TMI Blog2018 (3) TMI 1878X X X X Extracts X X X X X X X X Extracts X X X X ..... to the capital gains could be considered for deduction u/s.54 of the Act. The date of transfer of the asset giving rise to the capital gains was 15th November, 2012 and the payments made by the assessee to M/s. Aarthik Properties Limited after the said date was ₹ 5,00,000/- only. We are therefore of the opinion that lower authorities were justified in restricting the claim u/s.54 of the Act to the amounts paid by the assessee after 15.11.2012. Computation of capital gains - application of Section 50C - disallowance of claim for improvement - HELD THAT:- Assessing Officer is left with no choice but to consider the full value of consideration at the amount fixed by the DVO, if it is lower than what has been fixed for stamp duty. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned assessment year declaring income of H2,52,480/-. During the relevant previous year, assessee had sold flat at Abhiramapuram, Alwarpet, Chennai on 15th November, 2012 to one Smt. B. Parvathy. The sale consideration mentioned in the document was H69,00,000/-, though market value of the property was declared at H99,00,000/-. Ld. Assessing Officer required the assessee to explain why Section 50C of the Act should not be applied for determining full value of consideration. Since assessee objected to this, ld. Assessing Officer made a reference to the Department Valuation Cell. However, ld. Assessing Officer completed the assessment, considering the full value of the consideration as H99,00,000/-, since he could not receive the report from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for cost of improvement, ld. Assessing Officer held that assessee was unable to produce any evidence for such improvement. 7. Aggrieved, assessee moved in appeal before ld. Commissioner of Income Tax (Appeals). Ld. Commissioner of Income Tax (Appeals) held that ld. Assessing Officer was justified in invoking Section 50C of the Act. However, according to him, capital gains had to be worked out considering the value fixed by the DVO. The DVO had fixed the fair market value of the property sold by the assessee at H89,97,752/-. Ld. Commissioner of Income Tax (Appeals) directed the ld. Assessing Officer to rework the capital gains considering H89,97,752/- as the full value of consideration on sale of the asset. Viz-a-viz, claim of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been allowed. 10. Per contra, ld. Departmental Representative strongly supported the orders of the lower authorities. 11. We have considered the rival contentions and perused the orders of the authorities below. Viz-a-viz claim of exemption u/s.54 of the Act what is laid down by the statute is reproduced hereunder:- 1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family the capital gain arises from the transfer of a long-term capital asset being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of transfer or construction of a residential house within three years from the date of transfer. Copy of the agreement dated 26th July, 2012 between the assessee with M/s. Aarthik Properties Limited is available on record. Schedule C gives the specification with which the apartment is to be constructed. Clause 1 to 4 of this agreement is also relevant and reproduced hereunder:- 1.The VENDOR shall agree to sell the SCHEDULE B 'ROPERTY to the PURCHASER or to their nominees, as mentioned in the SCHEDULE B PROPERTY to a Total sale consideration of ₹ 44,36,OOO/- (Rupees Forty Four Lakhs Thirty Six Thousand Only) and the PURCHASER shall buy the said SCHEDULE B Property for the above sale consideration and have agreed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee within a period of three years from the date of transfer of asset, giving rise to the capital gains could be considered for deduction u/s.54 of the Act. The date of transfer of the asset giving rise to the capital gains was 15th November, 2012 and the payments made by the assessee to M/s. Aarthik Properties Limited after the said date was H5,00,000/- only. We are therefore of the opinion that lower authorities were justified in restricting the claim u/s.54 of the Act to the amounts paid by the assessee after 15.11.2012. 12. Viz-a-viz application of Section 50C of the Act, once the said section is invoked, ld. Assessing Officer is left with no choice but to consider the full value of consideration at the amount fixed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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