9911796707
TMI Blog2023 (5) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... , assessee has showed capital gains from sale of 50% share in a property which was inherited by him along with his brother Mr. Naresh Chandna, in 50% share each. Assessee claimed that, both the brothers had sold their shares to a builder for Rs. 4,53,75,000/- each. The brother of assessee has received Rs. 4,53,75,000/- for his 50% share, however, as per the agreement with the builder the assessee was supposed to receive following : 1. Entire basement 2. Entire ground floor 3. ¼ portion of entire stilt area including space for car parking 4. Space for one utility with common WC 5. 32.5% undivided, indivisible and impartible ownership rights in the said plot of measuring 30 square yards and Rs. 96,25,000/- in cash. Consequent to this agreement a sale deed was executed between the builder and the assessee. 3. On the basis of sale deed executed for 67.5% of the plot, the Ld. AO considered it to be the transfer of 67.5% of the property for Rs. 5,50,00,000/-, which was the sales consideration mentioned in the sale deed. The Ld. AO observed that the assessee was getting only 32.5% share in the new property. Thus, for the purpose of Section 54 of the Act, the Ld. AO consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O in charging interest u/s 234B and 234C of Income Tax Act, 1961. 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 4. Heard and perused the record. 5. In regard to ground no. 1 and 2 ; it has been submitted for the assessee that the valuation report has been accepted by the ld. AO for the purpose of fair market value of construction, however, cost of improvements as part of the report has not been considered on the basis that same is not supported with bills and vouchers. Ld. DR however, supported the findings of ld. Tax authorities below. It can be appreciated from the order of ld. AO that he has specifically mentioned that with respect to cost of improvement of the property, the assessee has provided the valuation report and based upon the same value of land at Rs. 17,40,000/- and value of building at Rs. 1,10,000/-, total Rs. 18,50,000/- is accepted and based upon the half share of assessee, the same was taken at Rs. 9,25,000/-. There appears to be no justification in accepting the cost of improvement provided by the valuer for improvement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75,000/- to Shri Naresh Chandna (the first party herein) and Rs. 96,25,000/- to Dr. Ramesh Chandna (the Second Party herein)] which shall form the total consideration against the rights, in the property to be transferred in favour of the Builder or his nominee/s on the completion or during the course of construction of the building. Out of the abovesaid amount, a sum of Rs. Fifty lacs only (Rs. 50,00,000/-) as part payment has been paid by the Builder to the Owners as under : 1. Rs. 25,00,000/- (Twenty five lacs only) vide Ch. No. 063036 dt. 16.11.2015 favouring Sh. Naresh Chandna. 2. Rs. 25,00,000/- (Twenty five lacs only) vide Ch. No. 063037 dt. 16.11.15 favouring Dr. Ramesh Chandna. Both drawn Yes Bank. 8. Further, relevant is the clause 8 available at page no. 118 of the paper book :- "8. That it is made clear that the said shri Naresh Chandna (the First party herein) shall only be entitled to a sum of Rs. 4,53,75,000/- (Four crores fifty three lacs seventy five thousand Rs. only) from as stated above and upon receipt of said amount, the First Party shall be left with no right, title, interest, claim or concern of any nature with the said property or any part thereof." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id property, the right to construct and own, inter-alia, the 3/4th Portion of Entire Stilt Area including space for Car parkings and space for Three Utilities with common W.C. therein, alongwith 67.5% undivided, indivisible and impartible ownership rights in the said plot of land measuring 300 sq. yds. Bearing no. D-8, situated at Greater Kailash Enclave-II, New Delhi, with all rights, title and interst, easements, privileges and appurtenances thereto, with all fittings, fixtures, connections, structure standing thereon, with all rights in common entrances, passages, driveway, staircase, and other common facilities and amenities to be provided therein, hereinafter referred to as 'THE SAID PORTIONS OF THE SAID PROEPRTY' for a total consideration of Rs. 5,50,00,000/- (Rs. Five Crores Fifty Lacs Only)." 11. Further clause 16 of the sale deed available at page no. 74 of the paper book is relevant and same is reproduced for convenience :- "16. That it is hereby also clarified that at present the said property is very old and therefore as and when the said property is re-constructed afresh, then in that event the share/ entitlement/ portions hereby sold to the Vendee shall not be chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Rs. 9,75,00,000/- in which the assessee has shown his share to be Rs. 4,53,75,000/- and from which indexed cost for acquisition and improvement of Rs. 1,07,02,142/- have been reduced and total capital gain has been calculated at Rs. 3,46,72,858/- on which the deduction u/s 54 of the Act has been claimed as Rs. 3,57,50,000/-. Thus, arriving at a total capital gain of nil. 15. Ld. AO while giving the benefit of Section 54 considered the fact that as per the sale deed 67.5% ownership rights have been transferred to the builder for Rs. 5,50,00,000/- and what remained with the assessee is 33.5% and accordingly proportionate value of 32.5% being the cost of new property u/s 54 was arrived at 2,64,81,481/-. 16. The bench is of considered opinion that what Ld. AO missed was the fact that the assessee on the basis of agreement with the builder had got entire basement, entire ground floor, 1/4th portion of entire stilt area including space for parking, space for one utility with common WC also in the new construction. The 32.5% undivided, indivisible and impartibly ownership rights in the said plot of measuring 300 square yards was the share in the land alone. Which was not transferred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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