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TMI Blog2018 (4) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... ally, Secunderabad. The said property was sold by a registered sale deed for a total consideration of Rs. 1.65 Crs. According to the assessee, a sum of Rs. 2 lakhs was paid as brokerage for sale of his house and each co-owner is entitled to claim deduction of Rs. 1 lakh. It was also submitted that the assessee received an extra amount of Rs. 5 lakhs towards various amenities in the house. 5. The assessee declared total income of Rs. 6,21,580/- for the year under consideration. For the purpose of verification of genuineness and veracity of the exemption claimed u/s 54EC of the Act, the A.O. had taken up the matter for scrutiny and accordingly issued a notice u/s 143(2) of the Act. In response, assessee submitted that property admeasuring 462 sq. yards with built up area of about 2820 sft was sold by them jointly and he had offered long term capital gains of Rs. 1,67,000/- wherein he had taken into consideration ½ share of the sale price on which he adopted indexed cost as 01.04.1981 and reduced the same from the sale value and thereafter a sum of Rs. 1 lakh was deducted towards transfer expenses and for the balance amount exemption was claimed u/s 54 of the Act being NHAI Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the assessee is eligible to adopt the fair market value of the asset as on 01st April, 1981 and accordingly the assessee has taken the value at Rs. 800/- per sq. yard having regard to the fact that the land is located in a prime locality, in the heart of the commercial hub. The proximity to commercial zone gives the land a premium price which is much more than the price fixed by the Sub-Registrar since the record of the Sub-Registrar is with regard to the entire area and it does not consider features like exact location of the property and locational advantages of the property. It was also stated that even as per the opinion of an expert, in the form of valuation report from an approved Valuer, the market value of the property in the same area in 1981 was around Rs. 800/- to Rs. 900/- per sq. yard. It was thus stated that the market value adopted by the assessee is reasonable. It was also stated that the basic value adopted by SRO is not an evidence of the market value of the property. Reliance was also placed upon a decision in the case of Gujarat Nirmal Laxminarayan Gover (Mrs.) vs. Appropriate Authority (223 ITR 572 at page 592) wherein it was stated that the guideline valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer i.e., on 25.10.2011 the assessee and his wife were residing in Flat No.202, Meghana Springs, West Marredpalli, Secunderabad. This residential house was purchased jointly as semi-finished and actually occupied by the assessee for his residence during January / February 2011. As per the provisions of section 54 of the Act, the assessee would be entitled for exemption on long term capital gains if a new property is purchased one year before the date of sale and thus assessee complied with the requirements of section 54 of the Act. It was also submitted that there was a lapse on his part in making proper claim earlier and revised computation was placed before the Assessing Officer which includes claim of exemption u/s 54 of the Act. 14. A.O. observed that the assessee did not make the claim at the time of filing of return or within reasonable time. Even on merits, property was purchased quite before and beyond the stipulated period i.e., the property was purchased on 15.02.2010 whereas the assessee should have purchased one year before the date of transfer. It was stated that the date of sale was 25.10.2011 and therefore the assessee should have purchased on or after 25.10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers for purchase of those items, it was stated that the total consideration received is approximately Rs. 4,40,000/- and he earned a profit of Rs. 50,000/- on sale of items which were admitted for tax purposes. 18. The A.O. disbelieved the claim of the assessee in the absence of documentary evidence of purchase bills / vouchers. According to him the said amount is a part of the advance received in lieu of sale of property. In his opinion no one would make / offer sale of furniture / fittings before selling of the property to the purchaser and realise cash. He accordingly treated the sum of Rs. 4,40,000/- as 'income from other sources'. 19. Aggrieved, assessee contended before the Ld. CIT(A) that the Assessing Officer erred in disbelieving the claim of the assessee with regard to the fair market value of the property as on 01.04.1981, payment of brokerage, sale of furniture and fittings and investment in purchase of property. Detailed submissions of the assessee are reproduced by the Ld. CIT(A). As could be seen from the order of the Ld. CIT(A), the market value of the building as on 01.04.1981 was adopted on the basis of valuation report of Approved Valuer and it cannot be disbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed the details / arguments and therefore this ground of appeal was dismissed as not pressed. 24. With regard to the claim of exemption u/s 54 of the Act Ld. CIT(A) observed that exemption is available if a property is purchased within one year before the date of transfer of residential property. The claim of the assessee was that it has purchased a semi-finished property and occupied during January / February 2011 and it happens to be within one year prior to the sale i.e., 25.10.2011 but the fact remains that the assessee did not produce the copy of the sale deed even at this stage. Since basic details are not filed and no claim was made before the Assessing Officer within the time prescribed under law the Ld. CIT(A) rejected the claim of the assessee. 25. As regards the cost of the items claimed to have been sold, so as to prove the source of cash deposits of Rs. 4,39,000/-, the assessee relied upon the confirmation letter from Dr. B. Hemanth and Dr. B. Bharathi for the purchase of household items from the assessee and his wife but the Ld. CIT(A) was of the opinion that the same cannot be relied upon since the confirmation letters were undated and it was not mentioned as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the orders passed by the Assessing Officer as well as the Ld. CIT(A). Learned DR also relied upon the following two decisions viz., (i) DCIT vs. Smt. A. Sarada (ITA No.922/Hyd/2009), dated 08.08.2013 and (ii) M. Siva Parvathi & Ors vs. ITO (7 ITR 468) in support of the stand taken by the Assessing Officer that in the absence of any comparable cases the only alternative left is to depend upon the SRO's valuation. In the case of Smt. A. Sarada (supra), the assessee adopted value as on 01.04.1981 @ Rs. 400/- per sq. yard and filed comparable sale instances located at Nizamshahi Road which gives rate of Rs. 450/- and Rs. 446/- respectively. It was also submitted that the property sold was a commercial property and hence the value adopted by the SRO @ Rs. 80/- per sq. yard, which was for residential properties, is not proper. According to the assessee the market value would not be less than Rs. 500/- per sq. yard. The Bench observed that the determination of cost of acquisition of a property is a technical aspect and without having complete facts and details of property, cost of acquisition as on 01.04.1981 cannot be determined in a precise manner. Tribunal directed the A.O. to recons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered opinion, is not in accordance with law. The ITAT Visakhapatnam Bench in the case of M. Siva Parvathi & Ors (supra) did not discuss the matter in detail, as noticed in para 12 of its order, and merely observed that the assesse has not furnished any other evidences to counter the value adopted by the Sub-Registrar whereas in the instant case the value is supported by an approved Valuer's report as well as the sale took place in the near vicinity in 1980. Therefore, the decision of the ITAT Visakhapatnam Bench is of no help to the Revenue. In the case of Smt. A. Sarada (supra) ITAT Hyderabad Bench categorically observed that the determination of cost of property is a technical aspect and without having complete details of the property such as location and it surroundings, it cannot be determined and also directed the A.O. to refer the matter to the DVO. In the said case no comparable case was placed before the Tax Authorities whereas in the instant case, before the Tribunal the assessee not only mentioned about the comparable cases but also furnished approved Valuer's report, who is a technical expert. The Assessing Officer merely rejected the contention of the assessee witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght purchase of residential house; therefore it cannot be said that the assessee constructed a residential house. Such being the case I do not find any infirmity in the orders passed by the Tax Authorities. Therefore Ground no.5 is rejected. 33. Vide Ground No.6 the assessee contends that the sale of the Golf equipment etc., ought to have been accepted by the Assessing Officer despite the fact that no evidence was produced with regard to the purchase of those items. Learned Counsel for the Assessee adverted my attention to page 82 of the paper book referring to confirmation given by Dr. B. Hemanth and Dr. V. Bharati wherein they have stated that they have purchased the following list of items from the assessee. No. of Items Item name Amount 1 Water Pump 5000 4 Teak Wood Beds 30,000 4 Dressing Tables 20,000 4. Wardrobes 40,000 4 Air Conditioners 48,000 2 Sony TV 43" and 32" with two tables 59,000 1 Sony Camera 18,000 1 Sony Video Recorder 14,000 1 Washing Machine 19,000 1 Cooking range 12,000 4 Almarah - 4 pcs 24,000 2 Kitchen cabinets 14,000 1 Set cane chairs and table 5000 1 Refregirator 18,000 1 German Sewing Machine 8,000 1 4 pc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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