Sh. Adarsh Kumar Swarup, Muzaffarnagar V. DCIT, Muzaffarnagar

ITA 1228/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6328 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 07-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BEDOBINA CHAUDHURI
• Keywords: Capital asset; Cost of acquisition; Fair market value; Valuation report; Capital Gains
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 54F; 142(1); 234B; 143(1); 48; 73; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 1228/DEL/2016 ASSESSMENT YEAR: 2011-12 SH. ADARSH KUMAR SWARUP, VS. DCIT, CIRCLE-1 POST BAG NO. 221, MUZAFARNAGAR RAMBAGH, JANSATH ROAD, MUZAFARNAGAR (UP) (PAN: AGIPS9620C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. M.P. RASTOGI, ADV. REVENUE BY : MS. BEDOBINA CHAUDHURI, SR. D R ORDER THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORD ER DATED 18.12.2015 OF THE LD. CIT(A), MUZAFFARNGAR PERTAINI NG TO ASSESSMENT YEARS 2011-12. 2. THE FOLLOWING GROUNDS RAISED HAVE BEEN RAISED B Y THE ASSESSEE:- 1. THAT THE CIT(A) HAS ERRED ON FACTS AND UNDER THE LAW IN DISALLOWING THE DEDUCTION U/S. 54 OF THE AC T ON SALE OF LAND APPURTENANT TO THE RESIDENTIAL HOUSE OWNED BY THE APPELLANT AND ALLOWED BY THE AO AND CONSEQUE NTLY THE ENHANCEMENT OF INCOME BY RS. 60,27,000/- IS ARBITRARY, UNJUST AND ANY RATE VERY EXCESSIVE. 2 2. THAT THE CIT(A) AS WELL AS AO HAS ERRED ON FACTS AND UNDER THE LAW IN ADOPTING THE FAIR MARKET VALUE OF LAND SOLD AT RS. 300/- PER SQ. YARDS AGAINST RS. 73 0/- PER SQ. YARDS DETERMINED BY APPROVED VALUER. 3. THAT THE LD. CIT(A) AND AO BOTH HAS ERRED ON FAC T AND UNDER THE LAW IN ADOPTING THE DEMAND COST OF TH E LAND, WHICH WAS ACQUIRED BY THE APPELLANT BY WAY OF INHERITANCE FROM HIS MOTHER SMT. ASHA SWARUP, BEING THE MARKET VALUE AS ON 1.4.1981 INSTEAD OF ITS VALUE AS ON 31.3.1985 AND CONSEQUENTLY THE COST OF THE LAND ADO PTED AT THE RATE OF 300/- PER SQ.YARDS, INSTEAD OF 730/- PER SQ. YARDS CLAIMED BY THE APPELLANT IS ARBITRARY, UNJUST AND ANY RATE VERY INADEQUATE. 4. THAT THE ASSESSEE DENIES HIS LIABILITY TO PAY IN TEREST CHARGED U/S.234A, 234B AND 234C OF THE ACT. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME O F HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED ON 17.8.2011 DECLARING TOTAL INCOME AT RS.15, 36,830/-. THE RETURN WAS PROCESSED ULS 143(1) OF THE IT ACT AND C ASE WAS SELECTED FOR SCRUTINY. ACCORDINGLY, NOTICE U/S.143(2) OF THE I.T. ACT, 1961 WAS ISSUED ON 6.8.2012 AND NOTICE U/S. 142(1) OF THE I .T. ACT, 1961 WAS ALSO ISSUED ON 21.6.2013 ALONGWITH QUESTIONNAIRE. IN COMPLIANCE TO 3 THE STATUTORY NOTICES U/S. 143(2)/142(1) OF THE I.T . ACT, 1961, THE ASSESSEES AR ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILED THE REQUIRED DETAILS AND DOCUMENTS. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE AO THAT DURING TH E YEAR UNDER CONSIDERATION THE ASSESSEE HAS SOLD A PLOT IN TWO P ARTS, THE VALUE AS PER CIRCLE RATE OF THIS PROPERTY WAS RS. 91,39,000/ - INCLUDING VALUE OF TREES 16,000/-. NO INCOME IN THIS REGARD HAS BEEN S HOWN BY THE ASSESSEE IN THE RETURN OF INCOME. THEREFORE, VIDE O RDER SHEET ENTRY DATED 6.1.2014 THE ASSESSEE WAS REQUIRED TO SUBMIT THE COMPUTATION OF CAPITAL GAIN. IN RESPONSE TO THERETO THE ASSESSE E VIDE HIS REPLY DATED 10.1.2014 SUBMITTED THE CALCULATION OF LONG T ERM CAPITAL GAIN. PERUSAL OF COMPUTATION FILED BY THE ASSESSEE REVEALS THAT THE ASSESSEE HAS TAKEN THE COST OF ACQUISITION OF PLOTS SOLD AS PER VALUATION REPORT PREPARED BY DR. RAJIV JAIN, GOVT. APPROVED VALUER IN WHICH THE RATE OF LAND HAS BEEN ADOPTED @ 730/- PER SQ. YARD IN 1985. AS PER SECTION 49(1) OF THE INCOME TAX ACT, 1961 CO ST OF ACQUISITION, IN CASE OF CAPITAL ASSET ACQUIRED BY C ERTAIN MODES OF ACQUISITION INCLUDING WILL, SHALL BE DEEMED TO BE T HE COST FOR WHICH THE PREVIOUS OWNER OF THE PROPERTY ACQUIRED IT. FUR THER, IN EXPLANATION TO THE SECTION 49(1) IT IS CLEARLY MENT IONED THAT THE COST OF PREVIOUS OWNER OF THE PROPERTY MEANS THE COST OF LAST PREVIOUS OWNER OF THE CAPITAL ASSET WHO ACQUIRED IT BY A MOD E OF ACQUISITION 4 OTHER THAN THAT REFERRED TO CLAUSE (I) TO (IV) OF T HIS SUB-SECTION. PERUSAL OF DOCUMENTS SUBMITTED BY THE ASSESSEE DURI NG THE COURSE OF ASSESSMENT PROCEEDING IT IS NOTICED THAT THE PROPER TY IN QUESTION WAS PURCHASED BY THE ASSESSEE'S GRAND MOTHER SMT. JYOTS NA KUMARI SWARUP BEFORE 1.4.1981 AS NO DATE OF PURCHASE IS ME NTIONED IN HER WILL DATED 15.1.1985. HENCE, FOR THE PURPOSE OF CO ST OF ACQUISITION THE CIRCLE RATE OF THE PROPERTY AS ON 1.4.1981 IS T O BE TAKEN. THE CIRCLE RATES AS ON 1.4.1981 HAVE BEEN OBTAINED FROM THE OFFICE OF THE ADM(FINANCE), MUZAFFAMAGAR. ACCORDING TO WHICH THE CIRCLE RATE OF THE PROPERTY SITUATED IN KAMBALWALA BAGH WAS RS. 30 0/- PER SQ. YARD AS ON 1.4.1981. VIDE ORDER SHEET ENTRY DATED 30.1. 2014 THE ASSESSEE WAS REQUIRED TO EXPLAIN AND, JUSTIFY WHY T HE COST OF ACQUISITION OF PROPERTY MAY NOT BE TAKEN AT THE CIR CLE RATE OF 300/- PER SQUARE YARDS AS ON 1.4.1981 IN VIEW OF THE PROV ISIONS OF SECTION 49(1) OF THE INCOME TAX ACT. 1961. IN RESPONSE TO W HICH THE ASSESSEE VIDE HIS REPLY DATED 31.1.2014 HAS SUBMITT ED AS UNDER:- 'THE ASSESSEE WOULD LIKE TO DRAW YOUR KIND ATTENTIO N TO THE FACT THAT THE LAND SOLD DURING THE YEAR WAS PART OF THE PORTION OF THE PROPERTY INHERITED BY THE ASSESSEE SHRI ADARSH KUMA R SWARUP FROM HIS MOTHER SMT. ASHA SWARUP AFTER HER DEATH ON 16 MARCH 1994 THROUGH HER WILL. AS STIPULATED IN SECTI ON 49(1)(II) REPRODUCED ABOVE, THE COST OF ACQUISITION OF THE PR OPERTY SOLD MEAN THE COST FOR WHICH THE LAST PREVIOUS OWNER HAD ACQUIRED 5 THE PROPERTY. IN THIS CASE, THE LAST PREVIOUS OWNER WAS THE ASSESSEE'S MOTHER SMT. ASHA SWARUP. SHE ACQUIRED TH E PROPERTY FROM HER MOTHER-IN-LAW SMT . JYOTSNA KUMAR I SWARUP THROUGH LATER'S WILL AFTER HER DEATH ON 5 MARCH, 19 85. AS SUCH THE COST OF THE PROPERTY SOLD IS TO BE TAKEN AS THE FAIR MARKET VALUE OF THE PROPERTY EXISTING IN MARCH, 1985 AND N OT AS ON 01.04.1981 AND THEREFORE IT REQUESTED THAT THE VALU E DERIVED IN THE VALUATION REPORT BE KINDLY ACCEPTED AND NOT @ 3 00/- PER SQ. YD AS MENTIONED BY YOUR HONOUR. AO OBSERVED THAT THE ABOVE CONTENTION OF THE ASSESS EE IS NOT CORRECT AS THE EXPRESSION 'PREVIOUS OWNER OF THE PR OPERTY' PAS BEEN DEFINED IN THE EXPLANATION OF SECTION 49(1) AS DISC USSED ABOVE. THEREFORE, THE COST OF ACQUISITION OF THE ASSESSEE IN RESPECT TO THE PROPERTY SOLD IS TAKEN AT RS. 300/- PER SQ. YD. TO THE COMPUTATION OF LONG TERM CAPITAL GAIN GIVEN BY THE ASSESSEE VIDE L ETTER DATED 10.1.2014 THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54 F OF THE INCOME TAX ACT, 1961 FOR INVESTMENT IN HOUSE PROPERTY. THE PERUSAL OF BALANCE SHEET AS ON 31.3.2011, SUBMITTED BY THE ASS ESSEE ALONGWITH RETURN OF INCOME, THERE ARE TWO HOUSE PROPERTIES WI TH THE ASSESSEE APART FROM NEW PROPERTY PURCHASED DURING THE YEAR, WHICH ARE AS UNDER:- DELHI KOTHI 5,55,504/- MUSSORIE FLAT 4,77,500/- 6 AS PER PROVISO OF SECTION 54F(1) NOTHING CONTAINED IN THIS SUB- SECTION SHALL APPLY WHERE THE ASSESSEE OWNS MORE TH AN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THEREFORE, 'THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 54F OF THE INCOME TAX ACT, 1961 AS TH E ASSESSEE ALREADY OWNED TWO RESIDENTIAL HOUSES. VIDE ORDER SH EET ENTRY DATED 3.2.2014 THE ASSESSEE WAS REQUIRED TO JUSTIFY HIS C LAIM OF SECTION 54F IN SPITE OF HAVING TWO RESIDENTIAL HOUSE AT DELHI A ND FLAT AT MUSSOORIE. IN RESPONSE OF WHICH THE ASSESSEE VIDE H IS REPLY DATED 14.2.2014 SUBMITTED THAT THE INVESTMENT OF RS. 60,7 0,000/- MADE IN THE PURCHASE OF HOUSE PROPERTY WOULD FALL UNDER SEC TION 54 AS SECTION 54F IS NOT APPLICABLE TO THE FACTS OF THE CASE. AFT ER CONSIDERING THE REPLY OF THE ASSESSEE AND THE DOCUMENTS SUBMITTED T HE CLAIM OF THE ASSESSEE U/S 54(1) IS ACCEPTED AND ASSESSMENT WAS C OMPLETED AT 24,60,130/- BEING TAXABLE LONG TERM CAPITAL GAIN VI DE AOS ORDER DATED 10.3.2014 PASSED U/S. 143(3) OF THE I.T. ACT , 1961. 4. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEAL ED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 08.12.201 5 HAS CONCLUDED THAT LONG TERM CAPITAL ASSET SOLD BY THE ASSESSEE IS LAND APPURTENANT TO THE BUILDINGBUT IS NOT A RESIDENTIA L HOUSE AND THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTI ON U/S.54 OF THE ACT FOR THIS TRANSACTION. LD. CIT(A) FURTHER OBSERVED THAT THEREFORE, THE DEDUCTION CLAIMED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS AND ALLOWED BY THE AO AT RS. 60,27,000/- IS DISALLO WED AND AO WAS 7 DIRECTED TO RECOMPUTED INCOME ASSESSED OF THE ASSES SEE. ACCORDINGLY, THE INCOME ASSESSED WAS ENHANCED BY R S. 60,27,000/- AND DISMISSED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD. C IT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 61 HAVING THE COP IES OF SALE DEED DATED 25.6.2010 IN FAVOUR OF TCMC DEVELOPERS LTD., MUZAFFARNGAR, EVIDENCING THAT THE LAND WAS PART OF HOUSE NO. 64, AGRASEN VIHAR FOR A SUM OF RS. 45,60,000/-; COPIES OF SALE DEED DATED 25.6.2010 IN FAVOUR OF ANKIT GARG, MUZAFFARNAGAR EVIDENCING THAT THE LAND WAS PART OF HOUSE NO. 64, AGRASEN VIHAR FOR A SUM OF RS. 45, 60,000/-; COPY OF WILL OF SMT.JYOTSNA KUMARI SWARUP; COPY OF WILL OF SMT. ASHA SWARUP; COPY OF REGISTERED VALUER SH. RAJIV JAIN RE PORT AS ON 1.4.1981 EVIDENCING THE MARKET VALUE OF THE LAND @R S. 600/- PER SQ. YARD; COPY OF REGISTERED VALUER SH. RAJIV JAIN REPO RT AS ON 31.3.1985 EVIDENCING THE MARKET VALUE OF THE LAND @ RS. 730/- PER SQ. YARD AND COPY OF HOUSE TAX ASSESSMENT AND RECORD OF THE MUNI CIPALITY, MUZAFFARNGAR IN RESPECT OF THE HOUSE. LD. COUNSEL O F THE ASSESSEE ALSO FILED THE BRIEF SYNOPSIS WHICH READ AS UNDER:- 1. THE APPELLANT HAILS FROM A WELL KNOWN INDUSTRIA L FAMILY OF SMALL TOWN MUZAFFARNAGAR WHERE THE APPELLANT'S F AMILY HAD OWNED SEVERAL INDUSTRIES LIKE SUGAR, VANASPATI, DISTILLERY, STEEL AND OTHERS. 8 2. THE APPELLANT'S GRANDMOTHER, SMT. JYOTSNA KUMARI SWARUP WIFE OF LATE LALA GOPAL RAJ SWARUP, RESIDENT OF RAM BAGH, MUZAFFARNAGAR WAS HAVING 50% SHARE IN THE RESIDENTIAL HOUSE (KOTHI) LOCATED IN RAM BAGH ALONG WITH THE LAND APPURTENANT THERETO AND THE SAME HAD BEEN BEQUEATHED BY SAID SMT. JYOTSNA KUMARI SWARUP IN FAVOUR OF HER GRANDSON ADARSH KUMAR SWARUP (THE APPELLANT) AND SMT. ASHA SWARUP WIFE OF PRABHAT KUM AR SWARUP IN EQUAL SHARE (PRESENTLY, THE HOUSE NO. 64, AGRASEN VIHAR, JANSATH ROAD, MUZAFFARNAGAR HAVING MUNICIPAL NO. 65, KAMBALWALA, MUZAFFARNAGAR). 3. THE SAID SMT. JYOTSNA KUMARI SWARUP EXPIRED ON 3 1ST MARCH 1985 AND IN ACCORDANCE WITH THE WILL, AFTER H ER DEATH SMT. ASHA SWARUP AND ADARSH KUMAR SWARUP HAD ACQUIRED THE RESIDENTIAL HOUSE AND THE LAND APPURTE NANT THERETO IN EQUAL SHARE. 4. LATER ON, SMT. ASHA SWARUP ALSO BEQUEATHED HER S HARE IN THE RESIDENTIAL HOUSE AND LAND APPURTENANT THERE TO, WHICH WERE INHERITED FROM SMT. JYOTSNA KUMARI SWARU P IN FAVOUR OF THE APPELLANT VIDE HER WILL DATED 8TH DEC EMBER 1993. SMT. ASHA SWARUP LATER ON EXPIRED ON 16TH MAR CH 1994 AND ACCORDING TO HER WILL, THE APPELLANT MR. A DARSH KUMAR SWARUP ALSO ACQUIRED HER SHARE IN THE RESIDEN TIAL 9 HOUSE AND LAND APPURTENANT THERETO. AT THE TIME OF DEATH, SMT. ASHA SWARUP WAS HAVING ONE-FOURTH SHARE IN THE RESIDENTIAL HOUSE AND THE LAND APPURTENANT THERETO. 5. DURING THE YEAR UNDER CONSIDERATION, THE APPELLA NT, OUT OF THE LAND APPURTENANT TO THE RESIDENTIAL HOUSE, H AD SOLD 608 SQUARE METRES LAND IN TWO PARTS FOR A SUM OF RS.91,39,000/- ON 25TH JUNE 2010. IN THE ASSESSMENT , THE ASSESSING OFFICER HAS ALSO ALLOWED DEDUCTION FO R THE INVESTMENT MADE IN A FLAT IS] S 54 OF THE INCOME-TA X ACT, 1961 (THE ACT) FOR A SUM OF RS.60,27,000/-, WHEREAS FOR THE BALANCE AMOUNT THE ASSESSING OFFICER WORKED OUT THE CAPITAL GAIN AT RS.6,35,870/-. 