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2016 (4) TMI 505 - ITAT PUNE

2016 (4) TMI 505 - ITAT PUNE - TMI - Determination of short term capital gain - Held that:- We find the CIT(A) has observed that the assessee has not submitted anything on the issue of short term capital loss and accordingly confirmed the order of the AO on the said issue. It is the submission of the Ld. Counsel for the assessee that although the balance sheet for the year ending 31-03-2005 and 31-03- 2006 were produced before the CIT(A) and arguments had taken place on different dates, however, .....

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n was a forest land on the appointed date and therefore the provisions of section 50C are not applicable to the facts of the present case since the assessee is not the owner of the land and it has only a right to claim compensation. Although the assessee had filed various documents to demonstrate that the land of the assessee is a forest land, however, we find the CIT(A) is silent on this issue. The AO in his remand report has also not dwelt upon this issue. It is also a fact that the above clai .....

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only entitled to claim compensation. The AO shall decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. - ITA No.159/PN/2011 - Dated:- 4-3-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee by : Written submission For The Revenue : Shri Manish Kumar Singh ORDER PER R.K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 18-12-2014 .....

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of income has declared income from business, long term capital gain and other sources. From the computation statement, the AO noted that the assessee has calculated the long term capital gain at ₹ 1,37,471/- on account of sale of land at Survey No.211, Village Maval, Taluka Mulshi by adopting the sale consideration at ₹ 1,07,00,000/-. From the sale deed dated 27-08-2005, the AO noted that although the sale consideration received has been shown at ₹ 1,07,00,000, however, the va .....

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f the said capital asset has been disputed by the assessee before the Collector of stamps, Pune (Rural) and the Collector has upheld the value of the capital asset for stamp duty purpose at ₹ 1,19,30,500/-. The AO, therefore, held that the Department is not obliged to refer the valuation of the capital asset to the valuation officer in view of provisions of section 50C(2) of the I.T. Act. The assessee reiterated that the matter should be referred to the valuation officer under the provisio .....

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the matter to the DVO for valuation of the property. The AO accordingly determined the long term capital gain at ₹ 1,09,43,736/-. After allowing for investment u/s.54F on account of purchase of a flat at ₹ 3,57,576/- and deduction u/s.54EC on account of investment in Nabard bonds, the AO determined the long term capital gain at ₹ 13,67,971/-. 5. The AO further noted from the computation of income that the assessee has claimed short term capital loss in respect of a shed at Wak .....

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he AO after deducting the WDV of ₹ 51,300/- from the sale proceed of ₹ 2,55,000/- determined the short term capital gain on sale of same at ₹ 2,03,700/-. 6. The assessee carried the matter before the CIT(A). So far as determination of short term capital gain on sale of shed is concerned the Ld.CIT(A) dismissed the ground raised by the assessee on this issue in absence of any submission before him. 7. So far as determination of long term capital gain at ₹ 3,67,971/- is con .....

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#39; (b) the value so adopted 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 A 0. 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-sect .....

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have been made before any authority, court or high court. The main issue of dispute is whether adjudication made by the Collector of Stamps was of the nature of appeal or revision or it could be treated as a reference to any authority. In this case the actual market value as per 'ready reckoner' taken out by the State Government for stamps duty purpose was ₹ 1,70,00,000/-. Since the appellant was not agreeable to this valuation, reference was made to the Collector of Stamps for ad .....

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adjudication could be covered within the ambit of the phrase reference made before any other authority. This is since as per the ready reckoner rate prescribed by the State Government, there existed a stamp duty valuation of ₹ 1.70 crores in respect of the impugned property; which was on a firm basis, and the assessee had referred the matter for adjudication of stamp duty to the Collector of Stamps. The appellant, therefore, had not accepted the stamp duty valuation prescribed by the State .....

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d not be applied. It is stated that there is no such condition given in section 50C of the I.T. Act. Moreover, it is contended to be a case of a compulsory acquisition of property by which the owner was to receive compensation for acquisition of the land, but it was a case when the assessee had freely transferred the rights in land subject to taking objection regarding its value for stamp duty, and himself offered capital gain on such transfer of capital asset. Therefore, for capital gain purpos .....

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ee s case. 2. Without prejudice to Ground No.1, lower authorities have erred in not referring the matter to Valuation Officer u/s.50C(2), same may be directed to be referred. 3. CIT(Appeals) has erred in confirming Assessing Officer s action of computing Short Term Capital Gain on sale of demolition material of shed and Building at ₹ 51,300/- against claim of Short Term Loss of ₹ 1,82,677/-. Loss claimed may please be allowed. 4. Lower authorities have erred in charging interest u/s. .....

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he attention of the Bench to the Notification of Declaration under the Central Act. Referring to pages 157 and 158 of the paper book he drew the attention of the Bench to the Notice No.31/2723 dated 21-06-1961. He accordingly submitted that the Notification has been issued u/s.35 of the Forest Act, 1927 before the appointed date. Referring to the various pages of the paper book he submitted that the land sold by the assessee was a Forest Land on the appointed date when Maharashtra Act, 1975 came .....

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s only the right to claim compensation and has no ownership right in land. He submitted that because of the above reasons the Registrar also refused to register the document. 10. Referring to the decision of the Mumbai Bench of the Tribunal in the case of Atul Puranik Vs. ITO reported in 132 ITD 499 he submitted that the Tribunal in the said decision has held that transfer of leasehold rights in land do not invite provisions of section 50C of the I.T. Act. Similar view has been taken by the Pune .....

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he assessee to refer the matter to the DVO. Therefore, the matter should be restored to the file of the AO with a direction to refer the matter to the DVO which is mandatory. 12. So far as the computation of short term capital gain is concerned he submitted that the Ld.CIT(A) has wrongly stated that the assessee has not submitted anything on this point. He submitted that computation of income with balance sheet for 31- 03-2005 and 31-03-2006 were submitted and the issue was explained to the CIT( .....

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first right over the land and hence section 50C is applicable in this case. He submitted that since the dispute regarding the valuation of the land has already been adjudicated by the Collector of Stamps, it is not open to the assessee to again dispute the valuation. Therefore, as per the provisions of section 50C(2)(b) the matter does not need any reference to the valuation officer. So far as the issue of computation of short term capital gain on sale of shed is concerned he submitted that the .....

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,67,971/- as long term capital gain and ₹ 2,03,700/- as short term capital gain. We find the CIT(A) has observed that the assessee has not submitted anything on the issue of short term capital loss and accordingly confirmed the order of the AO on the said issue. It is the submission of the Ld. Counsel for the assessee that although the balance sheet for the year ending 31-03-2005 and 31-03- 2006 were produced before the CIT(A) and arguments had taken place on different dates, however, the .....

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