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2016 (7) TMI 1186 - ITAT DELHI

2016 (7) TMI 1186 - ITAT DELHI - TMI - Capital gains computation - whether on actual amount received or on the deemed amount accrued to the assessee - Held that:- . AO without disputing the fact that the actual cost of consideration of the property in question was ₹ 5,00,000/- computed the capital gains on the basis of circle rate which were at ₹ 16,43,000/-. Ld. CIT (A) has also perpetuated the error committed by the AO which is not sustainable in the eyes of law. We are of the view .....

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statutorily required to compute the capital gain as per provisions contained u/s 48 of the Act on the basis of actual cost of consideration received by the assessee. - Whether lower revenue authorities have erred in computing the capital gain by ignoring the fact that the assessee has invested entire capital gain in specified bonds as per section 54EC? - Held tht:- AO as well as CIT (A) have erred in computing the capital gain in this case to the tune of ₹ 11,36,211/- by computing the .....

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he Assessee : Shri Anil Jain, CA For the Revenue : Shri Anil Kumar Sharma, Senior DR ORDER Per Kuldip Singh, Judicial Member The appellant, Shri Prem Nath, by filing the present appeal, sought to set aside the impugned order dated 03.01.2013 passed by ld. Commissioner of Income-tax (Appeals)-XXVIII, New Delhi qua the assessment year 2009-10 on the grounds inter alia that :- 1. On the facts and circumstances of the case the lower authorities have erred in computing appellants income from long ter .....

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tter to Valuation officer and not considering the case laws cited by appellant in this regard. 4. On the facts and circumstances of the case CIT(A) erred in construing that the provisions of section 50C are mandatory ignoring the provisions of sub section (2) of section 50C. 5. Appellant craves for grant of permission to add, amend, modify, delete or withdraw any ground of appeal at or any time before the hearing of the appeal. 2. Briefly stated the facts of this case are : pursuant to the notic .....

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79,240/- on sale of mutual funds apart from income from other sources to the tune of ₹ 1,53,197/-. From the details furnished during the assessment proceedings, it has come on record that assessee has sold a property bearing Plot No.20 measuring 365.08 sq.meters comprised in Khasra No.133/K, 133/KH and 135/2 of Somalwada, Nagpur for a consideration of ₹ 5,00,000/- to Mrs. Sakina, wife of Salimbhai Chimthanawala on 06.03.2009. From the perusal of the sale deed, it has come on record t .....

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following effect :- Sale consideration u/s 50C Rs.16,43,000/- Indexed cost of acquisition (as declared by the assessee) ₹ 2,06,780/- Rs.14,36,211/- Less deduction u/s 54EC ₹ 3,00,000/- Long Term Capital Gain Rs.11,36,211/- and made an addition thereof to the total income of the assessee. 3. Assessee carried the matter before the ld. CIT (A) by challenging the assessment order who has dismissed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of fili .....

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le to exemption provisions contained under section 54 to 54F, which are to the following effect:- 1. Without prejudice to ground no.1 to 4 of the memo of appeal your appellant submits that on facts and in circumstances of the case and in law, the authorities below have erred in computing exemption eligible to appellant u/s 54EC on the basis of capital gains computed by invoking provisions of section 50C(1) instead of sale consideration as mentioned in the sale deed. 2. On the facts and circumsta .....

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ant had invested net amount of capital gains of ₹ 2,93,211/- in specified Bonds as specified in section 54EC. 6. Without prejudice the merits of the case, we are of the considered view that additional grounds now sought to be raised by the assessee, which are legal grounds, are necessary for complete adjudication of the controversy at hand. So, we hereby allow the application moved under Rule 11 of Appellate Tribunal Rules, 1963 by the assessee to raise aforesaid additional grounds. 7. Ld. .....

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ited as Smt. Nilofer I Singh (2009) 309 ITR 233 and cases decided by ITAT, Jaipur Bench in cases cited as Nand Lal Sharma vs. ITO (2015) 172 TTJ 0412 (Jp) and Gyan Chand Batra vs. ITO (2010) 133 TTJ 0482. However, on the other hand, the ld. DR for the revenue relied upon the order passed by the AO as well as the ld. CIT (A). 8. Undisputedly, the assessee has purchased a plot in question from a housing society in the year 2002 for a sale consideration of ₹ 7,500/- against circle rate of  .....

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e is:- as to whether capital gains are to be computed on actual amount received or on the deemed amount accrued to the assessee? 10. Issue in controversy has already been set at rest by the Hon ble jurisdictional High Court in case cited as Smt. Nilofer I Singh (2009) 309 ITR 233 wherein it is held that computation of capital gain is to be done as per provisions contained u/s 48 of the Act by taking into consideration the actual cost of sale consideration received by the assessee and not the dee .....

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. Smt. Nilofer I Singh (supra) has categorically held that mode of computation of capital gain is statutorily defined u/s 48 of the Act which uses the words actual cost of "consideration" and not the deemed cost of consideration u/s 50C. We find merit in the arguments of the ld. AR that Section sac is deeming fiction by which stamp duty value of the asset sold is to be substituted for actual consideration. This being purely a fiction, its scope is limited to Section 50C only and cannot .....

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stamp duty valuation u/s 50C. Thus, assessee's claim of exemption as made in the return of income as raised in Ground No. 2 of the assessee is allowed. 11. AO without disputing the fact that the actual cost of consideration of the property in question was ₹ 5,00,000/- computed the capital gains on the basis of circle rate which were at ₹ 16,43,000/-. Ld. CIT (A) has also perpetuated the error committed by the AO which is not sustainable in the eyes of law. We are of the view that .....

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the capital gain as per provisions contained u/s 48 of the Act on the basis of actual cost of consideration received by the assessee. 13. The next question arises for determination in this case is :- as to whether lower revenue authorities have erred in computing the capital gain by ignoring the fact that the assessee has invested entire capital gain of ₹ 2,93,211/- in specified bonds as per section 54EC? 14. Provisions contained u/s 54EC are categoric enough to cover the case of the asse .....

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long-term capital asset (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the long-term specified asset is not less than the capital ga .....

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