RAJENDRA KUMAR SHARMA, Jaipur V. JCIT, Jaipur

ITA 358/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5385 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 15-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Opportunity of being heard; Fair market value; Valuation report
• Section: 143(3); 54B; 50C; 54F; 142(1); 69; 54; 37; 56; 139

Judgement Text

ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, 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 NOS. 358/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2011-12 . SHRI RAJENDRA KUMAR SHARMA, E-36-B, VIJAI NAGAR, MURLIPURA, SIKAR ROAD, JAIPUR. CUKE VS. THE JOINT COMMISSIONER OF INCOME-TAX, RANGE-4, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AASPS 9241 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NOS. 375/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2011-12 . THE JOINT COMMISSIONER OF INCOME-TAX, RANGE-4, JAIPUR. CUKE VS. SHRI RAJENDRA KUMAR SHARMA, E-36-B, VIJAI NAGAR, MURLIPURA, SIKAR ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AASPS 9241 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI GIRISH DAVE (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI KAILASH MANGAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30.03.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/04/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THESE ARE TWO CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE ARISING FROM THE ORDER DATED 06.02.2015 PASSED BY THE LEARNED CI T (A)-2, JAIPUR FOR THE A.Y. 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF DED UCTION OF RS. 83,54,434/- CLAIMED BY THE ASSESSEE U/S 54F OF INCO ME TAX ACT BY HOLDING THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUC TION U/S 54 OF ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT INCOME TAX ACT AS THE INVESTMENT IN NEW ASSET FOR CLAIMING DEDUCTION U/S 54F OF INCOME TAX ACT IS NOT A RESIDE NTIAL HOUSE WITH LAND APPUR5TENANT THERETO. THE ORDER OF LD CIT (A), CONFIRMING THE DISALLOWANCE OF DEDUCTION CLAIMED BY ASSESSEE U/S 5 4F IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERVERSE AND AGAINST THE LAW AND FACTS OF THE CASE. THE ORDER OF LD. CIT (A) IN THIS REGARD DESER VES TO BE SET ASIDE AND ADDITION MADE BY THE LD AO BY DISALLOWING THE DEDUCTION U/S 54F DESERVES TO BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT (A) ERRED IN SUSTAINING THE ADDITION OF RS. 2,2 4,863/- (RS. 2,04,78,163/- MINUS RS. 2,02,53,300/-) UNDER SECTIO N 50C OF INCOME-TAX ACT, 1961 ON THE B ASIS OF VALUE ADOPTED BY THE VALUATION OFFICER AT RS. 2,04,78,163/- AS AGAINST T HE DECLARED VALUE IN REGISTERED SALE DEED RS. 2,02,53,300/-. IN THE REVENUES APPEAL FOLLOWING GROUND IS RAISED :- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN RESTRICTI NG THE ADDITION TO RS. 2,24,863/- AS AGAINST RS. 1,07,89,217/- MADE BY THE AO U/S 50C OF THE ACT. GROUND NO. 2 OF THE ASSESSEE & GROUND NO. 1 OF THE REVENUE : 2. THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 3 1.03.2012 DECLARING TOTAL INCOME OF RS. 87,61,900/-. THE CASE WAS TAKEN UP FO R SCRUTINY ASSESSMENT AND NOTICE WAS ISSUED ON 13.09.2012. HOWEVER, A NOTICE UNDER SECTION 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED ON 23.07.2013. THEREAFTER, A FRESH NOTICE UNDER SEC. 142(1) WAS ISSUED ON 21.10.2013 AS THERE WAS A CHAN GE OF AO. AS PER THE AO, THE ASSESSEE WAS OWNER OF UNAUTHORIZED COMMERCIAL LAND BEARING KHASRA NO. 372, AREA 0.1504 HECTOR SITUATED AT GRAM: DAHAMI KHURD PATWAS , HALKA DAHAMI KALAN, TEHSIL SANGANER, DISTRICT JAIPUR WHICH WAS PURCHASED AT RS . 2767327/- AND HAS SPENT RS. 10,00,000/- FOR CONSTRUCTION OF BOUNDARY WALL. THE ASSESSEE HAS SOLD THE ABOVE SAID ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT LAND VIDE 12 REGISTERED SALE DEED ALL EXECUTED ON 3 1.1.2011 CONSISTING OF SHOP NOS. 1 TO 17 FOR A TOTAL CONSIDERATION OF RS. 2,02,53,30 0/- WHEREAS THE REGISTRAR STAMP VALUATION HAS ADOPTED THE VALUE AT RS. 3,10,42,517/ -. IT IS THE CASE OF THE ASSESSEE THAT NEITHER THE SELLER NOR THE BUYER HAVE CHALLENG ED THE STAMP VALUE EVALUATED BY THE REGISTRATION AUTHORITY. WHEN THE ASSESSEE HAD RECEIVED THE NOTICE FROM THE AO, A REQUEST WAS MADE ON 16.12.2013 THEREBY REQUESTING THE AO TO REFER THE MATTER TO THE VALUATION OFFICER AS PER PROVISIONS OF SECTION 50C(2)(B) OF THE IT ACT, 1961. ON THE REQUEST OF THE ASSESSEE, THE AO VIDE LETTER DAT ED 22.1.2014 HAS REFERRED THE MATTER TO THE VALUATION OFFICER FOR THE PURPOSE OF VALUATION. THEREAFTER, REMINDER WAS ALSO ISSUED TO THE VALUATION OFFICER TO SUBMIT THE REPORT BY 10 TH MARCH, 2014. ON 5 TH MARCH, 2014, THE AO HAS ISSUED A QUESTIONNAIRE THE REBY ASKING THE ASSESSEE TO REPLY TO THE SAME. THE ASSESSEE VIDE LETTER DATE D 10.03.2014 HAS REPLIED TO THE SAME. THE LETTER PROVIDES AS UNDER :- 1. IN THE PREVIOUS YEAR RELEVANT TO THE ABOVE SAID ASSESSMENT YEAR THE ASSESSEE INVESTED A SUM OF RS. 1,15,00,000/- IN PURCHASE OF LAND FOR CONSTRUCTION OF A RESIDENTIAL HOUSE. THE D EDUCTION U/S 54F AMOUNTING TO RS. 83,54,434/- HAS BEEN CLAIMED O N ACCOUNT OF SAID INVESTMENT IN THE LAND. COPY OF THE AGREEME NT TO PURCHASE AND REGISTERED PURCHASE DEED ARE ENCLOSED HEREWITH. THE ASSESSEE GOT CONSTRUCTED A RESIDENTIAL HOUSE IN THE F.Y. 2012-13 I.E. WITHIN THE STATUTORY TIME LIMIT ALLOWE D BY THE I.T. ACT, 1961 I.E. BEFORE THE DUE DATE OF FEBRUARY, 201 4. 2. COPY OF BILLS FOR CONSTRUCTION OF HOUSE ALONG WITH MAP OF THE HOUSE IS ENCLOSED HEREWITH. 3. THE TOTAL AREA OF LAND IS ABOUT 4090 SQ. MTR. AND T HE CONSTRUCTED AREA IS ABOUT 1504 SQ. FT. 4. NO APPROVAL IS REQUIRED FOR CONSTRUCTION OF THE ABO VE SAID RESIDENTIAL HOUSE. 5. COPY OF REGISTERED SALE DEED IS ENCLOSED AS PER POI NT NO. 1 OF THIS LETTER. ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT THE AO WITHOUT AWAITING FOR THE VALUATION REPORT OF THE VALUATION OFFICER HAD PASSED THE ASSESSMENT ORDER ON 13.03.2014 AND HELD THAT THE ASSESSEE HAS UNDER REPORTED THE SALE CONSIDERATION BY RS. 1,07,89,217/ -. THE REASONS GIVEN FOR NOT AWAITING AND NOT CONSIDERING THE REPORT OF THE VALU ATION OFFICER IS MENTIONED IN PARA 4.5 OF THE ASSESSMENT ORDER WHICH IS REPRODUCED HER EIN BELOW FOR THE SAKE OF CONVENIENCE :- 4.5. IT IS AGAIN IMPORTANT TO MENTION HERE THAT EV EN IF THE VALUATION OFFICER VALUED THE PROPERTY BELOW THE VALUE TAKEN B Y THE STAMP DUTY AUTHORITY, STILL IN THIS PARTICULAR CASE THE VALUE ADOPTED BY THE VALUATION OFFICER CAN NOT BE TAKEN FOR CALCULATING THE CAPITA L GAIN PURPOSE ON THE FOLLOWING GROUNDS :- - THE PROPERTY UNDER CONSIDERATION SOLD BY THE ASSESS EE WERE LAND FOR COMMERCIAL SHOPS. - THERE IS NO CONSTRUCTION ON THE COMMERCIAL LAND AS PER REGISTERED DEED AND IT IS JUST A BARE LAND. - THE STAMP DUTY AUTHORITY VALUED THE COMMERCIAL LAND PROPERTY AT RS. 3,10,42,517/- WHERE AS THE ASSESSEE TAKEN THE V ALUE AT RS. 2,02,53,300/-. - THE ASSESSEE ACCEPTED THE VALUE TAKEN BY THE STAMP DUTY AUTHORITY AND NEVER CHALLENGE THE VALUE OF THE PROP ERTY TO ANY APPELLATE AUTHORITY. - THE VALUE ADOPTED BY VALUATION OFFICER GENERALLY CO NSIDERED IN THE CASE WHEN THERE IS HUGE CONSTRUCTION OF BUILDING AN D ACCORDINGLY THE VALUATION OFFICER BY TAKING THE FAIR MARKET RAT E OF CONSTRUCTION COST AND CONSIDERING THE FACTORS LIKE TYPE & QUALIT Y OF CONSTRUCTION ETC., VALUED THE HOUSE, SHOP OR ANY CONSTRUCTED PRO PERTY ALONG WITH THE VALUE OF LAND. BUT IN THIS CASE THE PROPERTY IS PURELY BARE LAND AND THERE IS NO CONSTRUCTION ON IT. IN THIS CASE TH E VALUE ADOPTED BY THE STAMP DUTY AUTHORITY IS MORE REALISTIC AND FAIR . 3. THE ASSESSEE FEELING AGGRIEVED BY THE ORDER OF A O, HAS CHALLENGED THE FINDING OF THE AO WITH RESPECT TO 50C AND THE LD. CIT (A) A FTER CONSIDERING THE POSITION OF LAW HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE FOLLOWING MANNER :- ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT 3.2. THE ISSUE HERE THAT REQUIRES ADJUDICATION IS WHETHER THE FULL VALUE OF CONSIDERATION ACCRUING AS A RESULT OF TRAN SFER SHOULD BE TAKEN AS THE VALUE DETERMINED BY THE VALUATION OFFICER IN VIEW OF THE FACT THAT (I) THE ASSESSING OFFICER HAS PASSED THE ORDER U/S 143(3) ON 13.03.2014 WHEREAS THE REPORT OF THE VALUATION OFFI CER WAS RECEIVED LATER, DURING THAT DAY AND (II) THE ASSESSING OFFIC ER CAN DISPUTE, ON MERITS, THE VALUATION MADE BY THE VALUATION OFFICER U/S 50C OF THE IT ACT. 3.3. THIS IS NOT A CASE WHERE THE REPORT OF THE VAL UATION OFFICER WAS RECEIVED BEYOND THE LIMITATION DATE. IN THIS CASE, THE REPORT OF THE VALUATION OFFICER WAS RECEIVED ON 13.03.2014, THE S AME DAY WHEN THE ASSESSING OFFICER PASSED THE ORDER U/S 143(3), WELL BEFORE THE LIMITATION DATE FOR PASSING THIS ORDER. THEREFORE, IN MY VIEW, THE REPORT OF THE VALUATION OFFICER CANNOT BE IGNORED, ON THIS GROUND. ALSO, IN MY VIEW, THE ASSESSING OFFICER CANNOT OBJECT TO THE VA LUATION, MADE BY THE VALUATION OFFICER, ON MERITS. IN OTHER WORDS, THE A SSESSING OFFICER CANNOT SIT IN JUDGMENT OVER THE REPORT OF THE VALUA TION OFFICER AND IS DUTY BOUND TO FOLLOW THE SAME. IN VIEW OF THE ABOVE , IT IS HELD THAT THE FULL VALUE OF CONSIDERATION ACCRUING AS A RESULT OF TRANSFER, IS THE VALUATION SUBMITTED BY THE VALUATION OFFICER U/S 50 C, ON 13.03.2014, AT RS. 2,04,78,163/-. THEREFORE, ADDIT ION OF RS. 2,24,863/- (RS. 2,04,78,163 RS. 2,02,53,300) IS S USTAINED ON THIS ISSUE UNDER THE HEAD CAPITAL GAINS WHILE THE BALANC E ADDITION IS DIRECTED TO BE DELETED. THE ABOVE GROUNDS ARE ALLOW ED. 4. NOW THE REVENUE HAS CHALLENGED THE ORDER PASSED BY LD. CIT (A) ON THE GROUND MENTIONED HEREIN ABOVE AND SOUGHT TO CONTEND THAT THE ORDER PASSED BY THE AO IS REQUIRED TO BE UPHELD. 4.1. WHEREAS THE ASSESSEE HAS CHALLENGED THE ADDITI ON OF RS. 2,24,863/- ON THE GROUND THAT THE CAPITAL GAINS AS CALCULATED BY LD. CIT (A) WAS INCORRECT. 4.2. WE HAVE HEARD RIVAL CONTENTIONS OF THE PARTIES AND HAVE GONE THROUGH THE RECORD. SECTION 50C PROVIDES AS UNDER :- SECTION 50C. SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES : (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BU ILDING OR BOTH, IS LESS ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSED OR A SSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED O R ASSESSED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE- (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSED OR ASSESSABLE BY TH E STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MA RKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER ; (B) THE VALUE SO ADOPTED OR ASSESSED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MAD E BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE P ROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE ( I) OF SUB-SECTION (1) AND SUB- SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5 ) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX A CT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELAT ION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB- SECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION 1. FOR THE PURPOSES OF THIS SECTION, 'VALUATION OF FICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF T HE WEALTH-TAX ACT, 1957 (27 OF 1957). EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSIO N 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WER E REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB-SE CTION (1), THE VALUE SO ADOPTED OR ASSESSED BY SUCH AUTHORITY SHALL BE TAKE N AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER. SECTION 142A PROVIDES AS UNDER :- SECTION 142A: ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT (1) FOR THE PURPOSES OF MAKING AN ASSESSMENT OR REA SSESSMENT UNDER THIS ACT, WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTMENT RE FERRED TO IN SECTION 69 OR SECTION 69B OR THE VALUE OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE REFERRED TO IN SECTION 69A OR SECTION 69B IS REQUIRED TO BE MADE SECTION 69B OR FAIR MARKET VALUE OF ANY PROPERTY REFERRED TO IN SUB-SECTION (2 ) OF SECTION 56 IS REQUIRED TO BE MADE, THE ASSESSING OFFICER MAY REQUIRE THE VALUATI ON OFFICER TO MAKE AN ESTIMATE OF SUCH VALUE AND REPORT THE SAME TO HIM. (2) THE VALUATION OFFICER TO WHOM A REFERENCE IS MA DE UNDER SUB-SECTION (1) SHALL, FOR THE PURPOSES OF DEALING WITH SUCH REFERE NCE, HAVE ALL THE POWERS THAT HE HAS UNDER SECTION 38A OF THE WEALTH-TAX ACT, 1957 ( 27 OF 1957). (3) ON RECEIPT OF THE REPORT FROM THE VALUATION OFF ICER, THE ASSESSING OFFICER MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING H EARD, TAKE INTO ACCOUNT SUCH REPORT IN MAKING SUCH ASSESSMENT OR REASSESSMENT : PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHA LL APPLY IN RESPECT OF AN ASSESSMENT MADE ON OR BEFORE THE 30TH DAY OF SEPTEM BER, 2004, AND WHERE SUCH ASSESSMENT HAS BECOME FINAL AND CONCLUSIVE ON OR BE FORE THAT DATE, EXCEPT IN CASES WHERE A REASSESSMENT IS REQUIRED TO BE MADE I N ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. EXPLANATION IN THIS SECTION, VALUATION OFFICER HAS THE SAME M EANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). FROM THE CONJOINT READING OF THE ABOVE TWO PROVISIO NS, IT IS ABUNDANTLY CLEAR LIKE A DAY LIGHT THAT ONCE THE AO REFERRED THE MATTER TO T HE VALUATION OFFICER FOR ESTIMATION OF THE VALUE OF THE ASSET OR PROPERTY OR INVESTMENT , THE VALUATION OFFICER SHALL SEND THE VALUATION REPORT WITHIN 6 MONTHS FROM THE END O F THE MONTH IN WHICH THE REFERENCE WAS MADE TO THE AO. THEREAFTER, THE AO AF TER GIVING THE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TAKING INTO ACCOUNT SUC H REPORT MAKE THE ASSESSMENT OR REASSESSMENT. IN THE PRESENT CASE, AS MENTIONED HE REIN ABOVE, THE REFERENCE WAS MADE BY THE AO TO THE VALUATION OFFICER ON 22.1.201 4. THEREFORE, THE VALUATION OFFICER HAS 6 MONTHS TIME AS PER SECTION 142A(6) TO SUBMIT THE REPORT TO THE ASSESSING OFFICER. HOWEVER, DESPITE THAT THE AO INS ISTED FOR SUBMISSION OF THE REPORT BY 10 TH MARCH 2014 AND IN FACT, THE REPORT WAS RECEIVED IN THE OFFICE OF THE AO ON 13 TH MARCH, 2014. THE AO, IN OUR VIEW, WAS DUTY BOUND T O WAIT FOR THE REPORT OF THE ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT VALUATION OFFICER AS PER THE MANDATE REFERRED HEREI N ABOVE AND THEREAFTER HE IS STATUTORILY BOUND TO GRANT OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE AND CONSIDER THE REPORT OF THE VALUATION OFFICER. IN OUR VIEW, THE AO HAS BRAZENLY VIOLATED THE PROVISIONS OF LAW AND HAS COMMITTED SERIOUS ERROR I N DENYING THE BENEFIT OF VALUATION REPORT TO THE ASSESSEE. IN VIEW THEREOF, WE HAVE N O OPTION BUT TO UPHOLD THE FINDING OF THE LD. CIT (A). IN VIEW OF THE ABOVE, T HE APPEAL OF THE REVENUE IS REQUIRED TO BE DISMISSED AND IS ACCORDINGLY DISMISSED. 4.3. SINCE WE ARE UPHOLDING THE VALUATION MADE BY T HE VALUATION OFFICER AS WELL AS THE ORDER PASSED BY LD. CIT (A), THEREFORE, THE GRO UND NO. 2 OF THE ASSESSEE IS ALSO DISMISSED. ACCORDINGLY, WE DISMISS GROUND NO. 2 OF THE ASSESSEE. GROUND NO. 1 OF THE ASSESSEE APPEAL 5. GROUND NO. 1 OF THE ASSESSEE APPEAL RAISED IN TH E ASSESSEES APPEAL IS WITH RESPECT TO THE CAPITAL ASSET, CLAIMING DEDUCTION UN DER SECTION 54F OF THE IT ACT. THE AO HAS MENTIONED THAT THE ASSESSEE HAD MADE THE INV ESTMENT OF RS. 1,15,00,000/- IN THE PROPERTY AND HAD CLAIMED PROPORTIONATE DEDUC TION OF RS. 83,54,434/- UNDER SECTION 54F OF THE IT ACT. WHEN IT WAS NOTICED BY THE AO, THE ASSESSEE WAS CALLED UPON TO FURNISH THE DETAILS AND ACCORDINGLY THE ASS ESSEE HAS FURNISHED THE REPLY AS UNDER :- - THE TOTAL AREA OF LAND PURCHASED BY THE ASSESS EE WAS AROUND 37000 SQ. FT. (4090 SQ. MTR) AND THE ASSESSEE HAD S HOWN CONSTRUCTION AREA OF 1504 SQ. FT ONLY. - THE BILLS SUBMITTED BY THE ASSESSEE FOR CONSTRUCTIO N WERE NOT PROPER. THEY ARE JUST COMPUTER PRINTOUT WITHOUT ANY DETAILS OF WORK ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT DONE AND ALL SUCH BILLS WERE PAID IN CASH ONLY THAT TOO LESS THAN 20,000/- - THE YEAR UNDER CONSIDERATION IS FY 2010-11 (AY 2011 -12) AND THE LAST DATE FOR FILING ROI WAS 31.07.2011 I.E. THE AS SESSEE HAD TO INVEST BEFORE THIS DATE FOR CLAIMING DEDUCTION U/S 54F IN FY 2010- 11. IT IS NOTICED THAT THE ASSESSEE ACTUALLY PURCHA SED THIS LAND VIA REGISTERED DEED ON DATE 28.3.13. ALTHOUGH THE ASSES SEE CLAIMED THAT THE PROPERTY WAS ALREADY PURCHASED AND ACQUIRE D THROUGH KACCHA SODA/AGREEMENT VIDE DATED 2.6.2011 (COPY SUB MITTED) AND THEREAFTER THE AGREEMENT WAS REGISTERED ON 28.3.13. THE AO WAS NOT SATISFIED WITH THE REPLY FURNISHED B Y THE ASSESSEE AND, THEREFORE, THE AO HAS DISALLOWED THE DEDUCTION AND ADDED BACK THE AMOUNT OF RS. 83,54,434/- TO THE INCOME OF THE ASSESSEE. 6. FEELING AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED APPEAL BEFORE LD. CIT (A). THE LD. CIT (A) HAD CONSIDERED THE SUBMISSION S MADE BY THE ASSESSEE. HOWEVER, LD. CIT (A) WAS NOT IMPRESSED WITH THE SUB MISSION AND, THEREFORE, THE LD. CIT (A) HAS SUSTAINED THE ORDER PASSED BY THE AO. THE FINDING OF THE LD. CIT (A) ARE MENTIONED IN PARA 4.3, 4.4 AND 4.5 OF HIS ORDER AS UNDER :- 4.3. I HAVE PERUSED THE FACTS OF THE CASE, THE AS SESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFF ICER HAS DENIED DEDUCTION U/S 54F TO THE ASSESSEE ON THE FOL LOWING GROUNDS. (A) THE LAND IS AGRICULTURAL AND NOT RESIDENTIAL. (B) THE CONSTRUCTION OF RESIDENTIAL HOUSE WITHOUT APPRO VAL OF PLAN BY GOVT. AUTHORITY. (C) THE ASSESSEE HAS ALSO NOT SUBMITTED ANY ELECTRICITY AND WATER CONNECTION EVIDENCE. (D) THE LAND WAS REGISTERED IN THE NAME OF ASSESSEE ON 28.3.13 I.E. BEYOND THE PERIOD SPECIFIED IN SECTION 54F(4) AND SO ASSESSEE NOT COMPLIED CONDITIONS LAID DOWN THEREIN. THE AGREEMENT TO PURCHASE LAND EXECUTED ON 2.6.2011 CLA IMED ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT BY ASSESSEE HAS NO EVIDENTIARY VALUE AS PAYMENT OF CONSIDERATION SHOWN IN CASH. (E) THE BILLS FOR CONSTRUCTION ARE LACKING DETAILS AND CONTAIN NO DETAIL OF WORK DONE AND EACH PAYMENT MADE THEREFOR WAS IN CASH FOR LESS THAN RS. 20,000/-. (F) THE INSPECTOR PHYSICALLY VERIFIED THE PROPERTY AND FOUND THERE IS ONLY BOUNDARY WALL WITH GATE AND ON WHOLE LAND THERE WAS LITTLE CONSTRUCTION WITH WALLS AND TIN SH ED ROOFING AND CONSTRUCTION IS ABOUT 700-800 SQ.FT AS AGAINST 1504 SQ.FT. CONSTRUCTION CLAIMED BY ASSESSEE. THE ASSESS ING OFFICER, THUS, CONCLUDED THAT INVESTMENT WAS PURELY IN LAND AND NOT A RESIDENTIAL HOUSE AS REQUIRED U/S 54F OF I.T. ACT, 1961 AND SO ASSESSEE IS NOT ENTITLED TO CLAIMED DED UCTION U/S 54F. 4.4. THE ISSUE IN QUESTION IS WHETHER THE ASSESSEE IS THEREFORE, ELIGIBLE FOR DEDUCTION U/S 54F, IN THIS CASE. THE O BJECTIONS RAISED BY THE ASSESSING OFFICER THAT THE LAND PURCHASED IS AGRICULTURAL, AND NOT RESIDENTIAL; THAT THE HOUSE HAS BEEN CONSTR UCTED WITHOUT APPROVAL BY GOVERNMENT AUTHORITIES; THAT TH E ASSESSEE DOES NOT HAVE A PERMANENT ELECTRICITY CONNECTION; C ANNOT BY ITSELF BE A GROUND FOR DENYING DEDUCTION U/S 54F. HOWEVER, WHILE CONSIDERING THE CLAIM OF DEDUCTION, THE ENTIR E CONSPECTUS OF FACTS HAVE TO BE TAKEN INTO CONSIDERATION. I AGR EE WITH THE APPELLANT THAT THERE IS NO ADDITIONAL RIDER IN SECT ION 54F THAT THE LAND SHOULD NOT BE AGRICULTURAL, THE PLAN OF THE HO USE SHOULD BE APPROVED BY THE GOVERNMENT AUTHORITIES OR THAT, THE RE SHOULD BE A PERMANENT WATER AND ELECTRICITY CONNECTION. IT IS ALSO NOT NECESSARY THAT THE PROPERTY SHOULD BE REGISTERED OR THAT CONSTRUCTION OF THE HOUSE SHOULD BE MADE ON THE ENT IRE LAND AND NO PART OF THE LAND CAN BE LEFT VACANT. 4.5.1. WHILE THE ABOVE CONTENTIONS OF THE APPELLANT ARE CORRECT; THESE CONTENTIONS DO NOT FLOW FROM THE FACTS OF THIS CASE , AS DISCUSSED BELOW- 4.5.2. IT HAS BEEN HELD IN THE CASE OF NARENDRA MOH AN UNIYAL (SUPRA) THAT WHEN THE LAND IS PURCHASED AND BUILDING IS CONTRU CTED THEREON, IT IS NOT NECESSARY THAT SUCH CONSTRUCTION SHOULD BE ON THE ENTIRE PLOT OF LAND, MEANING THEREBY A PART OF THE LAND WHICH IS APPURTENANT TO THE BUILDING AND ON WHICH NO CONS TRUCTION IS MADE, THERE IS NO DENIAL OF EXEMPTION ON SUCH INVES TMENT. IN OTHER WORDS, A RESIDENTIAL HOUSE, WITHIN THE MEA NING OF SECTION 54F CAN INCLUDE A PART OF THE LAND WHICH IS APPURTENANT TO THE BUILDING ON ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT WHICH NO CONSTRUCTION IS MADE. HERE, IT IS ESSENTIA L TO UNDERSTAND THE MEANING OF THE WORD APPURTENANT. THE WORD ULTI MATELY DERIVES FROM LATIN APPERTINERE, TO APPERTAIN. APPURTENANC E IS A TERM FOR WHAT BELONGS TO AND GOES WITH SOMETHING ELSE, WITH THE A PPURTENANCE BEING LESS SIGNIFICANT THAN WHAT IT BELONGS TO. IN A LEG AL CONTEXT, AN APPURTENANCE COULD FOR INSTANCE REFER TO A BACK-YAR D THAT GOES WITH THE ADJOINING HOUSE. THE IDEA BEING EXPRESSED IS TH AT THE BACK-YARD BELONGS TO THE HOUSE, WHICH IS THE MORE SIGNIFICA NT OF THE TWO. IN 1919, THE SUPREME COURT OF MINNESOTA ADOPTED THE FO LLOWING DEFINITION OF AN APPURTENANCE : THAT WHICH BELONGS TO SOMETHI NG ELSE. SOMETHING ANNEXED TO ANOTHER THING MORE WORTHY. COHEN V WHITCOMB, (1919 142 MINN 20). IN THIS CASE, EVEN BY THE ASSESSEES OWN ADMISSION, THE RESIDENTIAL HOUSE CONSISTING OF A TIN SHED MEASURES 1394 SQ. FT. AND A GUARD ROOM MEASURING 159.5 SQ. F T. WHICH IS BUILT ON A PLOT OF LAND MEASURING 37,000 SQ. FT. THEREFORE, EVEN BY THE ASSESSEES OWN ADMISSION, THE STRUCTURE BUILT ON TH IS LAND (INCLUDING THE ROOM FOR THE WATCHMAN) OCCUPIES ONLY 4.2% OF TH E TOTAL PLOT AREA. THEREFORE, IN THIS CASE, THE LAND IS NOT APPURTENAN T TO THE CONSTRUCTED STRUCTURE BUT THE STRUCTURE IS APPURTENANT TO THE L AND. THE PHOTOGRAPHS FORMING A PART OF THE ASSESSMENT ORDER ALSO VALIDATE THIS POINT. A PERUSAL OF THE PLAN OF THIS RESIDENTIAL HO USE, FORMING A PART OF THE VALUATION REPORT SUBMITTED BY THE APPELLANT WOU LD ALSO, PROVE THE ABOVE POINT. 4.5.3. EVEN OTHERWISE, IT HAS TO BE EXAMINED WHETHE R THE CONSTRUCTED STRUCTURE CAN BE TERMED AS A RESIDENTIAL HOUSE. AS PER THE VALUATION REPORT, SUBMITTED BY THE APPELLANT, THIS RESIDENTIA L HOUSE CONSISTS OF A TIN SHED MEASURING 1394 SQ. FT. AND A GUARD ROOM ME ASURING 159.5 SQ. FT. AND HAS COSTED THE ASSESSEE A SUM OF RS. 1,15,0 0,000/-. NO PRUDENT MAN WILL CONSTRUCT A RESIDENTIAL HOUSE, MAD E UP OF A TIN SHED FOR A SUM OF RS. 1.15 CRORE. ALSO, DURING THE SITE VISIT MADE BY THE INSPECTOR, DURING THE COURSE OF ASSESSMENT PROCEEDI NGS IT WAS SEEN THAT ANIMALS WERE TIED IN THIS TIN SHED. OBVIOUSLY, A RESIDENTIAL HOUSE, WITHIN THE MEANING OF SECTION 54F, WOULD MEAN A HOU SE FOR HUMANS AND NOT ANIMALS. 4.5.4. IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THAT THE INVESTMENT IN THE NEW ASSET FOR CLAIMING DEDUCTION U/S 54F IS B Y NO STRETCH OF IMAGINATION, A RESIDENTIAL HOUSE WITH LAND APPURTEN ANT, THERETO. THEREFORE, THE APPELLANT IS NOT ELIGIBLE FOR DEDUCT ION U/S 54F. THE DISALLOWANCE OF DEDUCTION U/S 54F IS UPHELD. THIS G ROUND IS DISMISSED. 7. NOW THE ASSESSEE IS BEFORE US. 7.1. THE LD. A/R FOR THE ASSESSEE HAS REITERATED TH AT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THAT UNDER SECTION 54F THERE I S NO RESTRICTION TO CONSTRUCT ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT RESIDENTIAL HOUSE ON THE AGRICULTURAL LAND. IT WAS FURTHER SUBMITTED THAT THERE IS NO REQUIREMENT OF GETTING THE PLAN SANCTIONED FROM THE LOCAL AUTHORITY. FURTHER, IT WAS MENTIONED THAT THERE WAS NO PROVISION FOR GETTING T HE PERMANENT ELECTRICITY CONNECTION. LASTLY IT WAS CONTENDED THAT IT IS FOR THE ASSESSEE TO DECIDE THE SIZE OF ACCOMMODATION REQUIRED BY HIM AND THE REVENUE IS NO T RIGHT IN ITS RIGHTS TO COMMAND THE ASSESSEE TO CONSTRUCT THE HOUSE IN A PA RTICULAR MANNER. IT WAS ALSO SUBMITTED THAT AFTER THE SALE OF THE LAND ON 31.1.2 011, THE SALE AGREEMENT OF THE AGRICULTURAL LAND WAS ENTERED ON 9.6.2011 WITH SHRI KHIV SINGH AND THEREAFTER THE SALE DEED WAS EXECUTED ON 28 TH MARCH, 2013 AND THE CONSTRUCTION WAS RAISED AS PER THE VALUATION REPORT. THE VALUATION REPORT WAS SUB MITTED ON 16.1.2014. ON THE BASIS OF THE ABOVE AND ON THE BASIS OF THE FOLLOWIN G JUDGMENTS, IT WAS SUBMITTED THAT THE BENEFIT OF SEC. 54F IS REQUIRED TO BE GIVE N TO THE ASSESSEE :- ASSTT. CIT VS. OM PRAKASH GOYAL (2012) 53 SOT 158 (JPR.) CIT VS. DR. R. BALAJI (2014) 222 TAXMAN 305 (KARN.) CIT VS. SAMBANDAM UDAYKUMAR (2012) 345 ITR 389 (KARN.) ITO VS. SMT. B.S.SHANTIKUMARI (2014) 62 SOT 53 (BANG.)(TRIB.) CIT VS. AJIT SINGH KHAJANCHI (2007) 163 TAXMAN 426 (M.P) SANJEEV LAL VS. CIT (2014) 365 ITR 369 (SC) CIT VS. SMT. G.VENKATA LAXMI (2015) 373 ITR 572 (AP & T) CHANDRAKANT S. CHOKSI HUF VS. ASSTT. CIT (2015) 53 TAXMANN.COM 312 (MUM-TRIB) ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT CIT VS. VISHNU TRADING & INVESTMENT CO. (2003) 259 ITR 724 (RAJ.) NOVOPAN INDIA LTD. VS. COLLECTOR OF C.E. & C., 1994 SUPP (3) SCC 606 7.2. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON THE ORDERS PASSED BY THE AUTHORITIES BELOW. 7.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. SECTION 54F PROVIDES AS UNDER :- SECTION 54F : CAPITAL GAIN ON TRANSFER OF CERTAIN C APITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), W HERE 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 A SSET, NOT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERR ED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF ON E YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLA CE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONS TRUCTED, ONE RESIDENTIAL HOUSE IN INDIA (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 CA PITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE N ET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER S ECTION 45 : PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY WHERE(A) THE ASSESSEE, (I) OWNS MORE THAN ONE RESIDENTIAL H OUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET ; OR (II) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WI THIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASS ET ; OR(III) CONSTRUCTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET ; AND (B) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THAN THE ONE RESIDENT IAL HOUSE OWNED ON THE ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEAB LE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. EXPLANATION FOR THE PURPOSES OF THIS SECTION, NET CONSIDERATION, IN RELATION TO THE TRANSFER OF A CAPITAL ASSET MEANS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET AS REDUCED BY ANY EXP ENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER. (2) WHERE 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 HOU SE, THE INCOME FROM WHICH IS CHARGEABLE UNDER THE HEAD INCOME FROM HOU SE PROPERTY, OTHER THAN THE NEW ASSET, THE AMOUNT OF CAPITAL GAIN ARIS ING 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 TH E CASE MAY BE, CLAUSE (B), OF SUB-SECTION (1), SHALL BE DEEMED TO BE INCO ME CHARGEABLE UNDER THE HEAD CAPITAL GAINS RELATING TO LONG-TERM CAPI TAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH RESIDENTIAL HOUSE IS PU RCHASED OR CONSTRUCTED. (3) WHERE THE NEW ASSET IS TRANSFERRED WITHIN A PER IOD OF THREE YEARS FROM THE DATE OF ITS PURCHASE OR, AS THE CASE MAY BE, IT S CONSTRUCTION, THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST O F SUCH NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAU SE (B), OF SUB-SECTION (1), SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH NEW ASSET IS TRANSFERRED. (4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS NO T APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGIN AL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CO NSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF I NCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RE TURN SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLIC ABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 IN AN ACCOUNT IN ANY SUCH BANK OR INSTI TUTION AS MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZ ETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROO F OF SUCH DEPOSIT ; AND, FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUN T, IF ANY, ALREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTR UCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEM ED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SU B-SECTION IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONSTRUCTION O F THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THEN,(I) THE AMOUNT BY WHICH (A) THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRA NSFER OF THE ORIGINAL ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF THE NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B) OF SUB- SECTION (1),EXCEEDS, (B) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGED HAD THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTIO N (1) BEEN THE COST OF THE NEW ASSET, SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FR OM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES ; AND(II) TH E ASSESSEE SHALL BE ENTITLED TO WITHDRAW THE UNUTILISED AMOUNT IN ACCORDANCE WIT H THE SCHEME AFORESAID. IT IS THE ADMITTED CASE THAT SALE OF UNAUTHORIZED C OMMERCIAL LAND WAS EFFECTED ON 31.1.2011 AND THE AGREEMENT TO SALE FOR PURCHASE OF AGRICULTURE LAND WAS EXECUTED BETWEEN SHRI KHIV SINGH AND THE ASSESSEE ON 2.6.201 1 OF THE LAND BEARING KHASRA NO. 1262 AT VILLAGE MUHANA ADMEASURING 1.99 HECTOR AND 0.37 HECTOR. ON EXAMINATION OF THE AGREEMENT DATED 2.6.2011 AND OTH ER DOCUMENTS, WE NOTICED THE FOLLOWING:- 1) THE AGREEMENT IS NOT PROPERLY STAMPED AS PER THE ST AMP DUTY ACT. 2) THE AGREEMENT IS ALSO NOT REGISTERED UNDER THE REGI STRATION ACT. THE AGREEMENT PROVIDES THAT THE SALE OF THE LAND HAS BE EN TAKEN PLACE AS MENTIONED AS UNDER :- ;G FD GESA VIUH IKFJOKFJD VKO;DRKVKSA DH IWFRZ D S FY;S :I;KSA DH VKO;DRK GKSUS DS DKJ.K GEUS XZKE EQGKUK] IVOKJ GYDK EQGKUK] RGLHY LKAXKUSJ FTYK T;IQJ ESA D``FK HKWFE [KLJK UECJ 1262 JDCK 1-99 GSDVS;J DQY FDRK 01 JDCKK 1-99 GSDVS;J ESA LS VIUS LOKFERO O VF/KDKJ DH 0-37 GSDVS;J HKWFE DKS ML DS LEIW.KZ LOROKS O VF/KDKJKSA LFGR DS MLESA YXS GQOS CKSY LKSY IKYK IWYH ESM MKSY PKJKS VKSJ DH CKM.MH BR;KFN LFGR 1]15]00]000@& :I;S V{KJS ,D DJKSM IUNZG YK[K : I;S DH ,OT ESA JH JKTSUNZ DQEKJ 'KEKZ IQ= JH FKODQEKJ KEKZ VK;Q YXHKX 50 O KZ FUOKLH XZKE HKXSXK RG- UHE DK FKKUK FT- LHDJ GKY FUOKLH EDKU UA- BZ &36 CH] FOT; UXJ EQJYHIQJK LHDJ JKSM T;IQJ JKT- JKT; DKS DRBZ FO; DJ FN;K GSA ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT 3) THE ENTIRE SALE CONSIDERATION OF RS. 1,15,00,000/- WAS PAID IN CASH TO SHRI KHIV SINGH. 4) THE TITLE DOCUMENT OF SHRI KHIV SINGH BEING THE OWN ER ARE NOT BROUGHT ON RECORD. 5) THE GPA WAS EXECUTED BY SHRI NAURAT SINGH BROTHER O F SHRI KHIV SINGH ON 25.3.2013. 6) THE SALE DEED EXECUTED ON 29 TH MARCH, 2013 STIPULATES THAT SHRI KHIV SINGH AND HIS BROTHER SHRI NAURAT SINGH WERE THE OW NERS OF THE PROPERTY. ON THE BASIS OF THE ABOVE, WE HAVE STRONG DOUBT AND APPREHENSION THAT SHRI KHIV SINGH WAS NOT THE SOLE OWNER OF THE PROPERTY AND TH E PROPERTY WAS OWNED BY SHRI KHIV SINGH AND HIS BROTHER NAURAT SINGH. OUR DOUBT IS CONFIRMED FROM THE PERUSAL OF THE SALE DEED WHICH MAKES IT AMPLE CLEAR THAT SH RI KHIV SINGH ALONG WITH SHRI NAURAT SINGH WERE THE OWNERS OF THE PROPERTY. WE AR E OF THE OPINION THAT , IF SHRI KHIV SINGH AND SHRI NAURAT SINGH WERE THE OWNERS OF THE PROPERTY, HOW THE AGREEMENT CAN BE EXECUTED SOLELY BY SHRI KHIV SINGH AND HOW THE ENTIRE SALE CONSIDERATION WAS RECEIVED BY SHRI KHIV SINGH ON 2. 6.2011 IN THE ABSENCE OF ANY REGISTERED POWER OF ATTORNEY IN HIS FAVOUR EXECUTED BY SHRI NAURAT SINGH , PRIOR TO THE AGREEMENT . MOREOVER, THE AGREEMENT DATED 2.6.2 011 CANNOT BE RELIED UPON FOR ANY PURPOSE IN VIEW OF THE PROVISIONS OF SECTION 17 READ WITH SECTION 19 OF THE REGISTRATION ACT AND STAMP DUTY ACT. THEREFORE, WE ARE LEFT WITH NO OTHER OPTION BUT TO IGNORE THE AGREEMENT DATED 2.6.2011 AS THE SAID AGREEMENT, IN OUR VIEW, DO NOT CONFIRM ANY RIGHT, TITLE, INTEREST AND POWER OF ATT ORNEY IN FAVOUR OF THE ASSESSEE. THE HONBLE SUPREME COURT IN THE MATTER OF SURAJ LA MP AND INDUSTRIES LIMITED VS. STATE OF HARYANA (2011) 14 TAXMANN.COM 105 (SC) HAS REITERATED IN PARA 18 AS UNDER :- ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT 18. WE HAVE MERELY DRAWN ATTENTION TO AND REITERAT ED THE WELL-SETTLED LEGAL POSITION THAT SA/GPA/WILL TRANSACTIONS ARE N OT TRANSFERS OR SALES AND THAT SUCH TRANSACTIONS CANNOT BE TREAT ED AS COMPLETED TRANSFERS OR CONVEYANCES. THEY CAN CONTINUE TO BE TREATED AS EXISTING AGREEMENT OF SALE. NOTHING PREVENTS AFFECTED PARTIE S FROM GETTING REGISTERED DEEDS OF CONVEYANCE TO COMPLETE THEIR TI TLE. THE SAID SA/GPA/WILL TRANSACTIONS MAY ALSO BE USED TO OBTA IN SPECIFIC PERFORMANCE OR TO DEFEND POSSESSION UNDER SECTION 53A OF TP ACT. IF THEY ARE ENTERED BEFORE THIS DAY, THEY MAY BE RELIE D UPON TO APPLY FOR REGULARIZATION OF ALLOTMENTS/LEASES BY DEVELOPMEN T AUTHORITIES. WE MAKE IT CLEAR THAT IF THE DOCUMENTS RELATING TO S A/GPA/WILL TRANSACTIONS HAS BEEN ACCEPTED ACTED UPON BY DDA O R OTHER DEVELOPMENTAL AUTHORITIES OR BY THE MUNICIPAL OR RE VENUE AUTHORITIES TO EFFECT MUTATION, THEY NEED NOT BE DISTURBED, MERELY ON ACCOUNT OF THIS DECISION. IN VIEW THEREOF ALSO THE AGREEMENT DATED 2.6.2011 C ANNOT BE RELIED UPON BY THE ASSESSEE TO CLAIM THE PURCHASE OF CAPITAL ASSET WITHIN THE STATUTORY TIME LIMIT PROVIDED BY SECTION 54F. MOREOVER THERE IS NO INDEPENDENT DOCUMENT OR EVIDENCE TO SUPPORT THE TRANSFER OF CAPITAL ASSET I N FAVOUR OF THE ASSESSEE ON 2.6.2011 OR THEREAFTER BUT BEFORE THE REGISTRATION OF THE SALE DEED DATED 29.3.2013. 7.4. SINCE WE HAVE ALREADY HELD THAT THERE IS NO TR ANSFER OR PURPOSE OF THE PROPERTY IN PURSUANT TO THE AGREEMENT DATED 2.6.201 1, THEREFORE, THE ASSESSEE IN ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT OUR VIEW HAS NOT BEEN ABLE TO PROVE THAT HE HAS PUR CHASED NEW ASSET WITHIN THE PERIOD OF TWO YEARS AFTER THE DATE OF TRANSFER OF O RIGINAL ASSET. SINCE THE ASSESSEE HAS PURCHASED THE NEW ASSET BY VIRTUE OF REGISTERED SALE DEED ON 29.03.2013 AFTER GETTING THE GENERAL POWER OF ATTORNEY FROM THE BROT HER OF THE SELLER, NAMELY, SHRI KHIV SINGH DATED 25.3.2013, THEREFORE, THE NEW ASSE T (AGRICULTURAL LAND) WAS PURCHASED BY THE ASSESSEE BEYOND THE PERIOD OF 2 YE ARS. THUS THE BENEFIT OF SECTION 54F CANNOT BE ACCEDED TO THE ASSESSEE. IN VIEW THER EOF, THE GROUND OF THE ASSESSEE IS REQUIRED TO BE DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. BESIDES THIS, THE ASSESSEE HAS ALSO CLAIMED THAT THE PROCEE DS RECEIVED PURSUANT TO THE SALE OF THE COMMERCIAL LAND WAS INVESTED IN THE PURCHASE OF AGRICULTURAL LAND AND THEREAFTER CONSTRUCTION WAS RAISED IN THE PROPERTY, AND, THEREFORE, THE ASSESSEE WAS ENTITLED FOR THE DEDUCTION UNDER SECTION 54F, IN OU R VIEW THIS PART OF THE ISSUE , DO NOT REQUIRE ANY ADJUDICATION IN VIEW OF OUR ABOVE S AID FINDING. HOWEVER, WE MAY LIKE TO POINT OUT THAT THE ASSESSEE HAS NOT PLACED ON RECORD THE SALE DEED OF THE LAND IN HIS FAVOUR, WHICH HE HAS SUBSEQUENTLY SOLD CONSI STING OF 17 SHOPS/PLOT VIDE REGISTERED SALE DEED DATED 31.1.2011. PRODUCTION OF THE SALE DEED IN RESPECT OF THE SAID LAID IN FAVOUR OF THE ASSESSEE WAS/IS NECESSAR Y IN VIEW OF THE FACT THAT THE GIRDHAWARI CONTINUED TO SHOW THE NATURE OF THE LAND IS AGRICULTURAL. HOWEVER, TEHSILDAR HAS GIVEN THE CERTIFICATE THAT THE LAND I S SITUATED 12 KM FROM THE MUNICIPAL LIMIT OF THE JAIPUR NAGAR NIGAM. IN OUR VIEW, IF TH E ORIGINAL CHARACTER OF THE LAND SOLD BY THE ASSESSEE WAS AGRICULTURAL, THEN THE BENEFIT OF SECTION 54F CANNOT BE GRANTED IF THE LAND PURCHASED IS USED FOR RESIDENTIAL PURPO SES, FOR THAT THE BENEFIT CAN ONLY BE GIVEN UNDER SECTION 54B OF THE ACT. FURTHER IN VIEW OF THE JUDGMENT OF HONBLE ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT RAJASTHAN HIGH COURT IN THE MATTER OF KALYA VS. CIT (2012) 22 TAXMAN.COM 67 THE BENEFIT OF 54F CANNOT BE GIVEN TO THE ASSESSEE. MOREOVER, IF WE LOOK INTO THE SIZE OF THE AGRICULTU RAL LAND PURCHASED BY THE ASSESSEE VIDE REGISTERED SALE DEED DATED 29.3.2013, WE FIND THAT THE TOTAL SIZE OF THE PLOT IS 37,000 SQ. FT. WHEREAS THE CONSTRUCTED PORTION OF T HE ENTIRE COMPLEX WAS ONLY 1553.50 SQ. FT. (TIN SHED). THEREFORE, ALSO THE AS SESSEE CANNOT BE GIVEN THE BENEFIT OF SECTION 54F WITHIN THE MEANING OF LAW AS THE PRO PERTY PURCHASED BY HIM WAS AN AGRICULTURAL LAND AND THE HOUSE WAS CONSTRUCTED ONL Y OF 1553.50 SQ. FT. AGAINST THE TOTAL SIZE OF LAND ADMEASURING 37,000 SQ. FT. . TH E CHARACTER OF REMAINING PROPERTY WAS CONTINUED TO BE THE AGRICULTURAL IN NATURE. IN VIEW THEREOF GROUND NO. 1 IS DISMISSED. 8. IN THE RESULT, APPEALS OF REVENUE AND ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/04/2016 . 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:- 27/04/2016. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAJENDRA KUMAR SHARMA, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE JCIT, RANGE-4, 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. 358(2)/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR ITA NO. 358 & 375/JP/2015 SHRI RAJENDRA KUMAR SHARMA VS. JCIT