SHRI MATHUR LAL, KOTA V. INCOME TAX OFFICER, WARD-2-2, KOTA

ITA 940/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5418 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 06-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM SINGH CIT DHK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Period of limitation; Cost of acquisition; Reasonable cause; Corroborative evidences; Condonation of delay
• Section: 143(3); 54B; 50C; 54F; 54; 139

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 FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 940/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 MATHUR LAL, NEAR NEW HANUMANJI TEMPLE, SONGARIA, KOTA. CUKE VS. INCOME TAX OFFICER WARD 2(2), KOTA. TAN/PAN NO.: AAOPL 4029 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAM SINGH (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09/10/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 12/10/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 19/02/2018 OF LD. CIT(A), KOTA FOR THE A.Y. 2014-15 . 2. THERE IS A DELAY OF 91 DAYS IN FILING THE PRESENT APPEAL. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION O F DELAY, WHICH HAS BEEN SUPPORTED BY AN AFFIDAVIT OF THE ASSESSEE. 3. WE HAVE HEARD THE LD. AR OF THE ASSESSEE AS WELL AS THE LD DR ON CONDONATION OF DELAY AND CONSIDERED THE CAUSE OF DE LAY EXPLAINED BY THE ITA 940/JP/2018_ MATHUR LAL VS ITO 2 ASSESSEE IN THE AFFIDAVIT. THE LD AR HAS SUBMITTED T HAT THE ONLY ISSUE ARISING FROM THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) IS REGARDING THE CAPIT AL GAIN ASSESSED BY THE ASSESSING OFFICER IN RESPECT OF SALE OF AGRICULTURA L LAND AND CLAIM OF DEDUCTION U/S 54B AND 54F OF THE ACT. AFTER THE SAL E OF THE SAID AGRICULTURAL LAND, THE GRANDSON OF ONE SHRI RAGHUNA TH FROM WHOM THE LAND WAS PURCHASED IN THE YEAR 1965 BY THE FATHER OF THE ASSESSEE CHALLENGED THE TITLE OF THE LAND IN QUESTION BY FIL ING THE CASE ON 09/5/2016 IN THE COURT OF THE SDO. THE ASSESSEE WAS FIGHTING T HE SAID CASE FILED IN THE COURT OF SDO AND IN THE MEAN TIME, THE LD. CIT(A ) HAS PASSED THE IMPUGNED ORDER, WHICH WAS RECEIVED BY THE ASSESSEE O N 08/3/2018, HOWEVER, THEREAFTER ON 04/6/2018, THE CASE REGARDING TITLE OF THE LAND IN QUESTION WAS DECIDED AGAINST THE ASSESSEE BY THE SDO AND THEREFORE, THE ASSESSEE HAD TO TAKE IMMEDIATE STEPS FOR STAY AND F ILED THE APPEAL AGAINST THE SAID ORDER OF THE SDO. THUS, THE ASSESSE E GOT ENGAGED AND BUSY IN THE PROCEEDINGS OF THE APPEAL FILED BEFORE THE COURT OF REVENUE APPELLATE AUTHORITY, KOTA AND GOT THE STAY AGAINST THE ORDER OF THE SDO. THEREAFTER, THE ASSESSEE REALIZED THAT THE ASSESSEE HAS NOT CONSULTED HIS COUNSEL FOR FILING THE APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND CONSEQUENTLY THE PRESENT APPEAL WAS FILED. THE LD AR HAS REFERRED TO THE ORDERS PASSED BY THE SDO AS WELL AS THE REVENUE ITA 940/JP/2018_ MATHUR LAL VS ITO 3 APPELLATE AUTHORITY AND SUBMITTED THAT BOTH THE DEV ELOPMENTS HAPPENED SIMULTANEOUSLY AND THEREFORE, THE ASSESSEE COULD NO T TAKE STEPS FOR FILING THE APPEAL IN TIME. THUS, THE LD AR HAS PLEADED FOR CONDONATION OF DELAY IN FILING THE PRESENT APPEAL. 4. ON THE OTHER HAND, THE LD DR HAS VEHEMENTLY OPPO SED TO THE CONDONATION OF DELAY AND SUBMITTED THAT WHEN THE ASS ESSEE FIND TIME TO FILE THE APPEAL AGAINST THE ORDER PASSED BY THE SDO THEN AT THE SAME TIME, THE APPEAL SHOULD HAVE BEEN FILED AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S THE RELEVANT MATERIAL ON RECORD WE NOTE THAT THE ASSESSEE HAS EXP LAINED THE CAUSE OF DELAY IN PARAGRAPHS NO. 3 TO 6 OF THE AFFIDAVIT OF THE ASSESSEE AS UNDER: 3. THAT IN RESPECT OF THE AGRICULTURAL LAND SO SOL D BY ME A CASE WAS FILED ON 09.05.2016 IN THE COURT OF SDO BY SHRI CHOUTHMAL, G RANDSON OF SHRI RAGHUNATH ABOUT THE TITLE OF THIS PROPERTY FROM WHO M THIS LAND WAS PURCHASED IN 1965 BY MY FATHER, LATE SHRI JAGANATH. THEREFORE, DURING THE PERIOD WHEN THE ORDER PASSED BY CIT(A) WAS RECE IVED BY ME, I GOT INVOLVED IN THIS COURT CASE. 4. THAT THIS CASE WAS DECIDED AGAINST ME BY THE SDO COURT VIDE ORDER DATED 4 LH JUNE, 2018. THEREFORE, I HAD TO TAKE IMMEDIATE STE PS FOR STAY AND FILING APPEAL AGAINST THIS ORDER. ACCORDINGLY, I GO T INVOLVED TO PROTECT MY TITLE IN THIS LAND AND FILED APPEAL ON 11 TH JUNE, 2018 BEFORE THE COURT OF REVENUE APPELLATE AUTHORITY, KOTA FOR STAY OF THE O RDER OF SDO COURT. THIS CASE IS STILL PENDING BEFORE THE REVENUE APPEL LATE AUTHORITY, KOTA. BECAUSE OF ALL THESE LITIGATIONS, THE ORDER RECEIVE D FROM THE OFFICE OF COMMISSIONER (APPEALS) SLIPPED FROM MY MIND AND I C OULD NOT CONSULT MY ITA 940/JP/2018_ MATHUR LAL VS ITO 4 LEGAL COUNSEL ABOUT THE FUTURE COURSE OF ACTION TO BE TAKEN AGAINST THE ORDER OF CIT(A). 5. THAT IN THE LAST WEEK OF JULY, 2018 WHEN I WAS L OOKING IN TO THE OLD PAPERS, I NOTICED THAT I HAVE NOT CONSULTED MY COUN SEL AGAINST THE ACTION TO BE TAKEN IN RESPECT OF THE ORDER OF CIT(A). ACCO RDINGLY, I APPROACHED HIM ON 30 LH JULY, 2018 WHEN I WAS TOLD THAT APPEAL WAS REQUIRE D TO BE FILED BEFORE ITAT WITHIN 60 DAYS OF THE RECEIPT OF THE ORDER AND THEREFORE, HE SUGGESTED ME TO CONSULT M/S KALANI & COMPANY, JA IPUR FOR FUTURE COURSE OF ACTION. 6. THAT WHEN I APPROACHED M/S KALANI & CO., JAIPUR ON 31.07.2018, I WAS ADVISED TO FILE THE APPEAL BEFORE THE HONBLE ITAT WITH A PRAYER TO CONDONE THE DELAY IN FILING THE APPEAL. WE NOTE THAT THE ASSESSEE HAS ALSO FILED THE ORDER S PASSED BY THE REVENUE APPELLATE AUTHORITY WHEREBY THE ORDER OF THE SDO WAS STAYED AND THE MATTER WAS STILL PENDING BEFORE THE REVENUE APPELLATE AUTHORITY. THE REASON EXPLAINED BY THE ASSESSEE IN THE AFFIDAVI T ARE FOUND TO BE CORRECT AS THERE WAS AN ORDER OF SDO AGAINST THE ASS ESSEE WHEREBY THE TITLE OF THE ASSESSEE OVER THE LAND IN QUESTION WAS HELD TO BE INVALID. THUS, WHEN THE SUBJECT MATTER OF THE DISPUTE IN THE APPEAL ITSELF WAS UNDER CHALLENGE IN THE PROCEEDINGS BEFORE THE SDO A ND THEREAFTER THE ASSESSEE FILED THE APPEAL BEFORE THE REVENUE APPELL ATE AUTHORITY THEN THE REASONS AND CAUSE OF DELAY EXPLAINED BY THE ASSESSE E HAVING INVOLVED IN PROTECTING THE TITLE OF THE LAND BY CONTESTING THE CASE BEFORE THE SDO AS WELL AS BY FILING THE APPEAL BEFORE THE REVENUE APPE LLATE AUTHORITY IS A REASONABLE EXPLANATION. ACCORDINGLY, WE SATISFY THAT THE ASSESSEE WAS ITA 940/JP/2018_ MATHUR LAL VS ITO 5 HAVING A REASONABLE CAUSE FOR NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION. HENCE, WE CONDONE THE DELAY OF 91 DAYS IN FILING THE PRESENT APPEAL. 6. NOW WE DECIDE THE APPEAL ON MERITS. IN THIS APPEAL , THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE DISALLOWANCE OF INDEXED COST OF IMPROVEMENT TO THE EXTENT OF RS.6,75,930/- IN COMPUTING INCOME FROM LONG TERM CA PITAL GAIN. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S 54B TO THE EXTENT OF RS. 18,26,320 /- ON THE GROUND THAT THE AGRICULTURE LAND PURCHASED FOR RS.7 LAKHS ON 16.05.2012 IN THE NAME OF THE SON IS BEFORE THE DATE OF TRANSFER OF AGRICULTURE LAND SOLD BY THE ASSESSEE AND THAT THE EXPENDITURE OF RS . 10,11,000/- INCURRED ON SUCH LAND IS NOT ELIGIBLE FOR DEDUCTION . HE HAS FURTHER ERRED IN NOT CONSIDERING THE STAMP DUTY EXPENSES OF RS. 1,15,320/- INCURRED ON PURCHASE OF SUCH LAND IN CONSIDERING TH E CLAIM OF DEDUCTION U/S 54B. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONSIDERING THE COST OF THE PROPERTY ON WHICH DEDUCTION U/S 54F IS CLAIM ED AT RS. 38,21,640/- AS AGAINST RS.45,65,000/- CLAIMED BY TH E ASSESSEE AND THEREBY, RESTRICTING THE CLAIM OF DEDUCTION U/S 54F AT RS.20,07,687/- AS AGAINST RS.27,39,676/- CLAIMED BY THE ASSESSEE. 4. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 5. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 7. GROUND NO. 1 OF THE APPEAL IS REGARDING DISALLOWA NCE OF INDEXED COST OF IMPROVEMENT AMOUNTING TO RS. 6,75,930/- WHI LE COMPUTING THE LONG TERM CAPITAL GAIN. THE ASSESSEE SOLD THE AGRICU LTURAL LAND FOR A ITA 940/JP/2018_ MATHUR LAL VS ITO 6 CONSIDERATION OF RS. 88.00 LACS VIDE SALE AGREEMENT DATED 11/6/2013 AND SUBSEQUENTLY A SALE DEED WAS EXECUTED ON 22/09/2015. SINCE THE STAMP DUTY VALUATION WAS TAKEN AT RS. 1,17,95,288/-, THERE FORE, THE FULL VALUE CONSIDERATION U/S 50C OF THE ACT WAS ADOPTED AT RS.1 ,17,95,288/-. THE ASSESSEE CLAIMED INDEXED COST OF IMPROVEMENT AT RS. 42,12,292/- WHICH INCLUDES THE INDEXED COST IN RESPECT OF THE EXPENDI TURE INCURRED FOR LAND LEVELLING COST OF RS. 89,980/- IN THE YEAR 1984-85. THE SAID CLAIM OF RS. 6,75,930/- TOWARDS INDEXED COST OF LAND LEVELLING CO ST WAS DISALLOWED BY THE ASSESSING OFFICER AS THE ASSESSEE DID NOT FILE ANY SUPPORTING EVIDENCE. THE ASSESSEE SUBMITTED THE RECEIPT OF THE SAID EXPEN DITURE BEFORE THE LD. CIT(A), HOWEVER, THE LD. CIT(A) DID NOT ACCEPT THE CLA IM OF THE ASSESSEE ON THE GROUND THAT ALL GENUINE AND ALLOWABLE COST OF IMPROVEMENT HAS BEEN ALLOWED. 8. BEFORE US, THE LD AR HAS REFERRED TO THE COPY OF THE RECEIPT DATED 25/5/1984 AND SUBMITTED THAT SINCE IT WAS AN OLD REC ORD AND THE ASSESSEE COULD NOT TRACE AT THE TIME OF ASSESSMENT PROCEEDIN GS, HOWEVER, THE ASSESSEE FILED THE SAID RECEIPT BEFORE THE LD. CIT(A ) WHICH SHOWS THAT THE ASSESSEE GOT THE WORK OF LAND LEVELLING AND INCURRED THE SAID EXPENDITURE. THUS, THE LD AR HAS SUBMITTED THAT THE DENIAL OF CLA IM WITHOUT CONSIDERING THE SUPPORTING EVIDENCE IS NOT JUSTIFIED. ITA 940/JP/2018_ MATHUR LAL VS ITO 7 9. ON THE OTHER HAND, THE LD DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE RECEIPT FIL ED BY THE ASSESSEE IS AN AFTERTHOUGHT EVIDENCE AS THE ASSESSEE HAS FAILED TO ESTABLISH THE REQUIREMENT OF LEVELLING OF THE LAND IN THE YEAR 19 84-85. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. WE NOTE THAT THE ASSESSING OFFI CER HAS DENIED THE CLAIM OF COST OF IMPROVEMENT TO THE EXTENT OF RS. 6 ,75,930/- TOWARDS THE LAND LEVELLING COST OF RS. 89,980/- CLAIMED TO HAVE BEEN INCURRED IN THE YEAR 1984 FOR WANT OF ANY SUPPORTING EVIDENCE. THE A SSESSEE FILED THE RECEIPT OF THE SAID EXPENDITURE BEFORE THE LD. CIT(A ). WE HAVE GONE THROUGH THE RECEIPT FILED BY THE ASSESSEE WHICH IS P LACED AT PAGE NO. 52 OF THE PAPER BOOK AND FOUND THAT THE SAID RECEIPT C ONTAINS ALL THE DETAILS OF THE TRACTOR WITH REGISTRATION NUMBER AND OWNER OF THE TRACTOR WHO HAS ISSUED THE RECEIPT. THE NATURE OF WORK DONE ALONGWITH THE RATE AS WELL AS THE TOTAL AMOUNT RAISED AGAINST THE SAID WORK. IT IS STATED IN THE SAID RECEIPT THAT THE LEVELLING OF THE LAND WAS GOT DONE FOR THE PURPOSE OF IRRIGATION FROM CANAL THOUGH SUBSEQUENTLY THE ASSES SEE ALSO GOT THE TUBE WELL BORED IN THE LAND ITSELF. THUS, HAVING REGARD TO THE AREA OF THE LAND AND THE CONTENTS OF THE RECEIPT WE FIND THAT THE CLA IM OF EXPENDITURE INCURRED IN THE YEAR 1984 FOR LAND LEVELLING HAS BE EN ESTABLISHED BY THE ITA 940/JP/2018_ MATHUR LAL VS ITO 8 ASSESSEE BY PRODUCTION OF THE SAID RECEIPT. ACCORDI NGLY, THE CLAIM OF THE ASSESSEE DESERVES TO BE ALLOWED. WE DIRECT THE ASSES SING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE FOR INDEXED COST OF IMPRO VEMENT OF LAND AT RS. 6,75,930/-. HENCE, THIS GROUND OF THE ASSESSEES AP PEAL STANDS ALLOWED. 11. GROUND NO. 2 OF THE APPEAL IS REGARDING DISALLO WANCE OF CLAIM U/S 54B OF THE ACT TO THE EXTENT OF RS. 18,26,320/-. THE ASSESSEE CLAIMED DEDUCTION U/S 54B OF RS. 48,43,320/- WHICH INCLUDES PURCHASE OF AGRICULTURAL LAND OF RS. 7.00 LACS ON 16/5/2012 IN THE NAME OF SON AND THE EXPENDITURE ON IMPROVEMENT OF THE SAID LAND OF RS. 10,11,000/- INCLUDING THE COST OF CONSTRUCTION OF TWO ROOMS AND FURTHER TH E STAMP DUTY PAID BY THE ASSESSEE IN RESPECT OF ANOTHER AGRICULTURAL LAN D PURCHASED ON 05/7/2013. THE LD AR OF THE ASSESSEE HAS SUBMITTED T HAT THE LD. CIT(A) WHILE DECIDING THE CLAIM OF DEDUCTION U/S 54B OF THE ACT HAS CONFIRMED THE DISALLOWANCE IN RESPECT OF THE AGRICULTURAL LAND PURCHASED ON 16/5/2012. HOWEVER, THE ASSESSEE RECEIVED THE CONSID ERATION IN RESPECT OF THE LAND SOLD AT THE TIME OF THE AGREEMENT DATED 29/12/2011 THUS, THE LD AR HAS SUBMITTED THAT THE SAID CONSIDERATION TO THE EXTENT OF RS. 70.00 LACS RECEIVED AT THE TIME OF FIRST AGREEMENT DATED 29/12/2011 WAS INVESTED IN PURCHASE OF AGRICULTURAL LAND AND THERE FORE, THE AGRICULTURAL LAND PURCHASED OF RS. 7.00 LACS ON 16/5/2012 IS ELI GIBLE FOR DEDUCTION U/S ITA 940/JP/2018_ MATHUR LAL VS ITO 9 54B OF THE ACT. THE LD AR HAS POINTED OUT THAT THOU GH THERE WAS SUBSEQUENT AGREEMENT DATED 11/6/2013 AND THEREAFTER THE SALE DEED WAS EXECUTED ON 22/09/2015, HOWEVER, THE ASSESSEE RECEI VED PART CONSIDERATION AT THE TIME OF FIRST AGREEMENT TO SEL L DATED 29/12/2011. HENCE, THE LD AR HAS SUBMITTED THAT ONCE THE SALE C ONSIDERATION RECEIVED AGAINST THE SALE OF THE LAND IN QUESTION WAS USED FO R PURCHASE OF AGRICULTURAL LAND THEN THE CLAIM SHOULD NOT BE DENI ED ON TECHNICAL REASONS. 12. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE PROVISIONS OF SECTION 54B OF THE ACT CLEARLY ENVISAGED THAT THE D EDUCTION IS ALLOWABLE ONLY IN RESPECT OF THE AGRICULTURAL LAND PURCHASED AFTER THE SALE OF EXISTING AGRICULTURAL LAND. THUS, IT IS THE DEDUCTION ALLOWED ONLY WHEN THE CAPITAL GAIN IS USED FOR PURCHASE OF AGRICULTURAL LAND WITHI N A PERIOD OF TWO YEARS AFTER THE DATE OF TRANSFER AND NOT BEFORE THE TRANS FER. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE PROVISIONS OF SECTION 54B OF THE ACT SET OUT THE CONDITIONS FOR ALLOWING THE DEDUCTION IN RESPECT OF THE CAPITAL GAIN ARISING FROM TRANSFER OF AGRICULTURAL LAND IF THE ASSESSEE HAS PURCHASED WITHIN A PERIOD OF TWO YEARS, ANY OTHER LAND FOR BEING USED F OR AGRICULTURAL ITA 940/JP/2018_ MATHUR LAL VS ITO 10 PURPOSES. FOR READY REFERENCE, WE QUOTE THE PROVISIO NS OF SECTION 54B OF THE ACT: [ CAPITAL GAIN ON TRANSFER OF LAND USED FOR AGRICULTU RAL PURPOSES NOT TO BE CHARGED IN CERTAIN CASES. 54B. [(1)] [SUBJECT TO THE PROVISIONS OF SUB-SECTION (2 ), WHERE THE CAPITAL GAIN ARISES] FROM THE TRANSFER OF A CAPITAL ASSET BEING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE TRANSFE R TOOK PLACE, WAS BEING USED BY [THE ASSESSEE BEING AN INDIVIDUAL OR HIS PARENT , OR A HINDU UNDIVIDED FAMILY] FOR AGRICULTURAL PURPOSES [(HEREINAFTER REFERRED TO AS THE ORIGINAL ASSET)], AND THE ASSESSEE HAS, WITHIN A PERIOD OF TWO YEARS AFTER TH AT DATE, PURCHASED ANY OTHER LAND FOR BEING USED FOR AGRICULTURAL PURPOSES, THEN, INS TEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME-TAX AS INCOME OF THE PREVIOUS YEA R IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WITH IN ACCORDANCE WITH TH E FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, ( I ) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER THAN T HE COST OF THE LAND SO PURCHASED (HEREINAFTER REFERRED TO AS THE NEW ASSET), THE DI FFERENCE BETWEEN 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 ARISING FROM ITS TRANSFER WI THIN A PERIOD OF THREE YEARS OF ITS PURCHASE, THE COST SHALL BE NIL ; OR ( II ) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LE SS THAN THE COST OF THE NEW AS SET, THE CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING F ROM ITS TRA NSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE, THE COST SHALL BE REDU CED, BY THE AMOUNT OF THE CAPITAL GAIN.] [(2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT U TILISED BY THE ASSESSEE FOR THE PURCHASE OF THE NEW ASSET BEFORE THE DATE OF FURNIS HING THE RETURN OF INCOME UNDER SECTION 139 , SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH 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 UN DER SUB-SECTION (1) OF SECTION 139 ] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT; AND, FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILISED BY THE ASSESSEE FO R THE PURCHASE OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEM ED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB- SECTION (1), THEN, ITA 940/JP/2018_ MATHUR LAL VS ITO 11 ( I ) THE AMOUNT NOT SO UTILISED SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF TWO YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND ( II ) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SUCH AMO UNT IN ACCORDANCE WITH THE SCHEME AFORESAID. THUS, THE PROVISIONS ENVISAGED THE BENEFIT OF DEDUCT ION WHEN THE CAPITAL GAIN ARISING FROM THE TRANSFER OF AGRICULTURAL LAND IS USED FOR PURCHASE OF ANOTHER AGRICULTURAL LAND WITHIN A PERIOD OF TWO YEAR S AFTER THE DATE OF TRANSFER. THE LEGISLATURE HAS NOT INTENDED TO ALLOW THE CLAIM IN RESPECT OF THE LAND PURCHASED PRIOR TO SUCH TRANSFER AS IN THE CASE OF DEDUCTION U/S 54 AND 54F OF THE ACT. THUS, THE BENEFICIARY PROVISI ON HAS TO BE CONSTRUED AND INTERPRETED STRICTLY SO FAR AS THE PRIMARY COND ITION FOR ELIGIBILITY TO BE SATISFIED THOUGH THE OTHER ANCILLARY AND PROCEDURAL CONDITIONS REGARDING KEEPING THE FUND IN THE CAPITAL GAIN ACCOUNT SCHEME BEFORE DUE DATE OF FURNISHING RETURN OF INCOME CAN BE CONSTRUED LIBERA LLY ONCE THE PRIMARY CONDITION FOR ELIGIBILITY OF THE DEDUCTION IS SATIS FIED. EVEN OTHERWISE THE ASSESSEE INITIALLY ENTERED INTO AN AGREEMENT TO SEL L ON 29/12/2011 AND THEREAFTER ANOTHER AGREEMENT WAS ENTERED INTO BY THE ASSESSEE ON 11/6/2013, THEREFORE, THE FIRST AGREEMENT WAS NO MOR E IN EXISTENCE WHEN THE PARTIES HAVE ENTERED INTO A SECOND AGREEMENT WHI CH HAS ULTIMATELY CULMINATED IN EXECUTION OF SALE DEED ON 22/09/2015. IT IS NOT THE CASE THAT THE FIRST AGREEMENT DATED 29/12/2011 WAS THE BA SIS OF THE EXECUTION ITA 940/JP/2018_ MATHUR LAL VS ITO 12 OF SALE DEED. EVEN OTHERWISE THE ASSESSEE HAS DECLAR ED THE TRANSFER OF THE LAND IN QUESTION FOR THE YEAR UNDER CONSIDERATI ON AND NOT IN THE YEAR RELEVANT TO THE FIRST AGREEMENT DATED 29/12/2011. TH EREFORE, IF THE CONTENTION OF THE LD AR OF THE ASSESSEE IS ACCEPTED THEN THE TRANSFER ITSELF WOULD TAKE PLACE FROM THE DATE OF FIRST AGREEMENT AN D THE ENTIRE CASE HAS TO BE REVERSED BACK. THUS, HAVING REGARD TO THE FACT S AND CIRCUMSTANCES OF THE CASE WHEN THE ASSESSEE HIMSELF HAS DECLARED THE TRANSFER OF THE LAND IN QUESTION VIDE AGREEMENT DATED 11/6/2013 THE N THE EARLIER AGREEMENT DATED 29/12/2011 CANNOT BE CONSIDERED AS A RELEVANT DOCUMENT FOR THE PURPOSE OF TRANSFER OF THE LAND IN QUESTION. THERE IS NO DISPUTE THAT THE LAND FOR RS. 7.00 LACS WAS PURCHASE D BY THE ASSESSEE VIDE AGREEMENT DATED 16/5/2012 WHICH IS PRIOR TO THE SALE DECLARED BY THE ASSESSEE VIDE AGREEMENT DATED 11/6/2013. CONSEQUENT LY, THE SAID PURCHASE PRIOR TO THE SALE OF THE EXISTING LAND WOUL D NOT BE ALLOWABLE FOR DEDUCTION U/S 54B OF THE ACT. 13.1 THE NEXT GRIEVANCE OF THE ASSESSEE IS REGARDING THE DISALLOWANCE OF EXPENDITURE OF RS. 10,11,000/- CLAIMED BY THE ASSES SEE ON IMPROVEMENT OF THE SAID LAND WHICH IS PURCHASED VIDE AGREEMENT D ATED 05/7/2013. THOUGH THE LD. CIT(A) HAS ALLOWED THE CLAIM U/S 54B OF THE ACT TO THE EXTENT OF PURCHASE COST OF THE SAID LAND, HOWEVER, T HE CLAIM OF ITA 940/JP/2018_ MATHUR LAL VS ITO 13 IMPROVEMENT WAS DISALLOWED BY THE LD. CIT(A). WE FIND THAT OUT OF THE SAID CLAIM OF RS. 10,11,000/-, THE ASSESSEE HAS INC URRED SOME AMOUNT IN RESPECT OF LEVELLING OF THE LAND AND ERECTING BOUND ARY WALL AND THE BALANCE AMOUNT WAS INCURRED IN RESPECT OF THE CONSTR UCTION OF TWO ROOMS. AS FAR AS THE EXPENDITURE INCURRED BY THE ASSESSEE FOR IMPROVEMENT OF THE AGRICULTURAL AND MAKING IT FIT FOR AGRICULTURAL OPE RATIONS, THE SAID EXPENDITURE CAN BE ALLOWED AS COST OF THE LAND ITSEL F. HOWEVER, THE EXPENDITURE INCURRED FOR CONSTRUCTION OF TWO ROOMS C ANNOT BE REGARDED AS AN EXPENDITURE INCURRED FOR THE PURPOSE OF AGRICULT URAL LAND. HENCE WE ALLOW THE PART CLAIM OF THE ASSESSEE TO THE EXTENT O F THE EXPENDITURE INCURRED ON IMPROVEMENT OF THE AGRICULTURAL LAND AN D ERECTION OF BOUNDARY WALL. THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE THE DEDUCTION U/S 54B OF THE ACT BY ALLOWING THE SAID PART OF COST OF IMPROVEMENT ON THE AGRICULTURAL LAND. 13.2 THE NEXT GRIEVANCE OF THE ASSESSEE IN RESPECT O F THE CLAIM OF DEDUCTION U/S 54B OF THE ACT IS REGARDING THE STAMP DUTY EXPENDITURE WAS NOT TAKEN AS PART OF COST OF PURCHASE OF LAND. THE L D AR HAS REFERRED TO THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THOUG H THE LD. CIT(A) HAS ALLOWED THE CLAIM OF DEDUCTION U/S 54B OF THE ACT IN RESPECT OF THE LAND PURCHASED VIDE SALE DEED DATED 05/7/2013, HOWEVER, T HE STAMP DUTY PAID ITA 940/JP/2018_ MATHUR LAL VS ITO 14 BY THE ASSESSEE OF RS. 66,410/- WAS NOT INCLUDED IN THE COST OF PURCHASE OF LAND. WE FIND THAT THE STAMP DUTY IS PART OF COS T OF PURCHASE OF LAND AND THEREFORE WHILE ALLOWING THE CLAIM OF DEDUCTION U/S 54B OF THE ACT, THE TOTAL COST OF LAND INCLUDING THE STAMP DUTY HAS TO BE TAKEN INTO CONSIDERATION. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO CONSIDER THE STAMP DUTY PAID BY THE ASSESSEE AS PART OF THE COST OF PURCHASE OF AGRICULTURAL LAND WHILE COMPUTING THE DEDUCTION U/S 54B OF THE ACT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS PARTLY A LLOWED. 14. GROUND NO. 3 OF THE APPEAL IS REGARDING RESTRIC TING THE CLAIM OF DEDUCTION U/S 54F OF THE ACT TO RS. 20,07,687/- AS AGAINST RS. 27,39,676/- CLAIMED BY THE ASSESSEE. WE HAVE HEARD THE LD. AR AS WELL AS THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON R ECORD. THE ASSESSEE PURCHASED RESIDENTIAL PLOT AND THEN CONSTRUCTED A H OUSE. THE ASSESSEE HAS CLAIMED THE COST OF NEW HOUSE AT RS. 45,65,000/- AND FILED A COPY OF VALUATION OF A REGISTERED VALUER IN SUPPORT OF HIS CLAIM. THE LD. CIT(A) REFERRED THE MATTER OF VALUATION OF COST OF THE PRO PERTY TO THE DVO WHO HAS DETERMINED THE COST OF PROPERTY AT RS. 38,21,64 0/-. THE LD. CIT(A) HAS ADOPTED THE COST OF NEW HOUSE ESTIMATED BY THE D VO AND CONSEQUENTLY RESTRICTED THE DEDUCTION U/S 54F OF TH E ACT TO RS. 20,07,687/- AS AGAINST THE DEDUCTION CLAIMED BY THE ASSESSEE OF RS. ITA 940/JP/2018_ MATHUR LAL VS ITO 15 27,39,676/-. THE LD AR HAS POINTED OUT THAT THE ASS ESSEE HAS PURCHASED PLOT OF LAND FOR CONSTRUCTION OF HOUSE AT RS. 8.50 LACS AS PER THE AGREEMENT DATED 17/08/2013 AND ALSO FILED AN AFFIDA VIT OF THE SELLER TO CONFIRM THE PURCHASE CONSIDERATION OF THE LAND. HE HAS FURTHER CONTENDED THAT THE DVO HAS ADOPTED DLC RATE AT RS. 5,46,840/- IGNORING THE ACTUAL PURCHASE CONSIDERATION PAID BY THE ASSESSEE. FURTHE R THE DVO HAS NOT GIVEN ANY PRICE ACCELERATION WHILE ESTIMATING THE CO ST OF CONSTRUCTION OF THE HOUSE WHEREAS THE REGISTERED VALUER HAS ADDED TH E SAME @ 19.60% FROM THE YEAR 2012 TO 2014. THUS, THE LD AR HAS SUB MITTED THAT THE COST OF NEW HOUSE CLAIMED BY THE ASSESSEE IS BASED ON THE ACTUAL EXPENDITURE INCURRED BY THE ASSESSEE AND SHALL BE ALLOWED FOR TH E PURPOSE OF DEDUCTION U/S 54F OF THE ACT. 15. ON THE OTHER HAND, THE LD DR HAS RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE LD. CIT(A) HAS ALREADY ALLOWED THE CLAIM OF ASSESSEE TO THE EXTENT OF COST OF NEW H OUSE DETERMINED BY THE DVO. THE ASSESSEE HAS NOT POINTED OUT ANY DEFECT IN THE VALUE DETERMINED BY THE DVO EXCEPT RAISING THE MINOR ISSU ES WHICH IS NOTHING BUT THE SUBJECT MATTER OF ESTIMATES. 16. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD AT THE OUTSET, WE NOTE THAT, SO FAR AS THE PURCHASE ITA 940/JP/2018_ MATHUR LAL VS ITO 16 CONSIDERATION OF RESIDENTIAL PLOT, THE ASSESSEE HAS PRODUCED THE EVIDENCE OF RS. 8.50 LACS AS RECORDED IN THE PURCHASE AGREEM ENT DATED 17/8/2013 AND FURTHER AN AFFIDAVIT OF THE SELLER WAS FILED BY THE ASSESSEE. THEREFORE, TO THE EXTENT OF THE COST OF PLOT OF LAND IN QUESTI ON IS CONCERNED WHEN THE ASSESSEE HAS PRODUCED THE EVIDENCE OF ACTUAL PURCHA SE CONSIDERATION PAID BY THE ASSESSEE THEN THE QUESTION OF ESTIMATION OF THE PURCHASE CONSIDERATION DOES NOT ARISE. EVEN OTHERWISE WHEN THE LAND IN QUESTION IS WITHIN THE VILLAGE ABADI LAND THEN THE DLC RATE ADOP TED BY THE DVO IS NOT PROPER. HENCE, TO THE EXTENT OF THE COST OF PURCHAS E OF LAND WE ALLOW THE CLAIM OF ASSESSEE OF RS. 8.50 LACS BEING THE ACTUAL PURCHASE CONSIDERATION PAID BY THE ASSESSEE. AS REGARDS THE COST OF CONSTR UCTION OF THE HOUSE, WE FIND THAT THE ASSESSEE HAS FILED A VALUATION REPO RT OF REGISTERED VALUER ESTIMATING THE COST OF CONSTRUCTION AT RS. 37,03,63 0/- WHEREAS THE DVO HAS ESTIMATED THE COST OF CONSTRUCTION AT RS. 32,74 ,800/-. SINCE THE CLAIM OF ASSESSEE AS WELL AS THE DEPARTMENT IS BASED ON TH E ESTIMATED COST OF CONSTRUCTION DETERMINED BY THE RESPECTIVE VALUERS, THEREFORE, IT IS A PURE SUBJECT MATTER OF ESTIMATE NOT BASED ON ACTUAL EXPE NDITURE INCURRED. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN TWO SEPARATE ESTIMATES ARE THE BASIS OF CLAIM OF BOTH T HE PARTIES THEN TO BRING THE CONTROVERSY TO AN END WE FIND IT PROPER TO ESTIM ATE THE COST OF CONSTRUCTION OF THE HOUSE AS AVERAGE OF BOTH THE ES TIMATES MADE BY THE ITA 940/JP/2018_ MATHUR LAL VS ITO 17 REGISTERED VALUER AS WELL AS BY THE DVO. THE ASSESSIN G OFFICER IS DIRECTED TO TAKE THE COST OF CONSTRUCTION OF HOUSE AS AVERAG E OF BOTH THE VALUATIONS DONE BY THE REGISTERED VALUER AND BY THE DVO. HENCE, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/10/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12 TH OCTOBER, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI MATHUR LAL, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 2(2), KOTA. 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. 940/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR