I.T.O. Vs Shri Roop Narayan Sharma (ITAT Jaipur)
Conclusion: Deduction U/s 54F was available to assessee in respect of full value of consideration received and not on the value taken by the Sub-Registrar for the purposes of stamp duty.
Held: Assessee had sold agricultural land and invested for purchase of residential house. He claimed exemption U/s 54F in respect of actual amount of sale consideration received by him and not on the amount adopted for stamp duty purposes. However, AO allowed deduction U/s 54 by taking the amount invested. CIT(A) held that assessee was entitled for deduction U/s 54F in respect of full value of consideration received and not the value taken by the Sub-Registrar for the purposes of stamp duty. It was held the issue was squarely covered by the decision of the Hon’ble Delhi High court in the case of CIT Vs. Nilofar Singh, which had been followed in the case of Nand Lal Sharma Vs. ITO (2015) 61 taxmann.com 271 (JP Trib) 61 taxmann.com 271 and also in the case of Gyan Chand Batra 133 TTJ 482, respectfully following the same, there was no infirmity in the order of CIT(A) in directing the A. to allow the assessee’s claim of deduction U/s 54F in respect of full value of consideration actually received by him.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the revenue and the cross objection filed by the assessee against the order of ld.CIT(A)-I. Jaipur dated 05/02/2016 for the A.Y. 2007-07 in the matter of order passed U/s 143(3) read with Section 147 of the Income Tax Act, 1961 (in short, the Act).
2. First, we take up the appeal filed by the department wherein the revenue has raised following grounds of appeal:
“1. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in directing the AO to re-compute the Long Term Capital Gain holding that the assessee is entitled for deduction uls 54F in respect of full value of consideration received by the assessee and not the value taken by the sub registrar for the purposes of stamp duty.
2. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in allowing relief of Rs. 66,00,000/-out of total addition of Rs. 81,00,000/- made by the AO on account of unexplained bank deposits on the basis of additional evidences, which were never submitted before the AO despite providing various opportunities by the AO.
3. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in allowing relief of Rs. 66,00,000/- out of total addition of Rs. 81,00,000/- made by the AO on account of unexplained bank deposits on the basis of additional evidences, which were admitted without satisfying the conditions mentioned in Rule 46A of the IT Rules.”
3. Rival contentions have been heard and record perused. Facts in brief are that during the year under consideration, the assessee has sold its agricultural land. The case of the assessee was reopened on the basis of the information that the assessee had purchased an immoveable property and in absence of any return, source was not verifiable. In response to notice u/s 148, the appellant had filed his return declaring income from agriculture and bank interest. The assessee along with his three brothers had sold two agricultural lands admeasuring 40.30 Bighas for Rs. 6.80 Crores (in which share of the appellant is Rs. 1.70 Crore but valued by registering authority at Rs. 8.02 Crores in which share of the assessee is calculated at Rs. 2,00,50,000) and reinvested for purchase of agricultural lands as well as for purchase of residential house. Since as per opinion of the assessee the said lands were not capital assets u/s 2(14) of the Act and hence no such transaction of sale of agricultural lands was shown in the return filed in pursuance to notice u/s 148. During the assessment proceedings the AO not convinced with the arguments and submissions taxed the capital gain by curtailing eligible deductions to the assessee u/s 54B and u/s 54F of the Act. During the reassessment proceedings, the A.O. found that out of the sale proceeds, the assessee acquired residential house for which deduction was claimed U/s 54F of the Act in respect of value of consideration paid by the assessee. As per the A.O., the assessee is entitled for deduction U/s 54F of the Act only if the assessee has invested full amount of sale consideration of agricultural land as taken by the Sub-Registrar for the purpose of stamp duty. Thus, the A.O. restricted the deduction claimed U/s 54F of the Act. By the impugned order, the ld. CIT(A) directed the A.O. to allow exemption U/s 54F in respect of full value of consideration received by the assessee and not the value taken by the Sub-Registrar for the purpose of stamp duty. Against the order of the ld. CIT(A), the revenue is in further appeal before the ITAT.
4. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that during the year, the assessee had sold agricultural land of Rs. 70.00 lacs which was valued by the Registering Authority at Rs. 1,00,50,000/-and it had invested Rs. 35,26,740/- for purchase of residential house. The assessee claimed exemption U/s 54F of the Act in respect of actual amount of sale consideration received by him and not on the amount adopted for stamp duty purposes. However, the A.O. allowed a sum of Rs. 30,98,385/- as deduction U/s 54 by taking the amount invested at Rs. 33,26,700/-. The ld. CIT(A) has correctly held that the assessee is entitled for deduction U/s 54F in respect of full value of consideration received and not the value taken by the Sub-Registrar for the purposes of stamp duty. The issue is squarely covered by the decision of the Hon’ble Delhi High court in the case of CIT Vs. Nilofar Singh, which has been followed by the ITAT Jaipur Bench in the case of Nand Lal Sharma Vs. ITO (2015) 61 taxmann.com 271 (JP Trib) 61 taxmann.com 271 and also in the case of Gyan Chand Batra 133 TTJ 482, respectfully following the same, we do not find any infirmity in the order of the ld. CIT(A) in directing the A.O. to allow the assessee’s claim of deduction U/s 54F of the Act in respect of full value of consideration actually received by him.
5. The revenue is also aggrieved for deleting the addition of Rs. 66.00 lacs out of total addition of Rs. 81.00 lacs made by the A.O. on account of unexplained bank deposits.
6. Rival contentions have been heard and record perused. From the record we found that the A.O. made addition of Rs. 81.00 lacs to the income of the assessee on account of unexplained credits (including cash deposit of Rs. 15 lacs) in the bank account of the assessee as per the following details:
