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2017 (6) TMI 492 - AT - Income TaxDeduction u/s. 54EC - non accepting the actual consideration received by the assessee on account of sale of the impugned property - Held that:- The provisions for Section 54EC require to make investment in the specified securities on the basis of actual sale consideration and not on the basis of deeming amount of consideration as envisaged in section 50C of the Act. Whereas the provision of Sec. 50C provides for deemed value of consideration adopted as per the Stamp Valuation Authority for the purpose of capital gain. In the instant case the impugned property was sold at a value lesser than the value adopted for the purpose of stamp duty. Therefore the valuation determined for the purpose of stamp valuation is taken as sale consideration. However, such deeming provision cannot be applied to the provision of law as specified Section 54EC of the Act. Accordingly, the deduction u/s 54EC in the instant case shall be limited to the amount of ₹ 18 lakh i.e. actual investment. However, for the computation of capital gain the provision of deeming sale consideration shall be applied as specified under section 50C i.e. ₹ 35,76,180/-. In view of the above, the AO is directed to compute the capital gains after taking the sale consideration at ₹ 35,76,180.00 as per the provisions of section 50C of the Act. But for the purpose of deduction u/s. 54EC, the sale value would be taken at ₹ 18.99 lacs which is the actual sale consideration. Calculation of cost of acquisition - Held that:- Authorities Below have not considered the valuation report given by the registered valuer though the assessee’s claim to have filed the same before the Authorities Below. Similarly, we also find that assessee has declared the valuation of the impugned property @ ₹ 2030.00 per sq. ft. in the immediate preceding year as evident from the supporting documents which are placed on record. But on perusal of the same, we find that no scrutiny assessment was carried out by the Department in the earlier assessment year. Therefore in our considered view, the matter has not been adjudicated on the basis of merit. We also find that the valuation report showing the cost of acquisition of the assessee as submitted by the ld. AR was never verified by the Revenue. Therefore, we are not inclined to accept the same view taken by the Authorities Below. In view of the above, we are of the opinion that the issue of cost of acquisition as on 01.04.1981 needs to be re-verified in the light of above facts and circumstances. Therefore we remit the issue to the file of AO with the direction to re-verify the cost of acquisition as on 01.04.1981 and after providing reasonable opportunity of being heard to assessee as per law. This ground of assessee’s appeal is allowed for statistical purpose.
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