ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR V. SMT. KULWANT KAUR, ALWAR

ITA 678/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2010 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 30-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Valuation report
• Section: 54F; 69; 54

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 HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 678/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, ALWAR. CUKE VS. SMT. KULWANT KAUR, EG-28, ASHIANA GARDEN, BHIWADI, DISTT.-ALWAR (RAJ). PAN NO.: BIAPK 0556 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/10/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 10/10/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS THE APPEAL FILED BY THE REVENUE EMANATES FR OM THE ORDER OF THE LD. CIT(A), ALWAR DATED 05/06/2017 FOR THE A.Y. 2014-15. 2. THE RETURN OF INCOME WAS FILED ON 31/07/2014 DECLA RING TOTAL INCOME OF RS. 3,02,58,580/-, WHICH INCLUDES LONG TERM CAPIT AL GAIN OF RS. 3,00,41,869/- ON SALE OF PROPERTY LOCATED AT KHASRA NO. 534, VILLAGE- KHANPUR, TEHSIL-TIJARA. THIS PROPERTY WAS SOLD TO M/S P INKCITY HEIGHTS PVT. LTD. FOR A SALE CONSIDERATION OF RS. 4.50 CRORES VI DE SALE DEED DATED 03/06/2013. THE PART OF THE SALE CONSIDERATION WAS I NVESTED IN PURCHASE OF ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 2 A FLAT AT EG-28, ASHIANA GARDEN, BHIWADI FOR RS. 87 .50 LACS AND THE PURCHASE WAS EFFECTED ON 03/7/2013 ON WHICH THE ASSES SEE CLAIMED DEDUCTION U/S 54 OF THE INCOME TAX ACT, 1961 (IN SHO RT THE ACT). 3. THE LD. CIT(A) GRANTED THE RELIEF TO THE ASSESSEE ON VARIOUS ADDITIONS. 4. NOW THE REVENUE IS IN APPEAL BEFORE THE ITAT BY TA KING FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW ID. CIT(A) ERRED IN ALLOWING THE CLAIM OF DEDUCTION OF RS. 87,75,000/- U/S 54 OF THE IT ACT DISALLOWED BY THE AO FOR TAKING IN TO ACCOUNT TO COMPUTE CAPITAL GAIN AS THE ASSESSEE WAS NOT ENTITL ED TO SUCH CLAIM AS PER PROVISIONS OF SECTION 54 OF THE IT ACT 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW ID. CIT(A) ERRED IN ALLOWING THE CLAIM OF EXPENSES INCURRED ON SALE OF PROPERTY OF RS. 8,00,000/- DISALLOWED BY THE AO FOR COMPUTIN G NET CONSIDERATION RECEIVED, WITHOUT APPRECIATING THE MA TERIAL FACTS OF THE CASE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW ID.CIT(A) ERRED IN ALLOWING BENEFIT OF THE CLAIM OF RS. 39,43 ,196/- DISALLOWED BY AO WHILE COMPUTING CAPITAL GAIN INDEXED COST OF CONSTRUCTION OF HOUSE AND IT IMPROVEMENT THE ASSESSEE HAS FILED TO SUBSTANTIATE ITS CLAIM WITH DOCUMENTARY EVIDENCE. 5. IN THE GROUND NO. 1 OF THE APPEAL, THE ISSUE INV OLVED IS DELETING THE ADDITION OF RS. 87.75 LACS ON ACCOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 54 OF THE ACT, WHICH WAS DISALLOWED BY THE ASSESSI NG OFFICER. ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 3 6. THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 5.3 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT. FOLLOWING FACTS HAVE EMERGED; 1. THAT THE ASSESSEE HAS FILED RETURN OF INCOME FOR AY 2014-15 DECLARING TOTAL INCOME OF RS. 3,02,58,580/-. 2. THAT DURING THE YEAR UNDER CONSIDERATION THE ASS ESSEE HAS SOLD PROPERTY SITUATED AT VILLAGE- KHANPUR, TEHSIL- TIJA RA FOR A TOTAL CONSIDERATION OF RS. 4.5 CRORES. 3. THAT THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN OF RS. 3,00,41,869/- ON SALE OF THE ABOVE MENTIONED PROPER TY. 4. THAT THE ASSESSEE HAS FURTHER CLAIMED AN EXEMPTI ON OF RS. 87,75,000/- U/S 54 OF THE IT ACT ON ACCOUNT OF INVE STMENT IN A RESIDENTIAL PROPERTY. 5. THAT THE AO HAS CONTENDED THAT THE SAID PROPERTY IS AN AGRICULTURAL LAND AND SALE DEED AS WELL AS INSPECTORS REPORT HA S SHOWN THAT NO RESIDENTIAL PROPERTY WAS THERE ON THE LAND IN QUEST ION. THEREFORE, THE AO HAS REJECTED THE ASSESSEES CLAIM OF DEDUCTI ON U/S 54 OF THE ACT. 6. THAT THE ASSESSEE HAS SUBMITTED A NUMBER OF DOC UMENTS IN SUPPORT OF ITS CLAIM THAT THE PROPERTY WAS USED AS RESIDENT IAL PROPERTY BY THE ASSESSEE PRIOR TO ITS SALE. FOLLOWING DOCUMENTS WERE PRODUCED DURING APPELLATE PROCEEDINGS AS WELL AS ASSESSMENT PROCEEDINGS:- (I) ELECTRICITY BILL:- SINCE FEBRUARY, 2004 ONWAR DS TILL THE SALE OF THE PROPERTY IN FEBRUARY, 2014; (II) LPG CONNECTION BILL; (III) VALUATION REPORT BY APPROVED VALUER DATED 01 -06-2013 CONTAINING PHOTOGRAPHS OF THE PROPERTY SHOWING RESI DENTIAL STRUCTURE ON THE LAND. ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 4 (IV) PAN CARD LETTER DATED APRIL 30, 2009 ON SAID ADDRESS; (V) ELECTION CARD DATE OF ISSUE 19-02-2011; (VI) RATION CARD OF FAMILY OF ASSESSEE THAT INCLUD ES ASSESSEE AND HER TWO SON. (VII) AADHAR CARD DATED 24-02-2013 OF ASSESSEE AT SAME ADDRESS; (VIII) WELCOME NOTICE OF AXIS BANK TO CONFIRM THE ADDRESS IN NAME OF HER SON. (IX) CERTIFICATE/DECLARATION FROM CHAIRMAN OF MUNI CIPAL COMMITTEE, BHIWADI AND PARSHAD OF WARD-4, MUNICIPAL COMMITTEE, BHIWADI INDICATING THAT THE FAMILY WERE LIVING AT K HASARA NO. 534/41, KHANPUR, BHIWADI BETWEEN 2004 TO 2014. (X) COPY OF LAND AGREEMENT DATED 25-07-2008 DECLAR ING THAT THE SAID PROPERTY WAS GIVEN ON RENT AND THAT THE PR OPERTY INCLUDED A HOUSE APPURTENANT TO THE LAND. 5.3.2 I HAVE CONSIDERED THE ABOVE MENTION FACTS. T HE MOOT POINT IN THIS CASE IS WHETHER THE LAND UNDER CONSIDERATION WAS HAVING A R ESIDENTIAL PROPERTY OR NOT? IT IS TRUE THAT AT THE TIME OF SALE OF THE PROPERTY, THE APPELLANT HAS DECLARED IT AS- AGRICULTURAL LAND ONLY. IT IS SUBMI TTED BY THE APPELLANT THAT SUCH DECLARATION WAS MADE TO SAVE ON STAMP DUTY. HO WEVER, WHILE FILING THE RETURN OF INCOME BEFORE THE INCOME TAX AUTHORIT IES THE APPELLANT HAS CLAIMED RESIDENTIAL PROPERTY ON THE LAND TRANSFERRE D IN THIS CASE. THEREFORE, THERE ARE -TWO SETS OF DECLARATION (I) B EFORE THE STAMP DUTY AUTHORITIES WHERE THE LAND HAS BEEN SHOWN AS AGRICU LTURAL PROPERTY WHERE NO RESIDENTIAL PROPERTY HAS BEEN SHOWN ON THE LAND AND (II) BEFORE THE INCOME TAX AUTHORITIES WHERE A RESIDENTIAL PROP ERTY HAS BEEN SHOWN ON THE LAND. IN THIS REGARD, I HAVE TAKEN INTO CONS IDERATION HONBLE SUPREME COURT DECISION ON THE SLP (2008) 307 ITR (S T) 3, FILED IN THE CASE OF CIT V/S M/S VEERDIP ROLLERS PVT. LTD. 323 ITR 34 1 (GUJARAT HIGH COURT). ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 5 THE HONBLE GUJARAT HIGH COURT AND HONBLE SUPREME COURT HAS HELD AS UNDER: - WHERE IT WAS DECIDED THAT THE VALUE OF STOCK SHOWN IN THE BOOKS OF ACCOUNTS IS GENUINE OR NOT IN REFERENCE TO STOCK STATEMENT SUBM ITTED TO BANK HAS BEEN CONSIDERED BY THE TRIBUNAL AND CONSIDERING THE FACT DISCUSSED BY TRIBUNAL THAT STOCK SHOWN IN BOOKS IS GENUINE AS SUPPORTED BY BOO KS OF ACCOUNTS , WE SEE NO REASON TO HOLD THAT THE FINDINGS OF TRIBUNAL IS PER VERSE . CONSEQUENTLY, THE APPEAL STAND DISMISSED AT THE ADMISSION STAGE. FURTHER HONBLE SUPREME COURT -SLP (2008) 307 ITR (ST) 3 HAS DISMISSED SLP BY REVENUE AGAINST SAID ORDER IN THIS CASE APPEAL BY R EVENUE WAS DISMISSED BY THE GUJARAT HIGH COURT WHERE TRIBUNAL HAS DELETED THE A DDITION UNDER SECTION 69 B ON ACCOUNT OF THE DIFFERENCE BETWEEN THE CLOSING ST OCK FURNISHED TO BANK FOR AVAIL INS OF CREDIT FACILITY AND THAT DISCLOSED IN THE BOOKS OF ACCOUNTS FURNISHED BEFORE THE INCOME TAX AUTHORITIES. AS PER THE ABOVE JUDGMENT, IT IS IMPERATIVE TO SEE WHICH OF THE DECLARATION MADE BY THE APPELLANT IS CORRECT? ACCOR DINGLY, THE EVIDENCES PRODUCED BY THE APPELLANT DURING THE APPELLATE PROC EEDINGS AND DURING THE ASSESSMENT PROCEEDINGS HAVE BEEN CONSIDERED. IT WOULD BE PRUDENT TO FIRST CONSIDER THE PROVISION OF SECTION 54 OF TH E ACT, WHICH THE APPELLANT IS CLAIMED. THE PROVISIONS OF THE SECTION 54 OF THE IT ACT ARE AS UNDER:- 54. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDE D FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITA L ASSET, BEING BUILDINGS OR LANDS APPURTENANT THERETO, AND BEING A RESIDENTI AL HOUSE, THE INCOME OF WHICH IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' (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 PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, ONE RES IDENTIAL HOUSE IN INDIA, THEN, INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME-TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLA CE, IT SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 6 (I) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER T HAN THE COST OF THE RESIDENTIAL HOUSE SO PURCHASED OR CONSTRUCTED (HERE AFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE DIFFERENCE BETWE EN THE AMOUNT OF THE CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE ' CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISIN G FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUC TION, AS THE CASE MAY BE, THE-COST SHALL BE OR IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LE SS THAN THE COST OF THE NEW ASSET, THE CAPITAL GAIN SHALL NOT BE CHARGED UN DER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSE T ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SHALL BE REDUCED BY THE AMOUNT OF THE CAPITAL GAIN. THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT APPROPR IATED 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 SU CH RETURN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE D UE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB- SECTION (1) OF SECTION 139] IN AN ACCOUNT IN ANY SU CH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WIT H, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOM PANIED BY PROOF OF SUCH DEPOSIT; AND, FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE O R CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHA LL BE DEEMED 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 CONST RUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THE N, ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 7 (I) THE AMOUNT NOT SO UTILISED SHALL BE CHARGED UN DER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPI RES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SU CH AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. EXPLANATION.[OMITTED BY THE FINANCE ACT, 1992, W. E.F. 1-4-1993 .] THE RELEVANT PART OF THE SECTION TALKS ABOUT THE TR ANSFER OF A LONG TERM ASSET BEING BUILDING OR LAND APPURTENANT THERETO, A ND BEING A RESIDENTIAL HOUSE, THE INCOME OF WHICH IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THEREFORE, IN THIS CASE, THE IMPORT ANT QUESTION TO BE CONSIDERED IS WHETHER THERE IS A RESIDENTIAL PROPER TY OR NOT ON THE LAND SOLD DURING THE YEAR? THE APPELLANT HAS PRODUCED A NUMBER OF EVIDENCES ( AS MENTIONED IN PARA 5.3.1 ABOVE) IN SUPPORT OF ITS CLAIM THAT THERE WAS INDEED A RESIDENTIAL PROPERTY ON THE LAND IN QUESTION BETWEEN YEAR 2004 TO 2014 (THE YEAR IN WHICH THE PROPERTY WAS SOLD). I HAVE ALSO TAKEN INT O CONSIDERATION THE FACT THAT THE SAID LAND ALONGWITH THE BUILT-UP AREA WAS GIVEN ON RENT VIDE RENT AGREEMENT DATED 25-07-2008 ON A-RENT OF RS. 35 ,000/- PER MONTH. THE SAID RENT WAS RECEIVED BY CHEQUE. APART FROM TH IS, PLETHORA OF DOCUMENTS PRODUCED BEFORE THE AO AND DURING THE APP ELLATE PROCEEDINGS HAS GIVEN CREDENCE TO THE CLAIM OF THE APPELLANT THAT A HOUSE PROPERTY WAS THERE ON THE LAND WHEN IT WAS SOLD. IF THE APPELLANT HAS GIVEN A WRONG INFORMATION TO THE STAMP DUTY AUTHORI TIES FOR THE PURPOSE OF SALE DEED, HE IS LIABLE TO BE PENALIZED UNDER TH E STAMP DUTY ACT. SO FAR AS INCOME TAX ACT IS CONCERN, IT IS MY CONSIDERED V IEW THAT BASED ON FACTUAL MATRIX OF THE CASE THE APPELLANT IS LIABLE TO GET BENEFIT U/S 54 OF THE ACT. FURTHERMORE, A.OS CONTENTION THAT THE APPELLANT H AS NOT TAKEN PERMISSION TO CONSTRUCT RESIDENTIAL PROPERTY ON THE AGRICULTURAL LAND IS ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 8 ALSO NOT TENABLE AS IS DECIDED IN THE CASE OF MAHAVIR PRASAD GUPTA VS. CIT [20061 5 SOT 355 (DELHI) THAT EVEN A FARMHOUSE CAN BE A RESIDENTIAL HOUSE AND INVESTMENT IS ELIGIBLE FOR BENEFIT OF SECTION 54F O F THE IT ACT. THUS THERE IS NO PROHIBITION REGARDING CONSTRUCTION OF A RESIDENTIAL HOUSE ON AGRICULTURE LAND. CBDT CIR. NO. 667 DT. 18.10.1993 (204 ITR (ST) 103) HAS CLARIFIED THAT FOR THE PURPOSE OF COMPUTING EXEMPTION U/S. 54 OR 54F, THE COST OF THE PLOT TOGETHER WITH COST OF THE BUILDING WILL BE CONSIDER ED AS COST OF NEW ASSET, PROVIDED THE ACQUISITION OF THE PLOT AND ALSO THE CONSTRUCTION T HEREON ARE COMPLETED WITHIN THE PERIOD SPECIFIED IN THESE SECTIONS. EVEN OTHERWISE, FOR ARGUMENT SAKE, IF SECTION 54 IS NOT AVAILABLE THEN ALTERNATELY, DEDUCTION U/S 54F WOULD BE AVAILABLE. THE AO CANNOT DENY DEDUCTION U/S 54 AND SECTION 54F BOTH. IF A RESIDEN TIAL PROPERTY IS PROVED TO BE THERE THEN SECTION 54 OF THE ACT IS APPLICABL E AND IF THERE IS NO RESIDENTIAL PROPERTY THEN DEDUCTION U/S 54F OF THE ACT WOULD BE AVAILABLE. AS, THERE IS NO DISPUTE ABOUT INVESTMENT OF THE SALE PROCEED BY THE ASSESSEE IN A RESIDENTIAL PROPERTY. THEREFORE, IT IS MY CONSIDERED VIEW THAT ON THE BAS IS OF PLETHORA OF EVIDENCES PRODUCED BOTH DURING ASSESSMENT PROCEEDING AS WELL AS DURING APPELLATE PROCEEDING, THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S 54 OF THE ACT. ACCORDINGLY, THE AO IS DIRECTED TO COMPUTE THE TAXABLE CAPITAL GAIN TAKING INTO ACCOUNT THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S 54 OF THE ACT. ACCORDINGLY, THE GROUN D OF THE APPEAL ON THIS ISSUE IS PARTLY ALLOWED. 7. WHILE PLEADING ON BEHALF OF THE REVENUE , THE LD DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER AND PLEADED THAT THE ORDER OF THE LD. CIT(A) DESERVES TO BE SET ASIDE. 8. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE AFTER CONSIDERING ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE. THE AS SESSING OFFICER DENIED ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 9 THE BENEFIT TO THE ASSESSEE. HE PLEADED THAT THE AS SESSEE HAS PURCHASED AGRICULTURAL LAND ON 09/4/2003. A HOUSE WAS CONSTRU CTED DURING THE PERIOD 2002-03 TO 2005-06. THE ASSESSEE WAS RESIDING WITH HER FAMILY IN THIS HOUSE FROM 2004 TO FEBRUARY 2014. THESE FACTS ARE ES TABLISHED BY THE DOCUMENTS SUBMITTED BY THE ASSESSEE. THE ASSESSEE HA S GOT VALUATION DONE OF THE HOUSE AS ON 10/6/2013. THE VALUER CLEARL Y MENTIONS THAT THERE WAS A ONE STORIED HOUSE ALONGWITH THE BOUNDARY WALL ON THIS LAND. THE PHOTOGRAPHS OF THE HOUSE WERE ALSO TAKEN BY THE VALU ER. THE ASSESSEE HAD TAKEN ELECTRICITY CONNECTION FROM FEBRUARY, 2004 TO TILL FEBRUARY, 2014 DURING THE PERIOD WHEN THE ASSESSEE WAS RESIDING. NEC ESSARY EVIDENCES IN THIS REGARD WERE SUBMITTED. LPG CONNECTION WAS ALSO T HERE IN THE NAME OF SON OF ASSESSEE MANPREET SINGH. NECESSARY EVIDENCE IN THIS REGARD WAS ALSO SUBMITTED BEFORE THE AUTHORITIES BELOW. THE ADDR ESS IN THE RATION CARD, AADHAR CARD OF THE ASSESSEE AS WELL AS OF HER HUSBAND WERE OF THIS PROPERTY. INCOME TAX NOTICES WERE ALSO ISSUED ON THE ADDRESS OF THIS PROPERTY. THE PAN WAS ALSO ALLOTTED ON THIS ADDRESS. THE ASSESSEE WAS HAVING BANK ACCOUNT WITH THE AXIX BANK AND A CERTIFI CATE WAS ALSO OBTAINED FROM ICICI BANK WITH REGARD TO THE ADDRESS. THIS PROPERTY WAS GIVEN ON RENT FOR RS. 35,000/- PER MONTH. THE NECESS ARY AGREEMENT ON THIS REGARD WAS SUBMITTED. A CERTIFICATE OF THE CHAI RMAN OF THE MUNICIPAL COMMITTEE WAS ALSO SUBMITTED AND FINALLY, THE ASSESS EE SUBMITTED AN ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 10 AFFIDAVIT IN THIS REGARD. AFTER CONSIDERING ALL THE SE DOCUMENTS AND EVIDENCES, THE LD. CIT(A) OVERRULED THE OBSERVATION OF THE ASSESSING OFFICER IN THIS REGARD AND HE GRANTED RELIEF TO THE ASSESSEE. 9. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE A SSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE U/S 54 OF THE A CT ON THE BASIS OF REPORT OF THE TEHSILDAR AND INSPECTOR OBTAINED BY TH E ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS STATING THAT IT WA S AN AGRICULTURAL LAND AND AT THE TIME OF INSPECTION, IT WAS AN OPEN LAND. THE ASSESSING OFFICER OBSERVED THAT THE ELECTRICITY CONNECTION AND LPG CO NNECTION CANNOT BE TAKEN AS A CONCLUSIVE EVIDENCE AND HE ALSO OBSERVED THAT NO EVIDENCE WITH REGARD TO CONSTRUCTION OR IMPROVEMENT WAS FURNISHED. IT WAS ALSO OBSERVED THAT NO EVIDENCE OF CONTRACT OF DEMOLITION OF THE HOUSE WAS PRODUCED AND THE LAND WAS NOT GOT CONVERTED FROM AGR ICULTURAL LAND TO NON-AGRICULTURAL. THE ASSESSEE SUBMITTED A VALUATION REPORT WHEREIN ONE STORIED HOUSE HAVING BOUNDARY WALL WAS MENTIONED. THE VALUER HAS ALSO TAKEN PHOTOGRAPHS WHICH WERE ALSO PRODUCED DURING HEA RING, WHICH ARE PLACED AT PAGE NO. 32 OF THE PAPER BOOK. THE ELECTRI C CONNECTION AND THE LPG CONNECTION IN ASSESSEES NAME AND HER SONS NAME RESPECTIVELY ALSO ESTABLISH THAT THERE WAS A CONSTRUCTION ON THIS LAND AND WHICH WAS BEING UTILIZED AS RESIDENCE. NECESSARY EVIDENCE PLACED AT PAGE NOS. 33 TO 40 OF ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 11 THE PAPER BOOK. THE RATION CARDS WERE ALSO ON THIS A DDRESS. THE AAADHAR CARD OF THE ASSESSEE AS WELL AS HER HUSBAND WAS ALSO OF THIS ADDRESS. PAN WAS ALSO ALLOTTED ON THIS ADDRESS. EVEN THE INCOME T AX NOTICES ISSUED BY THE ASSESSING OFFICER WERE SERVED ON THIS ADDRESS, WH ICH ARE PLACED AT PAGES NO.41 TO 49 OF THE PAPER BOOK. THE PROPERTY WAS ON RENT FOR RS. 35,000/- PER MONTH FOR CERTAIN PERIOD FOR WHICH NECE SSARY EVIDENCE IS PLACED AT PAGE NO. 51 TO 52 OF THE PAPER BOOK, WHICH IS A RENT AGREEMENT. A CERTIFICATE FROM THE CHAIRMAN OF THE MUNICIPAL CO MMITTEE, PARSHAD OF THE MUNICIPAL COMMITTEE AND NEIGHBOURS OF THE ASSES SEE WERE ALSO FILED, WHICH IS PLACED AT PAGE NO. 52 TO 62 OF THE PAPER BO OK. THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE AFTER CONSIDERING AL L THESE EVIDENCES AND HE HAS ALSO OBSERVED THAT EVEN IF THE PROPERTY SOLD IS TAKEN AS AN AGRICULTURAL LAND THEN ALSO THE ASSESSEE IS ENTITLED FOR BENEFIT U/S 54F OF THE ACT. IN THE LIGHT OF THESE FINDINGS AND OBSERVATIONS OF THE LD. CIT(A), WE HOLD THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. WE UPHOLD THE SAME. ACCORDINGLY THIS GROUND OF THE REVENUES APPEAL IS DISMISSED. 10. IN THE GROUND NO. 2, THE ISSUE INVOLVED IS ALLO WING THE CLAIM OF EXPENSES INCURRED ON SALE OF PROPERTY OF RS. 8.00 L ACS, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. THE LD. CIT(A) HA S GRANTED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 12 6.3 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBM ISSIONS MADE BY THE APPELLANT. FOLLOWING FACTS HAVE EMERGED; 1. THAT THE ASSESSEE HAS FILED RETURN OF INCOME FOR AY 2014-15 DECLARING TOTAL INCOME OF RS. 3,02,58,580/-. 2. THAT DURING THE YEAR UNDER CONSIDERATION THE ASS ESSEE HAS SOLD PROPERTY SITUATED AT VILLAGE- KHANPUR, TEHSIL- TIJA RA FOR A TOTAL CONSIDERATION OF RS. 4.5 CRORES. 3. THAT THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN OF RS. 3,00,41,869/- ON SALE OF THE ABOVE MENTIONED PROPER TY. 4. THAT THE APPELLANT HAS CLAIMED A BROKERAGE PAYME NT OF RS. 8,00,000/- TO THE BROKERS INCURRED ON ACCOUNT OF SA LE OF THE ABOVE MENTIONED PROPERTY. 5. THAT THE ABOVE BROKERAGE WAS PAID THROUGH CHEQUE AS IS EVIDENT FROM THE BANK ACCOUNT OF THE APPELLANT. 6. THAT THE AO HAS DISALLOWED THE PAYMENT FOR WANT OF ADEQUATE VERIFICATION. 6.3.2 I HAVE CONSIDERED THE ABOVE MENTIONED FACTS. IN THIS REGARD, I HAVE ALSO TAKEN INTO CONSIDERATION THE FACT THAT THE BROKERAG E PAYMENT WAS MADE THROUGH CHEQUE AND DETAILS OF THE RECIPIENT WAS FIL ED DURING THE ASSESSMENT PROCEEDINGS ALSO. IN THIS REGARD, I HAVE ALSO TAKEN INTO ACCOUNT PREVALENT BROKERAGE RATE IN THE SALE/PURCHASE' OF R EAL ESTATE. AS PER CONFEDERATION OF REAL ESTATE BROKERS OF INDIA (CREB I), THE STANDARD RATE OF BROKERAGE ON SALE OF REAL ESTATE IS 2%. IN THIS CAS E THE APPELLANT HAS CLAIMED BROKERAGE OF RS. 8 LAKHS ON THE TOTAL SALE PROCEED OF RS. 4.5 CRORES, WHICH IS WITHIN THE RANGE OF PREVALENT BROKERAGE/CO MMISSION RATE IN REAL ESTATE. THEREFORE, IT IS MY CONSIDERED VIEW THAT TH E BROKERAGE PAID IN THIS CASE IS REASONABLE, HENCE APPELLANT IS GIVEN THE BE NEFIT OF BROKERAGE PAID OF RS. 8,00,000/- WHILE CALCULATING THE TAXABLE INC OME UNDER THE HEAD ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 13 CAPITAL GAIN. ACCORDINGLY, THE APPELLANT GROUND OF APPEAL ON THIS ISSUE IS ALLOWED. 11. NOW THE REVENUE IS IN APPEAL BEFORE THE ITAT. THE LD DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. ON THE CONTR ARY, THE LD AR OF THE ASSESSEE HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). 12. AFTER HEARING BOTH THE SIDES ON THIS ISSUE, WE H OLD THAT THE ASSESSEE HAS PAID BROKERAGE EXPENSES OF RS. 8.00 LACS, WHICH APPROXIMATELY 2% OF THE SALE CONSIDERATION, WHICH APPEARS TO BE REASONAB LE. THIS BROKERAGE WAS PAID TO THREE PERSONS AND THE PAYMENTS WERE MADE BY CHEQUES WHICH ARE VERIFIABLE FROM THE BANK STATEMENT OF THE ASSES SEE. CONSIDERING ALL THESE FACTS, WE FIND NO FAULT IN THE ORDER OF THE LD . CIT(A) AND WE SUSTAIN THE SAME ON THIS GROUND. ACCORDINGLY, THIS GROUND O F REVENUES APPEAL STANDS DISMISSED. 13. IN THE GROUND NO. 3, THE ISSUE INVOLVED IS ALLO WING BENEFIT OF THE CLAIM OF RS. 39,43,196/- DISALLOWED BY THE A.O. WHILE COMPUTING CAPITAL GAIN INDEXED COST OF CONSTRUCTION OF HOUSE AND ITS IMPROVEMENT. THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: 7.3 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT. FOLLOWING FACTS HAVE EMERGED; 1. THAT THE ASSESSEE HAS FILED RETURN OF INCOME FOR AY 2014-15 DECLARING TOTAL INCOME OF RS. 3,02,58,580/-. ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 14 2. THAT DURING THE YEAR UNDER CONSIDERATION THE ASS ESSEE HAS SOLD PROPERTY SITUATED AT VILLAGE- KHANPUR, TEHSII- TIJA RA FOR A TOTAL CONSIDERATION OF RS. 4.5 CRORES. 3. THAT THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN OF RS. 30,00,41,869/- ON SALE OF THE ABOVE MENTIONED PROPE RTY. 4. THAT WHILE CALCULATING THE TAXABLE CAPITAL GAIN THE APPELLANT HAS CLAIMED INDEXED COST OF CONSTRUCTION AND IMPROVEMEN T OF THE PROPERTY AT RS. 39,43,196/-. 5. THAT IN SUPPORT OF HIS CLAIM THE APPELLANT HAS F ILED COPY OF VALUATION DONE BY AUTHORIZED VALUER FOR THE COST OF CONSTRUCT ION. THE COST OF CONSTRUCTION GIVEN BY THE APPROVED VALUER IS VALUED AT RS. 27,74,275/- (ORIGINAL COST OF CONSTRUCTION AND IMPROVEMENT). 6. THAT THE APPELLANT HAS FILED THE SOURCE OF SUCH CONSTRUCTION VIDE ITS SUBMISSION AS IS REPRODUCED IN PARA 7.2. 7. THAT THE AO HAS REJECTED THE CLAIM OF ASSESSEE O N THE REASON THAT NO HOUSE PROPERTY WAS CONSTRUCTED ON THE SAID LAND AS PER SALE DEED. 7.3.2 SINCE, IT IS ALREADY HELD WHILE ADJUDICATING ON THE GROUND OF APPEAL NO. 2 AND 4 ABOVE THAT THERE WAS A HOUSE PROPERTY ON THE SAID LAND THEREFORE THE APPELLANT IS ELIGIBLE FOR GETTING BENEFIT OF IN DEXED COST OF CONSTRUCTION AS WELL AS THE IMPROVEMENT. ACCORDINGLY, THE AO IS DIRECTED TO GIVE BENEFIT OF INDEXED COST OF CONSTRUCTION AND IMPROVE MENT WHILE CALCULATING THE TAXABLE CAPITAL GAIN. APPELLANTS G ROUND OF APPEAL ON THIS ISSUE IS ALLOWED. 14. NOW THE REVENUE IS IN APPEAL BEFORE THE ITAT. THE LD DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. ON THE CONTR ARY, THE LD AR OF THE ASSESSEE HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). ITA 678/JP/2017 ACIT VS. SMT. KULWANT KAUR 15 15. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE ASSESSEE HAS CLAIMED DEDUCTION OF CONSTRUCTION AND IMPROVEMENT O F PROPERTY AT RS 39,53,196/-. THE ASSESSEE HAS SUBMITTED A VALUATION REPORT. THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE AFTER CONS IDERING ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE, THEREFORE, WE F IND NO FAULT IN THE ORDER OF THE LD. CIT(A) AND WE SUSTAIN THE SAME. 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/10/2017. SD/- SD/- DQY HKKJR HKKXPAN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10 TH OCTOBER, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-2, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- SMT. KULWANT KAUR, BHIWADI, ALWAR. 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. 678/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR