Sh. Sanjeev Lal, Chandigarh V. ITO, Chandigarh

ITA 774/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57607 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHILESH GUPTA
• Assessee Lawyers: B M KHANNA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 147; 148; 54; 37; 10; 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.774 /CHD/2011 (ASSESSMENT YEAR : 2005-06) SH.SANJEEV LAL VS. THE INCOME TAX OFFICER, # 258, SECTOR 8-B, WARD-1(3), CHANDIGARH. CHANDIGARH. PAN: AAEPL4045L AND ITA NO.775 /CHD/2011 (ASSESSMENT YEAR : 2005-06) SMT.SHAIL MOTI LAL VS. THE INCOME TAX OFFICER, # 258, SECTOR 8-B, WARD-1(3), CHANDIGARH. CHANDIGARH. PAN: AAEPL4045L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.M.KHANNA RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 23.11.2011 DATE OF PRONOUNCEMENT : 20.01.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THESE TWO APPEALS FILED BY THE DIFFERENT ASSESSEES ARE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), C HANDIGARH DATED 8.6.2011 RELATING TO ASSESSMENT YEAR 2005-06 AGAINS T THE ORDER PASSED U/S 143(3) THE INCOME TAX ACT, 1961. 2. BOTH THESE APPEALS RELATING TO DIFFERENT ASSESSE ES ON SAME ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C ONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 3. IDENTICAL GROUNDS OF APPEALS ARE RAISED BY THE T WO ASSESSEES, WHICH READ AS UNDER: 1. THAT THE LEARNED CIT (A) HAS FAILED TO APPRECIA TE THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS THEREBY ERRED IN ADOPTING THE VALUE OF SALE CONSIDERATION OF PROPERTY UNDER SECTION 50(C) OF TH E INCOME TAX ACT 1961 AS AGAINST THE ACTUAL CONSIDERATION RECEIVED AS PER AGREEMENT TO SELL. THE CIRCLE RATES ON THE DATE OF EXECUTION OF AGREEMENT TO SELL WERE MUCH LESS AS COMPARED TO THE RATES AT THE TIME OF ACTUAL REGISTRATION. THE DELA Y IN REGISTRATION WAS DUE TO LEGAL FORMATIONS REGARDING THE OWNERSHIP OF THE PROPERTY. 2. THAT THE LEARNED CIT(A) HAS ERRED IN DENYING DEDUCTION U/S 54 OF THE INCOME TAX ACT 1961, ON THE GROUND THAT THE PROPERTY WAS PURCHASED MORE THAN ONE YEAR BEFORE THE DATE OF SALE OF RESIDENTIAL PROPERTY. 3. THAT THE LEARNED CIT(A) HAS ERRED IN DENYING DEDUCTION ON THE AMOUNT SPENT ON CONSTRUCTION OF THE PROPERTY WHICH WAS WITHIN ONE YEAR BEFORE THE DATE OF SALE AND THEREAFTER. 3. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND O F APPEAL WHICH IS AS UNDER : 1. THAT THE AUTHORITIES BELOW MAY KINDLY BE DIRECT ED TO CORRECTLY WORKOUT THE LONG TERM CAPITAL GAIN AFTER INCLUDING INDEX COST OF BUILDING. IT HAS INADVERTENTLY BEEN OMITTED WHILE WORKING THE LONG TERM CAPITAL GAIN. 4. THE BRIEF FACTS OF THE CASE ARE THAT HOUSE NO.26 7, SECTOR 9-C, CHANDIGARH WAS THE SELF ACQUIRED PROPERTY OF SHRI A MRIT LAL WHO EXPIRED ON 7.2.1978. THE SAID PROPERTY WAS TRANSFERRED TO HIS WIFE SMT.SHAKUNTLA DEVI WHO HAD LIFE TIME INTEREST IN THE SAID PROPERT Y. AS PER THE WILL OF SHRI AMRIT LAL, ON THE DEMISE OF HIS WIFE THE PROPE RTY WAS INHERITED BY MRS.SHAIL MOTI LAL, SHRI RAJEEV LAL AND SHRI SANJEE V LAL IN EQUAL SHARES. THE THREE PERSONS WERE THE WIFE AND TWO SONS OF SHR I MOTI LAL, THE ELDER SON OF SHRI AMRIT LAL. THE SECOND SON OF SHRI AAMR IT LAL SHRI RANJIT LAL WAS RESIDING IN AMERICA AND HE CHALLENGED THE WILL OF HIS FATHER ON 7.8.1993. THE COURT STAYED THE TRANSFER OF THE PRO PERTY IN THE NAMES OF THE 3 THREE PERSONS. THE WIFE OF SHRI AMRIT LAL SMT.SHAK UNTLA DEVI DIED ON 2.9.1993. WHILE THE MATTER WAS PENDING IN THE COUR T, SHRI RANJIT LAL PASSED AWAY ON 2.12.2000. THERE WAS NO REPRESENTAT IVE ON BEHALF OF SHRI RANJIT LAL AND THE COURT ADJOURNED THE CASE SINE-DI E IN THE YEAR 2002. FINALLY THE MATTER WAS ADJUDICATED IN FAVOUR OF THR EE PERSONS I.E. SMT.SHAIL MOTI LAL, SHRI RAJEEV LAL AND SHRI SANJEEV LAL IN M AY, 2004. THE PROPERTY THEREAFTER WAS TRANSFERRED IN THE NAMES OF THESE THREE PERSONS IN AUGUST, 2004. DURING THE PENDENCY OF THE COURT PRO CEEDINGS THE THREE PERSONS, WHO WERE JOINT OWNERS OF THE PROPERTY IN E QUAL SHARES, ENTERED INTO AN AGREEMENT ON 27.12.2002 TO SELL THE SAID PR OPERTY TO SHRI SANDEEP TALWAR FOR A SUM OF RS.1.32 CRORES, AGAINST WHICH T HEY RECEIVED BIANA/EARNEST MONEY OF RS.15 LACS. AS PER CLAUSE-3 OF THE SAID AGREEMENT TO SELL, THE FINAL PAYMENT AND REGISTRATION OF SALE DEED WAS TWO MONTHS AFTER ISSUANCE OF OWNERSHIP TRANSFER LETTER FROM TH E ESTATE OFFICE, CHANDIGARH. THE SALE DEED WAS EXECUTED ON 24.9.200 4, WHEN ADMITTEDLY THE POSSESSION OF THE PROPERTY WAS HANDED OVER TO S HRI SANDEEP TALWAR. ' 5. THE ASSESSEE PURCHASED 50% IN HOUSE NO.528, SECT OR 8, CHANDIGARH ON 30.4.2003, AGAINST WHICH IT CLAIMED DEDUCTION UN DER SECTION 54 OF THE INCOME TAX ACT. THE ASSESSEE FAILED TO FURNISH ANY RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND CONSEQUENTLY NOTIC E UNDER SECTION 148 OF THE ACT WAS ISSUED TO BOTH THE ASSESSEES BEFORE US. THE PROCEEDINGS UNDER SECTION 147 OF THE ACT WERE INITIATED AS THE SALE D EED WAS REGISTERED ON STAMP DUTY OF RS.12.90 LACS. IN RESPONSE TO NOTIC E UNDER SECTION 148 OF THE ACT, THE ASSESSEE FILED RETURN OF INCOME DECLAR ING INCOME FROM LONG TERM CAPITAL GAIN ON SALE OF HOUSE NO.267, SECTOR 9 , CHANDIGARH AT NIL AFTER CLAIMING DEDUCTION UNDER SECTION 54 OF THE AC T, IN ADDITION TO OTHER INCOME. THE ASSESSING OFFICER UNDER PARA 2.1 AT P AGE 3 OF THE ASSESSMENT ORDER HAS INCORPORATED THE COMPUTATION OF LONG TERM CAPITAL GAIN DECLARED 4 BY THE ASSESSEE. THE ASSESSING OFFICER VIDE PARA 2.2 HAS DISCUSSED THE SALE CONSIDERATION DECLARED BY THE ASSESSEE AND ALS O THE BASIS OF INDEXED COST OF THE PROPERTY DECLARED BY THE ASSESSEE ON AC COUNT OF PURCHASE VALUE OF LAND AND THE COST OF CONSTRUCTION. THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN AS TO WHY LONG TERM CAPITAL GAIN BE NOT ASS ESSED BY ADOPTING THE SALE VALUE OF THE PROPERTY AT RS.2.15 CRORES IN VIE W OF THE PROVISIONS OF SECTION 50C OF THE ACT. THE ASSESSING OFFICER REJ ECTING THE EXPLANATION OF THE ASSESSEE WAS OF THE VIEW THAT THE SALE CONSIDER ATION IS TO BE TAKEN AT RS.2.15 CRORES I.E. THE VALUE SO ASSESSED BY THE RE VENUE AUTHORITIES FOR THE PURPOSE OF STAMPS. WITH REGARD TO THE CLAIM OF THE ASSESSEE UNDER SECTION 54 OF THE ACT, THE ASSESSING OFFICER NOTED THAT HOU SE NO.528, SECTOR 8, CHANDIGARH WAS PURCHASED BY SMT.SHAIL MOTI LAL AND SHRI SANJEEV LAL IN EQUAL SHARES IN APRIL, 2003; WHEREAS THE ORIGINAL A SSET WAS SOLD ON 24.9.2004 I.E. BEFORE ONE YEAR FROM THE DATE OF TRA NSFER OF THE ORIGINAL ASSET. THE CONTENTION OF THE ASSESSEE VIS--VIS EX EMPTION UNDER SECTION 54 OF THE ACT WAS REJECTED AS THE ASSESSEE HAD SOLD TH E PROPERTY ON 24.9.2004, ON WHICH DATE THE POSSESSION OF THE PROPERTY WAS HA NDED OVER AND THE EARLIER DOCUMENT DATED 27.12.2002 WAS ONLY AN AGREE MENT TO SELL, WHICH DID NOT CONFER ANY RIGHT ON THE PURCHASER OF THE PR OPERTY. THE ASSESSING OFFICER WHILE COMPUTING THE INCOME FROM LONG TERM C APITAL GAINS HAD TAKEN THE SALE VALUE AT RS.2.15 CRORES UNDER SECTION 50C OF THE ACT. THE INDEXED COST OF THE PLOT OF LAND WAS ALLOWED TO THE ASSESSE E. NO DEDUCTION ON ACCOUNT OF COST OF CONSTRUCTION HAS BEEN ALLOWED AS PER COMPUTATION IN THE ASSESSMENT ORDER. THE LONG TERM CAPITAL GAIN THUS WAS COMPUTED AT RS.48,69,333/- BY THE ASSESSING OFFICER, BEING 1/3 RD SHARE IN THE HANDS OF EACH OF THE CO-OWNERS. 6. THE CIT (APPEALS) UPHELD THE ORDER OF THE ASSESS ING OFFICER VIS-- VIS THE ADOPTION OF SALE VALUE OF THE PROPERTY IN V IEW OF THE PROVISIONS OF 5 SECTION 50C OF THE ACT. FURTHER DENIAL OF EXEMPTIO N UNDER SECTION 54 OF THE ACT WAS ALSO CONFIRMED BY THE CIT (APPEALS) OBS ERVING THAT THE INVESTMENT IN THE NEW ASSET WAS BEYOND ONE YEAR BEF ORE THE DATE OF SALE DEED OF THE ORIGINAL ASSET. FURTHER CONTENTION OF THE ASSESSEE THAT IT HAD INVESTED RS.18 LACS TOWARDS CONSTRUCTION OF 50% OF HOUSE NO.528, SECTOR 8, CHANDIGARH PURCHASED ON 30.4.2003 AND WAS ELIGIB LE FOR DEDUCTION UNDER SECTION 54E OF THE ACT, WAS ALSO REJECTED, AS, NO S UCH CLAIM WAS MADE IN THE RETURN OF INCOME OR BEFORE THE ASSESSING OFFICE R. 7. SHRI B.M.KHANNA APPEARED ON BEHALF OF THE ASSESS EE AND SHRI AKHILESH GUPTA, DR APPEARED ON BEHALF OF THE REVENU E AND PUT FORWARD THEIR CONTENTIONS. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEALS IS IN RELATION TO THE SALE OF HOUSE NO.267, SECTOR 9, CHANDIGARH, WHICH WAS JOINTLY SOL D BY THE CO-OWNERS I.E. SMT.SHAIL MOTI LAL, SHRI RAJEEV LAL AND SHRI SANJEE V LAL. THE PRESENT APPEALS ARE FILED BY TWO OF THE CO-OWNERS I.E. SHRI SANJEEV LAL AND SMT.SHAIL MOTI LAL. THE SAID PROPERTY WAS INHERITE D BY THE THREE CO- OWNERS AS PER THE WILL OF THEIR FATHER, UNDER WHICH NO SHARE IN THE PROPERTY WAS GIVEN TO ONE SON I.E. SHRI RANJIT LAL AND THE P ROPERTY WAS INHERITED BY THE CHILDREN OF OTHER SON I.E. SHRI AMRIT LAL. THE WILL OF THE FATHER WAS CHALLENGED BY SHRI RANJIT LAL BY WAY OF COURT PROCE EDINGS INITIATED ON 7.8.1993. DURING THE PENDENCY OF THE COURTS PROCEE DINGS, SHRI RANJIT LAL EXPIRED ON 2.12.2000 AND AS THERE WAS NO REPRESENTA TIVE ON HIS BEHALF, THE MATTER WAS ADJOURNED SINE-DIE IN THE YEAR 2002. TH EREAFTER THE COURT ADJUDICATED THE MATTER IN FAVOUR OF THE THREE CO-OW NERS IN MAY 2004, PURSUANT TO WHICH PROPERTY WAS TRANSFERRED IN THE N AMES OF THREE PERSONS IN AUGUST 2004. DURING THE PENDENCY OF THE COURT PROC EEDINGS VIS--VIS THE QUESTION OF OWNERSHIP OF THE PROPERTY, THE THREE CO -OWNERS ENTERED INTO AN 6 AGREEMENT ON 27.8.2002 TO SELL THE IMPUGNED PROPERT Y TO SHRI SANDEEP TALWAR FOR TOTAL CONSIDERATION OF RS.1.32 CRORES. AN AGREEMENT TO SELL WAS EXECUTED BETWEEN THE PARTIES IN WHICH RS.15 LACS WA S HANDED OVER TO THE SELLER OF THE PROPERTY AS EARNEST MONEY. IT WAS AG REED BETWEEN THE PARTIES AS PER CLASUE-3 OF THE AGREEMENT TO SELL THAT THE B ALANCE PAYMENT OF SALE CONSIDERATION AND REGISTRATION OF THE SALE DEED WOU LD BE WITHIN TWO MONTHS AFTER THE ISSUANCE OF OWNERSHIP TRANSFER LETTER FRO M ESTATE OFFICE, CHANDIGARH. THE COPY OF AGREEMENT DATED 8.12.2002 IS PLACED AT PAGES 18 TO 20 OF THE PAPER BOOK. AS PER CLAUSE-8 OF THE SA ID AGREEMENT TO SALE, THE PHYSICAL VACANT POSSESSION OF THE SAID PROPERTY WAS TO BE HANDED OVER AT THE TIME OF COMPLETION OF THIS BARGAIN. ADMITTEDLY , THE POSSESSION OF THE PROPERTY, THE FINAL PAYMENT OF THE SALE CONSIDERATI ON AND THE REGISTRATION OF THE SALE DEED WERE EXECUTED ON 24.9.2004. THE COPY OF THE SALE DEED DATED 24.9.2004 IS PLACED AT PAGES 26 TO 78 OF THE PAPER BOOK. THE ASSESSEE HAS ALSO ANNEXED DETAILS OF PAYMENT IN RESPECT OF SALE CONSIDERATION OF THE SAID HOUSE AT PAGE 21 OF THE PAPER BOOK. THE ASSESSEE I N THE RETURN OF INCOME FILED PURSUANT TO NOTICE ISSUED UNDER SECTION 148 O F THE ACT, HAD DECLARED THE SALE CONSIDERATION OF THE SAID PROPERTY AT RS.4 4 LACS BEING 1/3 RD OF TOTAL CONSIDERATION OF RS.1.32 CRORES. THE ASSESSING OFF ICER WHILE ISSUING NOTICE UNDER SECTION 148 OF THE ACT AND RECORDING R EASONS UNDER SECTION 147 OF THE ACT HAD NOTED THAT THE SAID PROPERTY WAS SOLD ON 24.9.2004 FOR RS.1.32 CRORES WITH STAMP DUTY OF RS.12.90 LACS. T HE INFERENCE OF THE ASSESSING OFFICER IN THIS REGARD WAS THAT THE VALUE OF THE PROPERTY WAS ASSESSED AT RS.2.15 CRORES FOR THE PURPOSE OF STAMP DUTY BY REGISTERING AUTHORITIES. INVOKING THE PROVISIONS OF SECTION 50 C OF THE ACT, THE ASSESSING OFFICER COMPUTED THE INCOME FROM LONG TER M CAPITAL GAINS IN THE HANDS OF THE ASSESSEES BY TAKING THE SALE CONSIDERA TION OF THE PROPERTY AT RS.2.15 CRORES. 7 SECTION 50C OF THE ACT READS AS UNDER: SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY ANY AUTHORITY 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 VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATI ON RECEIVED OR ACCRUING 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 OFFI CER THAT THE VALUE ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY UNDER SUB- SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PR OPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY O THER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF T HE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS M ADE, THE PROVISIONS 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, S UB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICA-TIONS, A PPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THA T ACT. [ EXPLANATION 1 ] .FOR THE PURPOSES OF THIS SECTION, VALUATION OFF ICER SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SEC TION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). [ EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E EXPRESSION ASSESSABLE MEANS THE PRICE WHICH THE STAMP VALUAT ION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONT AINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, I F IT WERE 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 [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SU B-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIV ED OR ACCRUING AS A RESULT OF THE TRANSFER.] 9. UNDER THE PROVISIONS OF SECTION 50C(1) OF THE AC T, WHICH HAS BEEN INSERTED BY THE FINANCE ACT 2002 W.E.F. 1..4.2003, WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF CAP ITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY REVENUE AUTHORITY FOR THE PURPOSE OF STAMP DUTY, THAN THE V ALUE SO ADOPTED BY THE 8 REVENUE AUTHORITIES SHALL BE DEEMED TO THE FULL CON SIDERATION RECEIVED OR ACCRUED AS A RESULT OF SUCH TRANSFER, FOR THE PURPO SE OF SECTION 48 OF THE ACT. THEREAFTER UNDER SECTION 50C(2) OF THE ACT TH E ASSESSING OFFICER IS EMPOWERED TO REFER THE VALUE OF CAPITAL ASSET TO TH E VALUATION OFFICER, WHERE A REFERENCE IS MADE BY THE ASSESSEE CHALLENGI NG THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. UNDER SUB-SECTION ( 3) TO SECTION 50C OF THE ACT, IT IS PROVIDED THAT WHERE THE VALUE ASCERT AINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED BY THE ST AMP VALUATION AUTHORITY, THE VALUE SO ADOPTED BY THE STAMP VALUAT ION AUTHORITIES SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION RECEIVE D OR ACCRUED. 10. THE ABOVE SAID PROVISIONS OF SECTION 50C OF THE ACT LAYS DOWN THAT WHERE DURING THE COURSE OF REGISTRATION OF A DOCUME NT OF TRANSFER OF LAND OR BUILDING OR BOTH, THE STAMP VALUATION AUTHORITY HAS ADOPTED THE VALUE WHICH IS HIGHER THAN THE VALUE RECEIVED OR ACCRUING TO THE ASSESSEE, PURSUANT TO THE TRANSFER OF SUCH OF AN ASSET, THEN, SUCH HIGHER VALUE IS TO BE CONSIDERED WHILE COMPUTING THE INCOME UNDER THE CAP ITAL GAINS, IN VIEW OF THE PROVISIONS OF SECTION 48 OF THE INCOME TAX ACT. THE PROVISIONS ARE THUS APPLICABLE WHERE THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY HAS ADOPTED OR ASSESSED SUCH VALUE WHICH IS AT VARIANCE WITH THE VALUE RECEIVED BY THE ASSESSEE ON ACCOUNT OF TRANSFER OF HIS ASSET. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ASSESSEE HAD ENTERED INTO AN AGREEMENT FOR SALE OF HOUSE NO.267, SECTOR 9, CHANDIGARH ON 27.12.2002. AS PER THE SAID AGREEMENT TO SELL T HE PROPERTY WAS AGREED TO BE SOLD FOR RS.1.32 CRORES. IN THE SALE DEED D ATED 24.9.2004 THE ASSESSEE HAD DECLARED THE SALE CONSIDERATION AT RS. 1.32 CRORES. COPY OF THE SALE DEED IS PLACED AT PAGES 26 TO 78 OF THE PAPER BOOK. PREAMBLE OF THE SALE DOCUMENT REFLECTS AS UNDER: TOTAL COVERED AREA APPROX : 2600 SQ.FT. TOTAL CONSIDERATION : RS.1,32,00,000/- 9 NON JUDICIAL STAMP PAPERS : RS.12,90,000/- (RS.25000X51+RS.15000X1) 11. THE TOTAL CONSIDERATION DECLARED BY THE ASSESSE E WAS RS.1.32 CRORES AGAINST THE SALE OF THE SAID PROPERTY. THE NON-JUD ICIAL STAMP PAPER OF WHICH SALE DEED WAS EXECUTED TOTALED TO RS.12.90 LA CS. THE PROPERTY SOLD BY THE ASSESSEE WAS WITH TOTAL COVERED ARE OF 2600 SQ.FT. COPY OF THE SALE DEED PLACED AT PAGES 26 TO 78 OF THE PAPER BOOK REF LECTS THE ABOVE SAID DETAILS CLEARLY. THE REGISTERING AUTHORITY WHILE R EGISTERING THE DOCUMENT HAS NOT SUPER-IMPOSED THE VALUE OF THE PROPERTY TO A FIGURE OTHER THAN THE FIGURE DECLARED BY THE ASSESSEE AT RS.1.32 CRORES. DURING THE COURSE OF HEARING THE LEARNED D.R. FOR THE REVENUE WAS DIRECT ED TO ENQUIRE FROM THE CONCERNED REGISTERING AUTHORITY WHETHER THE TOTAL C ONSIDERATION AS DECLARED BY THE ASSESSEE AT RS.1.32 CRORES HAS BEEN DISTURBE D. THE MATTER WAS ADJOURNED IN THIS BEHALF. THE LEARNED D.R. FOR THE REVENUE CONCEDED THAT WHILE REGISTERING THE DOCUMENT OF SALE DEED, THE SA LE CONSIDERATION OF RS.1.32 CRORES WAS ACCEPTED BY THE REGISTERING AUTH ORITY AND NO OTHER VALUE WAS TAKEN BY THE REGISTERING AUTHORITY, THOUGH THE SAID SALE DEED WAS EXECUTED ON STAMP PAPERS VALUING RS.12.90 LACS, WHI CH WAS HIGHER THAN IN RELATION TO THE TOTAL CONSIDERATION OF RS.1.32 CROR ES. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT THE SALE CONSIDERATIO N PAID BY THE ASSESSEE WAS AS PER THE RULES AND REGULATIONS. 12. WE FIND NO MERIT IN THE ORDERS OF THE AUTHORITI ES BELOW IN INTERPRETING THE PROVISIONS OF SECTION 50C OF THE A CT. THE SAID PROVISIONS ARE ATTRACTED ONLY WHERE THE SALE VALUE IS NOT ACCE PTED BY THE REGISTERING AUTHORITY AND THE SALE VALUE/FIGURE IS ADOPTED AT A VALUE HIGHER THAN THE ONE DECLARED BY THE ASSESSEE. IN THE PRESENT CASE THE SALE VALUE DECLARED BY THE ASSESSEE HAS BEEN ACCEPTED AS SUCH. THE STAMP VALU E OF RS.12.90 LACS DOES NOT EMPOWER THE ASSESSING OFFICER TO INVOKE THE PRO VISIONS OF SECTION 50C 10 OF THE ACT. ACCORDINGLY, THE PROVISIONS OF SECTION 50C OF THE ACT ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN VI EW THEREOF, WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE INCOME FROM CAPITA L GAIN IN THE HANDS OF THE ASSESSEE BY ADOPTING THE SALE CONSIDERATION AT RS.44 LACS I.E. 1/3 RD OF RS.1.32 CRORES. GROUND NO.1 RAISED BY THE ASSESSEE IS THUS ALLOWED. 13. VIS--VIS GROUND NO.2 THE PROVISIONS OF SECTION 54 OF THE ACT PROVIDE THAT FOR CLAIMING THE EXEMPTION BY WAY OF INVESTMEN T IN NEW ASSET, THE SAID INVESTMENT SHOULD BE MADE EITHER WITHIN ONE YEAR BE FORE THE DATE OF SALE OR TWO YEARS AFTER THE DATE OF TRANSFER OF THE ORIGINA L ASSET OR THE NEW ASSET SHOULD BE CONSTRUCTED WITHIN THREE YEARS FROM THE D ATE OF TRANSFER OF THE ORIGINAL ASSET. THE ASSESSEE HAD PURCHASED PLOT NO .528, SECTOR 8, CHANDIGARH VIDE PURCHASE DEED DATED 30.4.2003, COPY OF WHICH IS PLACED AT PAGE 82 OF THE PAPER BOOK. THE ASSESSEE HAD DECLAR ED INCOME FROM CAPITAL GAINS ON SALE OF HIS HOUSE IN SECTOR 9, CHANDIGARH, WHICH WAS SOLD ON 24.9.2004. THE PURCHASE OF NEW ASSET I.E. HOUSE IN SECTOR 8, CHANDIGARH ON 30.4.2003 IS BEYOND THE PERIOD OF ONE YEAR BEFOR E THE DATE OF SALE OF ORIGINAL ASSET. CONSEQUENTLY, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION CLAIMED UNDER SECTION 54 OF THE ACT. GROUND NO.2 R AISED BY THE ASSESSEE IS THUS DISMISSED. 14. THE NEXT ISSUE RAISED BY THE ASSESSEE IS IN CON NECTION WITH THE AMOUNT SPENT ON CONSTRUCTION OF NEW ASSET TOTALING RS.18 LACS. THE ASSESSEE HAS FURNISHED ON RECORD DATE-WISE DETAILS OF CERTAIN PAYMENTS MADE TO VARIOUS PERSONS, WHICH WERE NOT FILED BEFOR E LOWER AUTHORITIES. WHEN CONFRONTED, THE ASSESSEE WAS UNABLE TO FURNISH THE NATURE OF THE SAID PAYMENTS OR EVIDENCE OF HAVING INVESTED IN CONSTRUC TION OF THE NEW ASSET. IN THE ABSENCE OF ANY EVIDENCE BEING FILED BY THE A SSESSEE WE FIND NO MERIT IN GROUND NO.3 RAISED BY THE ASSESSEE AND HENCE THE SAME IS DISMISSED. 11 15. THE ASSESSEE HAS ALSO RAISED AN ISSUE VIDE ADDI TIONAL GROUND OF APPEAL IN WHICH IT HAD CLAIMED THAT WHILE COMPUTING THE INCOME FROM LONG TERM CAPITAL GAIN, THE INDEXED COST OF BUILDING WAS NOT ALLOWED TO THE ASSESSEE. FROM PERUSAL OF THE ORDER OF THE ASSESSI NG OFFICER WE FIND THAT IN PARAS 2.1 AND 2.2 AT PAGES 3 OF THE ASSESSMENT O RDER THE ASSESSING OFFICER HAD ACKNOWLEDGED THAT THE ASSESSEE HAD CLAI MED DEDUCTION ON ACCOUNT OF INDEXED COST OF LAND AND COST OF CONSTRU CTION OF THE PROPERTY. HOWEVER, WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE THE DEDUCTION ON ACCOUNT OF ONLY THE COST OF LAND HAS B EEN ALLOWED TO THE ASSESSEE. NO DEDUCTION ON ACCOUNT OF INDEXED COST OF BUILDING HAS BEEN ALLOWED TO THE ASSESSEE. ACCORDINGLY, WE DIRECT TH E ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE IN RESPECT OF INDEX ED COST OF BUILDING AFTER NECESSARY VERIFICATION. THE ADDITIONAL GROUND OF A PPEAL RAISED BY THE ASSESSEE IS THUS ALLOWED. 16. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DAY OF JANUARY, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20 TH JANUARY, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH