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TMI Blog2009 (8) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, therefore, interest is penal interest." 3. After hearing both the parties we find that during the assessment proceedings, the Assessing Officer noticed that the assessee had paid certain interest to the Noida Authorities because instalments in respect of the plots allotted to the assessee could not be paid in time. The Assessing Officer was of the view that such interest could not be allowed because there was no provision in the Act for the same. These additions were deleted by the first appellate authority vide paragraphs 8 to 12, which are as follows : "8. As mentioned above, the calculation sheet dated 6-4-2006 prepared by Noida confirmed the payment of principal at Rs. 60,76,000 against the outstanding cost of Rs. 41,70,600 thereby the Noida Authority charged additional cost of Rs. 19,05,400 (60,70,000 - 41,70,000) which was embedded in the payment of instalments due to charge of compound interest at the rate of 24 per cent per annum. The A.R. of the appellant claimed that the minor difference between Rs. 19,33,436 and Rs. 19,05,400 was on account of calculation made by the Noida Authority. Therefore, the Assessing Officer is directed to allow the claim of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 23,64,236, Rs. 3,000 and Rs. 4,72,560 in the cost of land to calculate the long-term capital gains arising on transfer of the above plots. The Assessing Officer is directed to work out the L.T.C.Gs in accordance with the provisions of Income-tax Act after taking into account the above facts. Accordingly, ground Nos. 2 & 4 of appeal are allowed." 4. Before us, the learned departmental representative submitted that interest was of penal nature and therefore, the same should not have been allowed. She strongly supported the order of the Assessing Officer. On the other hand, the learned counsel for the assessee, while supporting the order of the CIT(A) submitted that the interest was paid because instalments could not be paid in time and that is why Noida authorities had levied the interest which has become part of the cost of acquisition for the assessee and therefore, the same has rightly been allowed by the first appellate authority. He further relied upon the decision of the Hon'ble Madras High Court in the case of CIT v. K. Raja Gopala Rao [2001] 252 ITR 4591. 5. We have considered the rival submissions carefully and agree with the submissions put forth by the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... talizing interest paid on delayed payment of instalments. 6. The appeals filed by the revenue fail. Assessee's appeals 7. In the appeals filed by the assessee, the assessee challenges the order of the first appellate authority on the ground that no additions can be made on account of difference between the valuation declared by the assessee and the valuation under section 50C of the Act. 8. After hearing both the parties, we find that during the assessment proceedings the Assessing Officer noticed that the valuation for the purpose of section 50C was different and since the assessee had not challenged this valuation, he adopted the value of the sale proceeds which was adopted under section 50C. Though, before the Assessing Officer it was submitted in assessment year 2003-04 that Noida Authorities themselves have sold the plots at the similar rates and copy of the advertisement was also furnished, the Assessing Officer did not accept this submission and adopted the value for the purpose of stamp duty as sale consideration. On appeal, this action of the Assessing Officer was confirmed by the learned CIT(A). 9. Before us, the learned counsel for the assessee referred to section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (65) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation.-For the purpose of this section, "Valuation Officer" shall have the same meaning as in clause (e) of section 2 of the Wealth-tax Act, 1957 (27 of 1957)." A plain reading of the above provision clearly shows that normally the sale consideration can be taken on the same amount which has been adopted for the stamp duty purposes. However, sub-section (2) makes it very clear that whenever assessee claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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