R. Srinivasan (HUF) Vs ITO (ITAT Chennai)
The assessee, assessed in the status of a Hindu Undivided Family (HUF), appealed against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2008-09 arising from an assessment under Sections 143(3) and 250 of the Income Tax Act. The assessee challenged the adoption of the Departmental Valuation Officer (DVO) value for computing capital gains, the non-consideration of additional grounds, and the restriction of exemption under Section 54F.
The assessee had filed its return declaring total income of ₹1,23,100. During scrutiny, the Assessing Officer found that the assessee had sold land at Abishekapuram Village, Trichy, on 03.12.2007 for ₹15,67,125, whereas the guideline value for stamp duty purposes was ₹33,22,305. At the assessee’s request, the property was referred to the DVO, who determined its value at ₹24,45,000 under Section 50C(2). Based on the DVO valuation, the Assessing Officer computed long-term capital gains at ₹7,21,294. The assessee had entered into an agreement on 06.11.2009 for purchase of a residential flat at Bangalore along with two others, with the sale deed registered on 29.03.2010. The assessee’s share of the investment was ₹17,31,975, and exemption under Section 54F was claimed. The Assessing Officer denied the exemption on the ground that the new residential property was purchased beyond two years from the date of transfer and restricted the exemption to ₹15,37,000, resulting in assessment of total income at ₹8,44,394.
