SMT. MANBHAR DEVI MEENA, Jaipur V. DCIT, Jaipur

ITA 150/JPR/2012

• Counselvise Citation: 15023114 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 15-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA; SHUBHASH CHANDRA
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Principle of natural justice; Cost of acquisition; Valuation report; Competent authority
• Section: 50C; 54F; 131; 54

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 150/JP/2012 ASSTT. YEAR- 2008-09 PAN NO. ANXPM 3052 C SMT. MANBHAR DEVI MEENA, THE D.C.I.T. 19, NEW COLONY, MALVIYA NAGAR, VRS. CIRCLE-6, JAIPU R. JAIPUR. (APPELLANT) (RESPONDENT) ASSESSEE BY :- SHRI P.C. PARWAL. DEPARTMENT BY :- SHRI SHUBHASH CHANDRA & SHRI D.C. SHARMA. DATE OF HEARING : 15/09/2014 DATE OF PRONOUNCEMENT : 19/09/2014 O R D E R PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 14/11/2011 OF THE LEARNED C.I.T.-II, JAIPUR FOR THE A.Y. 2008-09. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LA W IN CONFIRMING THE ACTION OF THE A.O. IN COMPUTING THE LONG TERM C APITAL GAIN ON COMPULSORY ACQUISITION OF LAND BY GOVERNMENT AT RS. 79,69,970/- AS AGAINST LONG TERM CAPITAL GAIN OF RS. 24,63,598/ - DECLARED BY THE ASSESSEE BY: A) NOT ALLOWING THE DEDUCTION U/S 54 CLAIMED AT RS. 50, 33,354/- B) HOLDING THAT HE PHOTOGRAPHS FILED BY THE APPELLANT REGARDING RESIDENTIAL USE ARE NOT AUTHENTIC SINCE THE DATE AN D TIME OF THE PHOTOGRAPHS IS NOT ASCERTAINABLE. C) NOT ALLOWING DEDUCTION FOR INDEXED COST OF CONVERSIO N CHARGED AT RS. 43,334/- AS AGAINST RS. 17,235/- ALLOWED BY A .O. ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 2 2. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY AN Y OF THE GROUNDS OF APPEAL. 3. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 2. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE A SSESSEE HAD SHOWN INCOME FROM LONG TERM CAPITAL GAIN AND INTEREST. TH E ASSESSEE HAD SOLD A PLOT OF LAND FOR SALE CONSIDERATION OF RS. 81,92,000/-. THIS PLOT OF LAND WAS SITUATED AT KHASRA NO. 1414, VILLAGE- JHAR, TEHSIL- BASSI, JA IPUR MEASURING 0.72 HECTARE. THIS LAND WAS PURCHASED BY THE ASSESSEE FOR A COST OF RS. 5,38,707/- AND FURTHER SUM OF RS. 47,000/- WAS INCURRED ON CONV ERSION FROM AGRICULTURAL LAND TO COMMERCIAL/RESIDENTIAL PURPOSE. OUT OF THE TOTAL AREA OF THE PLOT 0.72 SQ. HECTARE, AN AREA MEASURING 2300 SQ.MTR WAS ACQUI RED BY THE GOVERNMENT AND THE REST OF AREA I.E. 4900/- SQ. MTR WAS RETAINE D BY THE ASSESSEE. THE ASSESSEE HAS WORKED OUT CAPITAL GAIN AS UNDER:- LONG TERM CAPITAL GAIN AGRICULTURE LAND 11.12.2007 VALUE U/S 50C 81,92,000/- SALES CONSIDERATION RECEIVED 81,92,000/- SALES CONSIDERATION 81,92,000/- LESS:- INDEX COST PURCHASE PRICE 6,41,096/- F.Y. 2003-04 5,38,707/-/463 X 551 CONVERSION CHARGES 53,952/- F.Y. 2004-05 47,000/480 X 551 6,95,048/- BALANCE 74,96,952/- LESS DEDUCTION U/S 54F 50,33,354/- 50,33,354/- 24,63,598/- ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 3 THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSE SSEE HAD SHOWN THE SALE CONSIDERATION OF THE PLOT AT RS. 5,38,707/-(COST OF LAND) PLUS RS. 47,000/- (CONVERSION CHARGES). THE AREA OF THE PLOT ACQUIRED BY THE GOVERNMENT WAS ONLY 2300 SQ. MTR OUT OF TOTAL AREA OF 7200 SQ. MTR WHILE THE ASSESSEE IN THE COMPUTATION OF THE INCOME HAD TAKEN THE ENTIRE PURC HASE COST. IT IS HELD THAT COST OF PURCHASE AND CONVERSION CHARGES SHOULD BE T AKEN ON PROPORTIONATE BASIS AS THE LAND ACQUIRED WAS NOT THE ENTIRE LAND I N POSSESSION OF THE ASSESSEE. THIS WAY AS AGAINST PURCHASE PRICE ADOPTED BY THE ASSESSEE AT RS. 5,38,707/- BUT PURCHASE PRICE SHOULD BE RS. 5,38,70 7 MULTIPLIED 2300 DIVIDED BY THE 7200 I.E. RS. 1,72,087 AND CONVERSION CHARGE S ADOPTED AT RS. 47,000/- MULTIPLIED BY 2300 DIVIDED BY 7200 I.E. RS. 15,014/ - SHOULD BE CLAIMED BY THE APPELLANT ON PROPORTIONATE BASIS. THE INDEXED COST O F ACQUISITION ACCORDINGLY WORKED OUT AT RS. 2,04,795/- ON PURCHASE PRICE AND R S. 17,223/- ON CONVERSION CHARGES. THE LEARNED ASSESSING OFFICER TA KEN COST OF ACQUISITION AT RS. 2,22,030/- IN PLACE OF 6,95,048/- CLAIMED BY TH E ASSESSEE ON PROPORTIONATE BASIS. THE LEARNED ASSESSING OFFICER FURTHER HELD T HAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 54 OF THE INCOME TAX ACT, 196 1 (IN SHORT THE ACT) AT RS. 50,33,354/-. ON VERIFICATION OF DETAILS SUBMITTED B Y THE ASSESSEE, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD PURCHASED AGRICULTURAL LAND FOR RS. 20 LACS PLUS STAMP DUTY OF RS. 1,62,70 0/- ON IT. THE ASSESSEE HAD CLAIMED CONSTRUCTION ON THE SAID PROPERTY AMOUNTING TO RS. 33,37,300/- THUS TOTAL CLAIM U/S 54 OF THE ACT WAS CLAIMED AT RS. 50 ,33,354/-. THE ASSESSEE HAD ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 4 FURNISHED VALUATION REPORT OBTAINED FROM A APPROVED VALUER. IT IS FOUND BY THE ASSESSING OFFICER THAT PROPERTY ON WHICH CONSTRUCTI ON HAD BEEN DONE, ADDRESSED WAS MENTIONED AS LAND AND BUILDING AT KHAS RA NO. 1414, VILLAGE JHAR, POST JHAR, TEHSIL- BASSI, JAIPUR. IT IS PROVED FROM THE VALUATION REPORT THAT CONSTRUCTION WAS NOT CARRIED OUT AT THE NEW LAN D PURCHASED BY THE ASSESSEE BUT AT THE LAND RETAINED BY THE ASSESSEE O UT OF THE LAND A PART OF WHICH WAS ACQUIRED BY THE GOVT. IN VALUATION REPORT, NO WHERE MENTIONED AS TO WHAT CONSTRUCTION WAS CARRIED OUT WHETHER IT WAS A C OMMERCIAL OR RESIDENTIAL ONE. IT ALSO DID NOT MENTION THE DATE O N WHICH SUCH VALUATION REPORT WAS PREPARED. THE VALUATION REPORT DID NOT EMP HATICALLY DECLARE THE CONSTRUCTION AS RESIDENTIAL OR COMMERCIAL AND ALSO DID NOT REFER TO NUMBER OF ROOMS, TOILETS, KITCHEN ETC. BUT IT REFERS TO STEEL SHUTTERS ONLY. IN ORDER TO VERIFY THE FACTS, DETAILED INQUIRY WAS CONDUCTED THR OUGH THE INSPECTOR OF THE CIRCLE. IT WAS REPORTED BY HIM THAT THE CONSTRUCTION WHICH WAS CLAIMED TO BE OF RESIDENTIAL NATURE WAS INSTEAD OF COMMERCIAL NATU RE. THE CONSTRUCTION WAS CONSISTING OF A BASEMENT AND A GROUND FLOOR. ON THE GROUND FLOOR SOME SEVEN SHOPS WERE BUILT AND TWO OF THEM WERE RENTED OUT AND O NE WAS A MOBILE REPAIR SHOP AND THE OTHER WAS A PHOTO STUDIO. THE CON STRUCTION OF BASEMENT SUGGESTED THAT IT WAS MEANT FOR GODOWN PURPOSE AS THE OPENING/ENTRY OF THE BASEMENT WAS GIVEN FROM WITHIN THE SHOP. THERE WAS AN A DJOINING LAND WHICH WAS FENCED WITH SPOKE WIRE. IT WAS GATHERED THAT THIS WA S THE NEW LAND BEARING KHASRA NO. 2/1, RAKBA 1 BIGHA 15 BISWA, WHICH THE ASSESSEE HAD ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 5 PURCHASED RECENTLY. THE ENTIRE CONSTRUCTION WAS CARRI ED OUT AT THE PLOT OF LAND LEFT WITH THE ASSESSEE AFTER ACQUISITION OF PART THE REOF AREA THAT IS THE ORIGINAL ASSET. THE LEARNED ASSESSING OFFICER ALSO ISSUED SUM MONS U/S 131 OF THE ACT TO APPROVED VALUER ON 2/12/2010 AND STATEMENT ON OA TH WAS RECORDED BY THE LEARNED ASSESSING OFFICER, WHICH HAS BEEN REPRODUCED ON PAGE 4 OF THE ASSESSMENT ORDER. IN STATEMENT, THE VALUER HAD CATE GORICALLY STATED THAT THE ASSESSEE HAD CARRIED OUT THE CONSTRUCTION FOR COMME RCIAL PURPOSE AND THAT TOO WAS CARRIED OUT ON THE PLOT OF LAND LOCATED AT KHASR A NO. 1414. THIS ALSO AUTHENTICATED THAT THE CONSTRUCTION CARRIED OUT WAS COMMERCIAL IN NATURE AND NOT ON THE NEW LAND BEING KHASRA NO. 2/1, RAKBA 1 BI GHA 15 BISWA PURCHASED BY THE ASSESSEE, WHICH WAS AN AGRICULTURAL LAND. IT WAS CONCLUDED THAT THE ASSESSEE NEITHER PURCHASED A RESIDENTIAL PLOT OF LA ND NOR HAD CONSTRUCTED A RESIDENTIAL HOUSE ON THE NEW ASSETS. THE INSPECTORS INQUIRY AS WELL AS VALUERS STATEMENT CLEARLY SHOW THAT THE CONSTRUCTION WAS NOT A RESIDENTIAL HOUSE BUT A COMMERCIAL BUILDING. THE CONSTRUCTION HAD BEEN DONE ON THE ORIGINAL LAND BEARING KHASRA NO. 1414 AND NEW LAND PURCHASED BEAR ING KHASRA NO. 2/1, RAKBA- 1 BIGHA 15 BISWA, WHICH HAD BEEN CLAIMED AS I NVESTMENT FOR DEDUCTION U/S 54F OF THE ACT, HAD NO CONSTRUCTION ON IT. 3. ON THESE FACTS, THE LEARNED ASSESSING OFFICER AG AIN GAVE SHOW CAUSE NOTICE TO THE ASSESSEE, WHICH WAS AVAILED BY THE ASSE SSEE BY LETTER DATED 15/12/2010. IT WAS SUBMITTED BY THE ASSESSEE THAT SH E HAD PURCHASED AGRICULTURAL LAND FOR RESIDENTIAL PURPOSE ON 17/11/ 2003 AND THE SAME WAS ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 6 CONVERTED INTO RESIDENTIAL AS WELL AS COMMERCIAL PUR POSE. AS TO LIVE IN PROPER WAY SHE REQUIRED TO CONSTRUCT BUILDING ON THIS LAND. THE NATIONAL HIGHWAY AUTHORITY HAD ACQUIRED COMPULSORILY 300 SQ.MTRS COM MERCIAL AREA OF KHASRA NO. 1414. DUE TO THIS ACQUISITION, SHE GOT RS. 81,9 1,536/- ON 14/12/2007 AS COMPENSATION FROM COMPETENT AUTHORITY. AFTER THIS A CQUISITION, REMAINING LAND WAS NOT ENOUGH FOR HER FAMILY AS SHE BELONGS TO RURA L FAMILY. HER FAMILY MEMBERS WERE ENGAGED IN DAIRY WORK. AFTER RECEIVING T HE COMPENSATION, SHE PURCHASED PIECE OF LAND FOR RS. 21,62,700/- INCLUDI NG STAMP DUTY, WHICH IS ADJOINED TO HER REMAINING HOUSE PROPERTY TO FULFILL THE NEED OF HER FAMILY AND THEIR DAIRY WORK. NEW LAND PURCHASED WAS AGRICULTURAL LAND AND DUE TO BAN ON LAND USE CONVERSION SHE WAS UNABLE TO GET THIS LAND CONVERTED IN RESIDENTIAL LAND FROM AGRICULTURAL LAND. SHE SPENT RS. 33,37,30 0/- ON CONSTRUCTION OF NEW HOUSE PROPERTY AND NEW LAND PURCHASED. SHE HAD CONST RUCTED BASEMENT AT HER NEW HOUSE PROPERTY FOR STORAGE OF GRAINS AS WELL AS FOR CATTLE FEEDS ALSO. SHE ALSO RELIED UPON THE DECISION IN THE CASE OF MA HAVEER PRASAD GUPTA VS. CIT (2006) 5 SOT 355 (DELHI) THAT MERE NON RESIDENTIA L USE WOULD NOT RENDER A PROPERTY INELIGIBLE FOR BENEFIT U/S 54F OF THE AC T. THE LEARNED ASSESSING OFFICER HAD NOT CONVINCED FROM THE REPLY OF THE ASS ESSEE AND HELD THAT THE NEW CONSTRUCTION OF COMMERCIAL BUILDING WAS MADE BY T HE ASSESSEE ON REMAINING LAND OF KHASRA NO. 1414 NOT ON NEW LAND PU RCHASED, WHICH IS EVIDENT FROM THE INSPECTORS REPORT AS WELL AS STATE MENT OF APPROVED VALUER. HE ALSO RELIED UPON THE DECISION OF HONBLE RAJASTH AN HIGH COURT RAJESH ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 7 SURANA VS. CIT 306 ITR 368. AFTER CONSIDERING THE AS SESSEES REPLY, THE LEARNED ASSESSING OFFICER ADOPTED THE VALUE ON THE BASIS OF SECTION 50-C OF THE ACT ON THE VALUATION OF STAMP DUTY AT RS. 81,92 ,000/- AND ALLOWED ONLY INDEXED ON PROPORTIONATE EXPENSES OF COST OF ACQUIS ITION AT RS. 2,22,030/- AND REMAINING AMOUNT OF RS. 79,79,970/- WAS TAXED UNDER THE HEAD LONG TERM CAPITAL GAIN. 4. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A), WHO HAD CONFIRMED THE ADDITION BY FOLLOWING THE SAME OBSERVATION AS OBSERV ED BY THE LEARNED ASSESSING OFFICER I.E. THE CONSTRUCTION WAS MADE O N REMAINING LAND, WHICH IS COMMERCIAL, WHICH WAS CONFIRMED BY THE CIRCLE INSPECT OR IN HIS INQUIRY REPORT AND STATEMENT OF APPROVED VALUER. IT IS HELD THAT T HE ARGUMENT OF THE APPELLANT THAT GODOWN WAS USED FOR RESIDENTIAL PURPO SE IS AFTER THOUGHT. THE APPELLANT ALSO SOUGHT CROSS EXAMINATION OF APPROVED VALUER ON WHICH LEARNED ASSESSING OFFICER RELIED UPON HEAVILY. THE LEARNED C IT(A) ALSO HAD NOT TAKEN ANY COGNIZANCE ON PHOTOS SUBMITTED BY THE APPELLANT ON THE GROUND THAT THERE IS NO DATE MENTIONED ON IT. HE FURTHER RELIED ON TH E DECISION OF HON'BLE SUPREME COURT IN THE CASE OF DIRECTOR OF INCOME TACT VS. BHARAT DIAMOND BOURSE (259 ITR 280) AND ALSO SUNITA OBEROI VS. ITO (126 TTJ 745). HE FINALLY UPHOLD THE ORDER OF THE ASSESSING OFFICER AND ALLOWE D THE COST OF ACQUISITION ON PRO RATA BASIS AS ALLOWED BY THE LEARNED ASSESSIN G OFFICER. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE US. ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 8 6. THE LEARNED A.R. FOR THE ASSESSEE CHALLENGED THE INDEXED COST OF CONVERSION CHARGES ON PROPORTIONATE BASIS. THE LEARN ED ASSESSING OFFICER HAD TAKEN CONVERSION CHARGES AFTER INDEXING AT RS. 17,2 35/-. AS PER ASSESSEE, IT SHOULD BE RS. 43,334/-. THE ASSESSEE BELONGED TO AN AGRICULTURAL FAMILY RESIDING IN VILLAGE KHORA, TEHSIL-BASSI, DISTRICT- J AIPUR. SHE HAS A LARGE FAMILY, FOR WHICH SHE GAVE OF PEDIGREE OF HER HUSBAND IN SUB MISSION. THE ENTIRE FAMILY CONSISTING OF THREE UNCLES OF HUSBAND OF THE ASSESSEE, THEIR WIVES AND SONS AND MOTHER IN LAWS OF THE ASSESSEE ARE RESIDING AT VILLAGE. THE MAIN SOURCE OF INCOME IS AGRICULTURE AND FROM DIARY FARM ING. THE FAMILY IS HAVING 4 COWS AND 10 BUFFALOS. THE HUSBAND OF THE ASSESSEE IS A BANK OFFICER. HE HAS CONSTRUCTED A RESIDENTIAL HOUSE AT 19, NEW COLONY, M ALVIYA NAGAR, JAIPUR AND THEREFORE, IN THE RETURN OF THE ASSESSEE, THIS ADDR ESS HAS BEEN GIVEN BUT FACT IS THAT THE ASSESSEE HAD CONSTRUCTED HOUSE ON REMAI NING LAND AFTER INCURRING EXPENDITURE OF RS. 33,37,300/- AND ALSO PURCHASED 1 BIGHA, 2 BISWA OF ADJOINING LAND ON 31/12/2007 FOR RS. 21,62,700/-. THE CONSTRUCTION COMPRISES OF 5 ROOMS, TOILET, BORING AND BOUNDARY WALL TO COV ER THE EXISTING LAND AND THE PURCHASED LAND. THE CONSTRUCTED AREA OF THESE ROOMS AND TOILET IS APPROXIMATELY 3263 SQ.FT. ON THESE ROOMS, SHOPS WERE CONSTRUCTED HAVING AREA OF 3263 SQ.FT. THE WAY WAS GIVEN FROM THE ROOM TO THE SHOP SO THAT PERSON RESIDING IN THE ROOM CAN GO TO THE SHOP DIRE CTLY. THE ENTIRE CONSTRUCTION WAS SO MADE THAT IT CAN BE USED BY THE FAMILY MEMBERS IN SUCH A MANNER THAT THEY CAN USE THE PROPERTY FOR THEIR RES IDENCE AS WELL AS TO ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 9 CONDUCT THE BUSINESS FROM THE SAME PLACE. THE LOWER A UTHORITIES HAVE HEAVILY RELIED ON THE STATEMENT OF APPROVED VALUER TO ARRIV E AT A CONCLUSION THAT CONSTRUCTION IS OF COMMERCIAL NATURE BUT BEFORE REL YING ON THIS STATEMENT, NO OPPORTUNITY TO CROSS EXAMINE THE APPROVED VALUER WAS PROVIDED. THEREFORE, AT THE TIME OF APPELLATE PROCEEDINGS, THE ASSESSEE EXP LAINED BEFORE THE LEARNED CIT(A) THAT THE LAND WAS AT LOW LEVEL, 5 ROOMS WHICH AR E STATED TO BE AT BASEMENT ARE ACTUALLY AT GROUND FLOOR AND ON THESE ROOMS SEVEN SHOPS WERE CONSTRUCTED OPENING TO THE ROAD SIDE. FOR SUPPORTIN G OF THIS FACT, THE APPELLANT PRODUCED THE PHOTOGRAPHS FOR VERIFICATION BEFORE TH E LEARNED CIT(A). THE LEARNED CIT(A) HAD DOUBTED THE AUTHENTICITY OF THE PHOTOGRAPHS BUT HE HAD NOT PHYSICALLY VERIFIED THE SPOT WHERE SHOPS AS WELL AS ROOMS WERE CONSTRUCTED. THE APPROVED VALUER HAD STATED ABOUT TH E BORING, WATER TANK, LAWN, HEDGES AND LANDSCAPING WHICH ITSELF SHOWS THAT ON THE GROUND FLOOR, ROOMS ARE CONSTRUCTED FOR RESIDENTIAL USE AS PER TH E REQUIREMENT OF THE FAMILY. THE LOWER AUTHORITIES HAVE ALSO RELIED ON THE FIELD E NQUIRY CONDUCTED THROUGH THE INSPECTOR OF THE CIRCLE BUT NO OPPORTUNITY WAS P ROVIDED TO CROSS EXAMINE THE INSPECTOR. THEREFORE, THE ENQUIRY CANNOT BE A BA SIS FOR CONSIDERING THE CONSTRUCTION AS FOR COMMERCIAL PURPOSE ALONE. THE AS SESSEE ALSO PURCHASED THE ADJOINING LAND BY INCURRING EXPENDITURE OF RS. 21,62,700/- AND CONSTRUCTED TWO ROOMS ON IT IN NEXT YEAR, WHICH WAS ALSO USED FOR RESIDENCE PURPOSE. THIS LAND IS APPURTENANT TO THE EXISTING RESIDENTIAL HOU SE. HE RELIED UPON THE DECISION IN THE CASE OF N. REVATHI VS. ITO (2014) 40 CCH 0008 (HYD)(TRIB.) ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 10 WHEREIN IDENTICAL ISSUE HAD BEEN DECIDED IN FAVOUR O F THE ASSESSEE. IN CASE OF MAHAVEER PRASAD GUPTA VS. JCIT (2006) 5 SOT 353 (DEL. ) (TRIB.) WHEREIN USE OF PROPERTY IS NOT A RELEVANT CRITERIA TO CONSIDER THE ELIGIBILITY OF SECTION 54F BENEFIT. A BARE READING OF THE PROVISIONS OF SECTIO N 54F OF THE ACT REFLECTS THAT WHAT IS REQUIRED IS INVESTMENT IN A NEW RESIDENTIAL HOUSE. IT IS FURTHER ARGUED THAT THE CASE LAW RELIED BY THE LOWER AUTHORITIES ARE NOT SQUARELY APPLICABLE IN CASE OF THE ASSESSEE. THEREFORE, IT IS PRAYED TO ALL OW THE DEDUCTION U/S 54F OF THE ACT. 7. AT THE OUTSET, THE LEARNED D.R. SUPPORTED THE OR DER OF THE LEARNED CIT(A) AND ARGUED THAT THE ENQUIRY REPORT OF A CIRCL E INSPECTOR AS WELL AS STATEMENT OF APPROVED VALUER INDICATE THAT THE CONS TRUCTED PROPERTY OF ASSESSEE WAS NOT RESIDENTIAL PROPERTY WITHIN THE MEAN ING OF SECTION 54F OF THE ACT, THUS ORDER OF THE LEARNED CIT(A) MAY BE CONFIR MED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS A FACT THAT INDEXED COST OF ACQUISITION OF CONVERSION CHARGES HAS BEEN TAKEN BY THE LEARNED ASSESSING OFF ICER WRONG, THEREFORE, HE IS DIRECTED TO RECOMPUTED THE INDEXED COST ON CONVE RSION CHARGES AFTER ALLOWING THE REASONABLE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE, WHICH WAS CLAIMED BY THE ASSESSEE AT RS. 43,334/- IN PACE OF RS. 17.235/-. IT IS UNDISPUTED FACT THAT THE LEARNED ASSESSING OFFICER HAD NOT ALLOWED CROSS EXAMINATION EITHER STATEMENT OF APPROVED VALUER OR ENQUIRY REPORT OF CIRCLE INSPECTOR. IT IS PRINCIPLE OF NATURAL JUSTICE IF TH E ASSESSING OFFICER USES ANY ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 11 EVIDENCE AGAINST THE ASSESSEE, HE/SHE SHOULD BE PRO VIDED A REASONABLE OPPORTUNITY OF BEING HEARD ON THE EVIDENCE BEFORE U SING IT AGAINST THE PERSON CONCERNED. THE ASSESSEE SUBMITTED THAT VALUATION REP ORT OF APPROVED VALUER TOTAL COST OF CONSTRUCTION WORKED AT RS. 32,28,000/- . THIS REPORT SHOWS THAT WHICH IS SELF OCCUPIED, YEAR OF CONSTRUCTION WAS 2008 , SPECIFICATION OF THE CONSTRUCTION WAS GROUND FLOOR AND OTHER FLOORS, FOUN DATION- STEPPED/SPREAD, SUB-STRUCTURE- RCC FRAMED STRUCTURE, SUPER STRUCTUR E- RCC FRAMED STRUCTURE, JOINERY/DOORS & WINDOWS- STEEL DOORS, R.C.C. WORK- RCC FRAMED STRUCTURE, PLASTERING, FLOORING FROM KOTA STONES, ROOFING INCL UDING WEATHER PROOF COURSE, DRAINAGE, COMPOUND WALL. TOTAL COST OF BASEMENT HAD WO RKED OUT AT RS. 13,71,214/-. GROUND FLOOR ROOMS CEMENT SHED(SHEET) RS. 50,184/-, MEZZANINE FLOOR AT RS. 2,83,580/- AND REMAINING ON BOUNDARY WA LL, BORING, WATER TANK, LAWN ETC. AT RS. 2,71,097/-. AS THE ASSESSEE IS AN A GRICULTURIST AND THEIR LIVING STANDARD AS PER VILLAGE IS VERY SIMPLE. GENERALLY O THER FACILITIES LIKE TOILET, BATHROOM, KITCHEN ETC. ARE VARY PERSON TO PERSON. TH ESE FACILITIES ARE DEPENDS ON BACKGROUND OF FAMILY. SOMEBODY PREPARED FOOD IN OPEN AREA OR IN TIN SHEDS. SIMILARLY FOR TOILET, THEY USE OPEN SPACE. I T IS TRUE THAT 7 COMMERCIAL SHOPS WERE NOT USED FOR RESIDENTIAL PURPOSE BUT IN A BSENCE OF ANY CONTRARY EVIDENCE WITH THE ASSESSING OFFICER, HE PRESUMED THA T THE BASEMENT ROOMS WERE USED FOR COMMERCIAL PURPOSES ALSO EXCEPT CIRCLE INSPECTORS REPORT AND STATEMENT OF APPROVED VALUER WITHOUT CROSS EXAMINATI ON ALLOWED. THEREFORE, WE FIND IN THE INTEREST OF JUSTICE AS WELL AS FACTS A ND CIRCUMSTANCES OF THE CASE ITA 150/JP/2011 SMT. MANBHAR DEVI MEENA VS DCIT 12 THAT BASEMENT PORTION INCLUDING OTHER FACILITIES SU RROUNDED IT I.E. BOUNDARY WALL, BORING, WATER TANK, LAWN WERE MEANT FOR RESIDENT IAL PURPOSES. THE HON'BLE SUPREME COURT HAS DELIVERED THE DECISION IN DIFFERENT CONTEXT, WHICH IS NOT SQUARELY APPLICABLE ON THE CASE OF ASSESSEE. IN THIS CASE, THE CLAIM U/S 54F OF THE ACT HAS BEEN CLAIMED BY AN AGRICULTURIST NOT ANY BUSINESS MAN. IT IS TRUE THAT ADJACENT LAND WAS AGRICULTURAL LAND ON WHIC H DEDUCTION U/S 54F OF THE ACT CANNOT BE ALLOWED AS ENVISAGED IN THE ACT IT SELF. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE THE CAPI TAL GAIN ON THE BASIS OF ABOVE DIRECTION GIVEN BY THIS BENCH. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/09/2014. SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 19 TH SEPTEMBER, 2014 * RANJAN COPY FORWARDED TO :- 1. SMT. MANBHAR DEVI MEENA, JAIPUR 2. THE DCIT, CIRCLE-6, JAIPUR 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 150/JP/2012) BY ORDER, AR ITAT JAIPUR.