ITO, UDAIPUR V. Shri Kanhaiya Lal Kalal, UDAIPUR

ITA 371/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74900 (ITAT-JODHPUR)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Fair market value
• Section: 50C; 54F; 54

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 371/JODH/2013 (A.Y. 2009-10) ITO, WARD-1(4), VS. SHRI KANHAIYA LAL KALAL, UDAIPUR. 44, PURBIA COLONY, OTC SCHEME B' BLOCK, UDAIPUR. PAN NO. ACHPK 7343 P (APPELLANT) (RESPONDENT) CO NO. 31/JODH/2013 (ITA NO. 371/JODH/2013) (A.Y. 2009-10) SHRI KANHAIYA LAL KALAL, VS. ITO, WARD-1(4), C/O SHRAWAN KUMAR GUPTA, ADVOCATE & UDAIPUR. TAX CONSULTANTS, 416 SURYA CHAMBER, RADIO MARKET, NEHRU BAZAR, JAIPUR.W PAN NO. ACHPK 7343 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA. DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 18/02/2014. DATE OF PRONOUNCEMENT : 21/02/2014. 2 O R D E R PER N.K. SAINI, A.M THE APPEAL BY THE DEPARTMENT AND THE CROSS OBJECTI ON BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 28/03 /2013 OF LD. CIT (A), UDAIPUR. 2 FIRST WE WILL DEAL WITH THE APPEAL OF THE DEPARTME NT. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1 ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF LTCG OF RS. 15,96,145/- 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) H AS ERRED IN ALLOWING CLAIM U/S 54F DESPITE THE UNCONTROVERTED FACT THAT THE ASSESSEE HAS NOT CONSTRUCTED THE HOUSE OVER THE CLAIMED PURCHASE OF PLOT. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DEL ETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING. 3. THE FIRST ISSUE VIDE GROUND NO.1 RELATES TO THE DE LETION OF ADDITION OF RS. 15,96,145/- MADE BY THE ASSESSING OFFICER UN DER THE HEAD LONG TERM CAPITAL GAIN. 4. FACTS OF THIS ISSUE IN BRIEF ARE THAT THE ASSESSE E DURING THE YEAR UNDER CONSIDERATION SOLD A PLOT WHICH WAS UNDER ACQ UISITION OF UIT FOR RS. 5,15,000/-. THE REGISTRAR HAD ADOPTED THE FAIR MARKET VALUE OF LAND 3 IN THE AREA FOR STAMP DUTY PURPOSES AT RS. 16,31,00 0/-. THE ASSESSEE HAD DECLARED LONG TERM CAPITAL GAIN CONSIDERING THE NET SALE CONSIDERATION AT RS. 5,15,000/- ON THE BASIS OF PROVISIONS OF SECTIO N 50C(2) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT ) AND CLAIMED TO HAVE INVESTED THE SALE CONSIDERATION FOR CONSTRUCTION OF NEW RESIDENTIAL HOUSE IN THE STIPULATED TIME I.E. PRIOR TO THE DATE OF FI LING OF RETURN, IN WHICH HE HAD INVESTED MORE THAN RS. 5,15,000/-. SO, ACCORDI NG TO HIM, DEDUCTION WAS ALLOWABLE AGAINST THE LONG TERM CAPITAL GAIN DE RIVED BY HIM AND AS SUCH THERE WAS NO CAPITAL GAIN TAX LIABILITY AGAINS T SUCH SALE. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, OBSERVED THAT THE ASSESSEE HAD CALCULATED LONG TERM CAPITAL GAIN ON THE ACTUAL SALE PRICE INSTEAD OF DEEMING SALE PRICE AS PROVIDED UND ER SECTION 50C(1) OF THE ACT. THE ASSESSING OFFICER ALSO DID NOT ALLOW CLAIM FOR DEDUCTION UNDER SECTION 54F OF THE ACT . IN THIS MANNER, AN ADDITION OF RS. 15,96,145/- WAS MADE. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED AS UNDER:- (I) THAT THE LEARNED AO HAS GROSSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN MAKING ADDITION BASED ON COMPUTATION OF LONG TERM CAPITAL GAIN TREATING THE SALE CONSIDERATION AT RS. 16,31,080/- AS AGAINST RS.5,15,000/- DECLARED BY THE ASSESSEE BY INVOKING PROVISIONS OF SECTION 50C. 4 (II) THE LD. AO ERRED IN NOT APPRECIATING THE CORRE CT POSITION OF LAW AS WELL AS FACTS IN THIS RESPECT BEFORE APPLYING SALE CONSIDER ATION AS PER DLC RATE FOR COMPUTATION OF LONG TERM CAPITAL GAIN WITHOUT BRING ING ANY MATERIAL EVIDENCE IN SUPPORT OF DLC RATE ON SUCH LAND. THE L D. AO ARRIVED AT WRONG CONCLUSIONS JUST ON THE BASIS OF ASSUMPTION AND PRE SUMPTIONS IGNORING THE FOLLOWING RELEVANT FACTS AND CIRCUMSTANCES OF THE C ASE. (A) THE LAND SOLD BY THE ASSESSEE WAS IN FACT SOLD UNDER VARIOUS DISADVANTAGEOUS POSITIONS IN COMPARISON TO THE OTHE R LAND SITUATED IN THE SAME AREA. (B) THE LAND SOLD WAS LITIGATED PROPERTY AND THE TI TLE OF THE LAND WAS NOT CLEAR. (C) THERE WAS ACQUISITION PROCEEDINGS INITIATED BY UIT FOR ACQUISITION OF TOTAL LAND OUT OF WHICH ONLY A PORTION BELONGED TO THE AS SESSEE WHICH WAS SOLD BY HIM. THE PROCESS FOR ACQUISITION WAS CONTINUED ON T HE DATE OF SALE ALSO. (D) AFTER SALE THE TOTAL LAND WAS IN FACT ACQUIRED BY UIT AND THE TOTAL COMPENSATION WAS MEAGER AMOUNT NOWHERE COMPARABLE W ITH THE ACTUAL SALE CONSIDERATION REALIZED BY THE ASSESSEE. THE TO TAL AWARD WAS OF RS.35,82,5001 FOR 6.2350 HECT AGRICULTURAL LAND ORI GINALLY IN THE NAME OF SHRI DAYARAM KUMAWAT. THE PORTION OF ASSESSEE WAS A BOUT 0.7150/35 AND 0.7150/51HECT. ACCORDINGLY THE SHARE OF AWARD OF HI S PORTION WAS ABOUT 24,600/- ONLY. HOWEVER THE ASSESSEE HAS SOLD THE LA ND AT RS. 5,15,000/- AT THE MAXIMUM PRICE WHICH CAN BE ACHIEVED CONSIDERING THE OVERALL FACTS BEFORE EXECUTION OF FINAL ACQUISITION PROCEEDING BY UIT OF SUCH LAND. (E) THE FACTS RELATED TO ACQUISITION PROCEEDINGS AN D THE DOCUMENTS RELATED THERE TOO WERE OBTAINED BY THE ASSESSEE FORM UIT UN DER THE RTI ACT 2005 AND COPY OF RELATED DOCUMENTS ARE PROVIDED TO THE A O DURING THE ASSESSMENT PROCEEDINGS WHICH CLEARLY SPEAKS ABOUT T HE FACT THAT THE AWARD AGAINST THE PORTION OF ASSESSEES LAND WAS LESS THA N RS. 25000 ONLY. CONSIDERING THE ABOVE TRUE AND CORRECT FACT OF THE CASE THE APPLICATION OF PROVISION OF 50C (1) BY THE ASSESSING OFFICER FOR C OMPUTATION OF LONG TERM CAPITAL GAIN IS NOT JUSTIFIED. THE ADDITION MADE BY THE ASSESSING OFFICER IGNORING OVER ALL FACTS AND THE PROVISIONS OF SECTI ON 50C(2) IS ILLEGAL, CONTRARY 5 TO THE FACTS AND NOT INCONFORMITY WITH THE LAW HENC E DESERVED TO BE DELETED. WE REQUEST YOUR GOODSELF TO PLEASE DELETE THE ADDIT ION MADE BY THE ASSESSING OFFICER IN THE INTEREST OF EQUITY AND JUS TICE. (III) WITHOUT PREJUDICE TO THE ABOVE, ALTERNATIVELY WE HAVE TO SUBMIT THAT THE LD. AO ERRED AT LAW IN NOT ADMITTING THE CLAIM OF A SSESSEE DURING THE ASSESSMENT PROCEEDING 'THAT THE VALUE ADOPTED BY TH E STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE'. THE ASSES SEE HAD SPECIFICALLY OBJECTED THE FAIR MARKET VALUE ESTIMATED BY THE REG ISTRAR AND HAD ALSO PRAYED TO REFER THE MATTER TO THE DVO AS PER SECTIO N 50C(2) OF THE ACT. THE ASSESSEE HAD ALSO PROVIDED SUFFICIENT MATERIAL IN S UPPORT OF HIS CLAIM THAT THE VALUE ADOPTED BY THE REGISTRAR WAS EXCEED THE C ORRECT POSITION OF FAIR MARKET VALUE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LEARNED ASSESSING OFFICER HAS ERRED AT LAW IN F RAMING THE ORDER AND RECOMPUTATION OF LONG TERM CAPITAL GAIN WITHOUT REF ERRING THE MATTER TO THE DVO. HE EXCEEDED HIS JURISDICTION BEFORE MAKING ADD ITION ON THIS ACCOUNT. IN THIS RESPECT HAVE TO SUBMIT AS UNDER: THE ID. AO HAS ERRED AT LAW, EXCEEDED HIS JURISDICT ION FOR INVOKING OF PROVISIONS OF SEC. 50C (1) FOR COMPUTATION OF LONG TERM CAPITAL GAIN ON SALE OF LAND IN THIS CASE. THE LEARNED ASSESSING OFFICER FURTHER ERRED IN IGNORING THE FACT THAT ASSESSEE HAD DISPUTED THE VALUE ADOPT ED BY STAMP DUTY AUTHORITY FOR LEVY OF STAMP DUTY AT THE TIME OF REG ISTRATION OF TRANSFER DURING THE COURSE ASSESSMENT PROCEEDING UNDER THE LT ACT, 1961. THE LD. AO HAS NOT CONSIDERED OR APPRECIATED THE PROVISIONS OF SECTION 50C IN TOTO I.E. SECTION 50C(2) HAS BEEN IGNORED BEFORE INVOKING PROVISION O F SECTION 50 C (1). THAT THE LEARNED ASSESSING OFFICER GROSSLY ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAD ALSO OBJECTED THE FAIR MARKET VALUE DETERMINED BY THE REGISTRAR DURING THE ASSESSMENT PROCEEDINGS. THE OB JECTION WAS CLEARLY STATED AGAINST THE VALUE ADOPTED BY STAMP DUTY AUTH ORITY AGAINST THIS LAND THAN THE FAIR MARKET VALUE AND HAS SUBSTANTIATED HI S CLAIM WITH COGENT MATERIAL THAT THE PROPERTY SOLD WAS IN FACT LITIGAT ED PROPERTY UNDER ACQUISITION OF UIT AND THE STAMP DUTY AUTHORITY HAD APPLIED D.L.C. OF CLEAR TITLE PROPERTY ON TRANSFER OF SUCH PROPERTY. FROM THE PLAIN READING OF PROVISIONS OF SEC. 50C, I T EMERGES THAT THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOV ERNMENT FOR THE PURPOSE 6 OF PAYMENT OF STAMP DUTY IN RESPECT OF LAND OR BUIL DING OR BOTH, SHALL FOR THE PURPOSE OF SEC. 48 BE DEEMED TO BE THE FULL VALUE O F THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER. LT NO WHERE PROVIDES THAT THE VALUATION DONE BY THE STATE GOVERNMENT FOR THE PURP OSE OF STAMP DUTY ETC. WOULD IPSO FACTO TAKE PLACE OF THE ACTUAL CONSIDERA TION AS BEING PASSED ON TO THE SELLER BY THE PURCHASER IN THE ABSENCE OF AN Y OTHER EVIDENCE. AS PER SEC. 50C, WHERE THE ASSESSEE HAS DISPUTED VA LUE ADOPTED BY STAMP DUTY AUTHORITY THE STAMP DUTY VALUATION AS FINALLY ACCEPTED FOR STAMP DUTY PURPOSES IS TAKEN AS FULL VALUE OF CONSIDERATION FO R THE PURPOSES OF CALCULATION OF CAPITAL GAINS. THE LAW DOES NOT PERM IT THE AO TO ESTIMATE THE FAIR MARKET VALUE OR TO ADOPT STAMP DUTY VALUATION IGNORING THE POSITION OF DISPUTES IN THIS RESPECT. LN THE PRESENT CASE, IT WAS AN ADMITTED FACT THAT A SSESSEE HAD DISPUTED THE VALUE ADOPTED BY STAMP DUTY AUTHORITY SO PROVISIONS OF SEC. 50C (1) WERE NOT APPLICABLE AT THE TIME OF FILING OF RETURN OR A T THE TIME OF ASSESSMENT OF INCOME BY THE AO. HENCE THE AO HAS EXCEEDED HIS JUR ISDICTION IN INVOKING SEC. 50 C (1) REJECTING THE CLAIMS OF ASSESSEE AND THEREBY ERRED IN MAKING ADDITION ON THIS ACCOUNT ADOPTING DISPUTED STAMP DU TY VALUATION WITHOUT REFERRING PROVISIONS OF SECTION 50C(2). HE FURTHER ERRED IN MAKING ADDITION WITHOUT MAKING REFERENCE TO THE VALUATION OFFICER A S REQUESTED BY THE ASSESSEE BECAUSE THE ASSESSEE HAD CLAIMED DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THAT THE VALUE ADOPTED BY STAMP DUTY AU THORITY IS MORE THAN THE FAIR MARKET VALUE OF THIS LAND' THE ADDITIONS M ADE IGNORING THE TRUE AND CORRECT FACTS ARE NOT INCONFORMITY WITH THE LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE ADDITION SO MADE DESERVES TO B E DELETED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- 1) AJMAL FRAGRANCES & FASHIONS (P) LTD. VS. ACIT REPOR TED AT (2009) 34 SOT 57 (MUMBAI) 2) MEGHRAJ BAID VS. ITO REPORTED AT (2008) 114 TTJ (JD ) 841 3) ITO VS. GEETA ROY REPORTED AT (2012) 146 TTJ 762 (C AL) 4) RAVIKANT VS. ITO REPORTED AT (2007) 110 TTJ (DEL.) 297. 7 IT WAS FURTHER SUBMITTED AS UNDER:- (IV) THE LD. AO FURTHER ERRED IN DISALLOWING THE EX EMPTION CLAIMED U/S 54F WITHOUT APPRECIATING THE TRUE AND CORRECT FACTS OF THE CASE FROM THE MATERIAL AVAILABLE ON RECORDS. THE ASSESSEE HAD INV ESTED THE GROSS SALE CONSIDERATION OF RS.5,15,000/- IN THE PURCHASE OF N EW RESIDENTIAL PLOT FOR CONSTRUCTION OF HOUSE WITHIN THE PRESCRIBED TIME AS PROVIDED UNDER SECTION 54F. THE TOTAL PAYMENT WAS OF RS. 8,00,000/- WHICH INCLUDED THE WHOLE SALE CONSIDERATION OF RS,5,15,000/- ALSO. AS THE INVEST MENTS WERE MADE PRIOR TO THE DATE OF THE FILING OF RETURN THE ASSESSEE WAS E NTITLED FOR CLAIM OF EXEMPTION UNDER SECTION 54F. THE LEARNED ASSESSING OFFICER HAS MISINTERPRETED THE PROVISION OF SECTION 54F AND RES ORTED TO THE TECHNICALITIES OF THE SECTION IGNORING THE CORRECT POSITION OF LAW IN THIS REGARD. THE COST OF LAND IS ALSO INCLUDED IN THE COST OF NEW CONSTRUCTI ON OF HOUSE AND IF THE COST OF LAND ITSELF IS MORE THAN THE SALE CONSIDERATION THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 54F IF SUCH INVESTMENT IS M ADE PRIOR TO THE DATE OF FILING OF RETURN. FURTHER THE DEEMING PROVISIONS OF SALE CONSIDERATION UNDER SECTION 50C ARE NOT APPLICABLE FOR SECTION 54F. IN THIS RESPECT WE HAVE TO SUBMIT AS UNDER:- THE ASSESSEE HAS UTILIZED WHOLE SALE CONSIDERATION OF RS. 5,15,000/- IN THE PURCHASE OF NEW RESIDENTIAL PLOT FOR CONSTRUCTION O F NEW RESIDENTIAL HOUSE. THE CALCULATION OF EXEMPTION U/S 54 F HAS BEEN DONE CONSIDERING THE ACTUAL SALE CONSIDERATION AS NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET'. AS THE COST OF NEW ASSET IS NOT LESS THEN THE NET CONS IDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHAL L NOT BE CHARGED U/S45 AS PROVIDED IN SECTION54F (1)(A)OF THE LT ACT, 1961. L N THE PRESENT CASE THE LONG TERM CAPITAL GAIN ARRIVED AT BEFORE EXEMPTION UNDER SECTION 54 F IS FULLY EXEMPT UNDER SECTION 54 F(1) (A). LN THIS RESPECT WE LIKE TO DRAW YOUR ATTENTION TOWA RDS THE FOLLOWING DECISIONS IN WHICH IT HAS BEEN HELD THAT THE DEEMIN G FICTION AS PROVIDED IN SECTION 50C IN RESPECT OF WORDS 'FULL VALUE OF CONS IDERATION' IS TO BE APPLIED ONLY TO SECTION 48 THE EXPLANATION TO SECTION 54 F (1) IS NOT GOVERNED BY THE MEANING OF THE WORD FULL VALUE OF CONSIDERATION AS MENTIONED IN SECTION 50 C: 8 GYAN CHAND BATRA V/S ITO (2010) 133 TTJ (JP) 482 CIT V/S SMT. NILOFER L. SINGH (2009) 221 CTR (D EL.) 277 CIT V/S ACE BUILDERS (P) LTD. (2005) 195 CTR (B OM.) 1 CIT V/S ASSAM PETROLEUM LND. (P) LTD (2003) 185 CTR (GAU.) 71 CONSIDERING THE ABOVE POSITION OF LAW WHATEVER LONG TERM CAPITAL GAIN IF ANY COMPUTED WILL BE ALLOWED AS DEDUCTION UNDER SECTION 54F ON ACCOUNT OF INVESTMENT IN RESIDENTIAL HOUSE UPTO THE DATE OF FI LING OF RETURN. WE REQUEST YOUR GOODSELF TO PLEASE DELETE THE WHOLE ADDITION MADE BY THE ASSESSING OFFICER UNDER THE HEAD LONG TERM CAPITAL GAIN IN THIS CASE IN THE INTEREST OF EQUITY AND JUSTICE.' 6 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE HAD SPECIFICA LLY OBJECTED THE FAIR MARKET VALUE ADOPTED BY THE REGISTRAR FOR COMPUTATI ON OF LONG TERM CAPITAL GAIN AND HAS ALSO PRAYED TO REFER THE MATTE R TO THE DVO CONSIDERING THE PROVISIONS OF SECTION 50C(2) OF THE ACT. LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER NEITHER ADMITTE D THE PRAYER FOR REFERRING THE MATTER TO THE DVO NOR CONSIDERED THE SUFFICIENT MATERIAL/EVIDENCES AVAILABLE ON RECORDS IN RESPECT OF CLAIM OF ASSESSEE THAT THE VALUE ADOPTED BY THE REGISTRAR WAS MORE TH AN THE CORRECT MARKET VALUE. LD. CIT(A) ALSO OBSERVED THAT THE AS SESSEE HAD FULLY AND REASONABLY DISCHARGED HIS ONUS FROM THE MATERIAL EV IDENCES WHICH DEMONSTRATE THAT THE FAIR MARKET VALUE WAS LESS THA N THE STAMP DUTY ON THE DATE OF THE SALE, SO, THE FAIR MARKET VALUE DEM ONSTRATED BY THE 9 ASSESSEE WAS REQUIRED TO BE ADOPTED FOR COMPUTATION OF LONG TERM CAPITAL GAIN. HE FURTHER OBSERVED THAT THE APPLICATION OF P ROVISIONS OF SECTION 50C(1) OF THE ACT IGNORING THE PROVISION OF SECTION 50C(2) OF THE ACT AND WITHOUT APPRECIATING TO THE TRUE AND CORRECT FACTS OF THE CASE WAS NOT JUSTIFIABLE. THE LD. CIT(A), THEREFORE, DELETED T HE ADDITION MADE BY THE ASSESSING OFFICER. NOW, THE DEPARTMENT IS IN APPEA L. 7 . LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT NO EVIDENCE WAS PRODUCED BY THE ASSESSEE TO SUBSTANTIATE THAT FAIR MARKET VALUE WAS LESS THAN T HE STAMP DUTY VALUATION ON THE DATE OF SALE. THEREFORE, THE LD. C IT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFI CER. IT WAS FURTHER STATED THAT THE MATTER MAY BE SENT BACK TO THE FILE OF ASSESSING OFFICER FOR REFERRING THIS ISSUE TO THE DVO AS PER THE PROV ISIONS OF SECTION 50C(2) OF THE ACT. IT WAS ALSO STATED THAT THE ASSESSEE D ID NOT FURNISH THE EVIDENCES IN RESPECT OF HIS CLAIM THAT THE FAIR MAR KET VALUE WAS LESS THAN THE STAMP DUTY VALUATION. 8 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR TH E ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND FURTHER SUBMITTED THAT SINCE THE FAIR MARKET VALUE WAS LESS THAN THE STAMP DUTY VALUATION 10 DETERMINED BY THE SUB-REGISTRAR, THEREFORE, THE ASS ESSING OFFICER WITHOUT REFERRING THE MATTER TO THE DVO AND BRINGING ANY EV IDENCE ON RECORD THAT THE FAIR MARKET VALUE DECLARED BY THE ASSESSEE WAS NOT CORRECT, WRONGLY MADE THE ADDITION AND THE LD. CIT(A) RIGHTLY DELETE D THE SAME. 9 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSEE MADE A PRAYER TO THE ASSESSING OFFICER TO REFER THE MATTER UNDER SECTION 50C(2) OF THE ACT TO THE DVO BY STATING THAT THE FAIR MARKET VALUE WAS LESS THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. HOWEVER, IT IS NOT CLEAR AS TO HOW AND IN WHAT MANNER, THE FAIR MARKET VALUE WAS LESS THAN THE VAL UE ADOPTED BY THE REGISTRAR FOR THE STAMP VALUATION PURPOSES. FROM T HE ORDERS OF THE AUTHORITIES BELOW ALSO IT IS NOT CLEAR AS TO WHY TH E PRAYER OF THE ASSESSEE FOR REFERRING THE MATTER TO THE DVO WAS NOT ACCEPTE D. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND IN THE AB SENCE OF CLEAR FACTS ON RECORD, DEEM IT APPROPRIATE TO REMAND THIS ISSUE BA CK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDA NCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. 11 10 . VIDE GROUND NO.2, THE GRIEVANCE OF THE DEPARTMENT RELATES TO CLAIM ALLOWED UNDER SECTION 54F OF THE ACT. 11 . FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT TH E ASSESSEE INVESTED RS. 8 LAC IN THE PURCHASE OF PLOT FOR CONSTRUCTION OF HOUSE AND CLAIMED DEDUCTION UNDER SECTION 54F OF THE ACT FOR A SUM OF RS. 5,15,000/- WHICH WAS SALE CONSIDERATION RECEIVED BY THE ASSESSEE. T HE ASSESSEE SUBMITTED TO THE ASSESSING OFFICER THAT THE INVESTMENT WAS MA DE WITH THE INTENTION TO BUILD UP HOUSE ON SUCH PLOT, BUT DUE TO DIFFEREN T REASON, THE SAID LAND COULD NOT BE GOT CONVERTED AND THE SITUATION AS WEL L AS LEGAL ACTION WERE BEYOND THE CONTROL OF THE ASSESSEE. IT WAS FURTHER STATED THAT THE ASSESSEE SOLD THE AGRICULTURAL LAND IN THE YEAR UND ER CONSIDERATION AND HAD ALSO UTILIZED FULL ACTUAL SALE CONSIDERATION FO R PURCHASE OF NEW PLOT FOR CONSTRUCTION OF RESIDENTIAL HOUSE. THEREFORE, HE WAS ENTITLED FOR EXEMPTION UNDER SECTION 54F OF THE ACT. THE ASSESS ING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE BY OB SERVING THAT FOR CLAIMING EXEMPTION UNDER SECTION 54F OF THE ACT, TH E HOUSE IS TO BE CONSTRUCTED OR PURCHASED WITHIN A STIPULATED TIME, BUT THE ASSESSEE HAD UTILIZED SALE CONSIDERATION FROM AGRICULTURAL LAND IN PURCHASING THE PLOT AND NOT IN CONSTRUCTING THE HOUSE. 12 12. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE PURCHASE OF PLOT WAS ALSO PA RT OF INVESTMENT IN HOUSE, SO THE DEDUCTION UNDER SECTION 54F OF THE AC T CANNOT BE DENIED IN THE YEAR OF PURCHASE OF PLOT. IT WAS FURTHER STATE D THAT IN CASE WHERE INVESTMENT WAS LESS THAN THE NET SALE CONSIDERATION , THE BALANCE AMOUNT WAS REQUIRED TO BE DEPOSITED IN LONG TERM CAPITAL G AIN ACCOUNT SCHEME. RELIANCE WAS PLACED ON THE DECISION OF ITAT JAIPUR BENCH IN THE CASE OF GYANCHANDRA BATRA VS. ITO (2010) 133 TTJ (JP) 482 A ND THE DECISION OF ITAT JODHPUR BENCH IN THE CASE OF JAGNATH SINGH LOD HA VS. ITO (2004) 85 TTJ (JD) 173. LD. CIT(A) AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE DIRECTED THE ASSESSING OFFICER TO ALLOW CLAIM OF TH E ASSESSEE UNDER SECTION 54F OF THE ACT BY OBSERVING THAT IT WAS ONL Y TECHNICAL DEFAULT AND ON THIS GROUND THE CLAIM OF EXEMPTION COULD NOT BE DENIED PARTICULARLY WHEN THE AMOUNT HAD BEEN ACTUALLY UTILIZED FOR THE CONSTRUCTION OF RESIDENTIAL HOUSE AND NOT FOR ANY OTHER PURPOSES. NOW THE DEPARTMENT IS IN APPEAL. 13. LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSI NG OFFICER AND FURTHER SUBMITTED THAT THE ASSESSEE UTILIZED THE SA LE CONSIDERATION FROM AGRICULTURAL LAND ONLY FOR PURCHASING THE PLOT AND NOT FOR CONSTRUCTING THE HOUSE OR PURCHASING THE CONSTRUCTED HOUSE, THEREFOR E, EXEMPTION UNDER 13 SECTION 54F OF THE ACT WAS NOT AVAILABLE TO THE ASS ESSEE AND THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW CLAIM OF THE ASSESSEE UNDER SECTION 54F OF THE ACT. 14. IN HIS RIVAL SUBMISSIONS, THE LEARNED COUNSEL F OR THE ASSESSEE SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT( A). 15. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE SOLD AGRICULTURAL LAND FOR A SUM OF RS. 5.15 LAC AND UTILIZED THE SAID AMOUNT IN PURCHASING PLOT FOR CONSTRUCTING THE HOUSE, HOWEVER, DUE TO CERTAIN DIF FICULTIES THE CONSTRUCTION COULD NOT BE DONE ON THE SAID PLOT, TH EREFORE, EXEMPTION UNDER SECTION 54F OF THE ACT WAS NOT AVAILABLE TO T HE ASSESSEE BECAUSE THE PRIME CONDITION FOR CLAIMING EXEMPTION UNDER SE CTION 54F OF THE ACT IS THAT THE AMOUNT FROM CAPITAL GAIN SHOULD BE UTIL IZED IN CONSTRUCTING THE RESIDENTIAL HOUSE WITHIN THREE YEARS FROM THE DATE OF TRANSFER OF ORIGINAL ASSET OR TO BE UTILIZED ONE YEAR PRIOR OR WITHIN TW O YEARS FROM THE DATE OF SALE IN PURCHASING RESIDENTIAL HOUSE. THE SAID CON DITION IS NOT FULFILLED BY THE ASSESSEE, THEREFORE, THE EXEMPTION UNDER SECTIO N 54F OF THE ACT WAS 14 NOT AVAILABLE TO THE ASSESSEE. IN THAT VIEW OF TH E MATTER, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE AND UPHELD THE VIEW TAKEN BY THE ASSESSING OFFICER. 16. AS REGARDS TO THE CROSS OBJECTION, LEARNED COUN SEL FOR THE ASSESSEE SUBMITTED THAT HE HAS INSTRUCTION NOT TO PRESS THE CROSS OBJECTION AND GAVE IN WRITING AS UNDER:- C.O. NOT PRESSED SD/-XXXXX 18/02/2014 17. IN VIEW OF THE ABOVE, CROSS OBJECTION OF THE AS SESSEE IS DISMISSED AS NOT PRESSED. 18. IN THE RESULT, APPEAL OF THE DEPARTMENT IS PART LY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES AND CROSS OBJECTIO N OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. (ORDER PRONOUNCED IN THE COURT ON 21 ST FEBRUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST FEBRUARY, 2014. VR/- 15 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.