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Income Tax Appellate Tribunal, ‘ B’ SMC BENCH : CHENNAI
Before: SHRI GEORGE MATHAN
आदेश / O R D E R
This is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-2,Chennai in ITA No.104/2016-17/A.Y 2008-09/CIT(A)/2 dated 27.01.2018 for the assessment year 2008-09.
Shri M.Kaushik represented on behalf of the Assessee and Shri B.Sagadevan represented on behalf of the Revenue.
It was submitted by ld.A.R that the assessee was 1/5th owner in 3. property, which was sold. It was a submission that ld. Assessing Officer had applied the provisions of the Sec.50C of the Act and determined the sale consideration of `30 lakhs. It was a submission that one fifth of that amount was treated as income of assessee. It was a submission that the issue was squarely by the decision of the Co-ordinate ‘SMC’ Bench of this Tribunal in the case of one of the co- owners being S.Sathyamurthy in dated 30.10.2018 wherein it has been held as follows:
“2. Vide its ground No.3, assessee assails computation of capital gains considering the value of a property at �30,00,000/- against �18,77,000/- assessed by the Department Valuation Officer. Ld. Counsel for the assessee submitted that assessee was a casual labour. According to him, assessee along with his four family members had sold a property at Velachery, Chennai, during the relevant previous year, by executing a power of attorney in favour of one Shri. Radhakrishnan. As per the ld. Authorised Representative assessee’s father was murdered on a dispute with regard to the above property and therefore legal heirs, including assessee had sold it under distress. Contention of the ld. Authorised Representative was that consideration shown in the sale deed though only �25,00,000/- assessee by mistake, in the return of income, had calculated his share taking the consideration as �30,00,000/-. As per
Ld. Authorised Representative, the ld. Assessing Officer had referred the valuation of the property to the Valuation Cell of the Department, applying on Section 50C of the Income Tax Act, 1961 (in short ‘’the Act’’). The valuer, as per the Ld.AR, had fixed the value of the property at �18,77,000/-. According to the ld. Authorised Representative, assessee at the best could have been assessed for the 1/5th share in �25,00,000/- and nothing done. Submission of the ld. Authorised Representative was that lower authorities had taken advantage of the ignorance and an error committed by the assessee, while filing the return.
Per contra, ld. Departmental Representative submitted that assessee himself had shown the sale consideration received by him as 1/5th of �30,00,000/-. According to him, assessee could not now turn around and say that consideration received was only �25,00,000/-
I have considered the rival contentions and perused the orders of the authorities below. Contention of the assessee is that the sum received was erroneously considered by him as �30,00,000/- , against actual amount of �25,00,000/- mentioned in the deed. It is not disputed that the value fixed for the property by the Department Valuation Officer u/s.50C of the Act was only �18,77,000/- though he adopted a higher value of �25,00,000/- considering what was mentioned in the Sale Deed. I am of the opinion that lower authorities ought not have taken advantage of the mistake committed by the assessee in showing the consideration at a higher amount than what was mentioned in the sale deed. Especially so, since Valuation cell of the Department valued the property at �18,77,000/-. I therefore direct the lower authorities to recompute the capital gains adopting 1/5th consideration of �25,00,000/- as the sum received by the assessee on sale of the property at Velachery, Chennai. Ground No.3 is treated as partly allowed.”
3.1 In regard to second issue, it was a submission that the assessee had invested her sale consideration in construction of additional space in already existing old residential house in the name of assessee’s husband. It was a submission that the assessee claimed benefit of deduction u/s.54F of the Act.
4. In reply, the ld.D.R vehemently opposed the claiming of benefit u/s.54F of the Act. It was a submission that he had no objection, if the issue may be restored to the file of ld. Assessing Officer in line with the decision of Tribunal in the case of S.Sathyamurthy referred to supra.
I have considered the rival submissions. As the issue in respect of sale consideration is squarely covered by the decision of the Co-ordinate ‘SMC’ Bench of this Tribunal in the case of one of the co-owners being S.Sathyamurthy referred to supra, respectfully following the decision of the Co-ordinate ‘SMC’ Bench of this Tribunal, the ld. Assessing Officer is directed to re-compute the capital gains adopting 1/5th share and consideration of `6/- lakhs as the sum received by the assessee on the sale of the property at Velachery. A perusal of the grounds raised by the assessee shows that the assessee has not challenged the issue of valuation of the property and the assessee has only challenged the claim for deduction u/s.54F of the Act, which was denied to the assessee. Consequently, the arguments of the assessee in respect of the valuation of the property by applying the provisions of the section 50C of the Act as done by the ld. Assessing Officer cannot be considered. Coming to the issue of claiming deduction u/s.54F of the Act, it is noticed that the assessee has constructed additional space allegedly in respect of the property owned by her spouse. The investment in the new property, or investment made to additions in the existing old property is not in the name of the assessee and consequently, the benefit of deduction u/s.54F cannot be granted. In the circumstances, Ground Nos. 1 to 7 of the assessee’s appeal stands dismissed.
In the open court, it was pronounced as partly allowed on account of the fact that the issue of the valuation as done by the ld. Assessing Officer was considered as a subject matter of the appeal on the basis of the submissions made by the ld.A.R on the Bar. I find that the issue of valuation by application of Sec.50C is not found in the grounds of appeal. Consequently, the appeal of the assessee is dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court after conclusion of hearing on 19th November, 2018, at Chennai.