SHRI CHIRANJIV LAL KACHOLIA, Kota V. ACIT, Kota

ITA 180/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74844 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 28-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: C M BIRLA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Fair market value; Valuation report
• Section: 50C; 54F; 54

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH : JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 180/JP/2012 (A.YS. 2007-08) CHIRANJIV LAL KACHOLIA, VS. ACIT, CIRCLE-1, POST OFFICE ROAD, KOTA. BHAWANIMANDI, DISTT. JHALAWAR. PAN NO. ASJPK 5477 A (APPELLANT) (RESPONDENT) ITA NO. 279/JP/2012 (A.YS. 2007-08) ITO, JHALAWAR. VS. CHIRANJIV LAL KACHOLIA, POST OFFICE ROAD, BHAWANIMANDI, DISTT. JHALAWAR. PAN NO. ASJPK 5477 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.M. BIRLA. DEPARTMENT BY : SHRI D.C. SHARMA - D.R. DATE OF HEARING : 31/01/2014. DATE OF PRONOUNCEMENT : 26/02/2014. O R D E R 2 PER N.K. SAINI, A.M THESE TWO CROSS APPEALS BY THE ASSESSEE AND THE DE PARTMENT ARE DIRECTED AGAINST ORDER DATED 25/01/2012 OF LD. CIT( A), KOTA. IN ASSESSEES APPEAL IN I.T.A.NO. 180/JP/2012, THE FOL LOWING GROUNDS HAVE BEEN RAISED:- (1). THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING MARKET VALUE OF PLOT AT RS. 117 12000/- AS AGAINST RS. 11000000/- RECEIVED. (2). THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ALSO ERRED IN RESTRICTING DEDUCTION U/S 54F TO ONE FLAT ONLY AS AGAINST FOUR FLATS CLAIMED WHICH WERE ON SAME FLOOR PURCHASED BY APPELLANT FOR HIS 4 SONS. (3) THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY AND/OR OTHERWISE SUBSTITUTE ANY OF THE FOREGOING GROUNDS A S AND WHEN REQUIRED. WHILE GROUNDS RAISED IN THE DEPARTMENTAL APPEAL IN I.T.A.NO. 279/JP/2012 READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) WORKING OUT THE VALUE OF THE PROPERTY AT RS. 2,440/ - PER SQ.FT. AGAINST RS. 2,905/- PER SQ.FT DETERMINED BY THE DVO. (II) REDUCING THE FAIR VALUE OF THE PROPERTY AT RS. 1,17 ,12,000/- AGAINST RS. 1,39,44,000/- DETERMINED BY THE VALUATION OFFICER A ND ADOPTED BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT. 3 (III) REJECTING THE REPORT OF DVO WITHOUT AFFORDING ANY O PPORTUNITY OF BEING HEARD TO DVO, THEREBY VIOLATING THE PROVISION S OF SECTION 23A(6)(A) OF W.T. ACT. (IV) THE APPELLANT CRAVES LIBERTY TO RAISE ADDITIONAL GR OUND AND TO MODIFY/AMEND THE GROUND OF APPEAL AT THE TIME OF HE ARING. 2. THE COMMON ISSUE IN BOTH THE APPEALS RELATES TO THE WORKING OUT OF THE VALUE OF THE PROPERTY. 3. FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT ASS ESSEE FILED RETURN OF INCOME ON 31/03/2008 DECLARING AN INCOME OF RS. 13, 74,250/-. THE ASSESSEE SOLD PLOT NO.4, JHALAWAR ROAD, KOTA FOR RS . 110 LAC, HOWEVER, VALUE TAKEN BY THE STATE GOVERNMENT FOR REGISTRATIO N PURPOSES WAS RS. 1,39,51,320/-. THE ASSESSING OFFICER, ON DEMAN D OF THE ASSESSEE, MADE A REFERENCE TO THE VALUATION WING OF THE DEPAR TMENT AND THE VALUATION OFFICER ESTIMATED THE VALUE OF THE PLOT A T RS. 1,39,44,000/-. VALUATION OFFICER ALSO ESTIMATED THE FAIR MARKET VA LUE AS ON 31/03/1981 AT RS. 9,98,400/- AS AGAINST THE VALUE TAKEN BY THE ASSESSEE AT RS. 9,60,000/-. THE ASSESSEE OBJECTED THE VALUATIO N MADE BY THE DVO VIDE LETTER DATED 24/12/2009 STATING THEREIN AS UND ER:- 5.(I) THIS BRINGS ME TO REFERENCE MADE BY YOUR HON OUR TO DEPARTMENT VALUATION OFFICER, AJMER FOR DETERMINATION OF FAIR MARKET VALUE OF PLOT ON 31/03/1981 AND ON 20/09/2006 (DATE OF SLAE). TH E HON'BLE DVO HAS ESTIMATED FAIR MARKET OF THE PROPERTY AS ON 01/04/1 981 AT RS. 998400/-. 4 THOUGH LEARNED DVO HAD INFORMATION AT HIS POSSESSI ON THAT IN 1981 OR EVEN EARLIER TO IT IN VICTINITY OF MY PLOT SHOPS FO R SUBSTANTIAL VALUE WERE SOLD AND ON THAT BASIS VALUE OF MY PLOT AS ON 01/04 /1981 SHOULD HAVE BEEN MORE THAN RS. 998400/- HOWEVER, TO PURCHASE PE ACE I DONT DISPUTE THE SAME. (II) THE LEARNED DOV HAS DETERMINED FAIR MARKET VAL UE OF THE PLOT AS ON 20/09/2006 AT RS. 13944000/- WHICH IS STATED BY HIM TO BE AT DLC RATE. WE SERIOUSLY OBJECT IT AND REQUEST YOUR HONOUR TO C ONSIDER OUR FOLLOWING SUBMISSIONS. (III) IN CONSONANCE TO PROVISIONS OF SECTION 50C TH E LEARNED DVO WAS TO ASCERTAIN THE FAIR MARKET VALUE OF THE PLOT AS ON 2 0/09/2006. HOWEVER, HE DID NOT MADE AN ATTEMPT TO FIND OUT THE FAIR MAR KET VALUE OF THE PROPERTY WHICH COULD HAVE BEEN POSSIBLE TO HIM BECA USE OF FOLLOWING STEPS TAKEN BY HIM:- A. WHAT IS THE BASIS OF DETERMINATION OF DLC RATE AT R S. 2905/-? WE ARE GIVEN TO UNDERSTAND THAT DLC RATE HAS BEEN FIXED BA SES ON VALUE DECLARED IN CASE OF A SHOP MEASURING ABOUT 124 SQ.F T. HAD LEARNED DVO ATTEMPTED TO DO SO HE COULD HAVE FIND OUT THAT 124 SQ.FT. HAS NO COMPARISON WITH OUR PLOT MEASURING 40*120 SQ.FT. I. E. 4800 SQ.FT. B. THE LEARNED DVO WAS REQUESTED BY US THAT DLC OF KO TRI GORDHANPURA ROAD IS ALSO RS. 2908/- PER SQ.FT. IT APPEARS THE LEARNED DVO DID NOT THINK IT APPROPRIATE TO VISIT THAT ROAD WHICH IS A COMMERCIAL HUB. HAD HE DONE SO HE COULD HAVE GATHERED THAT IF THAT ROAD HAS DLC OF RS. 2905/- THIS AREA SHOULD HAVE MUCH LESS DLC RATE. C. WE HAD REQUESTED LEARNED DVO THAT THE ORIGINAL PURC HASER WHO HAD PURCHASED PLOT FOR RS. 11000000/- (INCLUDING STAMP DUTY CHARGES) HAS SOLD THE SAID POT AFTER 6 MONTH FOR RS. 9900000/- T HEREBY HE HAS SUFFERED LOSS OF RS. 11 LAC. D. THE SECOND PURCHASER EVEN AFTER HUGE INVESTMENT SIN CE LAST 3 YEARS IS NOT MAKING ANY DEVELOPMENT OVER THE PLOT. THIS SHO WS THAT THERE IS NO COMMERCIAL VALUE. THE LEARNED DVO HAS INSPECTED T HE PLOT AND HAS FOUND THAT SINCE MORE THAN 3 YEARS THE PLOT IS ONE THE SAME CONDITIONS 5 WHERE IT WAS SOLD. THIS ITSELF COULD HAVE BEEN SUF FICIENT REASON TO TAKE VALUE OF THE PLOT LESS THAN DLC RATE. E. THE LEARNED DVO DID NOT SPELL OUT THAT BECAUSE OF FLY OVER THIS AREA IS LOSING COMMERCIALITY. AT THE MOST IT CAN BE AN ARE A FOR HOTELS AND BANKS BUT THAT TOO HAVE LIMITS. THE LEARNED DVO WAS GIV EN EVIDENCES FOR THE SAME BUT HE DID NOT CONSIDER IT APPROPRIATELY AND T HEREBY HE COULD NOT ARRIVE AT FAIR MARKET VALUE OF PROPERTY AT THE TIME OF SALE. F. THAT LEARNED DVO WAS ALSO REQUESTED THAT PLOT IS O F 40 FEET FRONT AND 120 FEET DEPTH. THE LEARNED DVO HAS TAKEN IT 120 * 40. THE BACK PORTION OF PLOT OPENS IN SERVICE LANE. THE BACK PO RTION OF SERVICE LANCE IS CONNECTED WITH RESIDENCE PLOT OF NEW COLONY WHIC H HAS DLC RATE OF 440 PER SQ.FT. THE LEARNED DVO WAS THEREFORE, REQ UESTED THAT THESE TWO BACK PORTION WHICH HAS SAME CONNECTIVITY HAS MU CH DIFFERENCE IN DLC RATE AND THEREFORE, HE WAS FURTHER REQUESTED TO ADOPT BELTING METHOD OF VALUATION BECAUSE WHATEVER VALUE THE FRON T PORTION HAS THE BACK PORTION CANNOT HAVE THE SAME VALUE. HAD THE L EARNED DVO MADE ANY JUDICIOUS ATTEMPT HE COULD HAVE FIND OUT THE SO LUTION WHICH COULD HAVE RESULTED IN VALUATION MUCH LOWER THAN THE SALE CONSIDERATION RECEIVED BY ME. THE ASSESSING OFFICER FORWARDED THE OBJECTION OF T HE ASSESSEE TO VALUATION OFFICER WHO VIDE LETTER DATED 29/12/2009 SUBMITTED THE COMMENTS, WHICH READ AS UNDER:- I) THE SALE INSTRUCTIONS TAKEN FROM SUB-REGISTRAR OFFICE, KOTA FOR THE YEAR 1981. AFTER ADJUSTMENTS OF FACTS THE LEVEL RA TE HAS BEEN WORK OUT (PLEASE SEE THE LEVEL RATE ANALYSIS ATTACHED WI TH THE VALUATION REPORT) II) THIS OFFICE HAS ADOPTED THE DLC RATE FOR ARRIVI NG AT FAIR MARKET VALUE OF THE PROPERTY AS ON 20/06/2006. THESE RATES ARE FIXED BY THE DLC 6 RATE COMMITTEE ON LEVEL AUTHORITY. THESE RATES ARE MOST REASONABLE AND ACTUAL PREVAILING MARKET RATE. III) THE DLC RATES ARE FIXED BY THE DLC RATE COMMIT TEE FOR THE DIFFERENT, DIFFERENT AREA. THESE RATES ARE VERY FROM COLONY T O COLONY AS SEEN FROM THE DLC. HENCE THESE ARE FIXED BY A DLC RATE COMMITTEE, NO COMMENTS IN REQUIRES FOR THESE RATES. IV) THE SECOND PURCHASER HAS NOT DEVELOPED THE PLOT OR STARTED CONSTRUCTION WORK, DOES NOT MEANS THAT THE PLOT IS NOT HAVING COMMERCIAL VALUE. NOBODY KNOWS THE MIND OF SECOND PURCHASE. IT IS WELL KNOW FACT THAT BOTH THE LANES ALONG SIDE OF TH E BRIDGE ARE HAVING CONTINUED CHAIN OF HOTELS, BANKS AND OTHER MARKET. THE LAND IN CONSIDERATION IN HAVING WIDE FRONT ROAD THEN THE OT HER SIDE OF THE FLYOVER AND HAVING MULTI FOLD VALUE THEN THE OTHER SIDE WHICH IS ALSO COMMERCIAL DESPITE NARROWER ROAD. HENCE THERE IS N O QUESTION TO CONSIDER THIS LAND LESS THAN COMMERCIAL ON ANY GROU ND. V) THE PLOTS IS A SINGLE PLOT AND CANNOT BE DECIDED IS TWO PORTIONS. THE PURCHASER OF THE PLOT WILL USE THIS PLOT AS A WHOLE AND WILL NOT DECIDE IT. THE BELTING METHOD OF VALUATION IS NOT APPLIED IN THIS CASE BECAUSE THIS METHOD IS APPLIED FOR VERY LARGE SIZE OF PLOT WHEN NEW COLONY AND COMMERCIAL AREA ARE DEVELOPED. HENCE, THIS BELT ING METHOD IS NOT APPLIED IN THIS CASE. IN VIEW OF THE ABOVE AND OBJECTION RAISED BY THE A SSESSEE DOES NOT REQUIRED ANY CHANGE IS VALUATION REPORT PREPARED BY THIS OFFICE WHICH IS FARE AND REASONABLE. 4. THE ASSESSING OFFICER OBSERVED THAT THE VALUATION OFFICER HAD CONSIDERED THE OBJECTIONS OF THE ASSESSEE AND TAKEN THE COST OF THE PLOT AS ON 31/03/1981 AT RS. 9,98,000/-. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAD PURCHASED 4 FLATS AND CLAIMED DEDUCTION UNDER 7 SECTION 54F OF THE I.T. ACT, 1961 (HEREINAFTER REFE RRED TO AS THE ACT IN SHORT). HOWEVER, DEDUCTION UNDER SECTION 54F OF TH E ACT IS AVAILABLE ONLY IN CASE OF ONE RESIDENTIAL HOUSE. THE CLAIM OF THE ASSESSEE WAS THAT ALL THE FLATS WERE CONNECTED TO EACH OTHER AND THE ENTR Y WAS FROM ONE GATE ONLY. THE ASSESSING OFFICER, HOWEVER, RESTRICTED E XEMPTION UNDER SECTION 54F OF THE ACT ONLY IN RESPECT OF ONE FLAT PURCHASE D @ RS. 17,50,000/-. ACCORDINGLY, THE INCOME WAS ASSESSED AT RS. 70,59,9 02/- IN THE FOLLOWING MANNER:- SALE PRICE 1,39,44,000/- LESS: COST OF SALE (STAMP-DUTY PAID) 9,32,040/- 1,30,11,960/- LESS: INDEXED COST OF PROPERTY 53, 45,542/- 76,66,418/- LESS: EXEMPTION U/S 54F 10,31,069 /- LONG TERM CAPITAL GAIN 66,35,349 /- INCOME FROM OTHER SOURCES 4,24,553/- TOTAL ASSESSED INCOME 70,59,902/- 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED AS UNDER:- 8 'GROUNDS OF APPEAL L TO 6 WHICH RELATES TO DETERMI NATION OF MARKET VALUE OF THE PLOT NO.4 JHALAWAR ROAD, KOTA ON 01/04/1981 AND ON 20/09/2006 ( DATE OF SALE OF PLOT) AND OVERLAPPING TO EACH OTHER READ S AS UNDER:- THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED AO ERRED IN TAKING DLC RATE AS A GUIDELINE FOR COMPUTATION OF C APITAL GAIN IGNORING THIS FACT THAT IT IS ONLY A GUIDELINE FOR DETERMINATION OF STAMP DUTY AND IT HAS NO CONCERN TO THE FAIR MARKET VALUE OF THE PROPERTY AN D THEREBY ITS ADOPTION BY LD. AO IS ARBITRARY AND ILLEGAL. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. AO ERRED IN NOT CONSIDERING THE DEFICIENCIES BROUGHT TO HIS NOTICE BY THE APPELLANT AND MORE PARTICULARLY THE ADVERSE EFFECT OF FLYOVER, THE SIZ E OF THE PLOT AND ITS LOCATION IN CORRECT PERSPECTIVE AND THEREBY ADOPTING DLC RAT E AS FAIR MARKET VALUE WITHOUT GIVING EFFECT OF AFORESAID DEFICIENCIES. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED AO FURTHER ERRED IN NOT CONSIDERING THIS FACT THAT LOCATION OF RESIDENTIAL PLOTS OF NEW COLONY WHICH ARE JUST AT THE WESTERN END OF PLOT OF APPELLANT FOR WHICH DLC RATE IS ONLY RS. 440/- AND BACK PORTION OF BOTH APP ELLANTS PLOT AS WELL AS RESIDENTIAL PLOTS OF NEW COLONY OPEN IN SAME SERVIC E LANE AND THEREFORE DLC RATE OF BACK PORTION OF PLOT IS SUBSTANTIALLY LESS. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE LEARNED AO WHICH IS BASED ON ORDER OF THE LEARNED DVO IN RELATION TO DETERMINATI ON OF FAIR MARKET VALUE OF THE PLOT ON 01.04.1981 AND' 20.09.2006 IS ARBITRARY AND VIOLATIVE TO THE ARTICLE 14 OF THE CONSTITUTION OF INDIA. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CASE THE LD. AO FURTHER ERRED IN NOT GIVING DEDUCTION OF 25% CONSIDERING BIGGER SIZE OF PLOT WHILE DETERMINING F AIR MARKET VALUE OF PLOT ON 20.09.2006 (DATE OF SALE OF PLOT) WHEREAS IT WAS GI VEN BY HIM WHILE DETERMINING FAIR MARKET VALUE ON O1.04.1981.THAT UN DER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED AO THEREFORE ERRED IN ADOPTING MARKET VALUE OF PLOT AT RS. 1,39,44,000/- AS AGAINS T RS. 1,10,00,000/ - RECEIVED BY THE APPELLANT. FACTS OF THE CASE ARE AS UNDER:- (I) THAT THE APPELLANT HAD PURCHASED PLOT NO.4, JHALAWA R ROAD, KOTA IN F.Y. 1977-78. 9 (II) THAT THE PLOT WAS SOLD BY HIM ON 20.09.2006 TO M/ S DEEPSHREE BUILDCON LTD. FOR RS. 1,10,00,000/-. (III) THAT STAMP AUTHORITIES DETERMINED VALUE OF TH E PLOT FOR THE PURPOSE OF LEVY OF STAMP DUTY AT RS. 13951320/-. (IV) THAT TOGETHER WITH THE RETURN OF INCOME FOR A SS. YEAR 2007-08 THE APPELLANT FILED APPLICATION U/ S 50C (2)(A) BRINGIN G OUT ALL FACTS TO THE NOTICE OF LEARNED AO AND REQUESTING HIM THAT THIS M ATTER MAY BE SENT TO LEARNED DVO FOR DETERMINATION OF FAIR MARKET VAL UE OF THE PROPERTY. THE LEARNED AO ACCEPTED OUR REQUEST AND R EFERRED THE MATTER FOR DETERMINATION OF FAIR MARKET VALUE OF PL OT ON 01.04.1981 & 20.09.2006. THE LEARNED DVO INSPECTED THE PROPERTY WHEREIN HE DID NOT THOUGHT APPROPRIATE TO HAVE OUR PRESENCE AND TH EREFORE WHEN THE PROPOSED VALUATION REPORT WAS RECEIVED BY THE APPEL LANT, THE APPELLANT REQUESTED FOR REINSPECTION WHICH WAS VERY KINDLY ACCEPTED BY HIM AND PROPERTY WAS INSPECTED BY HIM AGAIN. (V) THE LEARNED DVO, BASED ON 3 SALE INSTANCES ADO PTED THE FAIR MARKET VALUE OF THE PLOT AS ON 01.04.1981 & WHILE DOING SO HE MADE 25% DEDUCTION ON ACCOUNT OF BIGGER SIZE OF PLOT. HOWEVE R ON 20.09.2006, NO SUCH SALE INSTANCES WERE CONSIDERED BY HIM AND H E ADOPTED THE DLC VALUE AS ON 20.09.2006 AS THE FAIR MARKET VALUE OF THE PLOT. HE ALSO DID NOT THOUGHT IT APPROPRIATE TO MAKE DEDUCTI ON OF 25% FOR BIGGER SIZE OF PLOT AS WAS DONE BY HIM WHILE DETERM INING FAIR MARKET VALUE AS ON 01.04.1981. WITH THIS BACKGROUND, WE SUBMIT THAT WE HAVE 2 APPE ALS BEFORE YOUR HANOUR - ONE AGAINST VALUATION U/ S 50C (2) AND ANO THER AGAINST ORDER U/ S 143(3). IN OUR APPEAL AGAINST ORDER U/ S 50C (2), S IMILAR GROUNDS ARE THERE AND THEREFORE WE DO NOT REPEAT THE SAME BUT REQUEST YOUR HONOUR THAT CONSIDERING SAID SUBMISSIONS, THE LEARNED AO MAY BE DIRECTED TO PROVIDE 25% DEDUCTION ON ACCOUNT OF BIGGER SIZE OF PLOT LIK E HE HAD DONE VALUATION REPORT RELATED TO 01.04.1981 & AS AFTER SUCH DEDUCT ION MARKET VALUE WILL COME BELOW SALE PRICE OF RS. 1,10,00,000/- TO ACCEP T OUR SALE CONSIDERATION. 10 6 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE DIRECTED THE ASSESSING OFFICER TO TAKE FAI R MARKET VALUE OF THE PLOT AT RS. 1,17,12,000/- BY TAKING THE VALUE AT RS . 2,440/- PER SQ.FT. AS AGAINST RS. 2,905/- PER SQ.FT. 7 . AS REGARDS TO THE DEDUCTION UNDER SECTION 54F OF THE ACT, THE SUBMISSION OF THE ASSESSEE BEFORE THE LD. CIT(A) WA S AS UNDER:- APPELLANT IS MORE THAN 80 YEARS OF AGE WITH 4 SONS AND DOES NOT HAVE ANY OF OTHER HOUSE EITHER IN HIS OR HIS WIFE'S NAME AND HAD PURCHASED 4 FLATS UNDER ONE ROOF FOR HIS FAMILY. HE HAS PURCHASED 4 F LATS INTENTIONALLY TO ENABLE HIS 4 SONS TO TAKE ONE EACH WITHOUT ANY LITI GATION AFTER HIS DEATH. THIS IS ALSO A FACT THAT AS ON DATE, HE HAS MANAGED THE ENTRY OF FLAT IN SUCH A WAY THAT THEIR ENTRY IS ONLY THROUGH 1 ENTRY GATE. IT IS ALSO TO BE APPRECIATED THAT 2 FLATS ARE AT ONE SIDE OF THE GATE AND 2 ON O THER SIDE. WE HAD REQUESTED TO THE LEARNED AO TO ALLOW DEDUCTI ON U/S54F FOR HOUSE WHICH OF COURSE HAS FOUR FLATS HOWEVER IT HAS BEEN RESTRICTED BY HIM TO ONE FLAT ONLY. WE REQUEST YOUR HONOUR TO DIRECT LEARNED AO FOR ALLOWING DEDUCTION U/S 54F FOR ONE COMPOSITE HOUSE COMPRISIN G OF 4 FLATS. 8 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE, CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER BY OBSERVING IN PARA 4.72 OF THE IMPUGNED ORDER AS UNDER:- I HAVE CONSIDERED THE ASSESSING OFFICERS FINDING A ND ASSESSEES SUBMISSIONS:- 11 I) EACH FLAT HAS SEPARATE ENTRANCE. II) EACH FLAT HAS SEPARATE KITCHEN. III) EACH FLAT HAS SEPARATE DRAWING ROOM IV) EACH FLAT HAS SEPARATE POOJA GHAR. V) EACH FLAT HAS SEPARATE DRAWING ROOM. VI) THESE ARE NOT INTER-CONNECTED. VII) THE ASSESSEE HIMSELF MENTIONED THAT HE HAS PU RCHASED THE FLATS WITH AN INTENTION TO GIVE ONE FLAT EACH TO HIS FOUR SONS . ACCORDINGLY, IT IS HELD THAT THESE FOUR FLATS CONST ITUTE FOUR RESIDENTIAL UNITS AND NOT ONE. I HAVE ALSO GONE THROUGH THE CASE LAW [239 CTR (KAR ) 435] QUOTED BY ASSESSEE. IN THAT CASE HON'BLE KARNATA HIGH COURT HAS HELD TH AT IN SECTION 54 A RESIDENTIAL UNIT SHOULD BE UNDERSTOOD IN A SENSE TH AT THE BUILDING SHOULD BE RESIDENTIAL AND 'A' SHOULD NOT BE UNDERSTOOD TO IND ICATE A SINGULAR NUMBER. HOWEVER IN SECTION 54 F THOUGH THE LANGUAGE USED IS A RESIDENTIAL HOUSE, THE ENTIRE READING OF SECTION 54F, SPECIALLY SECTIO N 54 F(2) MAKES IT CLEAR THAT W.R.T. SEC 54 F THE INTENTION OF LEGISLATURE W AS TO TREAT 'A' AS A SINGULAR NUMBER ONLY. FOR READY REFERENCE SECTION 54F(2) IS REPRODUCED BELOW:- WHETHER THE ASSESSEE PURCHASES, WITHIN THE PERIOD OF [TWO YEARS] AFTER THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET, OR CONS TRUCTS, WITHIN THE PERIOD OF THREE YEARS AFTER SUCH DATE, ANY RESIDENTIAL HOUSE, THE INCOME FROM WHICH IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPER TY', OTHER THAN THE NEW ASSET, THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE (A), OR, AS THE CAS E MAY BE, CLAUSE(B), OF SUB-SECTION(1), SHALL BE DEEMED TO BE INCOME CHARGE ABLE UNDER THE HEAD 'CAPITAL GAINS' RELATING TO LONG-TERM CAPITAL ASSET S OF THE PREVIOUS YEAR IN WHICH SUCH RESIDENTIAL HOUSE IS PURCHASED OR CONSTR UCTED.' SECTION 54F CLEARLY PROVIDES THAT IF ASSESSEE ACQUI RES ANY OTHER RESIDENTIAL HOUSE OTHER THAN NEW ASSET THAN DEDUCTION U/S 54F W OULD BE WITHDRAWN. THIS CLEARLY SHOW, THAT THE INTENTION OF LEGISLATUR E IN SECTION 54F WAS DIFFERENT FROM SECTION 54 WHERE NO SUCH PROVISION L IKE SECTION 54F(2)] WAS PROVIDED. IT IS THEREFORE HELD THAT W.R.T. SEC 54F THE INTENTION OF LEGISLATURE 12 WAS TO TREAT 'A' AS A SINGULAR NUMBER ONLY, THE ACT ION OF ASSESSING OFFICER IS THEREFORE CONFIRMED. NOW, BOTH THE PARTIES ARE IN APPEAL. 9 . THE ASSESSEE HAS CHALLENGED THE FAIR MARKET VALUE OF THE PLOT IN QUESTION AS WELL AS RESTRICTING THE DEDUCTION UNDER SECTION 54F OF THE ACT WHILE THE DEPARTMENT HAS CHALLENGED THE FAIR MARKET VALUE DIRECTED TO BE TAKEN BY THE LD. CIT(A). 10 . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE DVO HAS TAKEN THE RATE @ RS. 2,905/- PER SQ.FT. ON THE BASIS OF D LC RATE AND IGNORED THIS VITAL FACT THAT THE ORIGINAL PURCHASER PURCHASED TH E PLOT FOR RS. 1,10,00,000/- INCLUDING STAMP DUTY CHARGES AND SOLD THE SAID PLOT AFTER 06 MONTHS FOR RS. 99,00,000/- BECAUSE OF FLYO VER THIS AREA WAS LOSING COMMERCIALITY. IT WAS FURTHER SUBMITTED THA T THE LD. CIT(A) WHILE DETERMINING THE FAIR MARKET VALUE ENHANCED THE VALU E OF THE PLOT AND THEREAFTER ALLOWED DEDUCTION @ 25% CONSIDERING THE BIGGER SIZE OF PLOT. IT WAS STATED THAT THE ENHANCED VALUE TAKEN BY THE LD. CIT(A) WAS NOT JUSTIFIED. IT WAS FURTHER STATED THAT A SIMILAR IS SUE HAVING IDENTICAL FACTS HAS BEEN DECIDED BY THIS BENCH OF THE TRIBUNAL IN T HE CASE OF SHRI RAMESHWAR PRASAD KACHOLIA VS. THE ACIT, CIRCLE-2, K OTA IN I.T.A.NO. 248 13 & 249/JP/2012 FOR THE A.Y. 2007-08 VIDE ORDER DATED 24/05/2013. COPY OF THE SAID ORDER WAS FURNISHED. 11 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT WHILE REDUCING THE FAIR MARKET VALUE OF THE PROPERTY AT RS. 1,17,12,000/- A S AGAINST RS. 1,39,44,000/- DETERMINED BY THE DVO, THE LD. CI T(A) HAS NOT GIVEN ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFF ICER. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSEE SOLD THE PLOT FO R A SUM OF RS. 1,10,00,000/- WHILE THE DVO ON THE BASIS OF DLC RATE DETERMINED THE VALUE AT RS. 1,39,44,000/-. HOWEVER, THE LD. CIT(A) AFTER ALLOWING DEDUCTION @ 25% ON ACCOUNT OF BIGGER SIZE OF THE PL OT DETERMINED THE FAIR MARKET VALUE AT RS. 1,17,12,000/-. A SIMILAR ISSUE WAS SUBJECT MATTER OF THE ADJUDICATION BEFORE THE ITAT, JAIPUR BENCH, JAI PUR IN I.T.A.NO. 248 & 249/JP/2012 FOR THE A.Y. 2007-08 IN THE CASE OF SHR I RAMESHWAR PRASAD KACHOLIA VS. ACIT, CIRCLE-2, KOTA WHEREIN THE DVO A DOPTED THE FAIR MARKET VALUE ON THE BASIS OF DLC RATE AT RS. 2,905/ - PER SQ.FT. AND THE LD. CIT(A) AFTER ACCEPTING THE CONTENTION OF THE AS SESSEE THAT THE PLOT 14 WAS LARGE IN SIZE AND THE PROPERTY WAS VALUED AS ON 03/04/2006 WHILE THE DLC RATES WERE FOR THE PERIOD FROM 26/09/2005 TO 09 /05/2006 AND THAT THE DLC RATES RELATED TO THE PLOT SITUATED ON THE H IGHWAY, WORKED OUT THE VALUE @ 2,290/- PER SQ.FT. AFTER ALLOWING THE REBAT E OF 25%. THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 3 OF THE ORDER DAT ED 24/05/2013 WHICH READ AS UNDER:- 3. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERIA L ON RECORD. THE APPELLANT HAD DECLARED SALE CONSIDERATION OF THE PR OPERTY AT RS. 70 LACS AS AGAINST THE VALUE ADOPTED BY THE STAMP VALU ATION AUTHORITY AT RS. 1,39,44,000/-. THE ASSESSEE HAS NOT SHOWN TO HA VE PREFERRED ANY APPEAL BEFORE COLLECTOR STAMPS AGAINST THE VALUE AD OPTED BY THE STAMP VALUATION AUTHORITY. DURING THE ASSESSMENT PR OCEEDINGS, HOWEVER, ASSESSEE AVAILED THE OPPORTUNITY AND OBJEC TED TO THE VALUATION SO ADOPTED TO BE EXCESSIVE AND UNREASONAB LE AND THUS CLAIMED THAT THE VALUE ADOPTED BY THE STAMP VALUATI ON AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. IN SUPPORT OF HIS CLAIM, THE ASSESSEE HAD LAID VALUATION REPORTS FROM TWO APPROVED VALUERS BEFORE THE DVO TO WHOM A REFERENCE WAS MADE. THE DVO, HOWEVER, PROCEEDED TO VALUE THE PROPERTY AT THE SAME PRICE OF RS. 1,39,44,000/- ADO PTED BY THE STAMP VALUATION AUTHORITY BY APPLYING DLC RATES. THE APPE LLANT THEREAFTER MADE DUE REPRESENTATION VIDE LETTER DATED 28.12.200 9 PLACED AT ASSESSEES PAPER BOOK PAGES 42 TO 44. THE DVO HAS A DOPTED THE LAND RATE AS ON 3.4.2006 AT RS. 2905/- PER SQ. FT AND VA LUED THE PLOT AT RS. 1,39,44,000/-. IN THE SAME VALUATION REPORT THE VAL UER HAD ESTIMATED THE VALUE OF THIS PLOT AS ON 1.4.1987 AT RS. 9,98,4 00/- AFTER ALLOWING DEDUCTION OF 25% ON ACCOUNT OF BIGGER SIZE PLOT ON THE ESTIMATED FAIR MARKET VALUE OF 277.45 PER SQ. FT. AND THUS WORKED OUT THE FINAL RATE AS ON 1.4.1987 AT RS. 208/- PER SQ. FT AS IS APPARE NT FROM ASSESSEES PAPER BOOK PAGES 34 AND 38 FORMING PART OF THE DVO S REPORT. NEITHER THE DVO NOR THE ASSESSING OFFICER ALLOWED T HIS REBATE OF 25% IN THE VALUE ADOPTED AS ON THE DATE OF SALE THOUGH THIS FACT WAS 15 EMERGING FROM THE SAME REPORT OF THE DVO ITSELF. TH E LD. CIT (A) CONSIDERING THIS AS AN INFIRMITY, CORRECTED THE RAT E TO RS. 2290/- PER SQ. FT. AS AGAINST RS. 2905/- DETERMINED BY THE DVO IN HIS DVOS REPORT. THE LD. CIT (A) ON THE PECULIAR FACT, IS NO T FOUND TO HAVE COMMITTED ANY ERROR IN CORRECTING THE DVOS REPORT AND MAKING NECESSARY MODIFICATION WHICH IS WITHIN THE SCOPE OF HIS POWERS. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE GROUND RAIS ED IN ITA NO. 286/JP/2012 BY THE REVENUE. THE SAME STANDS REJECTE D. 13. IN THE PRESENT CASE ALSO, IT APPEARS THAT THE L D. CIT(A) FIRST ENHANCED FAIR MARKET VALUE FROM RS. 2,905/- PER SQ. FT. WHICH WAS DETERMINED BY THE DVO AND THEREAFTER ALLOWED 25% RE BATE AND ULTIMATELY WORKED OUT THE VALUE OF THE PROPERTY AT RS. 2,440/- PER SQ.FT. WE, THEREFORE, BY RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER, MODIFY THE VALUE TO RS. 2,290/- PER SQ.FT. INSTEAD OF RS. 2,440/- TAKEN BY THE LD. CIT(A). IN THIS MANNER, GROUND NO.1 OF THE ASSESSEES APPEAL IS PARTLY ALLOWED WHILE APPEAL OF THE DEPARTMENT IS DI SMISSED. 14. AS REGARDS, ANOTHER ISSUE RELATING TO EXEMPTION UNDER SECTION 54F OF THE ACT IS CONCERNED, IT APPEARS THAT THE LD. CIT(A ) RESTRICTED THE EXEMPTION TO ONE FLAT ONLY AS AGAINST 4 FLATS PURCH ASED BY THE ASSESSEE. THE CLAIM OF THE ASSESSEE WAS THAT THERE WAS A SING LE ENTRY AND ALL THE FLATS WERE INTERCONNECTED. HOWEVER, IT IS NOT CLEA R AS TO WHETHER THE HOUSE WAS A COMPACT HOUSE OF 4 FLATS OR DIFFERENT 4 UNITS WERE THERE. 16 THEREFORE, THIS LIMITED ISSUE IS RESTORED BACK TO T HE FILE OF THE ASSESSING OFFICER TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THAT OF THE DE PARTMENT IS DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 26 TH FEBRUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26 TH FEBRUARY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JAIPUR.