility of performance applies in all force in this case and hence, the appellant cannot be denied the exemption claimed u/s 54F. In support, he relied on National Aviation Co. of India vs Deputy Commissioner of Income Tax (2011) 137 TTJ 662/53 DTR 379 (Mumbai) and Jagdish Malpani v/s ACIT (2005) 94 TTJ 321 (Ind) 6. Regarding decision of Hon ble Karnataka High Court in the case of Gouli Mahadevappa v/s ITO (2013) 356 ITR 90 (Kar), it was submitted as under: 6.1 At the outset, it is submitted that the real controversy involved in the facts and circumstances of the present assessee s case related to the true scope of the word net consideration defined u/s 54F to compute the allowable amount of the deduction and the LTCG u/s 45 r/w Sec. 48(2) without invoking Sec. 50C. In the case of Gouli Mahadevappa also to some extent this controversy was involved ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found in that case, showing higher stamp valuation than the real market value as wrong. On the contrary, in our case apart from the valuation report which justified/supported the declared sale consideration, that land was wrongly valued at commercial rates. Kindly refer letter dated 7.8.14. Therefore, the said decision cannot be said to be a law and laid down on the controversy which is involved in the present appeal. 6.5 Even assuming for a moment that in Gouli Mahadevappa (Supra), the Karnataka High Court has taken a contrary view in the context of Sec. 54F (though not admitted as stated above) the same may be having a persuasive value but not binding, not being a decision of Hon ble Apex Court or of the Jurisdiction High Court. More particularly, when this Hon ble Bench in as many as three decisions cited above, had already taken a view in favour of the assessee and the rule of consistency demands to follow them only, without taking a contrary view and other HC decisions is available on analogous law. Moreover, this decision of Hon ble Karnataka High court has already been considered in the case of Prakash Karnawat (Supra). 6.6 Lastly, in any case (assuming Karnataka High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... house in India ( hereafter in this section referred to as the new asset ) , the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say, ( a ) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ; ( b ) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45 : Explanation . - For the purposes of this section - net consideration in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer . ( 4 ) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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