TMI Blog2022 (4) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... partly. Determination of fair market value as on 1.4.1981 - We notice that the assessee could not furnish any material to support the claim of FMV of ₹ 25,000/- per cent. Hence, the only other credible material available in this case is copy of certificate obtained in 1981 itself from Tahsildar of Thrissur taluk. We noticed that the Ld CIT(A) has computed the FMV land as on 1.4.1981 at ₹ 4,000/- per cent on the basis of this certificate. While making computation, we notice that the Ld CIT(A) has adopted the value of building at ₹ 2,00,000/- - we noticed earlier that the FMV of building was adopted at ₹ 1,00,000/- both by the assessee and AO. Accordingly, we are of the view that the FMV of building should have been taken at ₹ 1,00,000/- by Ld CIT(A) instead of ₹ 2,00,000/-. We noticed that the value of 62 cents and building was estimated by the Tahsildar at ₹ 4,52,000/-. By adopting the value of building at ₹ 1,00,000/-, the value of 62 cents of land would work out to ₹ 3,52,000/-, which results in FMV of land per cent at ₹ 5,677/-. Accordingly, we are of the view that the FMV of land as on 1.4.1981 may be adopted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ChembuKavu village, Thrissur, Kerala, which was inherited from his father. The area of the house property consisted of 23 cents of ground and 2433 sq.ft.,of constructed building. The assessee sold the above said house property for a consideration of ₹ 2,45,20,000/-. The assessee declared nil capital gain after claiming exemption u/s 54 and u/s 54 EC of the Income-tax Act,1961 ['the Act' for short]. The A.O. however computed the longterm capital gain at ₹ 60,32,849/-. The Ld. CIT(A) granted partial relief and hence the assessee has filed this appeal before us. 3. The capital gain workings made by the assessee and by the A.O. are extracted below for the sake of understanding the dispute before us:- (A) Capital gains workings computed by the Assessee:- Sale consideration 2,45,20,000/- Less: Sale Expenses: 5,20,400/- Net Sale consideration: 2,39,99,600/- Acquisition detailsF.Y. Cost of purchase 81-82 6,75, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4EC 50,00,000 Taxable capital gain 60,32,849 4. The differences made by the AO in computation of capital gains are as under:- (a) Sale expenses allowed was ₹ 30,000/- only as against the claim of ₹ 5,20,400/-. (b) The assessee had adopted the market value of land as on 1.4.1981 at ₹ 25,000/- per cent. The AO, however, has adopted the market value on that date at ₹ 1000/- per cent. The market value of building as on 1.4.1981 adopted by the assessee at ₹ 1,00,000/- was accepted by the AO. (c) The assessee had claimed cost of improvement at ₹ 5,00,000/-. The AO has reduced the same to ₹ 1,00,000/-. (d) The assessee claimed before the AO that he has purchased new residential house from M/s Sattva Developers by paying a sum of ₹ 1,48,26,257/-. The assessee had originally claimed a sum of ₹ 1,18,00,620/- only as deduction u/s 54 of the Act. In view of the disallowances proposed by the AO, the assessee sought deduction of ₹ 1,48,26,257/- u/s 54 of the Act before the AO. However, the AO rejected the same observing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge. The only other evidence furnished the assessee, apart from acknowledgement referred above, is the bank statement, wherein the payment of ₹ 4,90,000/- made to Shri K.T. Verghese was found debited. 5.3 Thus, the assessee could not prove the payment of brokerage with concrete evidences. It is a common practice to pay brokerage while purchase or selling the properties. Since the assessee is in USA, it is quite possible that he would have paid brokerage to the broker who introduced the buyer. Hence, the payment of brokerage by the assessee cannot be discounted altogether and in our view, in the facts of the present case, in the absence of concrete evidences, the genuineness of the payment may be determined on the basis of circumstantial evidences, which are acknowledgement given on the letter pad of the assessee and the bank entries. Since these are incomplete documents, it is not clear as to whether the entire amount of ₹ 4,90,000/- represented only brokerage amount or not. Accordingly, in the absence of proper evidences, we are of the view that the entire claim of brokerage of ₹ 4,90,000/- may not be allowed. Accordingly, we restrict the brokerage payment to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in 1981 itself from Tahsildar of Thrissur taluk. We noticed that the Ld CIT(A) has computed the FMV land as on 1.4.1981 at ₹ 4,000/- per cent on the basis of this certificate. While making computation, we notice that the Ld CIT(A) has adopted the value of building at ₹ 2,00,000/-. However, we noticed earlier that the FMV of building was adopted at ₹ 1,00,000/- both by the assessee and AO. Accordingly, we are of the view that the FMV of building should have been taken at ₹ 1,00,000/- by Ld CIT(A) instead of ₹ 2,00,000/-. 6.3 We noticed that the value of 62 cents and building was estimated by the Tahsildar at ₹ 4,52,000/-. By adopting the value of building at ₹ 1,00,000/-, the value of 62 cents of land would work out to ₹ 3,52,000/-, which results in FMV of land per cent at ₹ 5,677/-. Accordingly, we are of the view that the FMV of land as on 1.4.1981 may be adopted at ₹ 5,700/- per cent. Accordingly, we modify the order passed by Ld. CIT(A) and direct the A.O. to adopt fair market value of land at ₹ 5,700/- per cent. 7.0 The next issue relates to rejection of claim of cost of improvement to ₹ 1 lakh as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged by its decision. Accordingly, if the assessee has spent ₹ 1,48,26,257/- in acquiring new residential house, then in order to meet the ends of justice, the same should be allowed as deduction u/s 54 of the Act. In the written submissions filed before the tax authorities, the assessee has furnished details of investment made in purchasing new residential house as under:- 03/11/2013 ₹ 2,00,000 30/11/2013 ₹ 1,19,00,000 10/07/2014 ₹ 25,12,905 10/07/2014 ₹ 2,13,352 TDS ₹ 1,33,774 ₹ 1,48,26,257 The next objection raised by the AO is that the assessee has not deposited the amount remaining unutilized before the due date for filing return of income u/s 139(1) of the Act in the capital gains account scheme. However, this objection of the AO is contrary to the binding decision rendered by Hon ble jurisdictional Karnataka High Court in the case of Fatima Bai Vs. ITO (2009) 32 DTR (Kar) 243. We notice that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn under s. 139. The assessee technically may have defaulted in not filing the return under s. 139(4). But, however, utilised the capital gains for purchase of property before the extended due date under s. 139(4). The contention of the Revenue that the deposit in the scheme should have been made before the initial due date and not the extended due date is an untenable contention. 12. The Gauhati High Court in CIT vs. Rajesh Kumar Jalan (2006) 206 CTR (Gau) 361 : (2006) 286 ITR 274 (Gau) has taken a similar view that the time-limit for deposit under the scheme or utilisation can be made before the due date for filing of returns under s. 139(4). Thus it is clear that if the assessee has utilised the entire capital gain by purchase of a house or construction of the new house within the stipulated period, the benefit of sec.54F cannot be denied. This view has been reaffirmed by the Hon'ble jurisdictional High Court in the case of Smt.Vrinda P.Issac (supra). Accordingly, if the assessee has constructed the new house and utilised the sale proceeds and capital gain within the period of limitation as provided u/s 54F, then the claim of the assessee u/s 54F cannot be deni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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