SMT. NEELAM MAHANA,LUCKNOW vs. INCOME TAX OFFICER-6(2), LUCKNOW

The assessee has taken various grounds of appeal which are argumentative in nature. However, the crux of her grievance is restriction of exemption u/s 54 of the Act which the learned CIT(A) has restricted upto Rs.10,00,000/- as against total denial by the Assessing Officer. The second grievance of the assessee is the calculation of Long Term Capital Gain. The case of the assessee was reopened u/s 147 of the Act as the Assessing Officer was in possession of an information that the assessee had sold one property and had not declared the same in the return of income. Before the Assessing Officer it was explained by the assessee that the in fact she had sold two properties during the year and the indexed cost of acquisition, as per the valuation report, was more than the sale consideration and therefore, there was a Long Term Capital Loss and it was further submitted that Rs.32,80,000/- has been invested in other residential property which gives the exemption from Long Term Capital Gain. The Assessing Officer however, held that the area of the property as per sale deed was lesser than the area of the property as per valuation certificate and therefore, he held that the above valuation report was not reliable and therefore, on the basis of valuation report, obtained from the Valuation Officer, he calculated the Long Term Capital Gain of one property and did not compute the capital gain / loss from the second property. Similarly, the Assessing Officer disallowed the exemption u/s 54 of the Act by holding that the assessee could not prove that the sale proceeds in one property has been invested in another property. The learned CIT(A) though confirmed the addition on account of Long Term Capital Gain but allowed exemption u/s 54 of the Act upto an amount of Rs.10,00,000/- only. The contention of the assessee that she had invested an amount of Rs.32,80,000/- in a residential property was also not accepted by the learned CIT(A). The learned CIT(A) has also not admitted additional evidence which the assessee had filed before him by holding that the above application does not explain as to what was the sufficient cause which prevented the assessee from producing these evidences before the Assessing Officer. I find that the contention of the assessee is that there were two sale deeds, the valuation report of one of them was filed with the Assessing Officer and the valuation report of the second property was filed with learned CIT(A) who had not admitted the same. However, I feel that since the authorities below have taken the sale value on the basis of valuation certificate of 7,930 sq. ft., which is the area of the two properties, It is not fair on the part of the Revenue authorities to take as cost of acquisition, the cost of one property. In view of the facts and circumstances, I deem it appropriate to remit the issue back to the file of the Assessing Officer who should pass afresh order after taking into account the additional evidences filed by the assessee. Needless to say that adequate opportunity of being heard will be provided to the assessee.

In the result, the appeal of the assessee stands allowed for statistical purposes.