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TMI Blog2018 (6) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,90,00,000. The action of the Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by accepting the sale consideration at Rs. 1,90,00,000 as evidenced by the sale deed. (c) In the facts and circumstances of the case and in law the Id. CIT(A) has erred in confirming the action of the Id. AO in not applying the DLC rate of land as on the date of Agreement to Sale. The action of the Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by applying the DLC rate of land as on the date of Agreement to Sale. (d) In the facts and circumstances of the case and in law the Id. CIT(A) has erred in confirming the action of the ld. AO in not treating the proposed amendment in Budget 2016 in section 50C of the Income Tax Act, 1961, as retrospective. The action of the id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by treating the said amendment as retrospective. (e) In the facts and circumstances of the case and in law the Id. CIT(A) has erred in confirming the action of the ld. AO in extending the scope of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Relief may please be granted by limiting the scope of section 50C of the Income Tax Act, 1961 in said matter. The assessee craves her rights to add, amend or alter any of the grounds on or before the hearing." 2. The assessee is an individual and derive income from rent, interest, dividend and capital gain on sale of land. The assessee filed her return of income for the assessment year under consideration on 31.03.2014 declaring total income of Rs. 35,28,010/-. The assessment was completed U/s 143(3) of the IT Act on 23.03.2016 at a total assessed income of Rs. 2,42,59,384/- which includes the addition made by the AO on account of long term capital gain of more than Rs. 2 crores. The controversy involved in this appeal is only regarding the addition made by the AO on account of long term capital gain by applying the provisions of Section 50C of the Act and restricted the benefit of claim U/ss 54B and 54F of the act. The assessee purchase agricultural land vide agreement dated 22.09.2011 and subsequently three sale deeds were executed on 20.03.2012, 05.06.2012 and 19.12.2012 respectively. The first transaction of sale vide sale deed dated 20.03.2012 does not fall in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of his contention he has relied upon the decision of Coordinate Benches of this Tribunal in case of Shri Sunil Jain vs. DCIT in ITA No. IT(IT) A No. 04/JP2017 vide order dated 27.04.2018. Thus, the ld. AR has submitted that even otherwise when the assessee invested the entire sale consideration for purchase of agricultural land eligible for benefit U/s 54B as well as purchase of residential house eligible for benefit of U/s 54F of the IT Act then, the computation of capital gain by the AO as per the provisions of Section 50C would be inconsequential. 4. On the other hand, the ld. DR has submitted that the claim of the assessee canot be accepted as the alleged agreement dated 22.09.2011 is not supported by any valid evidence as the said agreement is neither registered nor on stamp paper. Further, the sale deeds in question do not mention any prior agreement between the parties whereas the transaction of earlier sale deeds were mentioned in the subsequent sale deeds. Therefore, the alleged agreement to sell is only self serving document produced by the assessee for reducing the fair market value of the land in question as per provisions of Section 50C of the Act. The ld. DR has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to the fair market value adopted as per the provisions of Section 50C of the Act. Once, the assessee has invested the entire actual sale consideration for purchase of agricultural land eligible for deduction U/s 54B as well purchase of new residential house eligible for deduction Under section 54F of the Act then, no addition is justified based on the deemed full value consideration as per the provisions of Section 50C of the Act. An identical issue was considered by this Tribunal in case of Shri Sunil Jain Vs. DCIT(Supra) and held in paras 11 and 12 as under:- "11. We have considered the rival submissions as well as relevant material on record. The assessee has sold a property for consideration of Rs. 27,61,000/- on 16.01.2008. The assessee thereafter purchase a new property for a total investment of Rs. 55,03,270/-. Initially the full value consideration for the existing the capital asset was taken/adopted at Rs. 29,09,705/- being stamp duty valuation for the purpose of the registration of the sale deed however, subsequently the stamp duty authority revised valuation to Rs. 71,14,200/- and consequently the AO as reassessed the income of the assessee and computed the capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that the assessee did not deposit the sale consideration in the capital gain account scheme prior to purchase of the property. The Hon'ble Karnataka High Court in case of CIT vs. K. Ramachandra Rao while dealing with an identical issue as held in para 4 and 5 as under:- "4. Re.Point No. 1 Section 54(F) deals with capital gains on transfer of certain capital assets not to be charged in case, of investment on house. It reads as under: 54F. Capital gain on transfer of certain capital assets not to be charged income of investment in residential house.- (1) [Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or [two years] after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred. Provided that the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset (4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-section (4) stipulates if the amount of net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which transfer of the original asset took place or which is not utilized by him for the purchase or construction of the new asset before the date of furnishing the return of income under Section 139 of the Act shall be deposited by him before furnishing such return in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under Section 139(1) of the Act in an account in any such bank or institution as specified and utilized in accordance with any scheme which the Central Government may, by notification in the official gazette framed in this behalf. Sub-section (4) is attracted only to a case where the sale consideration is not utilized either for purchase or for construction of a residential house. It has no application to a case where the assessee invests the sale consideration derived from the transfer either in purchasing the property or constructing the residential house within the period stipulated in Section 54F(1). The proviso to Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im exemption from payment of income tax by retaining the cash, then the said amount is to be invested in the said account. If the intention is not to retain cash but to invest in construction or any purchase of the property and if such investment is made within the period stipulated therein, then Section 54F(4) is not at all attracted and therefore the contention that the assessee has not deposited the amount in the Bank account as stipulated and therefore, he is not entitled to the benefit even though he has invested the money in construction is also not correct." 5. For the aforesaid reasons both the substantial questions of law are answered in favour of the, assessee and against the Revenue. Therefore, we do not see merit in any of the appeals. Accordingly, all the four appeals are dismissed." Thus, it is clear that when the assessee has already invested the entire sale consideration for purchase of new property within the period as stipulated under the provisions of Section 54/54F of the Act then the benefit cannot be restricted or denied to the assessee due to the reasons that the full value consideration was admitted at the higher being the valuation by the stamp duty a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is eligible for deduction u/s 54 of the Act to the full amount of capital gain computed on the basis of deemed full value consideration u/s 50C of the Act when the actual sale consideration was fully invested in the new capital asset. Since, we have allowed the claim of deduction u/s 54 of the Act, therefore, the issue raised by the assessee regarding the valuation adopted u/s 50C without referring to the DVO becomes infructuous." Following the order of the Coordinate Benches of this Tribunal we hold that when the capital gain was fully invested in the new capital asset eligible for deduction U/ss 54B and 54F of the IT Act then the benefit of the provisions of Sections 54B and 54F of the Act would be available to the assessee to the full amount of capital gain computed on the basis of deemed full value U/s 50C of the Act. Hence, the addition made by the AO on account of capital gain is deleted. Since we have deleted the addition made by the AO, therefore, the other issues raised by the assessee in this appeal become academic in nature and do not require any specific findings. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court o ..... 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