HARDYAL SINGH, Jaipur V. DCIT, Jaipur

ITA 340/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5545 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 03-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value
• Section: 143(3); 50C; 54F; 2(14); 142(1); 234B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO.340/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2008-09 . SHRI HARDAYAL SINGH, DEVELOPMENT OFFICER, LIC OF INDIA, SIKAR. CUKE VS. THE DCIT, CIRCLE, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AGMPS 8126 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI MAHENDRA GARGIEY (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI KAILASH MANGAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08 .01.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 29/01/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OR LD. CIT (A)-III, JAIPUR DATED 9 TH JANUARY, 2013 FOR THE A.Y. 2008-09. THE ASSESSEE H AS RAISED THE FOLLOWING GROUNDS :- 1. THE IMPUGNED ADDITIONS AND DISALLOWANCES MADE IN TH E ORDER U/S 143(3) OF THE ACT DATED 16.12.2010 ARE BAD IN LAW A ND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER RE ASONS AND HENCE THE SAME KINDLY BE DELETED. 2.1 `10,30,497/- : THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACT S OF THE CASE IN CONFIRMING THE ASSESSMENT OF LONG T ERM CAPITAL GAIN 2 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. ( LTCG FOR SHORT) OF `10,30,497/- BY ADOPTING THE FULL VA LUE OF SALES CONSIDERATION U/S 50C OF THE ACT AT `11,40,453/- AS AGAINST THE CLAIM OF THE APPELLANT THAT NO TRANSFER AT ALL TOOK PLACE AN D THEREFORE, THE PROVISIONS RELATING TO THE CAPITAL GAIN U/S 45 R/W SEC.50C OF THE ACT ARE NOT AT ALL APPLICABLE . THE ASSESSMENT OF THE LONG TERM CAPITAL GAIN AND CONFIRMATION BY THE LD. CIT(A) WAS THEREFO RE, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS BE DELETED IN FULL. ALTERNATIVELY AND WITHOUT PREJUDICE TO ABOVE, 2.2 `9,25,497/-: THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADOPTION OF THE FULL VALUE OF SALES CONSIDERATION U/S 50C OF THE ACT AT `11,40,453/- WHICH WAS CONTRARY TO THE PROVISIONS OF LAW AND FACTS ON RECORD. THE L D. CIT(A) ALSO ERRED IN REJECTING THE OBJECTIONS MADE BEFORE HIM U/S 50C(2) OF THE ACT AND HAVING COTERMINOUS POWERS WITH THE AO, THE LD. CIT( A) COULD AND SHOULD HAVE ACTED THEREUPON. HENCE, VALUE AS DECLARED BY T HE APPELLANT AT `1,05,000/- BE CONSIDERED EVEN ASSUMING IT IS HELD THAT SEC.45 OF THE ACT IS APPLICABLE IN THE PRESENT CASE. THE ADDITION OF THE BALANCE `9,25,497/- [`10,30,497/- LESS `1,05,000/- ] BE DELETED. ALTERNATIVELY AND WITHOUT PREJUDICE TO ABOVE, 2.3.1 `10,30,497/-: THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN NOT ADMITTING THE LEGAL GROUND RELATING TO THE CLAIM OF DEDUCTION U/S 54F OF THE ACT. EVEN ASSUMING, IT WAS NOT A LEGAL GROUND, THE LD. CIT(A) HAVING COTERMINOUS P OWERS COULD AND SHOULD HAVE GOT THE ENQUIRES CONDUCTED IN THE INTER EST OF JUSTICE INSTEAD OF SHUTTING THE DOOR OF JUSTICE. HENCE, SUCH A GROU ND KINDLY BE ADMITTED NOW AND DEDUCTION AS CLAIMED KINDLY BE ALLOWED. 2.3.2 THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON T HE FACTS OF THE CASE IN OTHERWISE DENYING THE CLAIM MADE U/S 54F OF THE ACT, EVEN ON MERITS TAKING CONTRADICTORY STAND AND IGNORING THE FACT T HAT THE APPELLANT HAD ALREADY PROCEEDED TO CONSTRUCT A NEW HOUSE AND THEREFORE, ALSO ADMITTEDLY PURCHASED A RESIDENTIAL PLOT, WITHI N THE STIPULATED TIME LIMIT AND HENCE, WAS ENTITLED TO THE DEDUCTION U/S 54F OF THE ACT OF THE ENTIRE AMOUNT. THE APPELLANT THEREFORE, PLEASE BE A LLOWED DEDUCTION U/S 3 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. 54F OF THE ACT AND THE ENTIRE ADDITION OF THE LTCG `10,30,497/- BE DELETED IN FULL. 3. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN CHARGING INTEREST U/S 234A, 234B & 234C OF THE ACT. THE APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING OF ANY SUCH INTERE ST. THE INTEREST SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AN D FACTS, KINDLY BE DELETED IN FULL. GROUND NO. 1 : 2. AT THE TIME OF HEARING, GROUND NO. 1 IS NOT PRES SED BY THE LD. A/R OF THE ASSESSEE, THEREFORE, THE SAME IS DISMISSED AS NOT P RESSED. GROUND NO. 2 : 3. REGARDING GROUND NO 2, THE RELEVANT FACTS ARE TH AT THE ASSESSEE WHILE FILING THE RETURN OF INCOME ON 09.03.2009 HAS NOT DECLARED THE INCOME UNDER THE HEAD CAPITAL GAINS. ON RECEIPT OF INFORMATION FROM CIB WING OF THE INCOME TAX DEPARTMENT THAT ASSESSEE HAS SOLD A PLOT FOR RS. 1,05,000/- WHICH W AS VALUED AT RS. 11,40,453/- FOR THE PURPOSE OF STAMP DUTY, THE ASSESSEE WAS ASKED VIDE NOTICE U/S 142(1) DATED 06.10.2010 TO EXPLAIN WHY THE SALE CONSIDERATION OF THE ASSET MAY NOT BE TREATED AS RS. 11,40,453/- AS PER THE PROVISIONS OF SECTION 50C OF THE ACT AND TO FILE COMPUTATION OF CAPITAL GAIN. IN COMPLIANCE, THE ASSESSEE VIDE LETT ER DATED 18.11.2010 HAD FURNISHED COPY OF REGISTERED SALE DEED DATED 16.04.2007 WHERE BY PLOT OF LAND WAS SOLD FOR A CONSIDERATION OF RS. 1,05,000/-. HOWEVER, FOR THE PURPOSE OF STAMP DUTY THE VALUATION WAS TAKEN AT RS. 11,40,453/-. SUBSEQUENTLY, VIDE L ETTER DATED 06.12.2010 SHRI PRADEEP 4 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. PILANIA, THE A/R OF THE ASSESSEE SUBMITTED THAT THE SOLD PROPERTY WAS SITUATED AT PRITHVIRAJ NAGAR SCHEME, A DISPUTED AREA, AND LATER ON A SETTLEMENT WAS REACHED BETWEEN THE SELLER AND PURCHASER TO CANCEL THE SUBJ ECTED TRANSACTIONS AND RESTORE THE OWNERSHIP OF THE PLOT TO THE SELLER AS HELD BEFORE 16.04.2007. AS PER ASSESSEE, ANOTHER DOCUMENT REBUTTING BACK THE OWNERSHIP OVER THE SAID PLOT FROM PURCHASER TO THE ASSESSEE WAS EXECUTED AND GOT REGISTERED ON 23.02.2 008, AND THEREBY THE ASSESSEE PLEADED THAT THERE WAS NO TRANSFER OF PROPERTY ON 1 6.04.2007 AND HENCE SECTION 45 COULD NOT BE APPLIED AND ASSESSEE WAS NOT REQUIRED TO DISCLOSE ANY GAIN. 3.1. THE ABOVE CONTENTION OF THE ASSESSEE WAS NOT A CCEPTED BY THE AO FOR THE REASON THAT ON EXECUTION OF SALE DEED DATED 16.04.2007 THE TITLE OF THE PROPERTY WAS LEGALLY VESTED ON THE PURCHASER, AND THERE IS NO PROVISION FOR ANY CANCELLATION OF SUCH REGISTERED SALE DEED. THE LATER ACQUISITION OF THE SAME PROPERTY BY THE ASSESSEE ON A LATER DATE IS ANOTHER TRANSACTION FOR DIFFERENT CON SIDERATION AND UNDER DIFFERENT TERMS. THEREFORE, THE AO HELD THAT IT CANNOT BE SAID THERE WAS NO TRANSFER OF THE SAID PROPERTY ON 16.04.2007 AND THAT PROVISIONS OF SECTION 45 OR SECTION 50C OF THE ACT ARE NOT ATTRACTED. THE AO AFTER CONSIDERING THE EXPLANATION S OF THE ASSESSEE HELD THAT THE ASSESSEE HAD TRANSFERRED THE LAND ON 16.04.2007 FOR WHICH THE VALUE WAS ADOPTED BY THE SUB REGISTRAR FOR STAMP DUTY PURPOSE. THEREFORE , AS PER PROVISIONS OF SECTION 50C FULL VALUE OF SALE CONSIDERATION WAS ADOPTED BY THE AO AT RS. 11,40,453/- AND ACCORDINGLY COMPUTED THE CAPITAL AS UNDER AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE : 5 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. FULL VALUE OF SALE CONSIDERATION U/S 50C OF THE A CT RS. 11,40,453/- LESS : COST OF ACQUISITION, AS STATED AND EVIDENC E FILED BY ASSESS RS. 60,865/- (ONE HALF OF RS. 1,21,730/-) INDEXED COST OF ACQUISITION (60865 X 551/305) RS . 1,09,956/- LONG TERM CAPITAL GAIN : RS.10,30,497/- 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A), WHO AFTER DISCUSSING THE MATTER AT LENGTH IN HIS ORDER FROM P AGES 3 TO 5 HELD THAT THE SALE OF PLOT ON 16.04.2007 AND 23.02.2008 WERE TWO DIFFERENT TR ANSACTIONS. THE APPELLANT HAD TRANSFERRED AND SOLD THE PLOT ON 16.04.2007 MAKING HIM LIABLE TO PAY TAX ON LONG TERM CAPITAL GAINS ACCORDING TO THE PROVISIONS OF SEC. 4 5 READ WITH SECTION 50C OF THE ACT. HENCE, THE LD. CIT (A) DISMISSED THE GROUND OF THE ASSESSEE. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5.1. THE LD. A/R FOR THE ASSESSEE HAS SUBMITTED THA T THOUGH THE AO HAS POINTED OUT THAT THE ASSESSEE HAS SOLD A RESIDENTIAL PLOT ON 16 .04.2007 SITUATED AT PRITHVI RAJ NAGAR SCHEME, JAIPUR FOR A CONSIDERATION OF RS. 1,05,000/ - WHICH WAS VALUED BY THE STAMP VALUING AUTHORITY AT RS. 11,40,453/-, THE ASSESSEE HAS NOT DECLARED THE LONG TERM CAPITAL GAIN UNDER THE HEAD INCOME FROM CAPITAL GAI NS IN HIS RETURN OF INCOME. THEREFORE, THE AO CALLED UPON THE ASSESSEE AS TO WH Y SECTION 50C BE NOT APPLIED AS PER DLC RATE. THE ASSESSEE HAS FILED THE REPLY ON 18.1 1.2010, 30.11.2010 AND 06.12.2010. IN THE REPLY DATED 18.11.2010, THE ASSESSEE HAS SUB MITTED THAT THE ASSESSEE SOLD AN IMMOVABLE PROPERTY ON 16.04.2007 AT THE COST OF RS. 1,05,000/- TO SHRI GYAN CHAND 6 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. JAIN. THIS ASSET WAS ACQUIRED BY ASSESSEE 03/06/199 6. PHOTO COPIES OF BOTH THESE ASSETS ARE BEING ENCLOSED WITH THIS LETTER FOR YOUR KIND CONSIDERATION. THE ASSESSEE ACQUIRED THE IMMOVABLE ASSET I.E. ONE PLOT ON 03/06 /1996 FROM MEENAWALA SOCIETY, JAIPUR. THE ASSESSEE TRANSFERRED THIS PLOT ON 16.04 .2007. THE COPIES OF PURCHASE DEED AND SALE DEED OF THIS ASSET ARE BEING SUBMITTED FOR YOUR KIND PERUSAL. IN THE REPLY DATED 30.11.2010, THE ASSESSEE HAS FURTHER SUBMITTE D IN CONTINUATION OF THE REPLY DATED 18.11.2010 AS UNDER :- THE ASSESSEE ACQUIRED THIS IMMOVABLE ASSET (PLOT) DURING THE YEAR 1996-97 ON 03.06.1996 AT THE COST OF RS 1,21,7 30/-. HALF PORTION OF THIS IMMOVABLE ASSET WAS SOLD AT THE COS T OF RS. 1,05,000/- ON DATED 16.04.2007. THE ASSESSEE INCURR ED ONLY CAPITAL LOSS IN THIS CASE. THE ASSESSEE HAS NO ANY CAPITAL GAINS IN THIS CASE, THEREFORE, THERE ARISES NO QUESTION OF ANY COMPUTAT ION. MOREOVER THIS TRANSACTION OF SALE, IN FACT, WAS CANCELLED BY THE PARTIES AND THERE BEING NO TRANSFER, THERE IS NO QUESTION OF CA PITAL GAIN. IN REPLY DATED 06.12.2010, THE ASSESSEE HAS SUBMITT ED AS UNDER :- IN CONTINUATION OF OUR EARLIER LETTER DATED 30.11 .2010 AS REGARDS THE MATTER RELATING TO CAPITAL GAIN, IT IS FURTHER SUBMITTED THAT THE TRANSACTION OF SALE DATED 16.04.2007, IN FACT AND I N LAW WAS CANCELLED BY THE PARTIES VIDE A SEPARATE CANCELLATI ON DEED EXECUTED ON DATED 13.11.2007. IT IS SUBMITTED THAT THE BUYER , AFTER ENTERING INTO THE TRANSACTION, CAME TO KNOW THAT THE SUBJECT ED PLOT OF LAND WAS SITUATED IN PRITHVIRAJ NAGAR SCHEME. THE REPEAT ED NEWS IN THE PAPER IT TURNED OUT THAT THE SAID AREA WAS HIGHLY D ISPUTED, WAS UNDER ACQUISITION AND EXPOSED TO CONTINUOUS LITIGAT ION BEFORE THE 7 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. HONBLE RAJASTHAN HIGH COURT. CONSEQUENT TO THIS, M OST OF THE TRANSACTION OF PURCHASE/SALE IN ALL THE COLONIES/SO CIETIES FALLING IN PRITHVIRAJ NAGAR WERE SUSPENDED BY THE PROPERTY DEA LERS AND PARTIES (OTHER THAN SOME EXCEPTIONAL CASES). HE FOU ND THAT NO VALID CONSTRUCTION WAS PRACTICALLY POSSIBLE AND ALSO WAS NOT LEGALLY PERMISSIBLE. IN THESE CIRCUMSTANCES, THE BANKS WERE NOT PROVIDING ANY LOAN FOR CONSTRUCTION AND THERE WAS NO QUESTION OF APPROVAL OF LAND BY THE JDA. THIS COUPLED WITH SOME OTHER REASO NS, CREATED A SERIOUS TENSION IN THE MIND OF THE BUYER AND HE STA RTED FEELING CHEATED IN AS MUCH AS THESE FACTS WERE MADE KNOWN T O HIM BY THE SELLER. AFTER HAVING SUFFERED MENTAL AGONY HE PRESS URIZED THE SELLER TO TREAT THE SUBJECTED TRANSACTION AS CANCELLED SIN CE INCEPTION. AFTER SOME ROUNDS OF DISCUSSION THE PARTIES ULTIMATELY RE ACHED TO A SETTLEMENT THAT THE SUBJECTED TRANSACTION OF SALE B E TREATED AS CANCELLED AND THE SAME LEGAL AND FACTUAL POSITION O F THE PARTIES BE RESTORED AS WAS PRIOR TO 16.04.2007. THE PARTIES AL SO AGREED TO OBSERVED NECESSARY LEGAL FORMALITIES IN THIS REGARD . THE ASSESSEE AGREED TO COMPENSATE SHRI PRAVEEN KUMAR JAIN TOWARD S THE USE OF THE SALE CONSIDERATION RECEIVED BY IT AND ALSO AGRE ED TO BEAR THE NECESSARY EXPENSES. ACCORDINGLY, THE ASSESSEE AGREE D TO PAY LIQUIDATED DAMAGE OF RS. 1,95,000/-. CONSEQUENTLY T O THE CANCELLATION DEED, AGAIN A DOCUMENT REBUTTING BACK THE OWNERSHIP OVER THE SAID PLOT FROM SHRI PRAVEEN KUMAR JAIN TO THE ASSESSEE WAS EXECUTED AND GOT REGISTERED ON 23.02.2008. THUS , IT WILL BE OBSERVED THAT BECAUSE OF THIS CANCELLATION THE SUBJ ECTED TRANSACTION OF TRANSFER BACK AND THE LEGAL POSITION, THE RIGHTS AND OBLIGATIONS OF THE PARTIES RESTORED BACK TO THE SAME POSITION AND CONDITION AS IT EXISTED PRIOR TO 16.04.2007. 8 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. ON THE BASIS OF ABOVE SAID SUBMISSIONS, THE ASSESSE E HAS SUBMITTED THAT THERE IS NO TRANSFER OF CAPITAL ASSET TAKEN PLACE IN THE A.Y. 2 008-09 AND EVEN IF IT IS ALLEGED THAT THERE IS SOME TRANSFER OF CAPITAL ASSET, THE SAID C APITAL ASSET WAS RESTORED BACK TO THE ASSESSEE VIDE A FRESH DEED DATED 23.02.2008 REGISTE RED IN FAVOUR OF THE ASSESSEE. THE LD. A/R FURTHER RELIED UPON THE DEFINITION OF TRAN SFER UNDER SECTION 2(47) OF THE IT ACT AND HAS FURTHER SUBMITTED THAT THE ASSESSEE WAS ENT ITLED TO THE BENEFIT UNDER SEC. 54F OF THE IT ACT. 5.2. ON THE OTHER HAND, THE LD. D/R FOR THE REVENUE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND HAS CONTENDED THAT ONCE THE T RANSFER HAS TAKEN PLACE WITHIN THE MEANING OF THE ACT BY HANDING OVER THE POSSESSION A ND AFTER RECEIVING THE CONSIDERATION, CAPITAL GAIN IS REQUIRED TO BE CALCU LATED BASED ON THE STATUTORY PROVISIONS PROVIDED UNDER SEC. 50C OF THE ACT. IT WAS FURTHER CONTENDED THAT THE AUTHORITIES BELOW HAS RIGHTLY CALCULATED THE CAPITAL GAIN BY INVOKING SECTION 50C AFTER APPLYING DLC RATE. 5.3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY THE PARTIES BEFORE US AND ALSO PERUSED THE WRITTEN SUBMISSIONS AND PAPER BOOK FILED BY THE ASSESSEE. FIRSTLY, WE SHALL BE DECIDING THE ISSUE WHETHER THE TRANSFER IN THE EYES OF LAW HAS TAKEN PLACE BY THE EXECUTION OF REGISTERED SALE DEED DATED 16.04.2 007 BY THE ASSESSEE OR NOT. THE UNDISPUTED FACT IS THAT THE ASSESSEE VIDE REGISTERE D SALE DEED DATED 16.04.2007 HAS TRANSFERRED THE TITLE AS WELL AS THE POSSESSION OF THE PROPERTY BEARING NO. 27 TO SHRI PRAVEEN KUMAR JAIN SON OF SHRI G.C. JAIN RESIDENT O F VILLAGE DHOD, TEHSIL AND DISTRICT SIKAR FOR A CONSIDERATION OF RS. 1,05,000/-. IT IS ALSO NOT DISPUTED THAT THE DLC RATE, AS 9 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. APPLICABLE TO THE TRANSFER WAS FOR AN AMOUNT OF RS. 11,40,453/-, THOUGH IN THE SALE DEED THE CONSIDERATION MENTIONED WAS RS 1,05,000/- WHICH WAS PAID IN TOTALITY ON 29.04.2006. UNDISPUTEDLY, THE POSSESSION OF THE P ROPERTY WAS HANDED OVER BY THE ASSESSEE TO THE PURCHASER AT A TIME PRIOR TO THE EX ECUTION OF SALE DEED DATED 16.04.2007. INTERESTINGLY NO SPECIFIC DATE HAS BEE N AS TO WHEN POSSESSION WAS GIVEN TO THE BUYER BY THE SELLER IN THE SALE DEED . IT IS ALSO NOT DISPUTED THAT THE SAID LAND WAS ALLOTTED BY MEENAWALA GRAH NIRMAN SAHAKARI SAMI TI TO THE ASSESSEE VIDE LETTER DATED 03.06.1996. THUS THE LAND WHICH WAS ALLOTTED BY MEENAWALA GRAH NIRMAN SAHAKARI SAMITI WAS A CAPITAL ASSET WITHIN THE MEAN ING OF SECTION 2(14) AND BY VIRTUE OF SALE DEED DATED 16.04.2007 THERE IS A TRANSFER OF C APITAL ASSET BY WAY OF SALE BY THE ASSESSEE TO SHRI PRAVEEN KUMAR JAIN. THEREFORE, WE HAVE NO HESITATION BUT TO HOLD THAT THE CAPITAL ASSET WAS TRANSFERRED BY THE BY THE SAL E DEED DATED 16.04.2007 AND WE HOLD ACCORDINGLY. 5.4. THE CONTENTION OF THE ASSESSEE THAT THE SUBJEC TED LAND WAS THE SUBJECT MATTER OF LITIGATION IN SB CWP NO. 6709/2002 AND THE HONBLE JURISDICTIONAL HIGH COURT VIDE ORDER DATED 09.04.2003 HAS PASSED STAY ORDER THEREBY REST RAINING BUILDING ACTIVITY IN THE PLOT IN QUESTION. IN OUR VIEW, THE SAID ORDER INSTEAD O F HELPING THE CONTENTION OF THE ASSESSEE GOES AGAINST THE ASSESSEE. FIRSTLY, THE O RDER WAS PASSED ON 09.04.2003 BY THE HONBLE JURISDICTIONAL HIGH COURT AND THEREAFTE R MUCH WATER HAS FLOWN. THE TRANSACTION IN HAND IS ON 2007 AND PRIOR THERETO AS ALLEGED BY THE ASSESSEE AN AGREEMENT TO SALE WAS ENTERED BETWEEN THE ASSESSEE AND THE PURCHASER ,ON 10 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. 29.04.2006, WHEN THE ENTIRE SALE CONSIDERATION WAS GIVEN. THUS BEFORE EXECUTING THE SALE DEED DATED 16.04.2007 THE PURCHASER WAS HAVING SUFFICIENT TIME I.E. FROM 30 TH APRIL, 2006 TO 16.04.2007 TO VERIFY THE GENUINENESS , TITLE, POSSESSION AND OTHER ASPECTS IN RESPECT OF THE PROPERTY. AFTER PASSING OF APPRO XIMATELY ONE YEAR, THE PURCHASER SHRI PRAVEEN KUMAR JAIN HAS GONE AHEAD FOR PURCHASING TH E PROPERTY. NOT ONLY THIS, AS PER THE SALE DEED DATED 16.04.2007, THE PURCHASER HAS B ORNE ALL THE EXPENSES FOR REGISTRATION OF THE SALE DEED. IN OUR VIEW, AS THE PURCHASER HAS TAKEN MORE THAN A YEAR FOR GETTING THE SALE DEED REGISTERED AND HAS FURTHE R SPENT SUFFICIENT AMOUNT FOR REGISTRATION OF THE SALE DEED TO THE TUNE OF RS. 74 ,130/- FOR PURCHASE OF STAMP PAPER, THE CONTENTION OF THE ASSESSEE THAT HE DOES NOT WAN T TO PURCHASE THE PROPERTY ON ACCOUNT OF PROLONGED LITIGATION, IS PREPOSTEROUS AN D WITHOUT ANY MERIT. THEREFORE, WE HAVE NO OTHER OPTION BUT TO REJECT THE CONTENTION O F THE ASSESSEE ON THIS ACCOUNT. AS PER THE REPLY DATED 18.11.2010, 30.11.2010 AND 0 6.12.2010, THE ASSESSEE HAS FAILED TO PRODUCE THE ORIGINAL OF THE CANCELLATION DEED A ND HAS ONLY PRODUCED COPY OF THE CANCELLATION DOCUMENT ON 13.12.2010. IN OUR VIEW, IF THERE WAS ANY CANCELLATION DOCUMENT WHICH HAS TAKEN PLACE, THE ORIGINAL DOCUME NT WOULD HAVE BEEN WITH THE ASSESSEE, AS THE ASSESSEE WOULD HAVE BEEN THE SOLE BENEFICIARY OF SAID DOCUMENT . IN OUR VIEW, THE ALLEGED CANCELLATION AGREEMENT BETWEE N THE ASSESSEE AND THE PURCHASER, IF ACCEPTED, IS A TITLE DOCUMENT QUA THE ASSESSEE T HAT WILL NULLIFY THE EFFECT OF THE ORIGINAL SALE DEED AS PER THE ASSESSEE (THOUGH THIS CONTENTION OF NULLIFYING THE EFFECT OF REGISTERED DOCUMENT IS HIGHLY DISPUTABLE AND DEBATA BLE IN VIEW OF PROVISIONS OF TRANSFER 11 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. OF PROPERTY ACT). BUT SINCE THE CANCELLATION DOCUME NT AS IS ALLEGED IS THE TITLE DOCUMENT IN FAVOUR OF THE ASSESSEE, THEREFORE, THE ORIGINAL DOCUMENT SHOULD HAVE BEEN IN POSSESSION OF THE ASSESSEE, BUT THE ASSESSEE HAS FA ILED TO PRODUCE THE ORIGINAL DOCUMENT DURING THE ASSESSMENT PROCEEDINGS, IN OUR VIEW, IT GOES AGAINST THE ASSESSEE. THEREFORE, WE HAVE NO HESITATION TO HOLD THAT THE COMPLETE TRANSFER IN ACCORDANCE WITH LAW HAS TAKEN PLACE ON ACCOUNT OF R EGISTERED SALE DEED DATED 16.04.2007 AND, THEREFORE, THE ASSESSEE IS LIABLE T O PAY THE LONG TERM CAPITAL GAIN ON SALE OF THE CAPITAL ASSET ON DLC RATE OF THE PROPER TY AT RS. 11,40,453/-. ACCORDINGLY, THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. 6. THE ASSESSEE HAS TAKEN ALTERNATIVE GROUND IN THE WRITTEN SUBMISSION STATING THAT THE LONG TERM CAPITAL GAIN WAS NOT CORRECTLY TAXABL E IN THE A.Y. 2008-09 ON ACCOUNT OF THE FACT THAT THE ENTIRE SALE CONSIDERATION WAS PAI D BY THE ASSESSEE ON 29.04.2006 I.E. A.Y. 2007-08. 6.1 AT THE OUTSET, THE SAID GROUND OF THE ASSESSEE, IN OUR VIEW AND AS PER THE RECORD WAS NOT RAISED EITHER BEFORE THE AO OR BEFORE LD. C IT (A) OR BEFORE US. HOWEVER SUBSEQUENTLY AN ADDITIONAL GROUND WAS ADDED IN THE EXISTING GROUND TO THIS EFFECT IN THE FOLLOWING MANNER : RS. 10,30,497/-: THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ASSESSMENT OF L ONG TERM CAPITAL GAIN (LTCG FOR SHORT) OF RS. 10,30,497/- IN THIS YEAR WHEREAS AS PER U/S 2(47)(V) R/W SEC. 53A OF THE TRA NSFER OF PROPERTY ACT, 1882, LEGALLY SPEAKING, NO TRANSFER T OOK PLACE IN THIS YEAR. THE ASSESSEE HAVING RECEIVED THE ENTIRE SALE CONSIDERATION 12 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. AND PARTED WITH THE FULL CONTROL AND POSSESSION OF THE PLOT ON DATED 29.04.2006 (FALLING IN AY 2007-08) IT CANNOT BE SAI D THAT A TRANSFER TOOK PLACE IN THIS YEAR GIVING RISE TO A LIABILITY OF LTCG. THE ADDITION, THEREFORE, SO MADE IS COMPLETELY WITHOUT JURISDICTION, BAD IN LAW AND HENCE KINDLY BE DELETED IN FULL. THE LD. A/R HAS DRAWN OUR ATTENTION TO SECTION 2(4 7) READ WITH SEC. 53A OF THE TRANSFER OF PROPERTY ACT TO CANVAS HIS ARGUMENT THA T NO CAPITAL GAIN ACCRUED IN A.Y. 2008-09. FOR THAT PURPOSE HE HAS DRAWN OUR ATTENTIO N TO PARA 2.3 OF THE ORDER OF LD. CIT (A) TO THE FOLLOWING EFFECT :- 02.3. I HAVE DULY CONSIDERED THE SUBMISSIONS OF TH E APPELLANT AND THE MATERIAL AVAILABLE ON RECORDS. IT IS NOTICED FROM T HE SALE DEED DATED 16.04.2007 THAT THE SAID LAND WAS AGREED TO BE SOLD VIDE SALE AGREEMENT DATED 29.04.2006 AND THE ENTIRE SALE CONSIDERATION IN CASH WAS RECEIVED BY THE APPELLANT ON 29.04.2006. THE SALE WAS REGIST ERED AFTER A YEAR ON 16.04.2007 . FURTHER, HE HAS ALSO DRAWN OUR ATTENTION TO THE SAL E DEED DATED 16.04.2007 WHEREIN IT IS MENTIONED THAT THE ENTIRE SALE CONSIDERATION OF RS. 1,05,000/- WAS PAID ON 29 TH APRIL, 2006 AT THE TIME OF ENTERING INTO AGREEMENT AND FUR THER MENTIONED THAT THE POSSESSION WAS ALSO GIVEN. IT WAS MENTIONED IN THE SALE DEED IN RESPECT OF POSSESSION AS UNDER :- FO; FD;S X;S FUEUFYF[KR MRRJH HKKX IYKV DK OKLRF OD DCTK IZFKE I{K US F}RH; I{K DKS IWOZ ESA GH EKSADSA IJ DJK FN; K GSA ON THE BASIS OF THE ABOVE SAID POSITION, AFTER RELY ING ON THE JUDGMENTS IN THE CASE OF CIT VS. MORMASJI MANCHARJI VAID (2001) 168 CTR 565 (GUJ.)(FB) AND CHATURBHUJ 13 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. DWARKADAS KAPADIA VS. CIT (2003) 180 CTR 107 (BOM), AND JASBIR SINGH SARKARIA, IN RE (2007) 212 CTR 107 (AAR), IT WAS SUBMITTED THAT NO CAPITAL GAIN LIABILITY AROSE IN A.Y. 2008-09. THE LD. D/R FOR THE REVENUE HAS SUBMITTED THAT THE JUDGMENTS REFERRED HEREIN ABOVE AS WELL AS THE PROVISIONS OF LAW ARE NOT ATTR ACTED AND HAS SUBMITTED THAT THE LIABILITY AROSE IN THE AY. 2008-09. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MA TERIAL ON RECORD. IN OUR VIEW, IT IS UNDISPUTED FACT THAT THE ENTIRE SALE CO NSIDERATION WAS PAID ON 29 TH APRIL, 2006 I.E. IN THE A.Y. 2007-08 IN CASH. HOWEVER, WE ARE N OT IN AGREEMENT WITH THE SUBMISSIONS MADE BY THE LD. A/R THAT THE POSSESSION WAS ALSO HANDED OVER ON 29 TH APRIL, 2006. THE AVERMENT MENTIONED IN THE SALE DEE D CLEARLY STIPULATES THAT THE POSSESSION WAS GIVEN PRIOR TO THE REGISTRATION OF T HE SALE DEED. THE EXACT DATE OF HANDING OVER OF THE POSSESSION HAS NOT BEEN MENTION ED IN SALE DEED. SECTION 53A OF THE TRANSFER OF PROPERTY ACT PROVIDES AS UNDER :- WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDER ATION ANY IMMOVABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTA INED WITH REASONABLE CERTAINTY, AND THE TRANSFEREE HAS, IN PART PERFORMA NCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREO F, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSIO N IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT IN FURTHERANC E OF THE CONTRACT, AND THE TRANSFEREE HAS PERFORMED OR IS WILLING TO PERFO RM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT THE CONTRACT, THOUGH REQUIRED TO BE REGISTERED, HAS NOT BEEN REGISTERED, OR, WHERE THER E IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT BEEN COMPLETED IN THE MANNER PRESCRIBED THEREFOR BY THE LAW FOR THE TIME BEING I N FORCE, THE TRANSFEROR 14 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. OR ANY PERSON CLAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMING UNDER H IM ANY RIGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANSFEREE HAS TAKEN O R CONTINUED IN POSSESSION, OTHER THAN A RIGHT EXPRESSLY PROVIDED B Y THE TERMS OF THE CONTRACT: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGH TS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF T HE CONTRACT OR OF THE PART PERFORMANCE THEREOF. FROM THE BARE READING OF THE PROVISIONS, IT IS CLEA R THAT PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT IS NOT ATTRACTED AS THE AS SESSEE HAS FAILED TO PRODUCE THE WRITTEN CONTRACT BETWEEN THE ASSESSEE AND SHRI PRAV EEN KUMAR JAIN, PURSUANT THEREOF IN PART PERFORMANCE OF THE CONTRACT, THE POSSESSION OF THE PROPERTY WAS HANDED OVER TO SHRI PRAVEEN KUMAR JAIN. THEREFORE, THE ISSUE IS DE CIDED AGAINST THE ASSESSEE. GROUND NO. 2.3.1 & 2.3.2 : 7. WE SHALL BE DECIDING THESE GROUNDS TOGETHER. TH ESE GROUNDS WERE RAISED BEFORE LD. CIT (A). THE LD. CIT (A) HAS PASSED THE FOLLOWI NG ORDERS :- 03.1. I DO NOT AGREE WITH THE ALTERNATIVE CLAIM OF THE APPELLANT. FIRSTLY, NO SUCH CLAIM WAS MADE BEFORE THE AO AND H ENCE THE GROUND DOES NOT ARISE OUT OF THE ASSESSMENT ORDER. THE FACTS RE LATED TO THIS ALTERNATIVE PLEA WERE NOT AVAILABLE ON RECORDS OF ASSESSMENT. H ENCE, THE GROUND IS NOT ADMITTED. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT IS NO T ELIGIBLE FOR DEDUCTION U/S 54F ON MERITS ALSO. DEDUCTION U/S 545 F IS ALLOWABLE ON THE 15 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. INVESTMENT MADE IN CONSTRUCTION OF RESIDENTIAL HOUS E AND NOT ON THE MERE PURCHASE OF PLOT OF LAND. APPELLANT HAS NOT FURNISH ED ANY EVIDENCE OF CONSTRUCTION MADE ON THE SAID PLOT. NEITHER ANY CON STRUCTION PLAN APPROVED BY THE MUNICIPAL AUTHORITIES NOR ANY BILLS /VOUCHERS OF CONSTRUCTION MATERIAL AND WAGES WERE PRODUCED. IN F ACT, THE APPELLANT HIMSELF CLAIMED THAT CONSTRUCTION ACTIVITY WAS BANN ED IN THE AREA BY THE HONBLE RAJASTHAN HIGH COURT. THEREFORE, ON MERITS ALSO, APPELLANT IS NOT ELIGIBLE FOR DEDUCTION U/S 54F OF THE ACT. THE LD. A/R HAS DRAWN OUR ATTENTION TO THE WRITTEN SUBMISSIONS FILED BY HIM BEFORE LD. CIT (A) TO THE FOLLOWING EFFECT :- 2.2.1 ALTERNATIVELY AND WITHOUT PREJUDICE TO ABOVE, IT IS FURTHER SUBM ITTED THAT THE APPELLANT WAS ALSO ELIGIBLE TO THE EXEMPTION GR ANTED U/S 54F OF THE ACT IN AS MUCH AS THE APPELLANT NOT ONLY PURCHASED THE PLOT B UT ALSO CONSTRUCTED A RESIDENTIAL UNIT (PARTLY) WITHIN THE STIPULATED PER IOD. SEC.54F OF THE ACT PROVIDES THAT (1) [SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED F AMILY], THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPITAL ASSET, N OT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGI NAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR [TWO YEARS] AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERI OD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, (A) IF THE COST OF THE NEW ASSET IS NOT LESS THAN T HE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GA IN SHALL NOT BE CHARGED UNDER SECTION 45 ; (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEAR S TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION AS THE COST OF THE NEW ASS ET BEARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER SECTION 4 5: -----------. 16 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. EXPLANATION : FOR THE PURPOSES OF THIS SECTION, - ' NET CONSIDERATION', IN RELATION TO THE TRANSFER OF A CAPITAL ASSET, MEANS THE FULL VAL UE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPI TAL ASSET AS REDUCED BY ANY EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONN ECTION WITH SUCH TRANSFER. THE APPELLANT SHALL BE ENTITLED TO THE EXEMPTION U/ S 54F OF THE ACT, DEPENDING UPON THE AMOUNT OF INVESTMENT. IN THIS CASE, BY THE ADMISSION OF THE LD. AO HIMSELF , THE APPELLANT AFTER SELLING THE SUBJECTED PLOT, P URCHASED A NEW PLOT ON 13.02.2008 AND INVESTED RS.3 LACS, THE APPELLANT HAS FULFILLED THE CONDITION HERE ITSELF IN AS MUCH AS AGAINST THE TOTAL SALE CONSIDERATION OF RS.1,05,000/- HE HAD ALREADY PURCHASED A RESIDENTIAL PLOT OF LAND FO R RS.3 LACS I.E. MORE THAN THE SALE CONSIDERATION WITHIN THE PERIOD OF 3 YEARS (OF COURSE WITH A VIEW TO CONSTRUCT A NEW RESIDENTIAL HOUSE THEREON). THEREAF TER, THE APPELLANT HAS ALSO DONE SOME CONSTRUCTION IN AS MUCH AS A RESIDENTIAL UNIT CONSISTING OF TWO ROOMS, TOILET, KITCHEN ETC. WAS ALSO CONSTRUCTED (PARTLY) WHEREIN HE FURTHER INVESTED RS. 2.50 LACS (APPROX.) TILL THE EXPIRY OF 3 YEARS I.E. UPTO 16.04.2010 UNFORTUNATELY HOWEVER, BECAUSE OF THE FEAR OF DAMAGE/DESTRUCTION BY THE JDA AUTHORITIES, THE CONSTRUCTION HAD TO BE SUSPENDED FOR SOMETIME. THE APPELLANT HAS AGAIN RESUMED THE REMAINING WORK. THUS, TOTAL INVESTMENT OF RS.5.50 LACS (APPROX.) WAS MADE WITHIN PERMISSIBLE PERIOD UNDER LAW. IN TH AT VIEW OF THE MATTER, THE APPELLANT WAS FULLY ENTITLED TO THE EXEMPTION U/S 5 4F OF THE ACT AND HENCE, THERE WAS NO LIABILITY OF CAPITAL GAIN TAX. THE LD. A/R HAS ALSO RELIED UPON THE FOLLOWING JUDG MENTS : SMT. SHASHI VARMA VS. CIT (1999) 152 CTR (MP) 227 CIT VS. SARDARMAL KOTHARI (2008) 217 CTR (MAD) 414 MRS. SEETHA SUBRAMANIAN VS. ACIT (1996) 56 TTJ (MAD ) 417 SMT. RAJNEET SANDHU VS DCIT (2010) 133 TTJ (CHD)( UO) 64 SMT. USHA VAID VS ITO IN ITA NO. 98/(ASR)/2011 GYAN CHAND BATRA VS ITO (2010) 133 TTJ 482 (JP) 17 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. 7.1. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. THE AO WHILE DECIDING THE ISSUE HAS RECORDED THAT CONSEQUENTLY ANOTHER DOCUMENT REBUTTING BACK THE OWNERSHIP OVER THE SAID PLOT FROM PURCHASE R TO THE ASSESSEE WAS EXECUTED AND GOT REGISTERED ON 23.02.2008. THE PERUSAL OF THE DOCUMENT DATED 23.02.2008 CLEARLY SHOWS THAT THE DOCUMENT IS VIKRAY PATRA (SA LE DEED) EXECUTED BY SHRI PRAVEEN KUMAR JAIN IN FAVOUR OF SHRI HARDAYAL SINGH IN RESP ECT OF THE PLOT NO. 27 ALLOTTED BY MEENAWALA GRAH NIRMAN SAHAKARI SAMITI TO THE ASSESS EE ON 3 RD JUNE, 1996. THUS THE COMPARISON OF THE TWO REGISTERED SALE DOCUMENTS CL EARLY SHOWS THAT THE PROPERTY WHICH WAS EARLIER SOLD BY THE ASSESSEE TO THE PURCHASER, NAMELY PRAVEEN KUMAR JAIN WAS LATER ON TRANSFERRED BY SHRI PRAVEEN KUMAR JAIN TO THE AS SESSEE BY REGISTERED SALE DOCUMENT. BOTH THE TRANSACTIONS I.E. ONE BETWEEN TH E ASSESSEE AND PRAVEEN KUMAR JAIN DATED 16.04.2007 AND ANOTHER BETWEEN PRAVEEN K UMAR JAIN AND ASSESSEE DATED 23.02.2008 HAVE TAKEN PLACE WITHIN THE A.Y. 2008-09 AND IN BOTH THE SALE TRANSACTIONS THE DLC RATE IS APPLIED WAS RS 11,40,453/-, THOUGH IN THE LATER TRANSACTION THE SALE CONSIDERATION WAS MENTIONED AS RS. 3,00,000/- WHERE AS IN THE EARLIER SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS RS. 1,05,000/-. THUS T HE ASSESSEE HAD PAID RS. 1,95,000/- MORE FOR GETTING BACK THE TITLE IN RESPE CT OF THE SAME PROPERTY ON 23.02.2008. IF WE EXAMINE THE ISSUE, THE IN THE LIG HT OF ABOVE FACTS, IN OUR VIEW, THERE IS NO INCOME WHICH CAN BE SUBJECTED TO TAX AS THE I NCOME WHICH WAS RECEIVED BY SELLING THE PROPERTY WAS RS 1,05,000/- AND THE AMOUNT PAID FOR PURCHASE OF THE SAID PROPERTY WAS RS. 3,00,000/-. THE FULL VALUE CONSIDERATION IN THE CASE OF SELLING THE PROPERTY TO 18 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. SHRI PRAVEEN KUMAR JAIN WAS REQUIRED TO BE CONSIDER ED AS RS. 11,40,453/- IN ACCORDANCE WITH SEC. 50C. HOWEVER, THE SAME YARDSTI CK IS REQUIRED TO BE APPLIED WHEN IT COMES TO SALE CONSIDERATION PAID BY THE ASSESSEE . IN OUR VIEW, FOR THE PURPOSE OF THE COST OF THE NEW ASSET, THE SAME PRINCIPLE, IN THE P ECULIAR FACTS AND CIRCUMSTANCES IS REQUIRED TO BE APPLIED. THE ASSESSEE CANNOT BE AXE D TWICE. IN FACT, IF WE SEE THE FATE OF TRANSACTIONS, THE GENUINENESS OF THE TRANSACTION IS LOUD AND CLEAR AND IS APPARENT THOUGH WE HAVE HELD THAT THE TRANSFER HAS TAKEN PLA CE BETWEEN THE ASSESSEE AND SHRI PRAVEEN KUMAR JAIN, BUT NONETHELESS THE RE-TRANSFER /FRESH SALE DEED WAS ALSO EXECUTED BY SHRI PRAVEEN KUMAR JAIN IN FAVOUR OF THE ASSESSE E ON 23.02.2008. THEREFORE, IN OUR VIEW, THE ASSESSEE IS ENTITLED TO THE RELIEF CLAIME D UNDER THIS PROVISION. THUS, WE HOLD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF THE AMOUNT SPENT BY HIM FOR PURCHASE OF PLOT FOR THE SALE CONSIDERATION OF RS. 3,00,000/- A ND ANY OTHER ADDITION CAUSED WHICH MAY HAVE BEEN INCURRED BY HIM ON THE SAID PURCHASE OF THE LAND. THE SAME PARAMETERS SHOULD BE APPLIED FOR GIVING THE BENEFITS UNDER 54F AS HAD BEEN APPLIED UNDER SECTION 50C. 7.2. WITH RESPECT TO THE CLAIM OF THE ASSESSEE FOR INCURRING RS. 2,50,000/- FOR CONSTRUCTION OF THE PROPERTY, WE DO NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AS THERE IS A CLEAR CUT PROHIBITION BY THE HONBLE RAJ ASTHAN HIGH COURT PROHIBITING ANY KIND OF BUILDING ACTIVITIES/CONSTRUCTION ACTIVITIES. IF WE ALLOW THE INCURRING OF EXPENDITURES ON CONSTRUCTION, IT WILL BE VIOLATING THE ORDERS PASSE D BY THE HONBLE HIGH COURT. IN ANY CASE, NO DOCUMENT IN SUPPORT OF THE CONSTRUCTION RA ISED BY THE ASSESSEE HAS BEEN 19 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. PRODUCED BEFORE THE AUTHORITIES BELOW AND BEFORE US TO SHOW THAT THE AMOUNT OF RS. 2,50,000/- HAS BEEN SPENT BY HIM ON THE CONSTRUCTIO N. AS A RESULT, THE GROUND OF THE ASSESSEE IS PARTLY ALLOWED AND THE AO IS DIRECTED T O GIVE BENEFIT OF RS. 3,00,000/- UNDER THE PROVISIONS OF SEC. 54F FOR THE PURPOSE OF CALCU LATING THE LONG TERM CAPITAL GAIN AND FURTHER APPLY THE SAME PARAMETERS FOR THE PURPOSES OF SECTION 54F AS HAD BEEN APPLIED UNDER FOR SECTION 50C. GROUND NO 2.2 : 8. REGARDING THIS GROUND, THE ASSESSEE HAS SUBMITTED AS UNDER :- THE AO CONSIDERED THE DEEMED SALE CONSIDERATION AT RS. 11,40,453/- U/S 50C, IGNORING THE ACTUAL SALE CONSIDERATION OF RS 1,05,000/- ALTHOUGH DETAILED OBJECTIONS U/S 50C(2) WERE RAISED BEFORE HIM VIDE LETTER DATED 30.1 1.2010. BEFORE THE CIT(A) ALSO SPECIFIC GROUND NO. 2.2 WAS RAISED AND DETAILED SUBMIS SIONS WERE MADE BEFORE HIM AT PG 6 (PB 42) THE SAME ARE BEING REPRODUCED HEREUNDER: ALTERNATIVELY AND WITHOUT PREJUDICE TO OTHER SUBMISSI ONS, EVEN OTHERWISE RS.11,40,453/- WAS NOT THE TRUE AND CORRECT FAIR MARKE T VALUE OF THE SUBJECTED PROPERTY FOR THE FOLLOWING REASON: 1.1 THE PLOT IS ALLOTTED BY A SOCIETY AND SITUATED IN PRI THVIRAJ NAGAR WHICH WAS A RESIDENTIAL COLONY. IT IS A MATTER OF COMMON KNOW LEDGE THAT THE SAID AREA IS HIGHLY DISPUTED AS WAS UNDER ACQUISITIO N AND EXPOSED TO CONTINUOUS LITIGATION BEFORE THE HONBLE RAJASTHAN HIGH COURT. CONSEQUENT TO THIS, VARIOUS TRANSACTIONS OF PURCHASE /SALE IN ALL THE COLONIES/SOCIETIES FALLING IN PRITHVIRAJ NAGAR WERE S USPENDED BY THE PROPERTY DEALERS AND PARTIES OTHER THAN SOME EXCEPTIONA L CASES. NO VALID CONSTRUCTION WAS LEGAL AND PRACTICALLY POSSIBLE AND AL SO WAS NOT LEGALLY PERMISSIBLE. IN THESE CIRCUMSTANCES, THERE WAS NO QUEST ION OF APPROVAL OF LAND BY THE JDA. 20 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. 1.2 THERE APART, THE PLOT WAS NOT IN ACCORDANCE WITH VASTHU, WHICH IS AN IMPORTANT CONSIDERATION NOW A DAYS. 1.3 THE SIZE OF THE PLOT I.E. THE PART SOLD UNDER CONSIDER ATION WAS 30 FEET ON ONE SIDE WITH THE LENGTH OF 140 FEET OF 6 INCHES I.E. A LONG PLOT WITH A NARROW FRONTAGE WHICH IS NOT CONSIDERED TO BE GOOD SIZE FOR THE CONSTRUCTION OF A RESIDENTIAL HOUSE. FOR AN IDEAL CONST RUCTION, THE OWNER NORMALLY USES UPTO 60-70 FEET OR AT THE BEST 90 FEET IN THE LENGTH AND THEREFORE, THE REMAINING ALMOST HALF OF THE PLOT I.E. 50 FEET WOULD BE A WASTE. SINCE AT THE BACK, THERE WAS NO OPEN ROAD THERE FORE, SUCH REMAINING LAND COULD BE USED FOR A GODOWN ONLY THAT TOO WITH NO INDEPENDENT APPROACH OR AT THE BEST COULD BE USED FOR A KITCHEN GARDEN. 1.4 THE PLOT WAS FACING WEST WHICH IS NOT CONSIDERED AS GOO D AS NORTH FACING OR EAST FACING. 1.5 THERE APART, THE FOUR SIDES OF THE PLOT ARE UNEVEN AND NO T RECTANGULAR. WHEREAS THE WIDTH I.E. FRONT WAS OF 30 FEET THE WIDTH OF THE BACKSIDE WAS AROUND 33 FEET WHICH SHOWS THAT IT WAS A NAHARMUKHI PLOT NOT PREFERRED BEING AGAINST VASTHU . THE LD. CIT (A) IN PARA 4.2 OF HIS ORDER HAS REJECT ED THE CONTENTION OF THE ASSESSEE IN THE FOLLOWING TERMS :- 04.2. I DO NOT AGREE WITH THE AFORESAID ALTERNATI VE CLAIM OF THE APPELLANT. AO IS BOUND TO ADOPT THE VALUE ASSESSED BY THE REGISTRATION AUTHORITY FOR STAMP DUTY PURPOSE, AS L AID DOWN IN SEC. 50C OF THE ACT. THE ONLY EXCEPTION IS THAT WHERE AS SESSEE CLAIMS BEFORE THE AO THAT VALUE ASSESSED BY STAMP VALUATIO N AUTHORITY EXCEEDS THE FAIR MARKET VALUE, AO MAY REFER THE VAL UATION OF THE ASSET TO A VALUATION OFFICER. NO SUCH CLAIM WAS MAD E BY THE APPELLANT BEFORE THE AO. HENCE, PROVISIONS OF SEC. 50C(2) ARE NOT APPLICABLE IN THIS CASE. APPELLANT ALSO DID NOT DIS PUTE THE VALUATION OF PROPERTY BY THE STAMP DUTY AUTHORITY BEFORE ANY HIGHER AUTHORITY 21 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. OR COURT AS ENVISAGED IN SEC. 50C(2)(B) OF THE ACT. IT SHOWS THAT APPELLANT AGREED WITH THE VALUATION OF PROPERTY BY THE STAMP DUTY AUTHORITY AND THE SAME WAS THE MARKET PRICE OF PROP ERTY. IT IS ALSO PERTINENT TO MENTION HERE THAT THE MARKET VALUE OF THE PLOT WAS ASSESSED AT HIGHER FIGURE OF RS. 13,46,928/- BY THE STAMP VALUATION AUTHORITY IN THE SUBSEQUENT SALE DEED DATED 23.02.2 008. HENCE, MARKET VALUE OF THE SAID PLOT CAN NOT BE TAKEN AT R S. 1,05,000/-. THE GROUND RAISED BY THE APPELLANT IS ACCORDINGLY D ISMISSED. 8.1. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. IN OUR VIEW, THE ORDER PASSED BY THE LD. CIT (A) IS WELL F OUNDED AND ON MERIT, AS MENTIONED HEREIN ABOVE. THOUGH SECTION 50C(2) PROVIDES THAT IT IS FOR THE ASSESSEE TO CLAIM BEFORE THE AO THAT THE VALUE ADOPTED BY THE STAMP V ALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE, IN THAT EVENTUALITY THE AO MAY REFER TO THE VALUATION OFFICER FOR THE VALUATION OF THE CAPITAL ASSET IN ACCORDANCE WITH L AW. IN THE PRESENT CASE NO REQUEST HAS BEEN MADE BEFORE THE AO. THE PERUSAL OF THE PA PER BOOK AND RECORD SHOWS THAT EVEN BEFORE THE AO OR BEFORE US, THE ASSESSEE HAS N OT FILED ANY FAIR MARKET VALUE OF THE PROPERTY TO THE ESTIMATION OF THE ASSESSEE. FURTHE R, THE ASSESSEE HAS NOT CHALLENGED THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY EITHER AT THE TIME OF SELLING THE PROPERTY TO SHRI PRAVEEN KUMAR JAIN OR AT THE TIME OF PURCHASING THE PROPERTY FROM SHRI PRAVEEN KUMAR JAIN. IN OUR VIEW THE GROUND OF THE ASSESSEE IS REQUIRED TO BE DISMISSED AND ACCORDINGLY WE DISMISS THE GROUND OF THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 22 ITA NO. 340/JP/2013 A.Y. 2008-09 SHRI HARDAYAL SINGH VS DCIT, CIRCLE, JAIPUR. ORDER PRONOUNCED IN THE OPEN COURT ON 29/01/2 016. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29/01/2016 DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI HARDAYAL SINGH, SIKAR. 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 340/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR