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TMI Blog2015 (3) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... new residential building after demolishing the old building in the month of October, 2007. According to the ld.counsel, the construction of the new residential building was started in pursuance to the building permit granted by the Cochin Corporation on 28-11-2007. The total area constructed was 622.53 sq.mtr. the construction was completed on 27-09- 2009 as per the completion certificate issued by the Corporation of Cochin. The ld.counsel further submitted that the total cost of construction of the building is Rs. 1,27,50,000. After claiming exemption u/s 54F, the assessee returned a total income of Rs. 6,61,135. For the purpose of capital gain, according to the ld.counsel, the assessee took the fair market value as on 01-04-1981 at Rs. 1 lakh per cent. However, the assessing officer fixed the fair market value as on 01-04-1981 at Rs. 36,000 per cent. The assessee has also claimed Rs. 6,48,750 towards commission paid to the agents for selling the land. However, the assessing officer restricted the same at Rs. 4,32,500 without any reason. 4. According to the ld.counsel, the subject land is situated facing National Highway 49 on the Cochin Madurai Highway. The assessee has filed c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue as per the practice followed in valuation. The valuer has also found that this property is situated on NH 49 and has close proximity to Cochin Shipyard, M.G. Road, Naval Base and Cochin Airport. According to the ld.counsel, the subject land is well developed residential locality and having proximity to educational institutions, such as Sacred Heart College, Thevara. Since the assessing officer has not taken any pain to ascertain the market value other than getting the information from the Sub registrar's office, the market rate adopted by the assessee at Rs. 1 lakh has to be accepted. 6. On the contrary, Shri K.K. John, the ld.DR submitted that the assessee claimed the fair market value as on 01-04-1981 at Rs. 1 lakh. However, the assessing officer obtained information from the Sub Registrar's office and found that one cent of land was sold for Rs. 36,000 in the same locality. Accordingly, the assessing officer adopted Rs. 36,000 instead of Rs. 1 lakh. Since the assessing officer has taken the value on the basis of the information obtained from the Sub-Registrar, According to the ld.DR, the CIT(A) has rightly confirmed the addition. 7. We have considered the rival submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails furnished by the assessing officer is not uniform. When 1 Are of land was sold for Rs. 36,000 it is not known how 13 Ares of land was sold for Rs. 48,000. The information furnished by the Sub Registrar also shows that some part of the land in survey No.1009 was sold for Rs. 16,000 and the other part was Rs. 30,000. The information furnished by the Sub Registrar does not inspire confidence with regard to the market value said to be mentioned therein. In other words, the information furnished by the Sub Registrar does not disclose a uniform value in respect of the equivalent area of the land. No doubt, the information obtained by the assessing officer is also one of the factor to be considered for the purpose of determination of market value. It does not mean that the assessing officer has to take the value shown therein. As found by this Tribunal in the case of Kurian Joseph vs Dy.CIT in ITA No.137/Coch/2014 dated 17-10-2014 both the members are party to the order taking 10% of the sale consideration is also one of the approved methods of valuation. In this case, the property was sold for a sale consideration of Rs. 2,16,25,000. The value of one cent of land comes to only Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,16,250 towards commission paid to brokers for selling the land. 9. Shri K.K. Chandrasekharan, the ld.counsel for the assessee submitted that the assessee has paid 3% as commission to land brokers for sale of the land. However, the assessing officer has allowed only 2%. The assessee has filed the details of the brokers, their addresses, etc. before the assessing officer, copy of which is available at page 24 of the paper book. There is no reason to reduce the commission paid by the assessee to 2%. According to the ld.counsel, the prevailing rate of commission is 3% in Kerala. Therefore, the assessing officer has no justification for restricting the claim of the assessee at 2%. 10. On the contrary, Shri K.K. John, the ld.DR submitted that the assessee has claimed Rs. 6,48,750 towards payment of commission. However, the assessing officer allowed only Rs. 4,32,500 being brokerage / commission. In the absence of any other material, according to the ld.DR, the CIT(A) has rightly confirmed the addition made by the assessing officer. 11. We have considered the rival submissions on either side and also perused the material available on record. The assessee claimed Rs. 6,48,750 towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain account u/s 54F(4) of the Act. Therefore, the assessee is not eligible for any exemption. The ld.DR placed his reliance on the decision of this Tribunal in Smt. Rosamma Korah in ITA No.646/Coch/2013 dated 07-03-2014 and also the judgment of the Kerala High Court in Dr Xavier J Pulikkal ITA No.10 of 2014 judgment dated 20- 02-2014, copy of which is available on record. According to the ld.DR, if the money could not be spent before the due date for filing the return of income, the same has to be deposited in the capital gain account as required u/s 54F(4) of the Act. 14. On the contrary, Shri K.K. Chandrasekharan, the ld.counsel for the assessee submitted that the assessee started the construction in November, 2007 and the same was actually completed on 27-10-2009. From November, 2007 to October, 2008 the assessee has spent nearly Rs. 50 lakhs. From November, 2008 to October, 2009 the assessee has spent nearly Rs. 120 lakhs. The ld.counsel submitted that upto October, 2008, major portion of the construction was completed. From November, what was done is construction of wall, plastering, electrical work and construction of compound wall, etc. Therefore, according to the ld.coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has also filed a completion certificate from the Cochin Corporation showing that the building was completed on 15-07-2009. Accordingly, the CIT(A) allowed the entire claim of Rs. 1,27,50,000. 16. We have carefully gone through the provisions of section 54F(4). Section 54F(1) clearly says that the capital gain arising from transfer of long term capital asset is exempt from capital gain tax provided the assessee has within a period of one year before or two years after the date of transfer purchased or has within a period of 3 years constructed a residential house. Section 54F(4) clearly says that the net consideration which is not appropriated by the assessee towards the purchase of new asset within one year before the date on which the transfer of original asset took place or which is not utilized by him for purchase or construction of the new asset before the due date for filing the return of income u/s 139(1) of the Act, the same shall be deposited in the capital gain account. This Tribunal in the case of Smt. Rosamma Korah (supra) has an occasion to consider the same. This Tribunal found after considering the judgment of the Kerala High Court in CIT vs V.R. Desai (2011) 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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