KISHORI DEVI, Jaipur V. ITO, Jaipur

ITA 291/JPR/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5104 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 30-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA CIT DR DHK
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Cost of acquisition; Fair market value; Valuation report; Reassessment proceedings
• Section: 50C; 54F; 133(6); 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 291/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SMT. KISHORI DEVI 825-B, KHEDA MAHAPURA SIKAR ROAD, JAIPUR CUKE VS. THE ITO WARD- 4 (3) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AXBPD 2394 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI O.P. BHATEJA, ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27/07/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29 /07/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 27-01-2016 FOR THE ASSESSM ENT YEAR 2008-09 RAISING THEREIN FOLLOWING GROUNDS:- 1. THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING THE ACTION OF AO IN ADOPTING THE SALE CON SIDERATION OF AGRICULTURAL LAND OF 1 BIGHA 16 BISWA U/S 50C AT RS .27 LACS AS AGAINST ACTUAL CONSIDERATION OF RS.11.50 LACS WITHO UT REFERRING THE SAME TO DVO U/S 50C(2). 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF AO IN CONSIDERING THE FMV OF THE LAND AS ON 01.04.1981 AT RS.4,500/- (@ RS.2,500/- PER BIGHA) A S AGAINST ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 2 RS.1,90,000/- (@ RS.1,00,000/- PER BIGHA) CLAIMED B Y THE ASSESSEE AND THEREBY ADOPTING INDEXED COST OF ACQUISITION AT RS.24,795/- AS AGAINST RS.10,46,900/- CLAIMED BY THE ASSESSEE. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF AO IN NOT ALLOWING THE CLAIM OF DEDUC TION U/S 54F IN RESPECT OF EXPENDITURE OF RS.13 LACS INCURRED ON CO NSTRUCTION OF RESIDENTIAL HOUSE BY INCORRECTLY HOLDING THAT INVES TMENT IS MADE ON ALREADY CONSTRUCTED HOUSE AND THE AMOUNT OF INVESTM ENT SO MADE IS NOT SATISFACTORILY PROVED. 2.1 IN GROUND NO. 1, THE ASSESSEE IS AGGRIEVED THA T THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE AO BY THE LD. CIT(A) IN ADOPTING THE SALE CONSIDERATION OF AGRICULTURE LAND OF 1 BIG HA 16 BISWA U/S 50C AT RS. 27 LACS AS AGAINST ACTUAL CONSIDERATION OF RS. 11.50 LACS WITHOUT REFEREEING THE SAME TO DVO U/S 50C(2) OF THE ACT. THE BRIEF FACTS OF THE CASE THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD AGRICULTURAL LAND SITUATED AT VILLAGE NANGAL, JESA BOHRA, JHOTWARA, DISTRICT-JAIPUR FOR RS.11.50 LACS. IN THE RETURN FI LED ON 23.7.2010, THE , ASSESSEE COMPUTED THE LONG TERM CAPITAL GAIN OF RS. NIL BY ADOPTING THE SALE CONSIDERATION AT RS.11.50 LACS AND REDUCING TH ERE FROM INDEXED COST OF ACQUISITION AT RS.10,46,900/- AND DEDUCTION U/S 54F AT RS.1,03,100/- (ACTUAL INVESTMENT RS.13,00,000/- BUT RESTRICTED TO THE CAPITAL GAIN). IT IS OBSERVED THAT THE AO CONDUCTED ENQUIRY U/S 133(6) A ND ISSUED LETTER DATED 20.01.2012 TO THE ASSESSEE. IN RESPONSE TO THE SAME , ASSESSEE VIDE LETTER DATED 06.02.2012 INFORMED THAT THOUGH THE STAMP AUT HORITIES HAVE ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 3 DETERMINED THE VALUE OF LAND AT RS.27 LACS FOR STAM P DUTY PURPOSE BUT THE MARKET VALUE IS NOT MORE THAN RS.11.50 LACS AS THE LAND WAS DISPUTED AND ASSESSEE WAS NOT IN THE POSSESSION OF THE LAND. THE REQUEST WAS ALSO MADE BY THE ASSESSEE TO REFER THE MATTER TO THE VALUATIO N OFFICER U/S 50C(2) OF THE