TMI Blog2023 (3) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... me laid down u/s. 54F of the Act, the material on record does not suggest any construction of the house in terms of section 54F ? - HELD THAT:- Assessee could not furnish the requisite evidence to prove the fact that there was any actual construction within the time stipulated in section 54F of the Act. The assessee has not placed any cogent evidence, so that it can be inferred that actually there was construction of residential building out of the sale proceeds of the sale of land and also not placed evidence for the purchase of any materials relating to construction of residential building. Merely producing a copy of permission from Gram Panchayat with regard to construction permission that itself cannot discharge the assessee from proving actual construction. In our opinion, this is made believe story before us and without producing requisite evidence to suggest that the assessee has completed the construction within the period of 3 years after the date of transfer. It has also been noted that assessee has not produced any license/permission for construction of building in the scheduled property from any authorities said to be constructed and there was no evidence in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Authority or the Appellate Authorites, whose powers are co-extensive with those of the Assessing Authority, cannot refuse to meet those objections point by point'. 1.4 The Hon'ble Delhi High Court, in the case of CIT v. Khoobsurat Resorts (P) Ltd., (2012) 28 taxman.com 93dealing with a similar question held that the provisions of Sec, 50C of the Act only enable the Revenue to adopt the Guidance Value declared by the State for payment of stamp duty, as the Fair Market Value under section 48 of the Act. But that Guidance Value cannot, ipso facto, be taken as the valuation for the purposes of computing Capital Gain Tax liability in the hands of the assessee/seller. Sub Sec. 2 of Section 50C of the Act itself provides for reference to DVO if the assessee objects to invoking of Sec. 50C (1) of the Act'. 2. Facts of the case are that during the F.Y. 2013-14 corresponding to the A.Y. 2014-15 the assessee sold a property (l/4th share) bearing No.18/2, PID No.60-106-18/2 with super built up area of 2005 Sq. Ft. in the Third Floor, 10th Main D Road, 4th block, Jayanagar, Bengaluru-560011 dated 13.11.2013 for a consideration of Rs.1,55,00,000/-. The AO found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon. Therefore, the objection of the assessee to the report of the valuation officer was rejected by the ld. CIT(A). However, the ld. CIT(A) observed that the value to be adopted at Rs.2,34,63,205/- in the place of Rs.26,65,000/- as adopted by AO on the basis of DVO report. Against this assessee is in appeal before us. 4. After hearing both the parties, we are of the opinion that similar issue came for consideration before this Tribunal in the coowner s case Amarnath Sarla in ITA No.673/Bang/2019 dated 21.6.2022 wherein held as under: 7. We have heard the rival submissions and perused the materials available on record. In this case, assessee has filed the valuation report from the registered valuer before Ld. CIT(A) and the fact has been noted by the Ld. CIT(A) in his order. However, no credence has been given to it. As per the registered valuer report given by A.S. Anil Kumar dated 23.8.2018, the value has been determined by him as Rs.1,25,30,606/- as against the value adopted by the DVO at Rs.2,34,63,205/-. However, the assessee declared the value at Rs.1.55 crores in sale deed. However, the AO considered the guideline value adopted for registration as sale considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee would be entitled to the benefit U/S.54F of the Act irrespective of the fact that transaction not being complete in all respects. 2.3 In the case of CIT v, Smt B.S. Shantakumarl (2015) 233 Taxmann 347/60 taxmann.com 74 (Kar.) it was held that if the assessee has invested money in constructing the residential house, merely because the construction was not complete in all respect or such building is yet to be completed fully or the building not being in fit condition for being occupied, would by itself riot be ground for the assessee to be denied the benefit under Section 54F of the Act. 5.1 Facts of the case are that the assessee has sold one property for Rs.18,00,000/- vide deed of registration dated 22.11.2013 and another property for Rs.18,00,000/- vide deed of registration dated 28.11.2013. Thus total sale consideration from the sale of two plots received by the assessee was Rs.36,00,000/-. The assessee declared Long Term Capital Gains (LTCG) of Rs.29,76,006/- after claiming indexed cost of acquisition of Rs.3,23,994/- and brokerage of Rs.4,00,000/-. The assessee claimed exemption u/s 54F of the amount of capital gains. She entered into an agreement with Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . nearly towards the completion of three years from the date of sale of the property. The assessee does not have any evidence that the construction activity started within a period of three years, so there is no question of completion of construction of the residential house within that period. In the certificate of the Chartered Engineer also it is mentioned that construction activity has been stopped since February, 2017. During the appeal proceedings also the ld. AR stated that construction activity has stopped since February, 2017 and has not resumed since then. The ld. AR has filed copies of various judgments contending that benefit of section 54F of the Act has to be allowed even if the construction of residential house has not been completed. In the instant case, however, there is no question of completion of the residential house; it has not even started at the end of three years from the date of sale of the property. Therefore, the judgments relied upon by the ld. A.R. are not applicable to the case of the assessee. Hence the ld. CIT(A) agreed with the AO that the claim of deduction made u/s 54F of the Act is not allowable. The assessee has claimed expenditure of Rs.4,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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, this is to say, (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45. 6.2 A bare reading of the above provisions shows that the above provisions are incentive provisions intended to augment investment in residential houses. As per these provisions if the assessee within a period of one year before or two years after the date on which the transfer taken place purchases or within a period of three ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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