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TMI Blog2014 (2) TMI 1415X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case. The assessee is contesting in the cross-objection the denial of certain benefits by the learned CIT(A) in the order. 2. Briefly stated, facts are that the assessee is an individual and filed return of income admitting total income of Rs.29,80,485, calculating capital gains, after claiming deduction under S.54 on the transfer of property through a development agreement. The assessee was exclusive owner of House No.12-2-827 having land area of 940 sq. yards and House No.12-2-827/38 having land of 78 sq. yards. He alongwith his wife are joint owners of H. No. 12-2-827/A/2 having undivided interest in land area of 222 sq. yards and H.No.12-2-827/A/2/1 having undivided interest in land area of 222 sq. yards. Assessee's wife is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The Assessing Officer in the assessment order re-worked the capital gains by- (a) referring the property to Valuation and adopting the value of Rs.1,92,83,500 as against Rs.1,76,41,248 show-caused to the assessee; (b) taking 50% of the sale proceeds of half-share sold earlier on the same basis; (c) valuing terrace rights on 6th floor, even though retained by the assessee in the original agreement; (d) adopting the value of three bed room rent free accommodation provided for twenty four months, and (e) finally taking the proportionate value of one flat out of the total sale value and allowing deduction under S.54 to one residential flat. This has resulted in computation of capital gains at a higher amount. While doing so, the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered by the learned CIT(A), except on the powers of the Assessing Officer in referring to the valuation cell. The assessee, however, is aggrieved in the cross objections on the issue of restriction of deduction under S.54 on a total area of Rs.8757 sq. ft. covering five flats to 6997 sq. ft and valuation of three bed room accommodation for a period of 24 months, which was factually contested. 8. After hearing the rival contentions, we do not see any merit in the Revenue's ground. The statute permits reference to Valuation Cell under S.50C, S.55A and S.142A. There is no dispute on the powers of the Assessing Officer in making a reference under these sections. However, what the CIT(A) has decided was that those sections do not apply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of fair market value of any property under S.56(2). In the given facts of the case, these provisions are not applicable, nor can be invoked by the Assessing Officer. What Revenue is contesting can be appropriate if the reference was made in the hands of the builder, who may claim the cost of acquisition to ascertain the investment in the building, but in the assessee's case, who adopted the actual cost of construction for arriving at the sale consideration, these provisions do not apply. This is what the learned CIT(A) has decided. Therefore, we do not see any reason in the ground raised by the Revenue. Accordingly, the grounds are rejected, and the Revenue's appeal stands dismissed. 9. Coming to the cross-objection of the assessee, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to take into consideration, the capital gains arising on each of the house. As seen from the development agreement, the assessee is having a house having land of 940 sq. yards; another two houses in joint ownership with wife(items No.(ii) and (iii) on page 2 of the Development Agreement) of 222 sq. yards each; and a fourth house having land of 78 sq. yards, being item no (iv) in the Development Agreement. Since the proportion of capital gains vary according to the land included in the total land surrendered to the developer, the Assessing Officer is directed to work out the proportionate capital gains on each house, according to the land involved in that house and allow exemption under each of the houses under S.54. This aspect of work ..... X X X X Extracts X X X X X X X X Extracts X X X X
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