ACT. HOWEVER, THE AO ISSUED NOTICE U/S 148 O N 22.03.2013. THE ASSESSEE IN RESPONSE TO THIS NOTICE AGAIN FILED THE RETURN AT THE SAME INCOME AT WHICH THE ORIGINAL RETURN WAS FILED. IT I S NOTICED THAT IN REASSESSMENT PROCEEDINGS, THE AO TOOK THE SALE CONS IDERATION AT RS.27,00,000/- U/S 50C BEING THE VALUE ADOPTED BY T HE SUB-REGISTRAR FOR THE PURPOSE OF STAMP DUTY AS AGAINST ACTUAL SALE CO NSIDERATION OF RS.11,50,000/-. HENCE, THE AO ALLOWED INDEXED COST OF ACQUISITION AT RS.24,795/- BY CONSIDERING THE FMV OF THE LAND AS ON 01.04.1981 OF RS. 2,500/- PER BIGHA AS AGAINST RS.1,00,000/- PER BIGH A CLAIMED BY THE ASSESSEE. HE DID NOT ALLOW THE CLAIM OF DEDUCTION U /S 54F FOR THE REASON THAT ASSESSEE HAS CONSTRUCTED THE HOUSE AT ALREADY EXISTING HOUSE OF HER HUSBAND AND THE EVIDENCE THAT THE SALE CONSIDERATIO N ITSELF IS USED FOR CONSTRUCTION OF HOUSE IS NOT FILED NOR THE COMPLETE BILLS/VOUCHERS FOR SUCH CONSTRUCTION ARE FILED. ACCORDINGLY, THE AO COMPUTE D THE LONG TERM CAPITAL GAIN AT RS.26,75,205/- AS UNDER:- SALE CONSIDERATION U/S 50C RS.27,00,000/- LESS: INDEXED COST OF ACQUISITION RS. 24,795/ - LTCG RS.26,75,205/- ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 4 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATER BEFORE THE LD. CIT(A) WHO DISMISSED THIS GROUND OF REFERRING THE M ATTER TO THE DVO BY OBSERVING AS UNDER:- 3.3.1 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLAN T. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE HAD SOLD A LAND FOR A SALE CONSIDERATION OF RS. 11.50 LACS. HOWEVER, THE STAMP DUTY VALUATION OF THE PROPERTY AS ON THE DATE OF SALE WAS RS. 27.0 0 LACS .THE ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTIO N 50C HAS TAKEN THE VALUE OF CONSIDERATION AT RS. 27.00 LACS. IN TH E PROCEEDINGS BEFORE ME, THE APPELLANT IS TAKING A GROUND THAT TH E PROPERTY WAS NOT REFERRED TO DVO FOR HIS VALUATION AND FURNISHED SOME PAPERS TO SHOW THAT HIGH TENSION LINE PASSES THROUGH THE LAND AND HENCE ITS VALUE WOULD BE LESS. NO SUCH SUBMISSIONS WERE MADE BEFORE THE ASSESSING OFFICER, THE REPLY OF THE ASSESSEE IS REP RODUCED IN THE ORDER ITSELF, HENCE THIS GROUND IS DISMISSED. 2.3 NOW THE ASSESSEE IS IN APPEAL BEFORE ME AND SUB MITTED THAT IN RESPONSE TO THE ENQUIRY MADE U/S 133(6) BY THE AO, ASSESSEE HAS SPECIFICALLY REQUESTED THAT THE VALUE DETERMINED BY THE STAMP AUTHORITIES DO NOT REPRESENT THE MARKET VALUE AND THEREFORE THE MATTER BE REFERRED TO THE DVO U/S 50C(2) OF THE ACT. HOWEVER, IN SPITE OF SUCH SPECIFIC REQUEST THE MATTER WAS NOT REFERRED TO THE DVO. THE ASSESS EE FURTHER SUBMITTED THAT THE LAND UNDER REFERENCE WAS ENCROACHED, ASSES SEE WAS NOT IN ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 5 POSSESSION OF THE SAME, A HIGH TENSION 132KVA LINE WAS PASSING THROUGH THIS LAND AND THEREFORE ITS VALUE WAS MUCH LOWER TH AN THE LAND RATE PREVAILING IN THAT AREA. THEREFORE, AS CONTEMPLATED IN SECTION 50C(2), THE VALUATION OF PROPERTY OUGHT TO HAVE BEEN REFERRED T O THE DVO. THE ASSESSEE FURTHER SUBMITTED THAT THE AO IN DISCHARG ING A QUASI JUDICIAL FUNCTION HAD THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HER AN OPTION TO FOLLOW THE COURSES PROVIDED BY LAW WHICH HAS NOT BEEN DONE. THEREFORE, THE ADDITION MADE BY THE AO A ND CONFIRMED BY THE CIT(A) WITHOUT REFERRING THE MATTER TO THE DVO U/S 50C(2) IS BAD IN LAW. HENCE, IN THE INTEREST OF JUSTICE, THE MATTER BE SE T ASIDE TO THE AO TO REFER THE MATTER TO THE DVO U/S 50C(2). THE ASSESSEE HAS RELIED ON FOLLOWING CASE LAWS:- 1. SUDHA JAIN VS. ITO (2016) 46 CCH 573 (AGRA) (TR IB.) 2. SUNIL KUMAR AGARWAL VS. CIT (2015) 372 ITR 0083 (CAL)(HC) 3. ITO VS. ONKARMAL KAJARIA FAMILY TRUST (2014) 41 CCH 0180 (KOL)(TRIB) 4. RAJ KUMARI AGARWAL VS. DCIT (2014) 40 CCH 0739 (AGRA)(TRIB) 5. SUNIL KUMAR AGARWAL CIT (GA NO 3686/2013 IN ITAT NO 221/ 2013; JUDGMENT DATED 13TH MARCH 2014) HON'BLE CALCUTTA HIGH COURT. 2.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T THE ASSESSEE VIDE HIS ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 6 LETTER DATED 6-02-2012 ADDRESSED TO THE AO HAD REQU ESTED TO REFER THE MATTER TO THE DVO AS PER PROVISIONS OF SECTION 50C OF THE ACT AND IT APPEARS THAT THE AO HAD FAILED TO DO SO. HENCE, CON SIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF TH E CONSIDERED VIEW THAT THAT MATTER SHOULD BE REFERRED TO THE DVO BY THE AO . HENCE, IN THE INTEREST OF PRINCIPLES OF NATURAL JUSTICE, THE ISSU E IS RESTORED BACK TO THE FILE OF THE AO WITH THE DIRECTION TO REFER THE MATT ER TO THE DVO FOR HIS VALUATION OF THE PROPERTY IN QUESTION AND THEN DEC IDE THIS GROUND OF APPEAL OF THE ASSESSEE IN ACCORDANCE WITH THE PROVI SIONS OF LAW. THUS GROUND NO. 1 OF THE ASSESSEE IS ALLOWED FOR STATIST ICAL PURPOSES. 3.1 IN GROUND NO. 2, THE ASSESSEE IS AGGRIEVED THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF AO IN CONSIDERING THE FMV OF THE LAND AS ON 01.04.1981 AT RS.4,500/- (@ RS.2,500/- PER BI GHA) AS AGAINST RS.1,90,000/- (@ RS.1,00,000/- PER BIGHA) CLAIMED B Y THE ASSESSEE AND THEREBY ADOPTING INDEXED COST OF ACQUISITION AT RS. 24,795/- AS AGAINST RS.10,46,900/- CLAIMED BY THE ASSESSEE. THE BRIEF F ACTS OF THIS GROUND ARE THAT THE ASSESSEE HAD TAKEN THE FAIR MARKET VALUE AS ON 01.04.1981 OF 1 BIGHA 16 BISWA OF AGRICULTURAL LAND SOLD BY HER A T RS.1,90,000/- (I.E. @1,00,000/BIGHA). DURING ASSESSMENT PROCEEDING, THE ASSESSEE SUBMITTED THE REPORT OF REGISTERED VALUER DETERMINING THE FM V OF THE LAND AS ON 01.04.1981 AT RS.2,17,800/-. THE AO HAD TAKEN THE F MV OF THE LAND AT ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 7 RS.4,500/- (I.E. RS.2,500/- PER BIGHA) BY COMPARING IT WITH THE LAND AT KHASRA NO. 73 SOLD ON 13.01.1981 @2500/- BIGHA BY H OLDING THAT THE LAND OF THE ASSESSEE SITUATED AT KHASRA NO. 3 IS CO MPARABLE TO THE SAID LAND. 3.2 BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE PARA 3.3.2 OF HIS ORDER HAS CONFIR MED THE ACTION OF THE AO BY FOLLOWING OBSERVATION. 3.3.2. .THE ASSESSING OFFICER HAS OBTAINED A REGISTERED DOCUMENT OF THE AREA AND THE INFORMATI ON AND THE RATE OBTAINED FROM THE SAME IS MORE RELIABLE. T HIS PROPOSITION IS ALSO SUPPORTED BY THE DECISION IN TH E CASE OF54 TAXMAN.COM 310 (MADRA). THE ASSESSEE HAS FILED THE REGISTERED VALUERS REPORT SUBSEQUENTLY, WHEREAS TH E ASSESSING OFFICER HAS A CREDIBLE DOCUMENT TO ESTABL ISH THE COST OF ACQUISITION, ADOPTING THE SAME RATE WAS IN ORDER. IN VIEW OF THE ABOVE, THE COST OF ACQUISITION AS ADOPT ED BY THE ASSESSING OFFICER AT RS. 2500/- PER BIGHA IS CONFIR MED. THIS GROUND OF THE ASSESSEE IS DISMISSED. 3.3 NOW THE ASSESSEE IS IN APPEAL BEFORE ME WITH TH E PRAYER TO DETERMINE THE FAIR MARKET VALUE OF THE LAND AS ON 0 1-04-1981 AT RS. 1,90,000/- WITH FOLLOWING SUBMISSIONS . 1. THE AO DETERMINED THE FMV OF THE LAND AT RS.4500 /- AS ON 01- 04-1981 AS AGAINST VALUE OF RS.1,90,000/- DETERMINE D BY THE ASSESSEE BY COMPARING THE DLC RATE OF LAND AT KHASRA NO.73. THI S IS INCORRECT FOR THE FOLLOWING REASONS:- ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 8 (I) THE ASSESSEES LAND IS SITUATED AT KHASRA NO. 0 3 WHICH IS NEAR TO 100 FEET PAKKI DAMAR NIWAROO TO BAINAD ROAD WHEREAS THE LAND AT KHASRA NO.73 IS SITUATED 2 KM AWAY FROM THE LAND OF THE AS SESSEE, NOT APPROACHABLE AND LOCATED IN THE INTERIORS, FAR FROM ABAADI AREA. (II) THE LAND OF THE ASSESSEE WAS LEVELLED WHEREAS THE LAND AT KHASRA NO. 73 WAS UNLEVELLED. THE FACT OF EXISTENCE OF TEEBA AND A FOUR FEET DEEP HOLE I.E. KHADDA ON THE LAND AT KHASRA NO. 7 3 AT THE TIME OF ITS SALE ON 13.01.1981 IS ALSO EVIDENT FROM ITS SALE DEED (III) IN SUPPORT OF FMV OF THE LAND AS ON 01.04.198 1 ASSESSEE FILED A VALUATION REPORT FROM THE REGISTERED VALUER WHO CO NSIDERING ALL THESE FACT DETERMINED THE FMV AT RS.2,17,800/- AGAINST RS.1,90 ,000/- ADOPTED BY ASSESSEE. THE AO REJECTED THE SAME SIMPLY BECAUSE T HE VALUER HAS VALUED THE SAME @ 40/- PER SQUARE YARD AS AGAINST VALUING THE SAME IN TERMS OF PER BIGHA. IN FACT VALUING THE LAND IN TERMS OF SQ. YARD OR IN TERMS OF BIGHA MAKES NO DIFFERENCE. (IV) THE FMV TAKEN BY THE ASSESSEE AS ON 01-04-1981 AT RS.1,90,000/- IS REASONABLE IS ALSO EVIDENT FROM TH E FACT THAT INDEX COST IN F.Y. 2007-08 INCREASED BY 5.51 TIMES AS COMPARED TO 1981 AND IF THE AMOUNT OF RS.27 LACS IS DIVIDED BY 5.51 THAN THE VALUE AS ON 01-041981 WORKS OUT TO RS.4,90,018/- WHICH IS MUCH MORE THAN THE VALUE OF RS.1,90,000/- CONSIDERED BY THE ASSESSEE. (V) SINCE, AT THE TIME OF ASSESSMENT PROCEEDINGS IT SELF, THE ASSESSEE HAS RELIABLY PROVED THAT THE VALUE OF THE TWO LANDS IS NOT COMPARABLE, THE AO OUGHT TO HAVE ACCEPTED THE VALUATION AS PER THE VALUATION RE PORT OF THE REGISTERED VALUER. FOR THIS, RELIANCE IS PLACED ON THE RECENT DECISION OF KARNATAKA HIGH COURT IN THE CASE OF N. GOVINDRAJU VS.ITO REPORTED AT 233 TAXMAN 376 (PB 74-84). IN THIS CASE, THE ASSESSEE SOLD A PLOT OF LAND AND DECLARED LONG TERM CAPITAL GAIN. HE SUBMITTED VALUATION REPORT OF A REGISTERED VALUER D ECLARING FMV AT RS.225/- PER SQ. FT. AS ON 01.04.1981. THE AO ADOPTED FMV AT RS. 84/- PER SQ. FT. FOR COMPUTING THE CAPITAL GAINS ON THE BASIS OF THE SAL E DEED OF SOME NEARBY PROPERTY. ON APPEAL, CIT(A) AND ON FURTHER APPEAL THE TRIBUNA L CONFIRMED THE ASSESSMENT DONE BY THE AO. THE HIGH COURT HELD THAT THE MODE A DOPTED BY THE AO FOR ASCERTAINING THE VALUE AS ON 01.04.1981 IS NOT JUST IFIED AND GAVE THE FOLLOWING FINDING: IN THE INSTANT CASE, THE ASSESSEE HAD PROVIDED THE REASONS FOR DETERMINING RS.225/- PER SQ. FT. AS THE FAIR MARKET VALUE OF THE PROPERTY BY PRODUCING THE RELEVANT MATERIAL, INCLUDING VALUATIO N REPORT OF A REGISTERED VALUER, WHICH ALL HAVE BEEN IGNORED WHILE ARRIVING AT THE PRICE OF RS. 84/- PER SQ. FT. THE ASSESSING OFFICER ASSESSED THE VALUE OF THE PROPERTY AS ON 01.04.1981 ON THE BASIS OF SALE DEEDS OF SOME NEARB Y PROPERTIES REGISTERED FOR SUCH PRICE IN THE YEAR 1981 AND THUS, ARRIVED AT TH AT FIGURE. THUS, THE SAME CANNOT BE THE PROPER MODE OF ARRIVING AT THE FAIR MARKET VALUE OF THE ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 9 PROPERTY IN QUESTION AS ON 01.04.1981 FOR THE PURPO SE OF DETERMINING CAPITAL GAINS UNDER THE ACT.---------------- ---------IN SUCH VIEW OF THE MATTER, WE ARE OF THE OPINION THAT THE TRIBUNAL WAS NOT JUSTIFIED IN ARRIVING AT THE FAIR MARKET VALUE OF THE PROPERTY IN QUESTION AS ON 1.4.1981 WITHOUT TAKING INTO CONS IDERATION THE MATERIAL ON RECORD, INCLUDING THE VALUATION REPORT FILED BY THE ASSESSEE. THE MATTER THUS REQUIRES TO BE REMANDED TO THE ASSESSING OFFICER FO R DETERMINATION OF THE FAIR MARKET VALUE OF THE PROPERTY IN QUESTION IN ACCORDA NCE WITH LAW AND IN LIGHT OF THE OBSERVATIONS MADE HEREINABOVE. 2. THE CIT(A) HAS NOT CONSIDERED THE ABOVE DIFFEREN CES POINTED OUT BY THE ASSESSEE WITH REFERENCE TO THE LAND AT KHASRA N O.73 NOR THE AO CONSIDERED THE SAME. ONCE THE ASSESSEE HAS SUBMITTED THE REPOR T OF THE REGISTERED VALUER FOR DETERMINING THE FMV OF THE LAND AS ON 01.04.198 1, THE AO, IN TERMS OF SEC.55A AS EXISTING FOR THE RELEVANT AY IS BOUND TO ADOPT THE VALUE SO DETERMINED BY THE REGISTERED VALUER. HE COULD HAVE MADE REFERENCE TO THE DVO ONLY IN A SITUATION WHERE THE VALUE DETERMINED BY THE REGISTERED VALUER IS LESS THAN ITS FMV. IN THE PRESENT CASE, THE AO HAS NOT EVEN REFERRED THE MATTER TO THE DVO AND THEREFORE THE VALUE S DETERMINED BY THE REGISTERED VALUER OR THE VALUE ADOPTED BY THE ASSESSEE OUGHT TO HAVE BEE N ACCEPTED BY HIM. RELIANCE IN THIS CONNECTION IS PLACED ON THE FOLLO WING CASES IN WHICH IT HAS BEEN HELD THAT THE AO CANNOT REFER THE VALUE ADOPTE D BY ASSESSEES AS ON 1 APRIL 1981 TO A DVO IN CASE HE IS OF THE VIEW THAT THE VALUE ADOPTED BY THE ASSESSEE IS MORE THAN THE FAIR MARKET VALUE OF THE PROPERTY EITHER UNDER SECTION 55A(A) OR SECTION 55A(B)(II). CIT V PUJA PRINTS (360 ITR 697) (BOM) HIABEN JAYANTILAL SHAH V ITO (310 ITR 31) (GUJ) CIT V UMEDBHAI INTERNATIONAL P LTD (330 ITR 506) (C AL) CIT V GAURANGINIBEN S SODHAN INDL. (45 TAXMANN.COM 356) (GUJ) 3. THE LD. CIT(A) HAS REFERRED TO THE DECISION OF M ADRAS HIGH COURT REPORTED IN 54 TAXMANN.COM 310/ 229 TAXMAN 529. IN THIS CASE, AO ADOPTED THE FMV OF THE LAND AS ON 01.04.1981 AT RS.300 PERC ENT, I.E. THE GUIDELINE VALUE, CIT(A) ADOPTED AT RS.1,200 PERCENT AND THE H ONBLE ITAT FIX THE SAME AT RS.5,000/- PERCENT. ON THESE FACTS THE HONBLE H IGH COURT HELD THAT DETERMINATION BY THE TRIBUNAL DID NOT WARRANT ANY F URTHER MODIFICATION OR INTERFERENCE. THUS, THIS DECISION RATHER SUPPORTS T HE ASSESSEES CASE. IN VIEW OF THE ABOVE, THE LOWER AUTHORITIES BE DIRE CTED TO CONSIDER THE FMV OF THE LAND AS ON 01-04-1981 AT RS.1,90,000/-. ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 10 3.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 3.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T THE ASSESSEE HAD ADOPTED THE FAIR MARKET VALUE AS ON 01-04-1981 OF 1 BIGHA 16 BISWA OF AGRICULTURAL LAND SOLD BY HER AT RS. 1,90,000/- (I. E. @ 1,00,000/- PER BIGHA). DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE SUBMITTED THE REPORT OF REGISTERED VALUER WHO DETER MINED THE FAIR MARKET VALUE OF LAND AS ON 01-04-1981 AT RS. 2,17,800/- (P BP 12-18). IT IS OBSERVED THAT THE LAND WAS SITUATED AT VILLAGE NAAN GAL JAISA BOHRA, JHOTWARA, TEHSIL AND DISTT. JAIPUR. I FIND THAT TH E REVENUE HAS FAILED TO CONTROVERT OR TO BRING ANYTHING ON RECORD AGAINST T HE VALUATION ADOPTED BY THE REGISTERED VALUER. THEREFORE, IN MY CONSIDERED VIEW, THE VALUE ADOPTED BY THE ASSESSEE AT RS. 1.90 LACS AS ON 01-0 4-1981 DESERVES TO BE SUSTAINED. HENCE, THE GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. 4.1 IN GROUND NO. 3, THE ASSESSEE IS AGGRIEVED THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF AO IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S 54F IN RESPECT OF EXPENDITURE OF RS.1 3 LACS INCURRED ON CONSTRUCTION OF RESIDENTIAL HOUSE BY INCORRECTLY HO LDING THAT INVESTMENT IS MADE ON ALREADY CONSTRUCTED HOUSE AND THE AMOUNT OF INVESTMENT SO ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 11 MADE IS NOT SATISFACTORILY PROVED. IT IS OBSERVED T HAT THE DUR ING THE YEAR ASSESSEE INVESTED A SUM OF RS.13,00,000/- ON CONSTR UCTION OF THE HOUSE ON THE LAND OF HER HUSBAND SHRI SATYANARAYAN SHARMA SI TUATED AT 825-B IN VILLAGE KUKARKHEDA AND CLAIMED DEDUCTION U/S 54F. I N SUPPORT OF THE CONSTRUCTION OF HOUSE, THE ASSESSEE FILED COPY OF T HE VALUATION REPORT AND ACCORDING TO WHICH COST OF CONSTRUCTION OF THE HOUS E IS RS.13,33,381/-. THE ASSESSEE SUBMITTED THAT IN SUPPORT OF THE CONST RUCTION, SAMPLE OF THE BILLS FOR EXPENSES OF RS.4,56,968/- WAS ALSO FILED. HOWEVER, THE AO REJECTED THE CLAIM OF THE ASSESSEE BY HOLDING AS UN DER:- (I) THE ASSESSEE MADE THE INVESTMENT IN THE ALREADY CONSTRUCTED HOUSE OF HER HUSBAND. (II) THE SALE CONSIDERATION IS RECEIVED IN CASH AND THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO PROVE THAT THE ASSESS EE HAS UTILISED THE SALE CONSIDERATION IN THE CONSTRUCTION OF THE HOUSE . (III) THE VALUATION REPORT SHOWS THAT ASSESSEE HAS INCURRED EXPENSES OF RS.13,33,381/- ON THE CONSTRUCTION WHER EAS IN ASSESSMENT PROCEEDING ONLY BILLS OF RS.4,56,968/- W ERE PRODUCED. (IV) THE DECISION OF DELHI HIGH COURT REFERRED BY T HE ASSESSEE IN THE CASE OF CIT VS. KAMAL BEHAL (ITA 4/2013) IS NOT APPLICABLE AS THE FACTS ARE DISTINGUISHABLE. 4.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BE FORE THE LD. CIT(A) WHO HAS DISALLOWED THE DEDUCTION CLAIMED U/S 54 F OF THE ACT BY THE ASSESSEE BY FOLLOWING OBSERVATION. 4.3 ..IN THE CASE IN HAND BOTH THESE FACTS ARE MISSING. IT HAS NOT BEEN CATEGORICALLY PROVED THAT THE FUNDS RECEIVED BY THE ASSESSEE WERE INVESTED IN THE CONST RUCTION OF THE ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 12 HOUSE PROPERTY. THE SALE CONSIDERATION HAS BEEN REC EIVED IN CASH AND THE SAID AMOUNT IS SAID TO HAVE BEEN INVESTED I N THE HOUSE STANDING ON THE PLOT BELONGING TO THE ASSESSEE. FUR THER, COMPLETE EVIDENCE OF THE EXPENDITURE IN CONSTRUCTION COULD B E PRODUCED AND BILLS AND VOUCHERS OF RS. 4,56,968/- WERE ONLY PROD UCED AGAINST A CLAIM OF EXEMPTION FOR RS. 13,33,381/-. IN VIEW OF THE FACTUAL MATRIX AS ABOVE, THE TWO CRUCIAL ASPECTS THAT THE I NVESTMENT WAS ACTUALLY MADE BY THE ASSESSEE IN THE HOUSE WHICH AL READY EXISTED ON THE PLOT IN THE NAME OF THE HUSBAND AS WELL AS T HE AMOUNT OF INVESTMENT SO MADE WERE NOT SATISFACTORILY PROVED E ITHER BEFORE THE ASSESSING OFFICER OR IN THE PRESENT PROCEEDINGS. RE LIANCE OF THE APPELLANT ON THE CASE LAWS IS THUS MISPLACED. IN VI EW OF THE ABOVE, THE DEDUCTION CLAIMED U/S 54F IS HEREBY DISALLOWED. THIS GROUND OF APPEAL IS DISMISSED. 4.3 NOW THE ASSESSEE IS BEFORE ME WITH THE PRAYER T O ALLOW THE CLAIM OF DEDUCTION U/S 54F OF THE ACT IN RESPECT OF EXPEND ITURE OF RS. 13.00 LACS INCURRED ON CONSTRUCTION OF RESIDENTIAL HOUSE. THE ASSESSEE HAS ALSO FILED THE FOLLOWING WRITTEN SUBMISSION TO THIS EFFECT. 1. IT IS SUBMITTED THAT THE ASSESSEE HAS CONSTRUCTE D GROUND FLOOR, FIRST AND SECOND FLOOR ON THE LAND OF HER HUSBAND AT PLOT NO. 825-B IN VILLAGE KUKARKHEDA. THIS IS AN INDEPENDENT AND COMPLETE SEPARATE RESIDENTIAL UNIT. ON CONSTRUCTION, ASSESSEE INCURRED EXPENDITURE OF RS.13,00,000/- WHICH IS SUPPORTED BY THE VALUATION REPORT FILED BY THE ASSESSEE 2. THE LOWER AUTHORITIES HAVE INCORRECTLY OBSERVED THAT ASSESSEE HAS MADE THE INVESTMENT IN THE ALREADY CONSTRUCTED HOUSE OF HER HUSBAND IS INCORRECT. IN FACT THE ASSESSEE CONSTRUCTED INDEPENDENT HOUSE. THE EXISTING HOUSE C OMPRISES OF ONLY ONE ROOM AND WAS CONSTRUCTED IN THE YEAR 1969, WAS NOT IN USABLE CON DITION AND THEREFORE THE NEW HOUSE WAS CONSTRUCTED ON THE BALANCE PORTION OF THE LAND BY T HE ASSESSEE. IT IS A SETTLED LAW THAT FOR CLAIMING DEDUCTION U/S 54F IT IS NOT NECESSARY THAT THE CONSTRUCTION SHOULD BE ON THE LAND OF THE ASSESSEE. IT CAN BE ON THE LAND OF HIS/HER FAMI LY MEMBERS. FOR THIS RELIANCE IS PLACED ON THE DECISION IN THE CASE OF CIT VS. P.R. SESHADRI (2010 ) 329 ITR 0377(KAR.)(HC) (PB 49-58) WHERE IT WAS HELD THAT ASSESSEE IS ENTITLED TO EXEM PTION UNDER SECTION 54F IN RESPECT OF INVESTMENT IN THE CONSTRUCTION OF HOUSE PROPERTY ON THE LAND OWNED BY HIS WIFE. THE LD. CIT(A) HAS INCORRECTLY HELD THAT THE FACTS OF THIS CASE ARE MISSING IN THE CASE OF THE ASSESSEE IGNORING THAT THE LOWER AUTHORITIES HAVE NOT DENIED THE FACT OF THE CONSTRUCTION OF THE HOUSE BY THE ASSESSEE. 3. IT IS ALSO SUBMITTED THAT THE ASSESSEE RECEIVED THE CONSIDERATION ON SALE OF LAND IN CASH AND THE SAME WAS UTILISED IN CONSTRUCT ION OF THE HOUSE. THE FACT THAT ASSESSEE INCURRED THE EXPENDITURE ON CONSTRUCTION IS SUPPORT ED BY THE SAMPLE CONSTRUCTION BILLS SUBMITTED TO THE AO. OTHERWISE ALSO, THERE IS NO LA W THAT THE SAME SALE PROCEEDS SHOULD BE UTILISED IN INVESTMENT OF THE HOUSE TO CLAIM DEDUCT ION U/S 54F. THE ASSESSEE HAS RECEIVED THE SALE CONSIDERATION IN CASH AND THE SAME IS UTILISED IN INVESTMENT IN HOUSE. IT IS NOT THE CASE OF ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 13 THE AO THAT THE SALE CONSIDERATION IS UTILISED SOME WHERE ELSE. HENCE THE OBSERVATION OF THE LOWER AUTHORITIES IN THIS REGARD IS INCORRECT. 4. IT IS A SETTLED LAW THAT EVEN IF BORROWED FUNDS ARE UTILISED IN CONSTRUCTION OF THE HOUSE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 54F. IN THIS CONNECTION RELIANCE CAN BE PLACED ON THE FOLLOWING CASES: 1. ITO VS. K. C. GOPALAN (2000) 162 CTR 0566(KERALA)(H C) 2. SUMATHI GEDUPUDI VS. DCIT (2015) 44 CCH 0092 (HY D)(TRIB) 3. MUNEER KHAN VS. ITO (2010) 41 SOT 0504 (HYD.)(TR IB) 4. J. V, KRISHNA RAO VS. DCIT (2012) 54 SOT 0044(HY D)(TRIB) 5. DCIT VS. DR. P.S. PASRICHA (2008) 20 SOT 0468 (M UM.)(TRIB.) 5. THE ASSESSEE HAS FILED THE EVIDENCE OF CONSTRUCT ION OF HOUSE IN THE FORM OF SAMPLE BILLS. IN SUPPORT OF COST INCURRED ON CONSTR UCTION, VALUATION REPORT FOR UTILISATION OF THE SALE PROCEEDS IN THE CONSTRUCTION OF HOUSE. THERE I S NO MATERIAL WITH THE AO TO COME TO THE CONCLUSION THAT THE COST OF CONSTRUCTION IS LOWER T HAN WHAT IS CLAIMED. THE BILLS/VOUCHERS GIVEN WERE ONLY SOME BILLS/VOUCHERS TO PROVE THE FA CT OF CONSTRUCTION. THE QUANTUM OF CONSTRUCTION EXPENDITURE IS SUPPORTED BY VALUER REP ORT. HENCE THE OBSERVATION OF THE LOWER AUTHORITIES IN THIS CONNECTION IS INCORRECT. 6. BEFORE CIT(A), ASSESSEE ALSO CONTENDED THAT SINC E SHE HAS INVESTED RS.13,00,000/- IN CONSTRUCTION OF THE HOUSE WHICH IS MORE THAN THE AC TUAL CONSIDERATION, THE ENTIRE CAPITAL GAIN IS ALLOWABLE AS DEDUCTION EVEN IS THE SAME IS TO BE SE EN WITH REFERENCE TO VALUE DETERMINED BY SUB REGISTRAR. THIS IS BECAUSE SECTION 50C IS A DEEMING FICTION BY WHICH STAMP DUTY VALUE OF THE ASSET SOLD IS TO BE SUBSTITUTED FOR ACTUAL CONSIDERATION. THIS BEING PURELY A FICTION, ITS SCOPE IS LIMITED TO SECTION 50C ONLY AND CANNOT BE ENLARGED WITHOUT A S PECIFIC REFERENCE AND THEREFORE FOR COMPUTING DEDUCTION U/S 54F ONLY ACTUAL CONSIDERATION RECEIVE D IS TO BE TAKEN INTO ACCOUNT. FOR THIS PURPOSE RELIANCE IS PLACED ON THE FOLLOWING CASES:- 1. GYAN CHAND BATRA VS. ITO (2010) 6 ITR 0147 (JPR.)(T RIB.)(PB 59-64) 2. NAND LAL SHARMA VS. ITO (2015) 40 ITR 0518 (JAIP UR) (TRIB)(PB 65-73) 3. RAJ BABBAR VS. ITO (2013) 56 SOT 0001(MUM.)(TRIB ) IN VIEW OF THE ABOVE, SINCE THE ASSESSEE HAS INVE STED RS.13,00,000/- U/S 54F WHICH IS MORE THAN THE ACTUAL SALE CONSIDERATION OF RS.11,50 ,000/-, THE WHOLE OF THE CAPITAL GAIN IS ALLOWABLE AS DEDUCTION U/S 54F AND ACCORDINGLY DIRECTION BE G IVEN TO THE AO TO ALLOW THE CLAIM OF DEDUCTION U/S 54F TO THE ASSESSEE. 4.4 THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 4.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE CLAIM OF THE ASSESSEE IS T HAT SHE HAS MADE INVESTMENT IN CONSTRUCTION OF RESIDENTIAL HOUSE ON THE LAND BELONGING TO HER HUSBAND ON WHICH SHE INVESTED RS. 13.00 LACS. I N SUPPORT OF THE SAME, VALUATION REPORT OF REGISTERED VALUER DATED 28-10-2 013 WAS FILED. ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 14 ACCORDING TO THIS VALUATION REPORT, THE CONSTRUCTIO N COMPRISES OF RESIDENTIAL HOUSE AT GROUND FLOOR, FIRST FLOOR AND PART SECOND FLOOR AT ESTIMATED COST OF RS. 13,33,381/-. I FIND THAT AFT ER THE SALE OF THE LAND ON 5-03-2008 FOR RS. 11.50 LACS, ASSESSEE MADE INVESTM ENT IN THE CONSTRUCTION OF RESIDENTIAL HOUSE. IT IS NOT THE CA SE OF AO THAT SALE PROCEED OF THE LAND HAS BEEN UTILIZED BY THE ASSESS EE ELSEWHERE. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, I FEEL THAT TH E ASSESSEE HAS UTILIZED THE SALE PROCEEDS OF THE LAND IN CONSTRUCTION OF TH E RESIDENTIAL HOUSE. FURTHER IT IS NOTED THAT INVESTMENT IN CONSTRUCTION OF RESIDENTIAL BY THE ASSESSEE ON THE LAND BELONGING TO HER HUSBAND IS EL IGIBLE FOR DEDUCTION U/S 54F AS HELD BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. P.R. SESHADRI (SUPRA), WHERE IT WAS HELD AS UNDER:- HELD : THOUGH THE LAND MAY BE IN THE OWNERSHIP OF ASSESSEE'S SPOUSE, NEVERTHELESS THE TRIBUNAL HAS RE CORDED A CATEGORICAL FINDING THAT CONSTRUCTION WORK AS IN PR OGRESS DURING 21 ST APRIL, 1995 TILL 31 ST AUG. 1996 AND THE WIFE OF THE ASSESSEE COULD HAVE INCLUDED THE VALUE OF CONSTRUCTION FOR M ORTGAGE PURPOSE AND THIS ALONE DOES NOT MEAN THAT CONSTRUCT ION WAS CARRIED OUT BY THE WIFE OF THE ASSESSEE OUT OF HER OWN FUNDS SO AS TO DENY THE ASSESSEE THE BENEFIT OF DEDUCTION U/S 54F. IF THAT IS TO BE ACCEPTED AS FINDING OF FACT THEN THERE IS NO IMPEDI MENT IN THE ASSESSEE'S CLAIM FOR RELIEF U/S 54F, AS THE ASSESSE E HAD CLAIMED RELIEF TO THE EXTENT OF RS. 20,96,008/- AS HIS CONT RIBUTION TOWARDS THE COST OF CONSTRUCTION OF THE BUILDING AND THIS A MOUNT WILL FALL WITHIN THE COST OF THE BUILDING. IN VIEW OF THE DECISION OF THE HON'BLE KARNATAKA HI GH COURT IN THE CASE CIT VS. P.R. SESHADRI (SUPRA) AND THE FACTS OF THE CASE, , I HOLD THAT THE ITA NO. 291/JP/2016 SMT. KISHORI DEVI VS. ITO , WARD- 4 (3), JAIPUR . 15 ASSESSEE IS ENTITLED FOR DEDUCTION U/S 54F OF THE A CT. THUS GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/07/2016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29 /07/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. KISHORI DEVI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 4 (3), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 291/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR