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2016 (8) TMI 410 - ITAT DELHI

2016 (8) TMI 410 - ITAT DELHI - TMI - Applicability of provisions of section 50C on the basis of circle rate at the time of execution of sale deed - Held that:- Circle rate prevailing at the time of agreement to sell has to be considered for applying the provisions of section 50C. See ITO vs. Modipon Ltd [2015 (1) TMI 609 - ITAT DELHI] - Claim of deduction u/s. 54B - Held that:- There is no requirement that the investment in agriculture land has to be made out of sale proceeds and as such th .....

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2-8-2016 - Shri H. S. Sidhu, Judicial Member Assessee by : Sh . RS Singhvi, CA & Sh. Satyajeet Goel, CA Department by : Sh. A. Sreenivasa Rao, Sr.DR ORDER Per H. S. Sidhu, JM Assessee has filed this Appeal against the Order dated 28.2.2014 passed by the Ld. Commissioner of Income Tax (Appeals)-XXII, New Delhi pertaining to assessment year 2009-10 on the following grounds:- 1. As per on the facts and circumstances of the case the Ld CIT-(Appeals) has erred in not holding the Assessment Order .....

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x act 1961, and has not considered the circle rate prevailing at the time of agreement to sell entered by the appellant on 4-8-2007. 3 As per on the facts and circumstances of the case of the Assessing Officer has erred to pass the order on 29.12.2011 without affording any opportunity to the appellant about the addition of the amount of ₹ 2716388/-under the head capital gains. The case in fact has been adjourned to 1.12.2011 for want of confirmation of the cash creditors, the appellant att .....

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the Income Tax Act 1961. 5 As per on the facts and circumstance of the case the CIT-(Appeals) has erred in withdrawing the deduction u/s 54B of the Income Tax Act 1961, amounting to ₹ 7500300/- out of the deduction amounting to ₹ 8105300 already allowed by the Assessing Officer. Thus the CIT (Appeals) has made an enhancement of income by ₹ 7500300/-purely on mere conjecture surmises. 6 As per on the facts and circumstance of the case the CIT-(Appeals) has further erred in not c .....

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ough CASS. Accordingly, notice u/s. 143(2) of the Act, was issued on 26.8.2010 which was duly served upon the assessee. In response to the same and subsequent notices, Assessee s Authorized Representative attended the hearing from time to time and filed requisite information and documents. During the assessment proceedings the AO observed that the assessee has undervalued the sale consideration and therefore for the purpose of Section 50C of the I.T. Act, the value adopted by the stamp valuation .....

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he I.T. Act, 1961. 3. Against the order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 28.2.2014 has dismissed the appeal of the assessee by confirming the addition made by the AO and enhanced the income by disallowing the deduction u/s. 54B amounting to ₹ 75,00,300/-. 4. Aggrieved with the order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 5. During the course of hearing Ld. Counsel of the assessee stated that AO accepted the claim o .....

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reement to sell and execution of sale deed was merely a formality and as such the circle rate at the time of agreement to sell is relevant and applicable to the facts of the case. To support this contention, he cited the following cases laws:- ITO vs. Modipon Ltd. (2015) 57 Taxmann.com 360 (Delhi). - DCIT vs. S. Venkat Reddy (2013) 32 Taxmann.com 324 (Hyd.) In view of the above, he stated that the assessee s case is squarely covered by the aforesaid cases of the Tribunal including the decision o .....

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the enhancement to the extent of ₹ 75,00,300/-and has not properly considered the facts of the case and this disallowance is based on wrong appreciation of facts and legal principles. It was stated that the only ground on the basis of which claim was restricted is that payment for purchase of agriculture lands was not made out of proceeds from sale of agriculture land therefore the deduction u/s. 54B should be restricted to the amount actually invested out of sale proceeds. In this regard .....

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in the bank statement in reaching to the conclusion that payment for purchase of property has not been made out of sale proceeds. To support his contention, he relied upon the following case laws:- CIT vs. R. Srinivasan (2010) 45 DTR 208 (Mad.) - CIT vs. Dr. Ps Pasricha (Bombay High Court) ITA No. 1825 of 2009 - ITO vs. KC Gopalan (2000) 162 CTR 566 (Ker). In view of the above submissions, the Assessee s counsel has stated that the investment in agriculture land has to be made out of sale procee .....

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mitted that addition of ₹ 27,16,368/- was made on the basis of Stamp Duty Valuation. He further stated that AO has allowed excess deduction which has been rightly restricted to only ₹ 6,05,000/- by the Ld. CIT(A), hence, he requested that the order of the Ld. CIT(A) may be upheld. 7. I have heard both the parties and perused the records especially the orders of the Revenue authorities. With regard to addition of ₹ 27,16,668/- is concerned, I find that the assessee has purchased .....

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execution of sale deed was merely a formality and as such the circle rate at the time of agreement to sell is relevant and applicable to the facts of the case. I also find considerable cogency in the contention of the ld. Counsel of the assessee that similar and identical situation has been dealt by the Tribunal in the following cases:- ITO vs. Modipon Ltd. (2015) 57 Taxmann.com 360 (Delhi). Section 50C of the Income-tax Act, 1961 - Capital gains - Special provision for computation of full valu .....

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nhancement of circle rate was beyond control of assessee and buyer had not paid anything above amount that had been agreed between parties, addition made by Assessing Officer was to be deleted - Held, yes [Paras 13 and 16] [In favour of assessee] b. DCIT v. S. Venkat Reddy[2013] 32 taxmann.com 324 (Hyd) Section 5OC, read with section 2(47), of the Income-tax Act, 1961 - Capital gains - Special provisions for full value of consideration in certain cases [Date of transfer] - Assessment year 2006-0 .....

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formality, stamp duty value on date of sale agreement and not on date of registration was required to be adopted for computing capital gains - Held, yes [Para 19] [In favour of assessee] After perusing the aforesaid findings of the Tribunal, I am of the considered view that the issue in dispute is squarely covered by the aforesaid decision of the Tribunal, as per which Circle rate prevailing at the time of agreement to sell has to be considered for applying the provisions of section 50C. Respect .....

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ade out of proceeds from sale of agriculture land therefore the deduction u/s. 54B should be restricted to the amount actually invested out of sale proceeds. In this regard, from the records, it reveals that the entire payment for purchase of agriculture lands was made out of sale proceeds which is corroborated from the Bank Statement enclosed with the Paper Book Page No. 2 and such there is no valid basis for any disallowance. However, Ld. CIT(A) has considered the date of issuance of cheques f .....

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cases. 54B. (1) Subject to the provisions of sub-section (2), where the capital gain arises from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee being an individual or his parent, or a Hindu undivided family for agricultural purposes (hereinafter referred to as the original asset), and the assessee has, within a period of two years after that date, purchased any other land for being .....

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