6. DURING THE COURSE OF ASSESSMENT, THE ASSESSEE HA D CLAIMED THAT NO TAX ON CAPITAL GAIN ON SALE OF THE LAND IS CHARGEABLE TO TAX BECAUSE THE MARKET VALUE OF THE L AND ON THE DATE OF ACQUISITION OF LAND BY PREVIOUS OWNER, I.E. SMT. ASHA SWARUP IN TERMS OF SECTION 49 OF THE ACT ON 31 ST MARCH 1985 (BEING THE DATE OF DEATH OF SMT. JYOT SNA KUMARI SWARUP) WORKED OUT BY THE REGISTERED VALUER AT RS. 730/- PER SQUARE YARD AND AFTER INDEXATION, NOT HING REMAINS CHARGEABLE TO TAX. 7. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW T HAT IN VIEW OF THE EXPLANATION TO SECTION 49(1) OF THE ACT , THE COST OF ACQUISITION HAS TO BE SEEN NOT IN THE HANDS OF MRS. 10 ASHA SWARUP BUT IN THE HANDS OF SMT. JYOTSNA KUMAR SWARUP BECAUSE ASHA SWARUP HAD ALSO ACQUIRED THE SA ID PROPERTY BY WAY OF WILL AND BECAUSE SMT. JYOTSNA KU MARI SWARUP WAS HOLDING SUCH PROPERTY BEFORE 1ST APRIL 1 981. HENCE IN VIEW OF SECTION 55(2)(B)(II) OF THE ACT, T HE MARKET VALUE OF THE PROPERTY HAS TO BE TAKEN INTO CONSIDERATION AS ON 1 ST APRIL 1981. EVEN FOR THE P URPOSE OF THE VALUATION AS ON 1 ST APRIL 1981, THE ASSESSE E HAD WORKED OUT THE SAID PROPERTY BY REGISTERED VALUER S HRI RAJIV JAIN WHO WORKED OUT THE VALUE OF THE PROPERTY @ RS.600 / - PER SQUARE YARD. 8. THE ASSESSING OFFICER, INSTEAD OF THE MARKET VAL UE WORKED OUT BY THE REGISTERED VALUER, ADOPTED THE MA RKET VALUE OF THE PROPERTY ON THE BASIS OF CIRCLE RATE @ RS.300 / - PER SQUARE YARD AS ON 1 ST APRIL 1981 WITHOUT F URTHER BENEFIT OF PROPER INDEXATION AS AVAILABLE TO THE AS SESSEE AS PER THE SECOND PROVISO TO SECTION 48 OF THE ACT AND EXPLANATION (III) READ WITH SECTION 2(42A) AND EXPL ANATION 1(6) OF THE ACT. 9. THE APPELLANT FILED APPEAL BEFORE THE CIT (APPEA LS) AND OBJECTED THE ACTION OF THE ASSESSING OFFICER. THE A PPELLANT STATED THAT THE MARKET VALUE OF THE PROPERTY SHOULD HAVE BEEN TAKEN AS ON 31 ST MARCH 1985 WHEN THE PREVIOUS OWNER OF THE PROPERTY SMT. ASHA SWARUP HAD ACQUIRED 11 AND NOT ON 1 ST APRIL 1981 AND SECONDLY STATED THAT EVEN OTHERWISE THE VALUE OF THE PROPERTY AS ON 1 ST APRI L 1981 HAD BEEN ADOPTED BY THE ASSESSING OFFICER ON THE BA SIS OF CIRCLE RATE IS WRONG AND IT SHOULD HAVE BEEN TAKEN AS WORKED OUT BY THE REGISTERED VALUER @ RS.600 / - PE R SQUARE YARD BECAUSE THE CIRCLE RATES ARE FIXED FOR A PARTICULA.R LARGE AREA OF THE LOCALITY WITHOUT TAKI NG INTO CONSIDERATION THE EXACT LOCATION OF THE PROPERTY, W HEREAS THE VALUE DEPENDS UPON THE LOCATION OF THE PROPERTY ALSO. PROPERTY NEAR TO THE ROAD FETCHES MORE VALUE. 10. THE COMMISSIONER (APPEALS) DISMISSED THE CONTEN TION OF THE APPELLANT NOT ONLY WITH REGARD TO THE DATE O F ADOPTION OF MARKET VALUE AS ON 31 ST MARCH 1985 AS CONTENDED BY THE APPELLANT AND HAS ALSO REJECTED TH E MARKET VALUE OF THE PROPERTY AS WORKED OUT BY THE REGISTERED VALUER AND INSTEAD ADOPTED THE VALUE AS ON 1 ST APRIL 1981 ON THE BASIS OF CIRCLE RATE AS DONE BY T HE ASSESSING OFFICER. 11. HOWEVER, THE CIT (APPEALS) IN THE APPEAL PROCEE DINGS ALLEGED THAT THE DEDUCTION AS ALLOWED BY THE ASSESS ING OFFICER IN RESPECT OF SAID PROPERTY BY REGISTERED V ALUER SHRI RAJIV JAIN WHO WORKED OUT THE VALUE OF THE PRO PERTY @ RS.600 / - PER SQUARE YARD. 12 8. THE ASSESSING OFFICER, INSTEAD OF THE MARKET VAL UE WORKED OUT BY THE REGISTERED VALUER, ADOPTED THE MA RKET VALUE OF THE PROPERTY ON THE BASIS OF CIRCLE RATE @ RS.300 / - PER SQUARE YARD AS ON 1 ST APRIL 1981 WITHOUT F URTHER BENEFIT OF PROPER INDEXATION AS AVAILABLE TO THE AS SESSEE AS PER THE SECOND PROVISO TO SECTION 48 OF THE ACT AND EXPLANATION (III) READ WITH SECTION 2(42A) AND EXPL ANATION 1(6) OF THE ACT. 9. THE APPELLANT FILED APPEAL BEFORE THE CIT (APPEA LS) AND OBJECTED THE ACTION OF THE ASSESSING OFFICER. THE A PPELLANT STATED THAT THE MARKET VALUE OF THE PROPERTY SHOULD HAVE BEEN TAKEN AS ON 31 ST MARCH 1985 WHEN THE PREVIOUS OWNER OF THE PROPERTY SMT. ASHA SWARUP HAD ACQUIRED AND NOT ON 1 ST APRIL 1981 AND SECONDLY STATED THAT EVEN OTHERWISE THE VALUE OF THE PROPERTY AS ON 1 ST APRI L 1981 HAD BEEN ADOPTED BY THE ASSESSING OFFICER ON THE BA SIS OF CIRCLE RATE IS WRONG AND IT SHOULD HAVE BEEN TAKEN AS WORKED OUT BY THE REGISTERED VALUER @ RS.600/- PER SQUARE YARD BECAUSE THE CIRCLE RATES ARE FIXED FOR A PARTICULAR LARGE AREA OF THE LOCALITY WITHOUT TAKIN G INTO CONSIDERATION THE EXACT LOCATION OF THE PROPERTY, W HEREAS THE VALUE DEPENDS UPON THE LOCATION OF THE PROPERTY ALSO. PROPERTY NEAR TO THE ROAD FETCHES MORE VALUE. 13 10. THE COMMISSIONER (APPEALS) DISMISSED THE CONTEN TION OF THE APPELLANT NOT ONLY WITH REGARD TO THE DATE O F ADOPTION OF MARKET VALUE AS ON 31 ST MARCH 1985 AS CONTENDED BY THE APPELLANT AND HAS ALSO REJECTED TH E MARKET VALUE OF THE PROPERTY AS WORKED OUT BY THE REGISTERED VALUER AND INSTEAD ADOPTED THE VALUE AS ON 1 ST APRIL 1981 ON THE BASIS OF CIRCLE RATE AS DONE BY T HE ASSESSING OFFICER. 