Kalavathy Sundaram, CHENNAI V. ITO, CHENNAI

ITA 756/CHNY/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1576 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 27-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M MATHIVANAN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Valuation report
• Section: 50C; 54F; 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.3187/CHNY/2016 ( )( / ASSESSMENT YEAR : 2011-12 & ./ ITA NO.756/CHNY/2017 ( )( / ASSESSMENT YEAR : 2010-11 SMT. KALAVATHY SUNDARAM, NEW NO.26/1, OLD NO.23, LAKSHMAN STREET, MAHALINGAPURAM, NUNGAMBAKKAM, CHENNAI - 600 034. PAN : BMTPS 0139 Q V. THE INCOME TAX OFFICER, NON CORPORATE WARD 3(4), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI ANANDD BABUNATH, CA -.+, / 0 / RESPONDENT BY : SHRI M. MATHIVANAN, ADDL. CIT 1 / 2% / DATE OF HEARING : 28.06.2018 3') / 2% / DATE OF PRONOUNCEMENT : 07.09.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AG AINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) -4, CHENNAI, FOR THE ASSESSMENT YEARS 2011-12 AND 2010- 11. 2 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 THEREFORE, WE HEARD BOTH THE APPEALS TOGETHER AND D ISPOSING OF THE SAME BY THIS COMMON ORDER. 2. LETS FIRST TAKE THE ASSESSEES APPEAL IN I.T.A. NO.3187/CHNY/2016 FOR THE ASSESSMENT YEAR 2011-12. 3. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO VALUATION OF PROPERTY UNDER SECTION 50C OF THE INCO ME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 4. SHRI ANANDD BABUNATH, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT DURING THE YEAR UNDER CONS IDERATION, THE ASSESSEE SOLD A PROPERTY AT NARAYANAPURAM VARISAI T O THE EXTENT OF 4800 SQ.FT. AS PER THE SALE DEED, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE RECEIVED 50,00,000/- TOWARDS SALE CONSIDERATION. HOWEVER, THE ASSESSING OFFICER ADOP TED THE SALE CONSIDERATION UNDER SECTION 50C OF THE ACT AT 90,20,000/-. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDING, REQUESTED THE ASSE SSING OFFICER TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION O FFICER. HOWEVER, THE ASSESSING OFFICER REFUSED TO DO SO AND ULTIMATE LY ADOPTED THE VALUE UNDER SECTION 50C OF THE ACT AT 90,20,000/-. ACCORDING TO 3 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 THE LD. REPRESENTATIVE, THE CIT(APPEALS) ALSO CONFI RMED THE ORDER OF THE ASSESSING OFFICER. THE LD. REPRESENTATIVE FURT HER SUBMITTED THAT THE ASSESSEE IN TURN FILED A REPORT FROM AN APPROVE D VALUER WHO ESTIMATED THE COST AT 50,40,000/-. ACCORDING TO THE LD. REPRESENTATIVE, THE LAND IS SITUATED IN THE INTERIO R AREA OF NARAYANAPURAM VARISAI AND THERE WAS NO PROPER APPRO ACH ROAD, THEREFORE, THE APPROVED VALUER HAS RIGHTLY VALUED T HE PROPERTY AT 50,40,000/-. 5. SHRI ANANDD BABUNATH, THE LD. REPRESENTATIVE FOR THE ASSESSEE, FURTHER SUBMITTED THAT THE ASSESSEE CLAIM ED A SUM OF 3,10,000/- TOWARDS THE COST OF LEVELLING THE LAND. ACCORDING TO THE LD. REPRESENTATIVE, THE PLOT WAS IN A LOW LYING ARE A, THEREFORE, THE ASSESSEE REQUIRED TO FILL THE LAND WITH SAND SO THA T THE GROUND LEVEL CAN BE INCREASED. ACCORDING TO THE LD. REPRESENTAT IVE, THE CONTRACTOR SHRI MANIKANDAN HAS CERTIFIED THAT HE CO MPLETED THE WORK AND RECEIVED A SUM OF 3,10,000/-. HOWEVER, WITHOUT ACCEPTING THE MATERIAL FILED BY THE ASSESSEE, THE ASSESSING OFFIC ER CAME TO A CONCLUSION THAT IT IS A BOGUS ONE. ACCORDING TO TH E LD. REPRESENTATIVE, SINCE SHRI MANIKANDAN HAS CONFIRMED THE EXPENDITURE, WHICH WAS NOT CONTROVERTED BY THE ASSE SSING OFFICER 4 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 BY BRINGING ON RECORD ANY OF THE MATERIAL, THE CIT( APPEALS) OUGHT TO HAVE ALLOWED THE CLAIM OF THE ASSESSEE. 6. SHRI ANANDD BABUNATH, THE LD. REPRESENTATIVE FOR THE ASSESSEE, FURTHER SUBMITTED THAT THE ASSESSEE ALSO PAID A SUM OF 3,00,000/- TOWARDS BROKERAGE FOR THE SALE OF LAND. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE HAS ALSO FILED THE VOUCHERS BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFI CER DISALLOWED THE CLAIM OF THE ASSESSEE WITHOUT ANY VALID REASON. 7. ON THE CONTRARY, SHRI M. MATHIVANAN, THE LD. DEP ARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE EXECUTE D SALE DEED ON 28 TH JANUARY, 2011. ACCORDING TO THE LD. D.R., THE STA MP DUTY AUTHORITY ASSESSED THE VALUE OF THE PROPERTY AT 90,20,000/-. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THA T THERE WAS NO PROPER ROAD AND IT WAS SITUATED IN AN INTERIOR PLAC E. ACCORDING TO THE LD. D.R., THE ASSESSEE HAS ALSO FILED VALUATION REPORT FROM APPROVED / REGISTERED VALUER. THE APPROVED / REGIS TERED VALUER VALUED THE PROPERTY AT 50,40,000/-. EVEN THOUGH THE APPROVED / REGISTERED VALUER FOUND THAT THERE ARE SCHOOLS, HOS PITAL, MARKET, ETC. IN THE NEARBY AREA, HE HAS NOT IDENTIFIED THE DISTANCE BETWEEN 5 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 THE SAID INFRASTRUCTURE FACILITIES AND THE SUBJECT LAND. MOREOVER, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER IS BOUND TO CONSIDER THE GUIDELINE VALUE OR THE VALUE ASSESS ED BY THE SUB- REGISTRAR FOR THE PURPOSE OF COLLECTING STAMP DUTY. SINCE ADMITTEDLY THE PROPERTY WAS VALUED AT 90,20,000/-, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HAS RIGHTLY ADOPTED THE SAME. 8. REFERRING TO THE COST OF LEVELLING OF LAND, THE LD. D.R. SUBMITTED THAT EVEN THOUGH THE ASSESSEE HAS PRODUCE D A VOUCHER FROM ONE SHRI MANIKANDAN, A COPY OF WHICH IS EXTRAC TED BY THE ASSESSING OFFICER AT PAGE 13 OF HIS ORDER, THE LD. D.R. SUBMITTED THAT MERE PRODUCTION OF VOUCHER IS NOT SUFFICIENT T O PROVE THE EXPENDITURE SAID TO BE INCURRED BY THE ASSESSEE. T HEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HA S RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 3,10,000/-. REFERRING TO THE COST OF BROKERAGE TO THE EXTENT OF 3 LAKHS, THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED ANY DETAILS BEFORE THE ASSESSING OFFICER FOR PAYMENT OF BROKERA GE, THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CL AIM OF THE ASSESSEE. 6 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE SALE DEED DISCLOSED THE VALUE OF PROPERTY AT 50,00,000/-. HOWEVER, THE GUIDELINE VALUE SHOWS THE VALUE OF THE PROPERTY AT 90,20,000/-. THE ASSESSING OFFICER ADOPTED THE GUIDELINE VALUE O F THE PROPERTY AT 90,20,000/- AND COMPUTED THE CAPITAL GAIN ACCORDING LY. 10. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS O F SECTION 50C OF THE ACT WHICH READS AS FOLLOWS:- 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VA LUE ADOPTED OR ASSESSED OR ASSESSED OR ASSESSABLE BY ANY AUTHOR ITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRE D TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALU E SO ADOPTED OR ASSESSED OR ASSESSED OR ASSESSABLE SHALL , FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALU E OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATIO N FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALU ATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION F OR SUCH TRANSFER PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION, OR A PART T HEREOF, 7 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 HAS BEEN RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CL EARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DAT E OF THE AGREEMENT FOR TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECTI ON (1), WHERE- (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSED OR ASSESS ABLE BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DAT E OF TRANSFER ; (B) THE VALUE SO ADOPTED OR ASSESSED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY UNDER S UB- SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORI TY, 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 REF ERENCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), ( 4), (5) AND (6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (1) AN D 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 ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION 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 OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE ( R) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE ST AMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANY THING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIM E BEING IN 8 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECTI ON (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXC EEDS THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATIO N AUTHORITY REFERRED TO IN SUB-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED BY SUCH AUTHORITY SHALL BE TAKE N AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER. 11. IN VIEW OF THE ABOVE, WHEREVER THE CONSIDERATIO N RECEIVED FOR TRANSFER OF PROPERTY IS LESS THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY OF THE STATE GOVERNMENT, FOR TH E PURPOSE OF COLLECTION OF STAMP DUTY, THE VALUE SO ADOPTED SHAL L, FOR THE PURPOSE OF CAPITAL GAIN, BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE. HOWEVER, SUB-SECTION (2) OF SECTION 50C OF THE ACT SAYS THAT WHEN THE ASSESSEE CLAIMS BEFOR E THE ASSESSING OFFICER THAT THE VALUE ADOPTED BY STAMP VALUATION O FFICER EXCEEDED FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF TR ANSFER AND THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY WAS NOT DISPUTED IN APPEAL OR OTHER PROCEEDING, THE ASSESSING OFFICER M AY REFER THE MATTER TO THE VALUATION OFFICER. 12. IN THE CASE BEFORE US, IT IS THE DEFINITE CASE OF THE ASSESSEE THAT THE FAIR MARKET VALUE OF THE PROPERTY IS LESS THAN THE VALUE 9 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PU RPOSE OF COLLECTION OF STAMP DUTY AND A REQUEST WAS ALSO MAD E FOR REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER. THE ASSESSI NG OFFICER SIMPLY REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND TH AT SECTION 50C(2) SAYS THAT ASSESSING OFFICER MAY REFER THE VALUATION OF THE ASSET TO THE DEPARTMENTAL VALUATION OFFICER. TAKIN G THE ADVANTAGE OF THE TERM MAY IN SECTION 50C(2) OF THE ACT, THE ASSESSING OFFICER FOUND THAT THE APPROVED / REGISTERED VALUER HAS NOT POINTED OUT ANY SPECIFIC DISADVANTAGE IN THE PROPERTY, THEREFORE, I T IS NOT NECESSARY TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION O FFICER. WHEN THE ASSESSING OFFICER PLACED RELIANCE ON THE APPROVED / REGISTERED VALUERS REPORT FILED BY THE ASSESSEE, IT IS NOT KN OWN WHY THE VALUE ADOPTED BY THE APPROVED / REGISTERED VALUER WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE APPROVED VALUER HAS VAL UED THE PROPERTY AT 50,40,000/-. WHEN THE ASSESSEE CLAIMS THAT THE FAI R MARKET VALUE OF THE PROPERTY IS LESS THAN THE GUIDE LINE VALUE OR THE VALUE ADOPTED BY THE STAMP AUTHORITIES FOR THE PURP OSE OF COLLECTION OF STAMP DUTY, THEN THE ASSESSING OFFICER HAS NO OT HER WAY EXCEPT TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION O FFICER. 10 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 13. THE WORD MAY APPEARING IN SECTION 50C(2) OF T HE ACT DOES NOT GIVE ANY DISCRETION TO THE ASSESSING OFFICER WH EN THE ASSESSEE IS REQUESTING THE ASSESSING OFFICER TO REFER THE MA TTER TO THE DEPARTMENTAL VALUATION OFFICER. THE SCHEME OF THE INCOME-TAX ACT, 1961 IS TO FIND OUT THE FAIR MARKET VALUE OF THE PR OPERTY ON THE DATE OF TRANSFER AND TO COMPUTE THE CAPITAL GAIN ACCORDI NGLY. WHEN THE ASSESSEE FILED THE REPORT OF THE APPROVED / REGISTE RED VALUER AND SPECIFICALLY REQUESTED TO REFER THE MATTER TO THE D EPARTMENTAL VALUATION OFFICER, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THE ASSESSING OFFICER CANNOT SO LIGHTLY REFUSE TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER. THE VALUATION UNDE R SECTION 50C OF THE ACT HAS TO BE MADE AS PER THE PROVISIONS OF WEA LTH TAX ACT. THE FAIR MARKET VALUE IS NOTHING BUT A PRICE THAT M AY BE AGREED BETWEEN THE WILLING PURCHASER AND THE WILLING SELLE R. THE FAIR MARKET VALUE IS NOT A CONSTANT FIGURE. IT MAY FLUCTUATE D EPENDING UPON VARIOUS FACTORS, SUCH AS THE AREA OF THE LAND, LOCA TION OF PROPERTY, ACCESSIBILITY TO THE INFRASTRUCTURE FACILITIES LIKE ROAD, AIRPORT, BUS STAND, COLLEGES AND OTHER EDUCATIONAL INSTITUTIONS, ETC. THESE FACTORS PLAY IMPORTANT ROLE IN DETERMINING THE FAIR MARKET VALUE. UNFORTUNATELY, THE ASSESSING OFFICER HAS NOT REFERR ED THE MATTER TO 11 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 THE DEPARTMENTAL VALUATION OFFICER. THEREFORE, THE CIT(APPEALS) OUGHT TO HAVE ACCEPTED THE VALUE ADOPTED BY THE APP ROVED / REGISTERED VALUER IN THE VALUATION REPORT FILED BY THE ASSESSEE. 14. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE CIT(APPEALS). DURING THE APPELLATE PROCEEDING, IT APPEARS THAT THE CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO REFE R THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER. ACCORDINGLY, T HE MATTER WAS REFERRED TO THE DVO AND THE DVO APPEARS TO HAVE EST IMATED THE VALUE OF THE PROPERTY AT 81,68,304/- AS AGAINST THE GUIDELINE VALUE OF 90,20,000/-. A PERUSAL OF THE DEPARTMENTAL VALUATI ON OFFICERS REPORT SHOWS THAT THE METHOD PRESCRIBED UNDER THE W EALTH TAX ACT WAS NOT FOLLOWED. MOREOVER, THE FACTORS SUCH AS TH E LOCATION OF PROPERTY, AVAILABILITY OF INFRASTRUCTURE FACILITY A ROUND THE AREA, POTENTIAL DEVELOPMENT IN THE NEAR FUTURE, ACCESSIBI LITY TO THE INFRASTRUCTURE FACILITY SUCH AS ROAD, AIRPORT, EDUC ATIONAL INSTITUTIONS, ETC. WERE NOT PROPERLY CONSIDERED EITHER BY THE APP ROVED VALUER OR BY THE DEPARTMENTAL VALUATION OFFICER. IN THOSE CI RCUMSTANCES, RELYING UPON BOTH THE VALUERS REPORT WOULD NOT REF LECT THE CORRECT FAIR MARKET VALUE OF THE PROPERTY. THEREFORE, WHE N THE ASSESSEE CLAIMS THAT WHAT WAS RECEIVED IS ONLY 50,00,000/-, THE APPROVED / 12 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 REGISTERED VALUER ESTIMATED THE PROPERTY AT 50,40,000/- AND THE DEPARTMENTAL VALUATION OFFICER ESTIMATED AT 81,68,304/-, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ESTIMATI ON OF VALUE OF THE PROPERTY AFTER CONSIDERING THE INFRASTRUCTURE FACIL ITIES AND OTHER FACTORS AS REFERRED ABOVE, AT 69,00,000/- WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHO RITIES BELOW ARE MODIFIED AND THE ASSESSING OFFICER IS DIRECTED TO T AKE THE SALE CONSIDERATION OF THE PROPERTY AT 69,00,000/- AND THEREAFTER COMPUTE THE CAPITAL GAIN. 15. NOW COMING TO DEVELOPMENT CHARGES OF 3,10,000/-, THE ASSESSEE HAS PRODUCED THE RECEIPT FROM SHRI K. MANI KANDAN FOR FILLING UP THE LAND TO THE EXTENT OF 3,10,000/-. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE HAS PRODU CED THE RECEIPT FOR FILLING THE LAND, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE. THEREFORE, THE COST OF FILLING OF LAND HAS TO BE ALLOWED WHILE COMPUTING THE CAPIT AL GAIN. MOREOVER, THE PAYMENT OF BROKERAGE WAS ALSO DISALLO WED BY THE ASSESSING OFFICER. IT IS A FACT THAT IN THE REAL E STATE BUSINESS, THE ASSESSEE HAS TO PAY 2% TO 3% OF SALE CONSIDERATION AS BROKERAGE FOR NEGOTIATING THE PRICE OF THE PROPERTY TO THE PR OSPECTIVE 13 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 PURCHASERS. THEREFORE, THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT 2% OF THE TOTAL SALE CONSIDERATION HAS TO BE A LLOWED AS BROKERAGE CHARGES. ACCORDINGLY, THE ASSESSING OFFI CER IS DIRECTED TO ALLOW 2% OF 69,00,000/- AS BROKERAGE WHILE COMPUTING THE CAPITAL GAIN. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 17. NOW COMING TO ASSESSEES APPEAL IN I.T.A. NO.756/CHNY/2017. 18. SHRI ANANDD BABUNATH, THE LD. REPRESENTATIVE FO R THE ASSESSEE, SUBMITTED THAT THE ASSESSEE SOLD AN IMMOV ABLE PROPERTY AT FLAT NO.16, BLOCK NO.3, ASIAD COLONY, ANNA NAGAR WEST, CHENNAI, FOR A CONSIDERATION OF 25,00,000/-. THE ASSESSEE ADMITTED LONG TERM CAPITAL GAIN OF 1,09,844/-. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE COMPUTED THE CAPITAL G AIN AFTER COMPUTING THE INDEXED COST OF ACQUISITION AT 8,40,156/- AND COST OF REPAIRS IN RESPECT OF THE PROPERTY AT NO.26, LAKSHM ANAN STREET, MAHALINGAPURAM, CHENNAI. ACCORDING TO THE LD. REPR ESENTATIVE, THE ASSESSEE HAS SPENT ABOUT 15,50,000/- IN DEMOLITION AND RECONSTRUCTION OF THE PROPERTY AT NO.26, LAKSHMANAN STREET, 14 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 MAHALINGAPURAM. ACCORDING TO THE LD. REPRESENTATIV E, THE PROPERTY STANDS IN THE NAME OF THE ASSESSEES HUSBAND. THE ASSESSEE, AND HER HUSBAND ALONG WITH THEIR CHILDREN ARE LIVING TO GETHER IN THE SAID PROPERTY. THE CAPITAL GAIN ON 15,50,000/- WAS USED FOR ADDITIONAL CONSTRUCTION. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 54F OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT INV ESTED THE FUNDS IN ANY NEW CONSTRUCTION. ACCORDING TO THE LD. REPR ESENTATIVE, A NEW CONSTRUCTION WAS MADE IN THE PROPERTY BELONGING TO THE ASSESSEES HUSBAND AFTER DEMOLISHING A PART OF BUILDING. ACC ORDING TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER IS NOT JUSTIF IED IN REJECTING THE CLAIM OF THE ASSESSEE. MOREOVER, THE INVESTMENT W AS USED IN THE PROPERTY BELONGING TO THE ASSESSEES HUSBAND. MORE OVER, THE ASSESSING OFFICER HAS ALSO DISALLOWED THE COST OF I MPROVEMENT. ACCORDING TO THE LD. REPRESENTATIVE, THE IMPROVEMEN T MADE TO THE EXTENT OF 3,20,000/- HAS TO BE ALLOWED WHILE COMPUTING THE CA PITAL GAIN, THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER. 19. ON THE CONTRARY, SHRI M. MATHIVANAN, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE INVESTE D THE FUNDS IN 15 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 THE ADDITIONAL CONSTRUCTION IN THE HOUSE WHICH BELO NGS TO HER HUSBAND. ACCORDING TO THE LD. D.R., THE INVESTMENT WAS NOT MADE IN HER NAME. THE CLAIM OF THE ASSESSEE IS THAT PAR T OF EXISTING BUILDING, WHICH BELONGS TO HER HUSBAND, WAS DEMOLIS HED AND ADDITIONAL CONSTRUCTION WAS PUT UP. IF THAT IS SO, ACCORDING TO THE LD. D.R., THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UN DER SECTION 54F OF THE ACT. 20. WITH REGARD TO DEVELOPMENT CHARGES, THE LD. D.R . POINTED OUT THAT THE PROPERTY WAS SOLD ON 22.01.2010 BUT TH E QUOTATION FOR RENOVATION OF THE BUILDING WAS OBTAINED ONLY ON 20. 03.2010, AFTER THE SALE OF THE PROPERTY. THEREFORE, ACCORDING TO THE LD. D.R., THE PRESUMPTION IS THAT THE ASSESSEE HAS NOT SPENT ANY MONEY. HENCE, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CL AIM OF THE ASSESSEE. 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE APPEARS TO HAVE SOLD THE PROPERTY AT 31,20,000/-. HOWEVER, THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT IT WAS SOLD FOR 25,00,000/-. THE ASSESSING OFFICER, AFTER VERIFYIN G THE COPY OF SALE 16 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 DEED AND OTHER MATERIAL, FOUND THAT FOR SALE OF PRO PERTY, THE ASSESSEE HAS PAID BROKERAGE OF 1 LAKH AND ALSO TAKEN THE INDEXED COST OF ACQUISITION AT 4,20,156/- AND AFTER REDUCING THE BROKERAGE AND INDEXED COST OF ACQUISITION, THE ASSESSING OFFI CER COMPUTED THE LONG TERM CAPITAL GAINS AT 25,99,844/-. THE ASSESSEE HAS NOT DISPUTED THE COMPUTATION MADE BY THE ASSESSING OFFI CER WITH REGARD TO LONG TERM CAPITAL GAINS AT 25,99,844/-. THE DISPUTE IS ONLY WITH REGARD TO EXEMPTION CLAIMED BY THE ASSESS EE UNDER SECTION 54F OF THE ACT TO THE EXTENT OF 15,50,000/- AND DEVELOPMENT CHARGES OF 3,20,000/-. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT ON THE GROUND THAT THERE WAS NO CONSTRUCTION AND INVES TMENT WAS MADE IN THE PROPERTY BELONGING TO THE ASSESSEES HU SBAND AND NOT IN HER PROPERTY. 22. IT IS NOT IN DISPUTE THAT IN INDIA, DUAL OWNERS HIP IS PERMISSIBLE. IN OTHER WORDS, THE LAND CAN BELONG TO ONE PERSON A ND THE BUILDING CAN BELONG TO ANOTHER PERSON. IN THE CASE ON OUR H AND, THE INVESTMENT WAS SAID TO BE MADE NOT ON THE THIRD PAR TYS PROPERTY BUT THE PROPERTY BELONGING TO THE ASSESSEES HUSBAND. THE ADDITIONAL CONSTRUCTION SAID TO BE MADE BY THE ASSESSEE AFTER DEMOLISHING THE 17 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 PART OF THE BUILDING BELONGING TO HER HUSBAND IS NO T IN DISPUTE. HENCE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE ADDITIONAL CONSTRUCTION MADE HAS TO BE CONSTRUED AS INVESTMENT IN THE IMMOVABLE PROPERTY. IT IS NOT THE CASE OF THE REVE NUE THAT ADDITIONAL CONSTRUCTION MADE BY THE ASSESSEE IN THE BUILDING BELONGING TO HER HUSBAND IS NOT AN INDEPENDENT HABI TABLE UNIT. THE CASE WOULD STAND DIFFERENTLY IN CASE THE ADDITIONAL CONSTRUCTION CANNOT BE CONSTRUED AS INDEPENDENT RESIDENTIAL UNIT . WHEN THE ADDITIONAL CONSTRUCTION CAN BE CONSTRUED AS INDEPEN DENT RESIDENTIAL UNIT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION TH AT THE ASSESSING OFFICER IS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE. MOREOVER, IN THE EYES OF COMMON / HINDU LAW, HUSBAN D AND WIFE ARE CONSIDERED TO BE ONE AND SAME EVEN THOUGH THEY ARE INDEPENDENT AND DISTINCT ASSESSABLE ENTITY UNDER THE INCOME-TAX ACT. MOREOVER, IN A JOINT FAMILY SYSTEM, PARTICULARLY, M ALE DOMINATED SOCIETY, THE INVESTMENT WOULD ALWAYS BE MADE IN THE NAME OF ELDEST MALE MEMBER OF THE FAMILY. SINCE THE PROPERTY SOLD WAS ADMITTEDLY BELONGING TO THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE INVESTMENT MADE IN THE PROPERTY BELONGED T O THE ASSESSEES HUSBAND, HAS TO BE CONSTRUED AS INVESTME NT MADE BY 18 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 THE ASSESSEE. THE ADDITIONAL CONSTRUCTION, WHICH W AS NOT DISPUTED AS NOT AN INDEPENDENT RESIDENTIAL UNIT, BELONGING T O THE ASSESSEE, THEREFORE, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U NDER SECTION 54F OF THE ACT IN RESPECT OF THE INVESTMENT MADE. ACC ORDINGLY, BOTH THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE. HENCE, THE ORDERS OF BOTH THE AUTHORITIE S BELOW ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLO W THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT. 23. NOW COMING TO DEVELOPMENT EXPENDITURE OF 3,20,000/-, IT IS NOT IN DISPUTE THAT THE PROPERTY WAS SOLD ON 22.01. 2010. BUT, THE QUOTATION FOR SO-CALLED DEVELOPMENT WAS OBTAINED FR OM M/S THIRUMALAI CONSTRUCTION ONLY ON 20.03.2010. THEREF ORE, AFTER THE SALE OF PROPERTY, THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT THE ASSESSEE WOULD NOT HAVE INCURRED THE EXPENDITURE. THEREFORE, AS RIGHTLY SUBMITTED BY THE LD. D.R., THE CLAIM OF 3,20,000/- IS NOT JUSTIFIED. THE DISALLOWANCE OF DEVELOPMENT EXPENDI TURE OF 3,20,000/- IS CONFIRMED. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 19 I.T.A. NO.3187/CHNY/16 I.T.A. NO.756/CHNY/17 25. TO SUMMARISE THE RESULT, THE ASSESSEES APPEAL IN I.T.A. NO.3187/CHNY/2016 IS ALLOWED AND I.T.A. NO.756/CHNY /2017 IS PARTLY ALLOWED. ORDER PRONOUNCED ON 7 TH SEPTEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 7 TH SEPTEMBER, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.