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2022 (9) TMI 53 - AT - Income TaxGain on land sold - FMV determination - estimating the cost of acquisition of the immovable property as on 1/4/1981 at Rs. 350/- per sq yd relying on the market value of the property certified by the Joint Sub-Registrar, Rajahmundry as on 17/2/1987 - HELD THAT:- Fair market value of a capital asset is the value which would ordinarily fetch on sale in the open market on the relevant date and not on the value adopted for stamp duty purposes. In the absence of a confirmed fair market value as on 1/4/1981, the Ld. AO has also not referred the matter to the DVO for valuation of the property as on 1/4/1981. We also find that the Ld. CIT (A) has estimated the value at Rs. 350/- per sq yd based on the valuation provided by the Joint Sub-Registrar, Rajahmundry as on 17/2/1987. In the absence any evidence of fair market value, not being provided by both assessee and Revenue, we are therefore of the considered view that, since the property is located within a distance of one kilometre from the RTC Complex, within the Rajamundhry municipal limits, we find that the estimate made by Ld.CIT(A) is reasonable and hence no interference is required. Thus, the grounds No. 2 and 3 raised by the Revenue are dismissed. Cash expenses for the purpose of development of land - The admitted facts are that there are certain expenses incurred by the assessee in the development of land into plots. This was never denied by the Revenue Authorities. The only contention of the Revenue is that since the assessee has incurred certain expenditure by way of cash and documents evidencing by way of self-made vouchers, these expenses are not genuine. The expenses incurred by the assessee in the development of land is also evidenced from the inspection report submitted by the ACIT, Rajamahendravaram. The only dispute is with respect to the amount of expenditure actually incurred by the assessee for the development of land into plots. We find that the Ld. CIT(A) has rightly estimated the cost of development at Rs. 2,000/- per sq yd which in our view is reasonable and hence no interference is required on this issue in the order of the Ld. CIT(A). It is ordered accordingly. Thus, Grounds No. 4, 5 & 6 raised by the Revenue are dismissed. Levy of penalty Notice u/s 274 r.w.s. 271D - Cash sale of immovable property - Receipt of cash in relation to transfer of immovable property by the assessee attracting the provisions of section 269SS of the Act - HELD THAT:- Any person is barred from receiving from any amount otherwise by cheque or through banking channels in relation to transfer of the immovable property. Section 269SS of the Act prohibits receipt of any amount by way of cash in relation to the transfer of any immovable property. The Memorandum explaining the provisions of Finance Bill 2015 with respect to amendment proposed w.e.f 1/6/2015 in section 269SS. The objective of the amendment proposed in 269SS of the Act is to curb generation of black money. In the instant case the fact is that cash received by the assessee has been recorded in the sale deed and deposited by the assessee into the bank account, hence does not attract the provisions of section 269SS of the Act since there is no suppression of cash receipts by the assessee. The assessee has also offered the capital gains to tax. Therefore, in our opinion the order of the Ld JCIT deserves to be quashed. It is also found that the Ld.AO has not recorded satisfaction regarding the initiation of penalty proceedings. The Ld AO merely proposed to initiate penalty proceedings u/s 271(1)(c) of the Act - Thus the order Ld JCIT deserves to be quashed as relying on Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT] and therefore the order of the Ld. CIT(A) does not require interference and hence the appeal of the Revenue is dismissed.
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