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TMI Blog2018 (12) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... property of Rs. 42,00,000/- as per stamp valuation authorities in short SRO). Since the assessee having capital gains and did not file the return of income, the AO had issued the notice u/s 148 on 16.03.2016 and in response to the notice, the assessee filed return of income declaring 'Nil' income on 23.04.2016. Before the AO, the assessee submitted that the she has sold the property for a consideration of Rs. 30 lakhs and the entire net consideration was invested for acquiring the new residential house, and entitled for deduction u/s 54F thus there is no case for application of section 50C of the Act. Further the assessee relied on clause (a) of sub section 1 of section 54F and the Explanation for the purpose of net consideration. The AO not being convinced with the explanation of the assessee adopted the market value as assessed by the Stamps and Registration Authorities as per section 50C of the Act and determined the capital gains and allowed the deduction u/s 54F for an amount of Rs. 30,36,735/-. The resultant difference of an amount of Rs. 8,80,175/- was to be taxed under long term capital gains. 4. On appeal before the CIT(A), the Ld.CIT(A) confirmed the order of the AO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net consideration is the full value of consideration received or accrued as a result of transfer but not the deemed consideration as defined in section 50C of the Act. Section 54F(1)(a) clearly makes the assessee entitled for the net consideration, if the whole of such amount is paid for acquiring the new house. In the instant case, there is no dispute that the assessee has paid the whole of net consideration for acquiring the new house. On identical facts this Tribunal in the case of DCIT, Circle-2(1), Vijayawada Vs. Dr.Chalasani Mallikarjuna Rao vide I.T.A No.206/Viz/2013 dated 21.10.2016 held that section 50C has no application in case the entire net sale consideration has been applied for acquiring the new house. For the sake of clarity and convenience, we extract relevant part of the order of this Tribunal in para No.12 which reads as under : 12. The question is whether the assessee needs to invest the net sale consideration as a result of transfer or the full value of consideration as defined u/s 50C of the Act. The full value of consideration as defined u/s 50C of the Act is a deeming consideration which is applicable for the purpose of computation of capital gain under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll value of consideration mentioned in other provisions of the Act are not governed by the meaning of full value consideration as contained in s. SOC. The natural meaning of full value of consideration refers to consideration specified in the sale deed. Hence, for the meaning of full value of consideration mentioned in different provisions of the Act except in s. 48, one will have to consider the value of consideration as specified in sale deed. -CIT vs. Smt. Niofer I. Singh (2009) 22 (Del) 277: (2008) 14 DTR (Del) 108: (2009) 309 ITR 233 (Del) relied on. (Para 7.1) In Explanation to s. 54F(1), it is mentioned that net consideration means the full value a consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. The meaning of full value of consideration in Explanation to s. 54F(1) will not be governed by meaning o words 'full value of consideration' as mentioned in S.50C. The value adopted for stamp duty is to be considered as full value of consideration for the purpose of computing the capital gains under s. 48. Sec. 54F(1) says that capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual sale consideration of Rs. 24,60,000 has been invested in the new house property, the whole of the capital gains, even though worked out in terms of section 50C of the Act, would be eligible for deduction under section 54F of the Act and the assessee is not liable to pay any capital gains tax. 10. To appreciate the issue under consideration, we refer to the provisions of section 54F which reads as under "54F (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, one residential house in India (hereafter in this section referred to as the new 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 new asset is not less than the net consideration in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been defined as the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. In other words, the consideration which is actually received or accrued as a result of transfer has to be invested in the new asset. In the instant case, undisputedly, the consideration which has accrued to the assessee as per the sale deed is Rs. 24,60,000 and the whole of the said consideration has been invested in the capital gains accounts scheme for purchase of the new house property which is again not been disputed by the Revenue. The consideration as determined under section 50C based on the stamp duty authority valuation is not a consideration which has been received by or has accrued to the assessee. Rather, it is a value which has been deemed as full value of consideration for the limited purposes of determining the income chargeable as capital gains under section 48 of the Act. Therefore, in the instant case, the provisions of section 54F(1)(a) are complied with by the assessee and the assessee shall be eligible for deduction in respect of the whole of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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