11. HOWEVER, THE CIT (APPEALS) IN THE APPEAL PROCEE DINGS ALLEGED THAT THE DEDUCTION AS ALLOWED BY THE ASSESS ING OFFICER IN RESPECT OF INVESTMENT OF FLAT U/S 54 OF THE ACT WAS WRONG AS HE WAS OF THE VIEW THAT U/S 54 OF THE ACT THE DEDUCTION IS AVAILABLE ONLY WHEN THE RESIDENTIA L HOUSE IS TRANSFERRED AND NOT THE LAND APPURTENANT THERETO AND FOR THIS PURPOSE HE RELIED UPON THE JUDGMENT OF PUN JAB & HARYANA HIGH COURT IN THE CASE OF ASHOK SAYAL VS. C IT IN 209 TAXMAN 376 AND THE JUDGMENT OF THE RAJASTHAN HI GH COURT IN THE CASE OF RAJESH SURANA VS. CIT IN 306 I TR 366 AND THEN ENHANCED THE INCOME OF THE APPELLANT BY WA Y OF DISALLOWING THE DEDUCTION IS] S 54 OF THE ACT AS AL LOWED BY THE ASSESSING OFFICER ON THE INVESTMENT OF RS.60,27 ,000/- ASSESSEE'S CONTENTION: GROUND NO.1: 14 THE CIT (APPEALS) HAS DISALLOWED THE DEDUCTION IS U /S 54 OF THE ACT AS ALLOWED BY THE AO AND CLAIMED BY THE APPELLANT ON THE GROUND THAT BECAUSE THE SALE HAS B EEN ONLY OF THE LAND AND NOT THE RESIDENTIAL HOUSE EVEN IF THE LAND WAS APPURTENANT THERETO AND FOR THIS PURPOSE H AD RELIED UPON THE JUDGMENT OF ASHOK SYAL VS. CIT (P&H ) IN 209 TAXMAN 376 AND RAJESH SURANA VS. CIT (RAJ) IN 3 06 ITR 366. AS PER THE APPELLANT, THE FACTS OF BOTH HI GH COURTS ARE DIFFERENT AND NO SUCH ISSUE WAS THERE. IN THE CASE OF ASHOK SYAL (SUPRA), A RESIDENTIAL PL OT WAS ALLOTTED TO THE SAID ASSESSEE BY HOUSING AUTHORITIE S ON WHICH A- ROOM WITH MUD WAS MADE WITHOUT ANY BASIC AMENITIES AS REQUIRED FOR A RESIDENTIAL HOUSE. EVEN THE ELECTRICITY AND TOILET WERE NOT THERE. THE SAID ASS ESSEE CLAIMED THAT ON ACCOUNT OF BEING A ROOM CONSTRUCTED THEREON, HE SOLD THE HOUSE AND NOT THE LAND AND CLA IMED EXEMPTION IX] S 54 OF THE ACT. ON SUCH FACTS, PUNJA B & HARYANA HIGH COURT HELD THAT FIRST OF ALL NO ROOM W AS THERE AND SECONDLY EVEN IF IT IS ASSUMED THAT ROOM WAS THERE, IT WAS CONSTRUCTED WITH MUD FOR A CERTAIN PU RPOSE WITHOUT ANY BASIC AMENITIES AS IS NECESSARY IN A HO USE TO BE CALLED A RESIDENTIAL HOUSE. THE PUNJAB & HARYANA HIGH COURT HELD THAT INSTEAD OF HOUSE, AS CLAIMED, IT WA S ONLY 15 LAND SOLD, HENCE NO DEDUCTION IS] S 54 OF THE ACT I S ADMISSIBLE. IN THE CASE OF RAJESH SURANA (SUPRA), THE HORI'BLE RAJASTHAN HIGH COURT WAS EXAMINING THE ISSUE IX] S 53 AND NOT 54 OF THE ACT. IN THE SAID CASE ALSO, THE S AID ASSESSEE HAD SOLD THE PLOT OF LAND WITH A GARAGE AN D IN THOSE VERY FACTS THE RAJASTHAN HIGH COURT HELD THAT IN THE ABSENCE OF BASIC AMENITIES IT WAS NOT A HOUSE BUT P LOT OF LAND ONLY AND THEN DISALLOWED THE EXEMPTION U/S 53 OF THE ACT. AS FAR AS THE ASSESSEE'S CASE IS CONCERNED, IT IS BROUGHT TO YOUR KIND NOTICE THAT THE SAID LAND, WHICH WAS SOLD BY T HE APPELLANT, WAS FORMING PART OF THE RESIDENTIAL HOUS E NO. 64, AGRASEN VIHAR (RAM BAGH) , MUZAFFARNAGAR (HAVIN G A MUNICIPAL NO. 65, BAGH KAMBALWALA) AND ALL THE PROP ERTY WAS DULY ASSESSED TO HOUSE-TAX AND WAS SELF- OCCUPI ED BY THE OCCUPANTS VIZ. THE APPELLANT AND OTHER FAMILY MEMBERS. U/S 54 OF THE ACT, THE LEGISLATURE HAS USE D THE EXPRESSION 'BEING BUILDINGS OR LANDS APPURTENANT TH ERETO AND BEING A RESIDENTIAL HOUSE'. THE HON'BLE KARNATAKA HIGH COURT HAD EXAMINED THESE EXPRESSIONS WHILE CONSTRUING THE PROVISION OF SECTI ON 54 OF THE ACT IN THE CASE OF SHRI C.N. ANANTHARAMAN VS. A CIT IN 16 ITA NO. 1012/2008 VIDE ITS JUDGMENT DATED 10TH OCTO BER 2014 - COPY ENCLOSED. THE HON'BLE KARNATAKA HIGH CO URT HELD THAT THE DEDUCTION U/S 54 OF THE ACT IS ALSO A VAILABLE EVEN IF THE LAND, WHICH WAS APPURTENANT TO THE RESI DENTIAL HOUSE, IS SOLD AND IT IS NOT NECESSARY THAT THE WHO LE OF THE RESIDENTIAL HOUSE SHOULD BE SOLD BECAUSE THE LEGISL ATURE HAS USED THE WORDS 'OR' WHICH IS DISTINCTIVE IN NAT URE. IN THE INSTANT CASE, IT IS NOT THE CASE OF AO AND C IT (APPEALS) THAT THE LAND WAS NOT APPURTENANT TO THE RESIDENTIAL HOUSE. THE CASE OF THE CIT (APPEALS) IS THAT THE APPELLANT HAS SOLD ONLY THE LAND APPURTENANT TO THE HOUSE AND NOT RESIDENTIAL HOUSE WHICH, ACCORDING TO THE KARNATAKA HIGH COURT, IS NOT A REQUIREMENT UNDER TH E LAW AND EXEMPTION VI] S 54 OF THE ACT IS ALSO AVAILABLE TO THE LAND WHICH IS APPURTENANT TO THE HOUSE. THE FRONT P AGE OF THE SALE DEED ITSELF SHOWS THAT THE LAND WAS PART O F RESIDENTIAL HOUSE NO. 64, AGRASEN VIHAR, MUZAFFARNA GAR. THEREFORE, THE EXEMPTION AS CLAIMED AND ALLOWED BY THE ASSESSING OFFICER SHOULD BE UPHELD AND THE ENHANCEM ENT AS MADE BY THE CIT (APPEALS) DESERVES TO BE DELETED . GROUND NO.2: AS FAR AS THE APPLICATION OF RATE AS ADOPTED BY THE ASSESSING OFFICER FOR THE PURPOSE OF WORKING OUT TH E 17 CAPITAL GAIN IS CONCERNED, THE SAME IS WRONG INTER- ALIA BECAUSE: (I) THE MARKET VALUE SHOULD HAVE BEEN TAKEN AS WAS IN THE HANDS OF PREVIOUS OWNER SMT. ASHA SWARUP FROM WHOM THE APPELLANT HAD RECEIVED THE PROPERTY BECAUSE SHE IS THE PREVIOUS OWNER AS FAR AS THE ASSESSEE IS CONCER NED; AND (II) BECAUSE SMT. ASHA SWARUP HAD ACQUIRED THE PROPERTY AS ON 31 ST MARCH 1985, HENCE THE MARKET VALUE OF THE PROPERTY SHOULD HAVE BEEN TAKEN INTO ACCOUNT AS ON 31ST MARCH 1985 AS WORKED OUT BY THE REGISTERED VAL UER AT RS.730/ - PER SQ YARD. WITHOUT PREJUDICE TO ABOVE, EVEN IF IT IS PRESUMED THAT IT IS THE COST IN THE HANDS OF SMT. JYOTSNA KUMARI SWA RUP HAS TO BE TAKEN INTO ACCOUNT BECAUSE SMT. ASHA SWAR UP HAD ACQUIRED THE PROPERTY BY WAY OF A WILL FROM SMT. JYOTSNA KUMARI SWARUP. EVEN THE N THE MARKET VALUE OF THE PROPERTY AS ON 1 ST APRIL 1981 WAS MORE THAN AS ADOPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ADOPTED THE MARKET VALUE OF T HE PROPERTY AS THAT WAS NOTIFIED BY THE STAMP AUTHORIT IES FOR THE PURPOSE OF LEVY OF STAMP DUTY BY CIRCLE RATES. THE STAMP AUTHORITIES, WHILE FIXING THE CIRCLE RATES, D ID NOT TAKE INTO ACCOUNT VARIOUS ADVANTAGES AND DISADVANTA GES 18 AND THE LOCATION OF THE PROPERTY, BUT THEY FIXED TH E CIRCLE RATE ON A FIXED RATE FOR WHOLE OF THE LOCALITY. THE HON 'BLE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE CASE OF DINESH KUMAR MITTAL VS. ITO IN 193 ITR 770 HELD THAT THERE IS NO RULE OF LAW TO THE EFFECT THAT THE VALUE DETERMINED FOR THE PURPOSE OF STAMP DUTY IS THE MARKET VALUE OF THE PROPERTY. THE MARKET VALUE OF THE PROPERTY MAY BE M ORE OR MAY BE LESS. THEREFORE, IN SUCH CIRCUMSTANCES, WHEN A REGISTERED VALUER HAS WORKED OUT THE MARKET VALUE OF THE PROPE RTY AS ON 1 ST APRIL 1981 AT RS.600 / - PER SQUARE YARD AF TER TAKING INTO ACCOUNT THE LOCATION OF THE LAND, THE S AME SHOULD BE ADOPTED BY THE ASSESSING OFFICER. ADDITIONAL GROUND OF APPEAL: WHILE COMPUTING THE CAPITAL GAIN ON SALE OF PROPERT Y, THE ASSESSING OFFICER HAD ADOPTED THE DEEMED COST AS MA RKET VALUE OF THE PROPERTY AS ON 1 ST APRIL 1981 BECAUSE HE WAS OF THE VIEW THAT LATE SMT. ASHA SWARUP, FROM WH OM THE APPELLANT HAD RECEIVED THE PROPERTY BY WAY OF W ILL HAD INHERITED THE PROPERTY FROM LATE SMT. JYOTSNA KUMAR SWARUP AND ACCORDINGLY THE COST OF ACQUISITION OF T HE PROPERTY SHALL BE DEEMED TO BE THE COST FOR WHICH T HE PREVIOUS OWNER OF THE PROPERTY ACQUIRED IT. AS PER THE EXPLANATION TO SECTION 49(1) OF THE ACT, THE PREVIO US 19 OWNER OF THE PROPERTY MEANS THE LAST PREVIOUS OWNER OF THE PROPERTY WHO ACQUIRED IT BY A MODE OF ACQUISITI ON OTHER THAN THAT REFERRED IN CLAUSE (III) OF SECTION 49(1) OF THE IT ACT. HENCE ACCORDINGLY THE COST IN THE HANDS OF SMT. JYOTSNA KUMAR SWARUP SHALL BE DEEMED TO BE THE COST OF THE PROPERTY. AS SMT. JYOTSNA KUMAR SWARUP WAS HOLDING THE PROPERTY PRIOR TO 1 ST APRIL 1981, HENC E IN VIEW OF THE PROVISION OF SECTION 55(2)(B) OF THE AC T THE FAIR MARKET VALUE OF THE ASSET AS ON 1 ST DAY OF APRIL 1 981 WOULD BE THE DEEMED COST OF ACQUISITION. THE COMPUTATION OF CAPITAL GAINS HAS BEEN PRESCRIBE D U/S 48 OF THE IT ACT AND IT STATES THAT CAPITAL GAINS S HALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED AS A RESULT OF THE TRANSFER OF A CAPITAL ASSET, COST OF THE ACQUISITION OF ASSET AND THE COST OF ANY IMPROVEMENT THERETO. THE SECOND PROVISO TO SECTION 48 OF THE IT ACT FURT HER STATES THAT IF THE LONG TERM GAINS ARISES FROM THE TRANSFER OF A LONG TERM CAPITAL ASSET, THEN THE COST OF ACQU ISITION MEANS THE INDEXED COST OF ACQUISITION. THE INDEXED COST OF ACQUISITION HAS BEEN DEFINED IN EXPLANATION (III) A ND IT STATES THAT THE INDEXED COST OF ACQUISITION MEANS ' AN AMOUNT WHICH BEARS TO THE COST OF ACQUISITION THE S AME PROPORTION AS COST INFLATION INDEX FOR THE YEAR IN WHICH THE 20 ASSET IS TRANSFERRED, BEARS TO THE COST INFLATION I NDEX FOR THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE A SSESSEE OR FOR THE YEAR BEGINNING ON THE FIRST DAY OF APRIL 1981, WHICHEVER IS LATER'. THE LONG TERM CAPITAL ASSET AND SHORT TERM CAPITAL ASSET HAS BEEN DEFINED IN SECTION 2(29A) AND 2(42A) OF TH E IT ACT RESPECTIVELY. THE SHORT-TERM CAPITAL ASSET MEAN S A CAPITAL ASSET HELD BY AN ASSESSEE FOR NOT MORE THAN 36 MONTHS IMMEDIATELY PRECEDING THE D ATE OF ITS TRANSFER. EXPLANATION 1(B) TO SECTION 42A OF THE IT ACT FURTHER STATES THAT IN DETERMINING THE PERIOD F OR WHICH ANY CAPITAL ASSET IS HELD BY THE ASSESSEE, IN THE C ASE OF A CAPITAL ASSET WHICH BECOMES THE PROPERTY OF THE ASS ESSEE IN THE CIRCUMSTANCES MENTIONED IN SUB-SECTION (1) O F SECTION 49, THERE SHALL BE INCLUDED FOR WHICH AN AS SET WAS HELD BY THE PREVIOUS OWNER REFERRED TO IN THE SAID SECTION. IN THE INSTANT CASE, THE PREVIOUS OWNER HAS BEEN CONSIDERED BY THE ASSESSING OFFICER SMT. JYOTSNA KU MAR SWARUP IN VIEW OF THE EXPLANATION TO SECTION 49 AN D NOT SMT. ASHA SWARUP. HENCE THE NECESSARY COLLOLARY ARI SES THAT THE PERIOD OF HOLDING HAS TO BE COMPUTED FROM 1 ST APRIL 1981 BEING THE BASE YEAR FOR WHICH THE COST H AS BEEN DEEMED AND ACCORDINGLY THE INDEXED COST OF THE 21 PROPERTY SHOULD BE WORKED OUT AFTER TAKING INTO ACC OUNT THE DATE OF DEEMED COST OF ACQUISITION, I.E. 1 ST A PRIL 1981 ONWARDS FOR THE PURPOSE OF COMPUTATION OF CAPITAL G AINS. IN THE INSTANT CASE, THE ASSESSING OFFICER, FOR THE PURPOSE OF INDEXATION, HAS ADOPTED THE DATE AS 31ST MARCH 1 985 AND NOT 1ST APRIL 1981. HENCE THE ASSESSING OFFICER BE DIRECTED TO WORK OUT THE INDEXED COST, THEREBY TAKI NG INTO ACCOUNT THE DATE OF ACQUISITION AS 1ST APRIL 1981. 7. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW AND STATED THAT LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE, HENCE, HE REQ UESTED THAT THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT (A), PAPER BOOK AND BRIEF SYNOPSIS. WE FIND THAT IN THIS CASE RET URN OF INCOME WAS FILED ON 17.8.2011 DECLARING TOTAL INCOME AT RS.15, 36,830/-. THE RETURN WAS PROCESSED ULS 143(1) OF THE IT ACT AND C ASE WAS SELECTED FOR SCRUTINY. ACCORDINGLY, NOTICE U/S.143(2) OF THE I.T. ACT, 1961 WAS ISSUED ON 6.8.2012 AND NOTICE U/S. 142(1) OF THE I .T. ACT, 1961 WAS ALSO ISSUED ON 21.6.2013 ALONGWITH QUESTIONNAIRE. IN COMPLIANCE TO THE STATUTORY NOTICES U/S. 143(2)/142(1) OF THE I.T . ACT, 1961, THE ASSESSEES AR ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILED THE REQUIRED DETAILS AND DOCUMENTS. DURING THE COUR SE OF ASSESSMENT 22 PROCEEDINGS IT WAS NOTICED BY THE AO THAT DURING TH E YEAR UNDER CONSIDERATION THE ASSESSEE HAS SOLD A PLOT IN TWO P ARTS, THE VALUE AS PER CIRCLE RATE OF THIS PROPERTY WAS RS. 91,39,000/ - INCLUDING VALUE OF TREES 16,000/-. NO INCOME IN THIS REGARD HAS BEEN S HOWN BY THE ASSESSEE IN THE RETURN OF INCOME. THEREFORE, VIDE O RDER SHEET ENTRY DATED 6.1.2014 THE ASSESSEE WAS REQUIRED TO SUBMIT THE COMPUTATION OF CAPITAL GAIN. IN RESPONSE TO THERETO THE ASSESSE E VIDE HIS REPLY DATED 10.1.2014 SUBMITTED THE CALCULATION OF LONG T ERM CAPITAL GAIN. PERUSAL OF COMPUTATION FILED BY THE ASSESSEE REVEALS THAT THE ASSESSEE HAS TAKEN THE COST OF ACQUISITION OF PLOTS SOLD AS PER VALUATION REPORT PREPARED BY DR. RAJIV JAIN, GOVT. APPROVED VALUER IN WHICH THE RATE OF LAND HAS BEEN ADOPTED @ 730/- PER SQ. YARD IN 1985. AS PER SECTION 49(1) OF THE INCOME TAX ACT, 1961 COST OF ACQUISITION, IN CASE OF CAPITAL ASSET ACQUIRED BY C ERTAIN MODES OF ACQUISITION INCLUDING WILL, SHALL BE DEEMED TO BE T HE COST FOR WHICH THE PREVIOUS OWNER OF THE PROPERTY ACQUIRED IT. FUR THER, IN EXPLANATION TO THE SECTION 49(1) IT IS CLEARLY MENT IONED THAT THE COST OF PREVIOUS OWNER OF THE PROPERTY MEANS THE COST OF LAST PREVIOUS OWNER OF THE CAPITAL ASSET WHO ACQUIRED IT BY A MOD E OF ACQUISITION OTHER THAN THAT REFERRED TO CLAUSE (I) TO (IV) OF T HIS SUB-SECTION. PERUSAL OF DOCUMENTS SUBMITTED BY THE ASSESSEE DURI NG THE COURSE OF ASSESSMENT PROCEEDING IT IS NOTICED THAT THE PROPER TY IN QUESTION WAS PURCHASED BY THE ASSESSEE'S GRAND MOTHER SMT. JYOTS NA KUMARI SWARUP BEFORE 1.4.1981 AS NO DATE OF PURCHASE IS ME NTIONED IN HER 23 WILL DATED 15.1.1985. HENCE, FOR THE PURPOSE OF CO ST OF ACQUISITION THE CIRCLE RATE OF THE PROPERTY AS ON 1.4.1981 IS T O BE TAKEN. THE CIRCLE RATES AS ON 1.4.1981 HAVE BEEN OBTAINED FROM THE OFFICE OF THE ADM(FINANCE), MUZAFFAMAGAR. ACCORDING TO WHICH THE CIRCLE RATE OF THE PROPERTY SITUATED IN KAMBALWALA BAGH WAS RS. 30 0/- PER SQ. YARD AS ON 1.4.1981. VIDE ORDER SHEET ENTRY DATED 30.1. 2014 THE ASSESSEE WAS REQUIRED TO EXPLAIN AND, JUSTIFY WHY T HE COST OF ACQUISITION OF PROPERTY MAY NOT BE TAKEN AT THE CIR CLE RATE OF 300/- PER SQUARE YARDS AS ON 1.4.1981 IN VIEW OF THE PROV ISIONS OF SECTION 49(1) OF THE INCOME TAX ACT. 1961. IN RESPONSE TO W HICH THE ASSESSEE VIDE HIS REPLY DATED 31.1.2014 WHICH WAS C ONSIDERED BY THE AO OBSERVED THAT THE ABOVE CONTENTION OF THE ASSESS EE IS NOT CORRECT AS THE EXPRESSION 'PREVIOUS OWNER OF THE PROPERTY' PAS BEEN DEFINED IN THE EXPLANATION OF SECTION 49(1) AS DISCUSSED AB OVE. THEREFORE, THE COST OF ACQUISITION OF THE ASSESSEE IN RESPECT TO THE PROPERTY SOLD IS TAKEN AT RS. 300/- PER SQ. YD. TO THE COMPUTATIO N OF LONG TERM CAPITAL GAIN GIVEN BY THE ASSESSEE VIDE LETTER DATE D 10.1.2014 THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54F OF THE INCOM E TAX ACT, 1961 FOR INVESTMENT IN HOUSE PROPERTY. THE PERUSAL OF BA LANCE SHEET AS ON 31.3.2011, SUBMITTED BY THE ASSESSEE ALONGWITH RETU RN OF INCOME, THERE ARE TWO HOUSE PROPERTIES WITH THE ASSESSEE AP ART FROM NEW PROPERTY PURCHASED DURING THE YEAR, WHICH ARE AS UN DER:- DELHI KOTHI 5,55,504/- MUSSORIE FLAT 4,77,500/- 24 AO ALSO OBSERVED THAT AS PER PROVISO OF SECTION 54F (1) NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY WHERE THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THEREFORE, 'THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 54F OF THE INCOME TAX AC T, 1961 AS THE ASSESSEE ALREADY OWNED TWO RESIDENTIAL HOUSES. VIDE ORDER SHEET ENTRY DATED 3.2.2014 THE ASSESSEE WAS REQUIRED TO J USTIFY HIS CLAIM OF SECTION 54F IN SPITE OF HAVING TWO RESIDENTIAL H OUSE AT DELHI AND FLAT AT MUSSOORIE. IN RESPONSE OF WHICH THE ASSESSE E VIDE HIS REPLY DATED 14.2.2014 SUBMITTED THAT THE INVESTMENT OF RS . 60,70,000/- MADE IN THE PURCHASE OF HOUSE PROPERTY WOULD FALL U NDER SECTION 54 AS SECTION 54F IS NOT APPLICABLE TO THE FACTS OF TH E CASE. AFTER CONSIDERING THE REPLY OF THE ASSESSEE AND THE DOCUM ENTS SUBMITTED THE CLAIM OF THE ASSESSEE U/S 54(1) IS ACCEPTED AND ASSESSMENT WAS COMPLETED AT 24,60,130/- BEING TAXABLE LONG TERM CA PITAL GAIN VIDE AOS ORDER DATED 10.3.2014 PASSED U/S. 143(3) OF T HE I.T. ACT, 1961. IN APPEAL LD. CIT(A), VIDE HIS IMPUGNED ORD ER DATED 08.12.2015 HAS CONCLUDED THAT LONG TERM CAPITAL ASS ET SOLD BY THE ASSESSEE IS LAND APPURTENANT TO THE BUILDINGBUT IS NOT A RESIDENTIAL HOUSE AND THEREFORE, THE ASSESSEE IS NOT ENTITLED F OR DEDUCTION U/S.54 OF THE ACT FOR THIS TRANSACTION. LD. CIT(A) FURTHE R OBSERVED THAT THEREFORE, THE DEDUCTION CLAIMED BY THE ASSESSEE DU RING ASSESSMENT PROCEEDINGS AND ALLOWED BY THE AO AT RS. 60,27,000/ - IS DISALLOWED AND AO WAS DIRECTED TO RECOMPUTED INCOME ASSESSED O F THE 25 ASSESSEE. ACCORDINGLY, THE INCOME ASSESSED WAS ENH ANCED BY RS. 60,27,000/- AND DISMISSED THE APPEAL OF THE ASSESSE E. 8.1 I FURTHER NOTE THAT THE ASSESSEE HAILS FROM A W ELL KNOWN INDUSTRIAL FAMILY OF SMALL TOWN MUZAFFARNAGAR WHERE THE ASSESSEE'S FAMILY HAD OWNED SEVERAL INDUSTRIES LIKE SUGAR, VAN ASPATI, DISTILLERY, STEEL AND OTHERS. THE ASSESSEE'S GRANDMOTHER, SMT. JYOTSNA KUMARI SWARUP WIFE OF LATE LALA GOPAL RAJ SWARUP, RESIDENT OF RAM BAGH, MUZAFFARNAGAR WAS HAVING 50% SHARE IN THE RESIDENTI AL HOUSE (KOTHI) LOCATED IN RAM BAGH ALONG WITH THE LAND APPURTENANT THERETO AND THE SAME HAD BEEN BEQUEATHED BY SAID SMT. JYOTSNA KUMAR I SWARUP IN FAVOUR OF HER GRANDSON ADARSH KUMAR SWARUP (THE APP ELLANT) AND SMT. ASHA SWARUP WIFE OF PRABHAT KUMAR SWARUP IN EQ UAL SHARE (PRESENTLY, THE HOUSE NO. 64, AGRASEN VIHAR, JANSAT H ROAD, MUZAFFARNAGAR HAVING MUNICIPAL NO. 65, KAMBALWALA, MUZAFFARNAGAR). THE SAID SMT. JYOTSNA KUMARI SWARUP EXPIRED ON 31ST MARCH 1985 AND IN ACCORDANCE WITH THE WILL, AFTER HER DEATH SM T. ASHA SWARUP AND ADARSH KUMAR SWARUP HAD ACQUIRED THE RESIDENTIA L HOUSE AND THE LAND APPURTENANT THERETO IN EQUAL SHARE. LATER ON, SMT. ASHA SWARUP ALSO BEQUEATHED HER SHARE IN THE RESIDENTIAL HOUSE AND LAND APPURTENANT THERETO, WHICH WERE INHERITED FROM SMT. JYOTSNA KUMARI SWARUP IN FAVOUR OF THE APPELLANT VIDE HER WILL DAT ED 8TH DECEMBER 1993. SMT. ASHA SWARUP LATER ON EXPIRED ON 16TH MAR CH 1994 AND ACCORDING TO HER WILL, THE APPELLANT MR. ADARSH KUM AR SWARUP ALSO ACQUIRED HER SHARE IN THE RESIDENTIAL HOUSE AND LAN D APPURTENANT 26 THERETO. AT THE TIME OF DEATH, SMT. ASHA SWARUP WAS HAVING ONE- FOURTH SHARE IN THE RESIDENTIAL HOUSE AND THE LAND APPURTENANT THERETO. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE, OUT OF THE LAND APPURTENANT TO THE RESIDENTIAL HOUSE, HAD SOLD 608 SQUARE METRES LAND IN TWO PARTS FOR A SUM OF RS.91,39,000/ - ON 25TH JUNE 2010. IN THE ASSESSMENT, THE ASSESSING OFFICER HAS ALSO ALLOWED DEDUCTION FOR THE INVESTMENT MADE IN A FLAT IS U/S 54 OF THE INCOME- TAX ACT, 1961 (THE ACT) FOR A SUM OF RS.60,27,000/- , WHEREAS FOR THE BALANCE AMOUNT THE ASSESSING OFFICER WORKED OUT THE CAPITAL GAIN AT RS.6,35,870/-. DURING THE COURSE OF ASSESSMENT, TH E ASSESSEE HAD CLAIMED THAT NO TAX ON CAPITAL GAIN ON SALE OF THE LAND IS CHARGEABLE TO TAX BECAUSE THE MARKET VALUE OF THE LAND ON THE DAT E OF ACQUISITION OF LAND BY PREVIOUS OWNER, I.E. SMT. ASHA SWARUP IN TE RMS OF SECTION 49 OF THE ACT ON 31 ST MARCH 1985 (BEING THE DATE OF D EATH OF SMT. JYOTSNA KUMARI SWARUP) WORKED OUT BY THE REGISTERED VALUER AT RS. 730/- PER SQUARE YARD AND AFTER INDEXATION, NOTHING REMAINS CHARGEABLE TO TAX. HOWEVER, THE ASSESSING OFFICER W AS OF THE VIEW THAT IN VIEW OF THE EXPLANATION TO SECTION 49(1) OF THE ACT, THE COST OF ACQUISITION HAS TO BE SEEN NOT IN THE HANDS OF MRS. ASHA SWARUP BUT IN THE HANDS OF SMT. JYOTSNA KUMAR SWARUP BECAUSE A SHA SWARUP HAD ALSO ACQUIRED THE SAID PROPERTY BY WAY OF WILL AND BECAUSE SMT. JYOTSNA KUMARI SWARUP WAS HOLDING SUCH PROPERTY BEF ORE 1ST APRIL 1981. HENCE IN VIEW OF SECTION 55(2)(B)(II) OF THE ACT, THE MARKET VALUE OF THE PROPERTY HAS TO BE TAKEN INTO CONSIDER ATION AS ON 1 ST 27 APRIL 1981. EVEN FOR THE PURPOSE OF THE VALUATION A S ON 1 ST APRIL 1981, THE ASSESSEE HAD WORKED OUT THE SAID PROPERTY BY REGISTERED VALUER SHRI RAJIV JAIN WHO WORKED OUT THE VALUE OF THE PROPERTY @ RS.600 / - PER SQUARE YARD. THE ASSESSING OFFICER, INSTEAD OF THE MARKET VALUE WORKED OUT BY THE REGISTERED VALUER, A DOPTED THE MARKET VALUE OF THE PROPERTY ON THE BASIS OF CIRCLE RATE @ RS.300 / - PER SQUARE YARD AS ON 1 ST APRIL 1981 WITHOUT FURTH ER BENEFIT OF PROPER INDEXATION AS AVAILABLE TO THE ASSESSEE AS PER THE SECOND PROVISO TO SECTION 48 OF THE ACT AND EXPLANATION (III) READ WI TH SECTION 2(42A) AND EXPLANATION 1(6) OF THE ACT. THE ASSESSEE FILE D APPEAL BEFORE THE CIT (APPEALS) AND OBJECTED THE ACTION OF THE ASSESS ING OFFICER. THE ASSESSEE STATED THAT THE MARKET VALUE OF THE PROPER TY SHOULD HAVE BEEN TAKEN AS ON 31 ST MARCH 1985 WHEN THE PREVIOUS OWNER OF THE PROPERTY SMT. ASHA SWARUP HAD ACQUIRED AND NOT ON 1 ST APRIL 1981 AND SECONDLY STATED THAT EVEN OTHERWISE THE VALUE O F THE PROPERTY AS ON 1 ST APRIL 1981 HAD BEEN ADOPTED BY THE ASSESSING OFFIC ER ON THE BASIS OF CIRCLE RATE IS WRONG AND IT SHOULD HAVE BE EN TAKEN AS WORKED OUT BY THE REGISTERED VALUER @ RS.600 / - PER SQUAR E YARD BECAUSE THE CIRCLE RATES ARE FIXED FOR A PARTICULAR LARGE A REA OF THE LOCALITY WITHOUT TAKING INTO CONSIDERATION THE EXACT LOCATIO N OF THE PROPERTY, WHEREAS THE VALUE DEPENDS UPON THE LOCATION OF THE PROPERTY ALSO. PROPERTY NEAR TO THE ROAD FETCHES MORE VALUE. THE C OMMISSIONER (APPEALS) DISMISSED THE CONTENTION OF THE APPELLANT NOT ONLY WITH REGARD TO THE DATE OF ADOPTION OF MARKET VALUE AS O N 31 ST MARCH 28 1985 AS CONTENDED BY THE ASSESSEE AND HAS ALSO REJE CTED THE MARKET VALUE OF THE PROPERTY AS WORKED OUT BY THE REGISTER ED VALUER AND INSTEAD ADOPTED THE VALUE AS ON 1 ST APRIL 1981 ON THE BASIS OF CIRCLE RATE AS DONE BY THE ASSESSING OFFICER. HOWEVER, TH E CIT (APPEALS) IN THE APPEAL PROCEEDINGS ALLEGED THAT THE DEDUCTION A S ALLOWED BY THE ASSESSING OFFICER IN RESPECT OF SAID PROPERTY BY RE GISTERED VALUER SHRI RAJIV JAIN WHO WORKED OUT THE VALUE OF THE PROPERTY @ RS.600 / - PER SQUARE YARD. THE ASSESSING OFFICER, INSTEAD OF THE MARKET VALUE WORKED OUT BY THE REGISTERED VALUER, ADOPTED THE MA RKET VALUE OF THE PROPERTY ON THE BASIS OF CIRCLE RATE @ RS.300/- PER SQUARE YARD AS ON 1ST APRIL 1981 WITHOUT FURTHER BENEFIT OF PROPER IN DEXATION AS AVAILABLE TO THE ASSESSEE AS PER THE SECOND PROVISO TO SECTION 48 OF THE ACT AND EXPLANATION (III) READ WITH SECTION 2(4 2A) AND EXPLANATION 1(6) OF THE ACT. THE ASSESSEE FILED APPEAL BEFORE T HE CIT (APPEALS) AND OBJECTED THE ACTION OF THE ASSESSING OFFICER. T HE ASSESSEE STATED THAT THE MARKET VALUE OF THE PROPERTY SHOULD HAVE B EEN TAKEN AS ON 31 ST MARCH 1985 WHEN THE PREVIOUS OWNER OF THE PRO PERTY SMT. ASHA SWARUP HAD ACQUIRED AND NOT ON 1 ST APRIL 1981 AND SECONDLY STATED THAT EVEN OTHERWISE THE VALUE OF THE PROPERTY AS ON 1 ST APRIL 1981 HAD BEEN ADOPTED BY THE ASSESSING OFFICER ON THE BA SIS OF CIRCLE RATE IS WRONG AND IT SHOULD HAVE BEEN TAKEN AS WORKED OU T BY THE REGISTERED VALUER @ RS.600/- PER SQUARE YARD BECAUS E THE CIRCLE RATES ARE FIXED FOR A PARTICULAR LARGE AREA OF THE LOCALI TY WITHOUT TAKING INTO CONSIDERATION THE EXACT LOCATION OF THE PROPERTY, W HEREAS THE VALUE 29 DEPENDS UPON THE LOCATION OF THE PROPERTY ALSO. PRO PERTY NEAR TO THE ROAD FETCHES MORE VALUE. THE COMMISSIONER (APPEALS) DISMISSED THE CONTENTION OF THE ASSESSEE NOT ONLY WITH REGARD TO THE DATE OF ADOPTION OF MARKET VALUE AS ON 31 ST MARCH 1985 AS CONTENDED BY THE APPELLANT AND HAS ALSO REJECTED THE MARKET VALUE OF THE PROPERTY AS WORKED OUT BY THE REGISTERED VALUER AND INSTEAD ADO PTED THE VALUE AS ON 1 ST APRIL 1981 ON THE BASIS OF CIRCLE RATE AS D ONE BY THE ASSESSING OFFICER. HOWEVER, THE LD. CIT(APPEALS) IN THE APPEA L PROCEEDINGS ALLEGED THAT THE DEDUCTION AS ALLOWED BY THE ASSESS ING OFFICER IN RESPECT OF INVESTMENT OF FLAT U/S 54 OF THE ACT WAS WRONG AS HE WAS OF THE VIEW THAT U/S 54 OF THE ACT THE DEDUCTION IS AV AILABLE ONLY WHEN THE RESIDENTIAL HOUSE IS TRANSFERRED AND NOT THE LA ND APPURTENANT THERETO AND FOR THIS PURPOSE WE RELY UPON THE JUDGM ENT OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF ASHOK SAYAL VS. C IT IN 209 TAXMAN 376 AND THE JUDGMENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF RAJESH SURANA VS. CIT IN 306 ITR 366 AND THEN ENHAN CED THE INCOME OF THE ASSESSEE BY WAY OF DISALLOWING THE DEDUCTION IS U/S 54 OF THE ACT AS ALLOWED BY THE ASSESSING OFFICER ON THE INVE STMENT OF RS.60,27,000/-. THE CIT (APPEALS) HAS DISALLOWED TH E DEDUCTION U/S 54 OF THE ACT AS ALLOWED BY THE AO AND CLAIMED BY T HE ASSESSEE ON THE GROUND THAT BECAUSE THE SALE HAS BEEN ONLY OF T HE LAND AND NOT THE RESIDENTIAL HOUSE EVEN IF THE LAND WAS APPURTEN ANT THERETO AND FOR THIS PURPOSE HAD RELIED UPON THE JUDGMENT OF ASHOK SYAL VS. CIT (P&H) IN 209 TAXMAN 376 AND RAJESH SURANA VS. CIT ( RAJ) IN 306 ITR 30 366. AS PER THE ASSESSEE, THE FACTS OF BOTH HIGH CO URTS ARE DIFFERENT AND NO SUCH ISSUE WAS THERE. 8.2 I ALSO FIND THAT IN THE CASE OF ASHOK SYAL (SU PRA), A RESIDENTIAL PLOT WAS ALLOTTED TO THE SAID ASSESSEE BY HOUSING AUTHORITIES ON WHICH A- ROOM WITH MUD WAS MADE WITHOUT ANY BASIC AMENITI ES AS REQUIRED FOR A RESIDENTIAL HOUSE. EVEN THE ELECTRICITY AND T OILET WERE NOT THERE. THE SAID ASSESSEE CLAIMED THAT ON ACCOUNT OF BEING A ROOM CONSTRUCTED THEREON, HE SOLD THE HOUSE AND NOT THE LAND AND CLAIMED EXEMPTION U/S 54 OF THE ACT. ON SUCH FACTS, PUNJAB & HARYANA HIGH COURT HELD THAT FIRST OF ALL NO ROOM WAS THERE AND SECONDLY EVEN IF IT IS ASSUMED THAT ROOM WAS THERE, IT WAS CONSTRUCTED WIT H MUD FOR A CERTAIN PURPOSE WITHOUT ANY BASIC AMENITIES AS IS N ECESSARY IN A HOUSE TO BE CALLED A RESIDENTIAL HOUSE. THE PUNJAB & HARYANA HIGH COURT HELD THAT INSTEAD OF HOUSE, AS CLAIMED, IT WA S ONLY LAND SOLD, HENCE NO DEDUCTION U/S 54 OF THE ACT IS ADMISSIBLE . 8.3 I FURTHER NOTE THAT IN THE CASE OF RAJESH SURAN A (SUPRA), THE HORI'BLE RAJASTHAN HIGH COURT WAS EXAMINING THE ISS UE U/S 53 AND NOT 54 OF THE ACT. IN THE SAID CASE ALSO, THE SAID ASSESSEE HAD SOLD THE PLOT OF LAND WITH A GARAGE AND IN THOSE VERY FA CTS THE RAJASTHAN HIGH COURT HELD THAT IN THE ABSENCE OF BASIC AMENIT IES IT WAS NOT A HOUSE BUT PLOT OF LAND ONLY AND THEN DISALLOWED THE EXEMPTION U/S 53 OF THE ACT. 8.5 AS REGARDS ASSEESSEES S CASE IS CONCERNED, IT IS BROUGHT TO OUR NOTICE THAT THE SAID LAND, WHICH WAS SOLD BY THE AS SESSEE, WAS 31 FORMING PART OF THE RESIDENTIAL HOUSE NO. 64, AGRAS EN VIHAR (RAM BAGH) , MUZAFFARNAGAR (HAVING A MUNICIPAL NO. 65, B AGH KAMBALWALA) AND ALL THE PROPERTY WAS DULY ASSESSED TO HOUSE-TAX AND WAS SELF- OCCUPIED BY THE OCCUPANTS VIZ. THE ASSESSEE AND OTH ER FAMILY MEMBERS. U/S 54 OF THE ACT, THE LEGISLATURE HAS USE D THE EXPRESSION 'BEING BUILDINGS OR LANDS APPURTENANT THERETO AND B EING A RESIDENTIAL HOUSE'. 8.6 I FURTHER FIND THAT THE HON'BLE KARNATAKA HIGH COURT HAD EXAMINED THESE EXPRESSIONS WHILE CONSTRUING THE PRO VISION OF SECTION 54 OF THE ACT IN THE CASE OF SHRI C.N. ANANTHARAMAN VS. ACIT IN ITA NO. 1012/2008 VIDE ITS JUDGMENT DATED 10TH OCTOBER 2014 HAS HELD THAT THE DEDUCTION U/S 54 OF THE ACT IS ALSO AVAILA BLE EVEN IF THE LAND, WHICH WAS APPURTENANT TO THE RESIDENTIAL HOUSE, IS SOLD AND IT IS NOT NECESSARY THAT THE WHOLE OF THE RESIDENTIAL HOUSE S HOULD BE SOLD BECAUSE THE LEGISLATURE HAS USED THE WORDS 'OR' WHI CH IS DISTINCTIVE IN NATURE. 8.7 IN THE INSTANT CASE, IT IS NOT THE CASE OF AO A ND CIT (APPEALS) THAT THE LAND WAS NOT APPURTENANT TO THE RESIDENTIA L HOUSE. THE CASE OF THE CIT (APPEALS) IS THAT THE ASSESSEE HAS SOLD ONLY THE LAND APPURTENANT TO THE HOUSE AND NOT RESIDENTIAL HOUSE WHICH, ACCORDING TO THE KARNATAKA HIGH COURT, IS NOT A REQUIREMENT U NDER THE LAW AND EXEMPTION U/S 54 OF THE ACT IS ALSO AVAILABLE TO TH E LAND WHICH IS APPURTENANT TO THE HOUSE. THE FRONT PAGE OF THE SAL E DEED ITSELF SHOWS 32 THAT THE LAND WAS PART OF RESIDENTIAL HOUSE NO. 64, AGRASEN VIHAR, MUZAFFARNAGAR. THEREFORE, THE EXEMPTION AS CLAIMED AND ALLOWED BY THE ASSESSING OFFICER SHOULD BE UPHELD AND THE ENHA NCEMENT AS MADE BY THE CIT (APPEALS) IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE, THE SAME IS DELETED. 9. WITH REGARD TO GROUND NO. 2 IS CONCERNED, RELATI NG TO APPLICATION OF RATE AS ADOPTED BY THE ASSESSING OFFICER FOR THE PURPOSE OF WORKING OUT THE CAPITAL GAIN, THE SAME IS WRONG INTER-ALIA BECAUSE: (I) THE MARKET VALUE SHOULD HAVE BEEN TAKEN AS WAS IN THE HANDS OF PREVIOUS OWNER SMT. ASHA SWARUP FROM WHOM THE APPELLANT HAD RECEIVED THE PROPERTY BECAUSE SHE IS THE PREVIOUS OWNER AS FAR AS THE ASSESSEE IS CONCER NED; AND (II) BECAUSE SMT. ASHA SWARUP HAD ACQUIRED THE PROPERTY AS ON 31 ST MARCH 1985, HENCE THE MARKET VALUE OF THE PROPERTY SHOULD HAVE BEEN TAKEN INTO ACCOUNT AS ON 31ST MARCH 1985 AS WORKED OUT BY THE REGISTERED VAL UER AT RS.730/ - PER SQ YARD. WITHOUT PREJUDICE TO ABOVE, EVEN IF IT IS PRESUMED THAT IT IS THE COST IN THE HANDS OF SMT. JYOTSNA KUMARI SWA RUP HAS TO BE TAKEN INTO ACCOUNT BECAUSE SMT. ASHA SWAR UP HAD ACQUIRED THE PROPERTY BY WAY OF A WILL FROM SMT . JYOTSNA KUMARI SWARUP. EVEN THEN THE MARKET VALUE O F THE PROPERTY AS ON 1 ST APRIL 1981 WAS MORE THAN AS 33 ADOPTED BY THE ASSESSING OFFICER. THE ASSESSING OFF ICER HAS ADOPTED THE MARKET VALUE OF THE PROPERTY AS THA T WAS NOTIFIED BY THE STAMP AUTHORITIES FOR THE PURPOSE O F LEVY OF STAMP DUTY BY CIRCLE RATES. THE STAMP AUTHORITIE S, WHILE FIXING THE CIRCLE RATES, DID NOT TAKE INTO AC COUNT VARIOUS ADVANTAGES AND DISADVANTAGES AND THE LOCATI ON OF THE PROPERTY, BUT THEY FIXED THE CIRCLE RATE ON A F IXED RATE FOR WHOLE OF THE LOCALITY. IN THIS BEHALF, I DRAW S UPPORT FROM THE JUDGEMENT OF THE HON'BLE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE CASE OF DINESH KUMAR MI TTAL VS. ITO IN 193 ITR 770 WHEREIN IT HAS BEEN HELD TH AT THERE IS NO RULE OF LAW TO THE EFFECT THAT THE VALU E DETERMINED FOR THE PURPOSE OF STAMP DUTY IS THE MAR KET VALUE OF THE PROPERTY. THE MARKET VALUE OF THE PROP ERTY MAY BE MORE OR MAY BE LESS. THEREFORE, IN SUCH CIRCUMSTANCES, WHEN A REGISTERED VALUER HAS WORKED OUT THE MARKET VALUE OF THE PROPERTY AS ON 1 ST APRIL 1 981 AT RS.600 / - PER SQUARE YARD AFTER TAKING INTO ACCOUN T THE LOCATION OF THE LAND, THE SAME SHOULD BE ADOPTED BY THE ASSESSING OFFICER. WE HOLD AND DIRECT ACCORDINGLY A ND ALLOW THE GROUND NO. 2 RAISED BY THE ASSESSEE. 34 10. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENTS, AS AFORESAID , WE ALLOW THE APPEAL OF THE ASSESSEE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN THE AFORESAID MANNER. ORDER PRONOUNCED IN THE OPEN COURT ON 28/03/2017. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 28/03/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES