JANNO, Jaipur V. ITO, Alwar

ITA 776/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5575 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 26-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Keywords: Capital asset; Cost of acquisition; Tangible material; Fair market value; Corroborative evidences; Reassessment proceedings
• Section: 54B; 147; 148; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 776/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SMT. JANNO W/O LATE SHRI MAMMAN KHAN R/O VILLAGE TULEDA, DISTT. ALWAR CUKE VS. THE ITO WARD- 1(2) ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AZJPJ 9511 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL , CA JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08/02/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 15/02/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), ALWAR DATED 28-06-2016 FOR THE ASSESSMENT YEAR 201 1-12 RAISING THEREIN GROUNDS OF APPEAL AS UNDER:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING THE VALIDITY OF ORDER PASSED U/S 147 EVEN WHEN THE NOTICE U/S 148 IS NOT SERVED ON THE ASSESSEE ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 2 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ALLOWING THE INDEXED COST OF ACQUISITION AND IMPROV EMENT AT RS. 7,46,508/- AS AGAINST RS. 12,02,592/- CLAIMED B Y THE ASSESSEE. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S 54B IN RESP ECT OF PURCHASE OF AGRICULTURAL LAND FOR RS. 5,20,050/-. 2.1 APROPOS GROUND NO. 1 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 4.5 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL A S REMAND REPORT OF THE AO, SUBMISSIONS MADE INCLUDING JUDICIAL CITATIONS GIVEN THEREIN AND FIND THAT THE AO HAS ISSUED NOTICE TO THE APPELLANT BEFORE INITIATING RE ASSESSMENT PROCEEDINGS. NOTICES ISSUED BY THE AO WERE REFUSED TO BE RECEIVED BY THE APPELLANT. HER SON AND CO-OWNER OF THE PROPERTY ATTENDED THE PROCEEDINGS ONCE IN HIS CASE AND FILED THE DETAILS OF THE PROPERTY SOLD BY THEM. REASSESSM ENT PROCEEDINGS WERE STARTED ON THE BASIS OF MATERIAL A VAILABLE ON RECORD. 4.6 HOWEVER, THE CASE LAW RELIED ON BY THE APPELLANT DOES NOT HAVE APPLICABILITY TO THE FACTS OF THE CASE AS THE SERVICE OF NOTICE WAS DULY EFFECTED. THE FUN CTION OF THE ASSESSING OFFICER IS TO ADMINISTER THE STATUTE WITH SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN IN-BUIL T IDEA OF FAIRNESS TO TAXPAYER (ASSTT. CIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (2007) 291 ITR 500 (SC). IN DETERM INING WHETHER COMMENCEMENT OF REASSESSMENT PROCEEDINGS IS VALID, THE COURT HAS ONLY TO SEE WHETHER THERE IS P RIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT OPENED THE CASE. THE SUFFICIENCY OR CORRECTNESS OF THE MAT ERIAL IS NOT A THING TO BE CONSIDERED AT THIS STAGE AS HELD BY T HE SUPREME COURT IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. VS. ITO (1999) 236 ITR 34 (SC), GREAT ARTS (P) LTD. VS. ITO (2002) 257 ITR 639 (DEL.). THE ASSESSEE CANNOT CHALLENGE ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 3 SUFFICIENCY TO BELIEF ITO VS. LAKHMANI MEWAL DAS (1976) 103 ITR 437 (SC) 4.7 HON'BLE SUPREME COURT HAS LAID DOWN IN THE CASE OF KELVINATOR INDIA 320 ITR 561 THAT AO HAS PO WER TO REASSESS, ONLY IF THERE IS A TANGIBLE MATERIAL AND THE PROCEDURE LAID DOWN IN THE CASE OF GKN DRIVERSHAFT HAS BEEN FOLLOWED BY THE AO. THE AO HAS DISCHARGED THE DUTY WHICH LAY UPON HIM BEFORE INITIATING THE REASSESSME NT PROCEEDINGS. 4.8 THUS IN VIEW OF THESE FACTS, I HOLD THAT AO H AD RIGHTLY INITIATED THE PROCEEDINGS U/S 147/148 OF TH E I.T. ACT. 2.2 AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, I FIND NO MERIT IN THE ARGUMENTS ADVANCE D BY THE LD. AR OF THE ASSESSEE AT THE TIME OF HEARING BEFORE THE BENCH. H ENCE, THE GROUND NO. 1 OF THE ASSESSEE IS DISMISSED. 3.1 AS REGARDS GROUND NOS. 2 AND 3 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDE R:- 5.12 AS REGARDS THE ISSUE OF COST OF ACQUISITION IS CONCERNED, THE AO IN HIS REMAND REPORT AFTER EXA MINING IN DETAIL THE EVIDENCE FILED BY THE APPELLANT HAS ACCE PTED THAT FAIR MARKET VALUE (FMV) AS ON 01-04-1091OF THE PROP ERTY BASED ON DLC RATES COMES TO RS. 69,015/- PER BIGHA. THE APPELLANT HAS CLAIMED COST OF ACQUISITION AT RS. 60 ,483/- AS ON 01-04-1981 WHICH HAS BEEN ACCEPTED BY THE AO FOR INDEXATION PURPOSES. FURTHER, WITH REGARD TO THE CL AIM OF THE APPELLANT FOR HAVING PAID SETTLEMENT COST OF RS. 10 LACS WHICH WAS PAID BEFORE THE COURT OF DISTRICT COLLECT OR ON 02- 0320, THE PROPORTIONATE SHARE OF EACH CO-OWNER (1/7 ) OF RS. ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 4 1,42,857/- IN F.Y. 2008-09 HAS BEEN ACCEPTED BY THE AO FOR INDEXATION. BESIDES, THE PROPORTIONATE SHARE OF AGR ICULTURE CUSTODIAN COST OF RS. 9,93,678/- PAID TO GOVERNMENT OF RAJASTHAN ON 29-06-2010 IN WHICH EACH CO-OWNER (1/7 ) SHARE OF RS. 1,41,953/- IN F.Y. 2010-11 HAS BEEN ACCEPTED BY THE AO FOR INDEXATION. THE CLAIM OF LAND LEVELING EXPEN SES OF RS. 20,000/- HAVING INCURRED BY THE APPELLANT WAS F OUND BY THE AO TO BE WITHOUT ANY SUPPORTING EVIDENCE AND HE NCE WAS REJECTED. 5.13 CONSIDERING THE ABOVE FACTS AS STATED BY THE A O IN THE REMAND REPORT, I HOLD THAT THE COST OF ACQUI SITION AND COST OF IMPROVEMENT AS COMPUTED BY THE AO HAVE TO B E TAKEN INTO ACCOUNT FOR COMPUTATION OF LONG TERM CAP ITAL GAINS ON SALE OF LAND. IN THE ABSENCE OF ANY EVIDEN CE BEING FILED BY THE APPELLANT IN THE CROSS REPLY , I REJECT THE CLAIM OF LAND LEVELING EXPENSES MADE BY THE APPELLANT. 5.14 AS REGARDS THE CLAIM OF DEDUCTION U/S 54 OF TH E I.T. ACT IS CONCERNED, THE AO IN HIS REMAND REPORT HAS STATED THAT THE APPELLANT IS ENTITLED TO THE CLAIM OF DEDU CTION UNDER THIS SECTION TO THE EXTENT OF INVESTMENT MADE BY HE R FOR PURCHASE OF AGRICULTURAL LAND IN HER NAME, SOLELY O R JOINTLY. THE APPELLANT IN THIS CASE HAS PURCHASED AGRICULTUR AL LAND FOR RS. 9,00,100/- ON 01-10-2010 FOR WHICH CLAIM OF DED UCTION UU54B OF THE I.T. ACT HAS BEEN ACCEPTED BY THE AO. FURTHER, APPELLANT HAS PURCHASED LAND OF RS. 5,20,050/- ON 2 6-08- 2006 FOR WHICH CLAIM OF DEDUCTION U/S 54B OF THE I. T. ACT HAS NOT BEEN ACCEPTED BY THE AO IN THE REMAND REPOR T. NO DEDUCTION WILL BE AVAILABLE TO THE APPELLANT FOR TH E LAND PURCHASED IN HER NAME IN F.Y. 2006-07 AS THE PROVIS IONS OF SUB-SECTION (1) OF SECTION 54B OF THE I.T. ACT REQU IRE THAT INVESTMENT OF LONG TERM CAPITAL GAINS ON SALE OF AG RICULTURAL LAND HAS TO BE MADE FOR THE PURCHASE OF NEW AGRICUL TURAL LAND WITHIN TWO YEARS FROM THE DATE OF TRANSFER OF THE O RIGINAL ASSET (AGRICULTURAL LAND). IN THIS CASE, THE LAND P URCHASED IN HER NAME IS MUCH MORE I.E. 04 YEARS BEFORE THE SALE OF AGRICULTURAL LAND WHOSE PROFITS ARE SUBJECT MATTER OF TAXATION. ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 5 THEREFORE, I HOLD THAT NO DEDUCTION U/S 54BOF THE I .T. ACT AGAINST THIS PURCHASE OF LAND WOULD BE AVAILABLE TO THE APPELLANT. 5.15 THUS, IN VIEW OF THE ABOVE DISCUSSION, AO IS BEING DIRECTED TO COMPUTE THE LONG TERM CAPITAL GAI NS IN THE HANDS OF THE APPELLANT BY TAKING THE SALE CONSIDERA TION OF RS. 23,26,071/- AFTER GIVING A DEDUCTION FOR COST OF AC QUISITION (AS DISCUSSED IN PARA 5.10 & 5.11) AND COST OF IMPR OVEMENT. FURTHER, DEDUCTION U/S 54B OF THE I.T. ACT MAY BE G IVEN FOR INVESTMENT OF RS. 9,00,100/- MADE IN THE NAME OF SE LF (AS DISCUSSED ABOVE). 3.2 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASS ESSEE PRAYED FOR ALLOWANCE OF BOTH THE GROUNDS I.E. GROUND NO. 2 AND 3 FOR WHICH THE LD. AR OF THE ASSESSEE FILED THE FOLLOWING WRITTEN SUBM ISSION. IN RESPECT OF EACH OF THE ISSUE, THE ASSESSEES EXPLANATION IS A S UNDER: (A) INDEXED COST OF ACQUISITION THE ASSESSEE HAS CONSIDERED THE F.M.V. OF THE LAND AS ON 01.04.1981 AT RS. 1,21,000/-. FOR THIS PURPOSE SHE RELIED ON A SALE DEED DATED 10.07.1985 OF A HOUSE OF 52.14 SQ. YARD SOLD FOR RS . 12,000/- GIVING A RATE OF RS. 222/- PER SQ. YARD. THE LAND SOLD BY THE ASSESSEE AND HER SONS IS 2 HECTARE AND 11 AIRE WHICH WORKS OUT TO 25 ,249 SQ. YARD (1 HECTARE=11,959 SQ YARD AND 25 AIRE = 3,025 SQ. YARD ). THEREFORE THE ASSESSEES 1/7 TH SHARE IN THE TOTAL LAND WORKS OUT TO 3,607 SQ. YAR D AND THE VALUE BY ADOPTING A RATE OF RS. 222/- PER SQ. Y ARD COMES TO RS. 8,00,754/-. CONSIDERING THIS FACT, ASSESSEE ADOPTED THE FMV OF THE LAND AT RS. 1,21,000/- WHICH IS QUITE REASONABLE AN D JUSTIFIED. THE AO TOOK THE VALUE AS ON 01.04.1981 AT RS. 60,48 3/- BY OBSERVING THAT THE DLC VALUE OF AGRICULTURAL LAND AT VILLAGE TULEDA AS ON 05.08.1998 IS RS. 2,00,200/- PER BHIGA AND ACCORDIN GLY THE LAND VALUE OF 1.21 BHIGA OF THE ASSESSEE COMES TO RS. 2, 42,242/- PER BHIGA AND APPLYING REVERSE INDEXATION IT COMES TO RS. 69, 015/-. BUT ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 6 ASSESSEE ACCEPTED IN REPLY DATED 16.05.2016 THAT SA ME MAY BE CONSIDERED AT RS. 60,483/-. IT IS SUBMITTED THAT ASSESSEE SOLD THE LAND TO A BU ILDER. THE LAND HAS THUS A COMMERCIAL POTENTIAL. ACCORDINGLY ASSESSEE D ETERMINED THE FMV OF THE LAND AS ON 01.04.1981 CONSIDERING THE SA LE INSTANCE OF LAND DATED 10.07.1985 IN THE SAME VILLAGE. THE LOWE R AUTHORITIES HAVE NOT CONTRADICTED THE SAID EVIDENCE. THEREFORE, THE FMV AS DETERMINED BY THE ASSESSEE SHOULD BE ACCEPTED. FURT HER, EVEN AS PER THE DLC VALUE OF THE AGRICULTURAL LAND DATED 05.08. 1998 AND APPLYING THE REVERSE INDEXATION, THE FMV AS ON 01.0 4.1981 WORKS OUT TO RS. 69,015/-. THEREFORE, THERE IS NO REASON TO TAKE THE SAME AT RS. 60,483/- EVEN IF THE LD. AR OF THE ASSESSEE AGR EES TO TAKE THE FMV AS ON 01.04.1981 AT RS. 60,483/-. THIS APART TH E LAND OF THE ASSESSEE BEING ON THE MAIN ROAD AND HAVING COMMERCI AL POTENTIAL, THE VALUE AS DETERMINED BY THE AO AS ON 01.04.1981 FOR AN AGRICULTURAL LAND AT LEAST SHOULD BE DOUBLED WHICH GIVES THE VALUE AT RS. 1,21,000/-. THEREFORE, THE VALUE ADOPTED BY THE ASSESSEE AS ON 01.04.1981 AT RS. 1,21,000/- SHOULD BE ACCEPTED AND THE AO BE DIRECTED TO ALLOW THE INDEXATION BENEFIT ACCORDINGL Y. (B) INDEXED COST OF IMPROVEMENT THE ASSESSEE HAS CLAIMED COST OF IMPROVEMENT OF RS. 20,000/- ON ACCOUNT OF LAND LEVELLING EXPENSES IN THE FY 2007-0 8. THIS EXPENDITURE WAS INCURRED FOR REMOVING THE KACCHI DO L AND THE NALI BEFORE SELLING THE LAND. THIS WORK WAS DONE BY UTIL ISING THE JCB. THIS EXPENDITURE IS VERY REASONABLE. THERE IS NO FI NDING OF THE LOWER AUTHORITIES THAT SUCH EXPENDITURE IS NOT INCURRED. THEREFORE, EVEN IF THE EVIDENCE IS NOT FILED, CONSIDERING THE EXPLANAT ION OF THE ASSESSEE THE SAME SHOULD BE ACCEPTED AND THE CAPITAL GAIN BE DIRECTED TO BE WORKED OUT AFTER ALLOWING THE SAME. (C) DEDUCTION U/S 54 B ON AGRICULTURAL LAND PURCHASED THE ASSESSEE CLAIMED IT AS DEDUCTION U/S 54B ON AGR ICULTURAL LAND PURCHASED ON 26.08.2006 FOR RS. 5,20,050/- (PB 25-30) . THIS CLAIM IS NOT ACCEPTED BY THE AO IN THE REMAND REPORT AND ALS O BY THE LD. CIT(A) THAT THIS LAND IS PURCHASED BY THE ASSESSEE 4 YEARS PRIOR TO THE EXECUTION OF SALE DEED AND THEREFORE THE SAME IS NO T ALLOWABLE U/S 54B. IN DENYING THE ABOVE CLAIM BOTH THE AUTHORITIES IGN ORED THE FACT THAT ASSESSEE ENTERED INTO AN AGREEMENT TO SALE THE AGRI CULTURAL LAND ON 18.03.2006 TO SHRI JAGDISH S/O INDER SINGH BENIWAL AND IN PURSUANCE TO THAT AGREEMENT ASSESSEE RECEIVED RS. 9,17,000/- BY 26.06.2006 ( PB 17) . THIS AGREEMENT WAS SUBSTITUTED BY AGREEMENT DATED ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 7 11.05.2007 WITH M/S CROSS BRIDGE DEVELOPERS PVT. LT D. THE SALE DEED COULD BE EXECUTED ONLY ON 03.08.2010 BECAUSE O F DISPUTE IN THE OWNERSHIP OF THE LAND WHICH WAS SETTLED BY THE ASSE SSEE AFTER MAKING PAYMENT OF SETTLEMENT / RELINQUISHMENT TO THE DAUGH TERS AS PER THE COURT ORDER AND DEPOSITING THE CUSTODIAN CHARGES TO THE GOVERNMENT. UNDER THESE CIRCUMSTANCES, THE ASSESSEE PURCHASED T HE AGRICULTURAL LAND FOR RS. 5,20,050/- ON 26.08.2006 IMMEDIATELY A FTER SHE RECEIVED PART CONSIDERATION. THIS IS WITHIN THE PERIOD PRESC RIBED U/S 54B AND THEREFORE THE SAME IS ELIGIBLE UNDER DEDUCTION AS H ELD BY THE SUPREME COURT IN CASE OF SH. SANJEEV LAL ETC. VS. CIT (2014) 365 ITR 0389. IN THIS CASE THE APPELLANTS ENTERED INTO AN AGREEM ENT TO SELL THE HOUSE ON 27TH DECEMBER, 2002 AND RECEIVED A SUM OF RS. 15 LAKHS AS EARNEST MONEY. ANOTHER HOUSE WAS BOUGHT BY THEM ON 30TH APRIL, 2003. IN THE MEANWHILE, A DISPUTE AROSE REGA RDING THE PROPERTY AND MATTER WENT INTO COURT. THE APPELLANTS WERE RES TRAINED FROM EXECUTING THE SALE DEED TILL THE MATTER WAS DECIDED . THUS, THE SALE DEED WAS EXECUTED ON 24TH SEPTEMBER, 2004. THE AO D ISALLOWED THE CLAIM U/S 54 FOR THE REASON THAT THE TRANSFER OF TH E ORIGINAL ASSET, I.E. THE RESIDENTIAL HOUSE, HAD BEEN EFFECTED ON 24TH SE PTEMBER, 2004 WHEREAS THE APPELLANTS HAD PURCHASED ANOTHER RESIDE NTIAL HOUSE ON 30TH APRIL, 2003 I.E. MORE THAN ONE YEAR PRIOR TO T HE EXECUTION OF THE SALE DEED. ON THESE FACTS IT WAS HELD AS UNDER: 23. CONSEQUENCES OF EXECUTION OF THE AGREEMENT TO SELL ARE ALSO VERY CLEAR AND THEY ARE TO THE EFFECT THAT THE APPE LLANTS COULD NOT HAVE SOLD THE PROPERTY TO SOMEONE ELSE. IN PRACTICA L LIFE, THERE ARE AFTER EXECUTING AN AGREEMENT TO SELL AN IMMOVEABLE PROPERTY IN FAVOUR OF ONE PERSON, TRIES TO SELL THE PROPERTY TO WHOSE FAVOUR THE RIGHT PROVISION HAS BEEN INCORPORATED IN THE ACT, I S ALSO VERY CLEAR THAT EVENTS WHEN A PERSON, EVEN ANOTHER. IN OUR OPI NION, SUCH AN ACT WOULD NOT BE IN ACCORDANCE WITH LAW BECAUSE ONCE AN AGREEMENT TO SELL IS EXECUTED IN FAVOUR OF ONE PERSON, THE SAID PERSON GETS A RIGHT TO GET THE PROPERTY TRANSFERRED IN HIS FAVOUR BY FI LING A SUIT FOR SPECIFIC PERFORMANCE AND THEREFORE, WITHOUT HESITAT ION WE CAN SAY THAT SOME RIGHT, IN RESPECT OF THE SAID PROPERTY, B ELONGING TO THE APPELLANTS HAD BEEN EXTINGUISHED AND SOME RIGHT HAD BEEN CREATED IN FAVOUR OF THE VENDEE/TRANSFEREE, WHEN THE AGREEMENT TO SELL HAD BEEN EXECUTED. 24. THUS, A RIGHT IN RESPECT OF THE CAPITAL ASSET, VIZ. THE PROPERTY IN QUESTION HAD BEEN TRANSFERRED BY THE APPELLANTS IN FAVOUR OF THE VENDEE/TRANSFEREE ON 27TH DECEMBER, 2002. THE SALE DEED COULD NOT BE EXECUTED FOR THE REASON THAT THE APPELLANTS HAD BEEN PREVENTED FROM DEALING WITH THE RESIDENTIAL HOUSE BY AN ORDER OF A COMPETENT COURT, WHICH THEY COULD NOT HAVE VIOLATED. ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 8 25. IN VIEW OF THE AFORESTATED PECULIAR FACTS OF TH E CASE AND LOOKING AT THE DEFINITION OF THE TERM TRANSFER AS DEFINED UNDER SECTION 2(47) OF THE ACT, WE ARE OF THE VIEW THAT THE APPELLANTS WERE ENTITLED TO RELIEF UNDER SECTION 54 OF THE ACT IN RESPECT OF TH E LONG TERM CAPITAL GAIN WHICH THEY HAD EARNED IN PURSUANCE OF TRANSFER OF IN CHANDIGARH AND USED FOR PURCHASE OF A NEW PROPERTY BEING HOUSE NO. 267, SECTOR 9-C, SITUATED ASSET/RESIDENTIAL HOU SE. 26. THE APPEALS ARE, THEREFORE, ALLOWED WITH NO ORD ER AS TO COSTS. THE IMPUGNED JUDGMENTS ARE QUASHED AND SET ASIDE AN D THE AUTHORITIES ARE DIRECTED TO RE-ASSESS THE INCOME OF THE APPELLANTS FOR THE ASSESSMENT YEAR 2005-2006, AFTER TAKING INTO AC COUNT THE FACT THAT THE APPELLANTS WERE ENTITLED TO THE RELIEF, SU BJECT TO FULFILMENT OF OTHER CONDITIONS. THE FACTS OF THE ASSESSEES CASE ARE SIMILAR TO THE FACTS OF THE CASE OF SANJEEV LAL AND THEREFORE, AO BE DIRECTED TO ALLOW THE CLAIM OF DEDUCTION U/S 54B FOR PURCHASE OF AGRICULTURAL LAND FOR RS. 5,20,050/-. 3.3 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF THE CIT(A). 3.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS REGARDS GROUND 2 OF THE AS SESSEE FOR INDEXED COST OF ACQUISITION AND IMPROVEMENT AT RS. 7,46,508/- AS AGAINST RS. 12,02,592/- CLAIMED BY THE ASSESSEE, IT IS OBSERVED THAT THIS DIFFERENCE HAS ARISEN FOR TWO REASONS. THE FIRST REASON IS THAT TH E LOWER AUTHORITIES HAVE TAKEN THE FAIR MARKET VALUE OF LAND AS ON 01-04-198 1 AT RS. 60,483/- BY BACKWARD INDEXING OF THE DLC RATES AS ON 5-08-1998 OF THE AGRICULTURAL LAND AND THEREBY INDEXING IT TO RS. 4,30,034/- AS A GAINST THE ASSESSEE'S CLAIM OF FAIR MARKET VALUE OF THE LAND AS ON 01-04- 1981 AT RS. 1,21,000/- BASED ON SALE DEED OF HOUSE DATED 10-07-1985 AND TH EREBY INDEXING IT TO ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 9 RS. 8,60,310/-. THE SECOND REASON IS THAT THE LAND LEVELLING CHARGES OF RS. 20,000/- CLAIMED TO BE INCURRED IN F.Y. 2007-08 WHI CH IS INDEXED TO RS. 25,808/- IS NOT ALLOWED FOR WANT OF EVIDENCE. TAKIN G INTO CONSIDERATION ALL THE FACTS OF THIS GROUND, I FIND THAT THE FAIR MARKET VALUE OF THE LAND AS ON 01-04-1981 DETERMINED BY THE ASSESSEE AT RS. 1,2 1,000/- ON THE BASIS OF SALE DEED DATED 10-07-1985 (PB 20-22) OF A HOUSE OF 52.14 SQ. YARD SOLD FOR RS. 12,000/- IS MORE REASONABLE. THIS IS B ECAUSE AS PER THIS SALE DEED THE RATE WORKS OUT AT RS. 222/- PER SQ. YARD. THE ASSESSEE'S LAND IS 3,607 SQ. YARD AND ADOPTING THIS RATE ITS VALUE COM ES TO RS. 8,00,754/- BUT ASSESSEE HAS ONLY CONSIDERED APPROXIMATELY 15% OF T HIS VALUE I.E. RS. 1,20,113/- WHICH IS ROUNDED OFF BY THE ASSESSEE TO RS. 1,21,000/- AS THE FAIR MARKET VALUE OF THE AGRICULTURAL LAND AS ON 01 -04-1981. FURTHER, THE COST OF IMPROVEMENT CLAIMED ON ACCOUNT OF LAND LEV ELLING CHARGES OF RS. 20,000/- TO REMOVE THE KACHI DOL AND TO MAKE THE LA ND EVEN WHICH BECAUSE OF THE IRRIGATION NAIL WAS UNEVEN BY USING THE JCB IS REASONABLE. THEREFORE, THE AO IS DIRECTED TO CONSIDER THE INDEX ED COST OF ACQUISITION AND IMPROVEMENT OF THE AGRICULTURAL LAND SOLD BY TH E ASSESSEE AT RS. 12,02,592/- AS CLAIMED BY THE ASSESSEE. THUS GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 10 3.4.1 IN RESPECT OF GROUND NO. 3, IT IS NOTICED TH AT THAT THE ASSESSEE CLAMED DEDUCTION U/S 54 IN RESPECT OF PURCHASE OF AGRICULTURAL LAND FOR RS. 5,20,050/- WHICH IS STATED TO BE OUT OF THE AMO UNT OF RS. 9,17,000/- RECEIVED UPTO 26-06-2006 AS PER THE EARLIER AGREEME NT TO SALE DATED 18- 03-2006. THE LOWER AUTHORITIES HAVE NOT ALLOWED THI S CLAIM FOR THE REASON THAT THE SALE DEED OF THE AGRICULTURAL LAND UNDER C ONSIDERATION WAS REGISTERED ON 03-08-2010 AND THEREFORE, THE AGRICU LTURAL LAND PURCHASED PRIOR TO THE EXECUTION OF SALE DEED IS NOT ENTITLED FOR DEDUCTION U/S 54B. HOWEVER, THIS CLAIM OF THE REVENUE IS NOT TENABLE I N VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SANJEEV LA L VS. CIT 365 ITR 389 AND ALSO THE DECISION OF HON'BLE MUMBAI HIGH C OURT IN THE CASE OF SUBHASH VINAYAK SUPNEKAR 97 CCH 250 WHEREIN IT WAS HELD THAT WHERE THE INVESTMENT IN PURCHASE OF RESIDENTIAL HOUSE OR INVESTMENT IN BOND IS OUT OF THE AMOUNT RECEIVED ON AGREEMENT TO SALE, TH E DEDUCTION SHOULD BE ALLOWED EVEN IF THE SALE DEED IS REGISTERED SUBSEQU ENTLY. HOWEVER, I FIND THAT THE ASSESSEE HAS ONLY 1/7 TH SHARE IN THE AGRICULTURAL LAND SOLD AND THEREFORE, TO ASCERTAIN THE AVAILABILITY OF THE AMO UNT WITH THE ASSESSEE TO PURCHASE THE AGRICULTURAL LAND OF RS. 5,20,050/-, T HE ISSUE IS SET ASIDE TO THE FILE OF THE AO WITH THE DIRECTION TO ALLOW THE DEDUCTION U/S 54B IN ITA NO. 776/JP/2016 SMT. JANNO VS. ITO, WARD- 1(2), ALWAR 11 RESPECT OF THE PURCHASE OF THIS AGRICULTURAL LAND TO THE EXTENT OF AVAILABILITY OF THE FUNDS WITH THE ASSESSEE. THUS G ROUND NO. 3 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 -02-20 17. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15 /02/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. JANNO, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD-1(2), ALWAR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 776/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR