TMI Blog2020 (12) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... Second Proviso of section 50C. In view of the factual and legal discussion, we are of the view that Stamp Duty Valuation as on 21.02.2012 has to be considered for the purpose of section 50C of the Act. Since we have accepted the primary contention of the AR of the assessee, therefore, discussion on the area of land / plot will become academic. In the result, Ground No.1 of the assessee is allowed. Disallowance of deduction under section 54F - Lower Authorities rejected the claim of the assessee on the ground that assessee owned more than one residential house other than new residential house on the date of transfer of original asset - HELD THAT:- In the present case, the assessee failed to substantiate by cogent evidences that Ashirwad Palace Flat is being used for commercial purpose. Similarly, in Sanjeev Puri Vs DCIT [ 2016 (8) TMI 907 - ITAT DELHI] the assessee in the said case was using one of the properties for professional office. Thus, both the case laws relied by the AR is not helpful to assessee. In our view the assessee was having more than one residential property besides Muktanand Co.op Housing Society, when the capital gain invested for purchase of new reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough his valuation report. It is therefore prayed that the above action of the Id. CIT (A) be quashed and that the resultant addition made on the basis of above referred valuation report be deleted as void ab initio and invalid. 3) The ld. Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the action of the Id. AO of applying the jantri rate of ₹ 22,100/- per sq. metre to the original area of plot i.e. to 7,500 sq. metre; whereas the total area of the land sold is 5,423 sq. metre only. It is therefore prayed that the above action of the Id. CIT(A) and the finding of the Id. AO that the sale consideration shown by the appellant for the land sold is less than the jantri value on account of consideration of incorrect area of land be quashed and all the resultant proceedings and actions including making of reference to the Valuation Officer u/sec.50C of the Act, making of addition on the basis of the report of the Id. DVO and the confirmation thereof by the Id.CIT (Appeals) be also quashed. 4) The Id. Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the action of the Id. DVO of making the valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer noted that the stamp duty was paid on more than the actual sale consideration shown on the document. In order to verify the facts, the AO issued notice under section 133(6) of the Act to the Sub- Registrar concerned. The Sub-Registrar concerned provided the necessary details and disclosed that stamp duty authority valued the property at ₹ 16.57 crore. On the basis of the aforesaid information, the AO was of the view that there was a difference between the sale price and the value determined by the stamp duty authorities. The assessee was confronted with the fact and was asked to explain as to why the provision of section 50C should not be invoked and the difference therein be not added to the income of assessee. The assessee filed vide his reply dated 19.01.2015 and objected for application of rate of Jantri Value adopted by Stamp Valuation Authority. The assessee also disputed the measurement of plot of which stamp duty authority calculated the stamp value. The assessee also made request for referring the matter to the valuation officer for arising on correct value of the land sold. The AO made reference to the Valuation Officer for determining the fair v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of aforesaid plot of land. The assessee in the computation of income claimed deduction under section 54F of ₹ 14,98,727/- by investing the amount of capital gain in purchase of Flat No.206, 2nd Floor, Raj Abhishek City Homes, Sachin Palsana Road, Surat. On perusal of balance sheet of assessee as on 31.03.2012 the AO noted that assessee has more than one residential house other than new asset acquired. Hence, the assessee is not entitled for benefit under section 54F of the Act, accordingly, a show cause notice dated 13.03.2015 was issued to the assessee as to why the claim of deduction under section 54F of the Act should not be disallowed. 6. The assessee filed his reply dated 27.03.2015, in the reply the assessee stated that he is in possession of a Flat in Ashirwad Palace Surat. The said flat is occupied by assessee for commercial purpose. The assessee is a partner in a registered firm, namely M/s Sarvodaya Petroleum and the property/ flat is used as office cum go down since operation of Petrol Pump. The property is used for safe custody of cash. For Second property in Avadh Lake City, the assessee contended that this property was under consideration and furnished t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in no circumstances the seller shall demand any increase in the sale consideration. The AR for the assessee explained that Jantri rate of land as per Stamp Valuation Authority, on the date of execution of agreement on 21.02.2011 was ₹ 7200/- per sq.mtr. The sale deed was registered on 16. 06.2011, in the meantime the Jantri Rate was revised in the month of April 2011 by Stamp Valuation Authority. The Jantri Rate as on 16.06.2011 was increased to ₹ 22,100/- per sq.mtr. At the time of registration of sale deed, the Stamp Valuation Authority charged the value of the stamp paper at the prevailing Jantri Rate. The assessee received consideration agreed between the parties as mentioned in the sale deed. 9. The ld. AR of the assessee submits that provision of section 50C is not applicable on the facts of the case of assessee as the legislation has inserted First and Second Proviso to section 50C of the Act by Finance Act, 2016 applicable with effect from (w.e.f.) 01.04.2017, wherein it has been provided that where the date of agreement fixing the amount of consideration and the date of registration for transfer of capital asset are not the same, the value adopted or asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Further, there is no dispute that initial agreement to sale was executed on 21.02.2011. The Lower Authorities have not brought any material on record to dispute that on the date of execution of agreement to sale the assessee and his Co-owner has not received part consideration through account payee cheque. Further, it is not in dispute that Stamp Valuation/Jantri Rate at the time of execution of agreement to sale was ₹ 7200/- per sq.mtr. The Jantri Rate was revised w.e.f. 18.04.2011. The registered sale deed of transfer of plot of land sold by assessee was presented for registration on 16.06.2011. The Stamp Valuation Authority charged the value of stamp on the prevailing Jantri Rate of the land on the date of registration of instrument. The Lower Authorities made addition on account difference of valuation of property furnished by valuer and the consideration shown by assessee. The ld. CIT(A) while affirming the action of AO in para 6.1.4 recorded that during the assessment, the assessee himself requested to consider the report of DVO, accordingly the AO rightly adopted the value as per DVO. 12. Before us, the AR of the assessee vehemently argued that assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than new residential house on the date of transfer of original asset. The ld. AR for the assessee submits that on the date of transfer of land the assessee was having only one residential property in occupation of assessee. Therefore, the claim of exemption under section 54F of the Act is allowable. The ld. AR for assessee submits that flat in Ashirwad Palace, Bhatar Road, Surat is in possession of the assessee since 31.03.2012. This property is occupied by the assessee for commercial purpose. The assessee is a partner in the registered firm i.e. Sarvodaya Petroleum and the property is utilised by office cum go down of a partnership firm and that cash of Petrol Pump is kept in safe custody in the said flat. To strengthen his contention, the ld. AR for the assessee relied upon the decision of Hon'ble Gujarat High Court in Navin Jolly Vs ITO [2020] 117 taxmann.com 323 (Karnataka High Court) and decision of Delhi Tribunal in Sanjeev Puri Vs DCIT [2016] (72 taxmann.com 147) (Del). The ld. AR for the assessee further submits that the Lower Authorities has not brought on record any evidence indicating that this property was not used for commercial purpose. 15. For Avadh Lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. We have considered the rival submission of the parties and perused the orders of the Lower Authorities. We have also deliberated on various case laws and relied by the ld. AR of the assessee. The AO made disallowance of claim under section 54F of the Act by taking view that assessee owned more than one residential house on the date of sale of asset, capital gain of which was invested for purchase of new residential asset. The AO also held that the assessee has not disputed the ownership of various properties of assessee shown in this balance sheet. The ld CIT(A) affirmed the action of AO with similar observation. 21. Before us, the AR of the assessee made exhaustive written submissions as well as oral submissions with regard to various residential houses. The AR of the assessee submits that Ashirwad Palace flat is occupied by the assessee for commercial purpose. It is also the contention of the ld. AR for the assessee that the assessee is a partner in a registered firm i.e. Sarvodaya Petroleum and that property in question is being used as office cum go down for keeping cash of the Petrol Pump. No documentary piece of evidence to substantiate the submission that Ashirwad Pala ..... X X X X Extracts X X X X X X X X Extracts X X X X
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