MRS. RANJANA KHULLAR,NEW DELHI vs. ACIT, NEW DELHI

Assessee by : Sh. Salil Aggarwal, Adv Sh. Shailesh Gupta, CA Revenue by: Sh. F.R. Meena, Sr. DR Date of Hearing 15/12/2016 Date of pronouncement 13/02/2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(A)-XXVIII, New Delhi dated 14.11.2013 for the Assessment Year 2008-09. 2. The assessee has raised the following grounds of appeal:- “1. In the facts and circumstances of the case the addition retained for Rs. 13,10,9247-relating to the sale of build up property's l/3rd share, in Shop at Plot No. 9929 to 9935, New Rohtak Road, New Delhi-110005, against the gross sale registered of Rs. 2,00,0007- is unjust, unlawful addition on the basis of circle rate, is unjustified and the material placed on the record not considered. Thus the order is illegal and unwarranted.

2. That the learned CIT (A) has failed to appreciate the facts brought on record by the assessee to substantiate and justify the sale consideration received.

3. That the provision of section 50(c)(2) was not applicable as Agreement of Sale was made in April, 2007 and Sale Deed was registered on 17.07.2007 and circle rates were published on 18.07.2007. Ignoring this fact and evidence placed on record is unwarranted, not justified and against the facts and circumstances of the case.

4. The appellant craves leave to add /or to amend / or to delete / or to modify / or to alter any of the aforesaid grounds of appeal before or at the time of hearing of the case.”

3. Appellant is an individual who filed her return of income on 22/09/2008 declaring an income of Rs. 1 549208/–. During the course of assessment proceedings it was found that assessee has sold 1/ 3rd share of the property Page 2 of 4 of one and half storied built up property bearing municipal No. 9929 to 9935 built on freehold land admeasuring 3985 yd.² situated at new Rohtak Road New Delhi and assessee was asked about the sale proceeds on capital gains arising on the sale of the said property. During the course of assessment proceedings the assessee submitted that 1/3rd portion of the shop, which was sold on 17/07/2007 was in the possession of an old tenant for last 50 years at a meager rent of Rs. 8.50 per month for the whole shop yielding annual income of Rs. 102/– only. It was further submitted that there was no possibility of getting such tenant evicted. It was further submitted that complete particulars of the property are fully described in the valuation report determining fair market value as on 01/04/1981. In the circumstances it was stated that assessee was forced to sell this property. With regard to the query for circle rate pertaining on the date of sale of the property, It was submitted that there is no prescribed circle rate notified by any government authority or any state authority at the relevant point of time and later on w.e.f. 18/07/2007 first-time the prescribed rates were notified. It was therefore stated that there was no circle rates on existence on the date of the sale. However, the Ld. assessing officer rejected the contention of the assessee and stated that minimum rates for valuation of land and immovable properties in Delhi were already in existence in the assessment year 2008 – 09 and the same rate should be applied for working out the capital gain of the assessee. Thereafter applying the provisions of section 50 C of the income tax act, he determined the full circle value of the property at Rs. 4 135643/– and adopted 1/3rd of such sum at Rs. 1 378548/– as this deemed sale consideration and worked out capital gain of Rs. 1 310924/– of such property. Consequently, assessment under section 143 (3) of the income tax act was framed on 27. 12 2010 determining the total income of the assessee at Rs. 2 860132/–. Assessee being aggrieved with the order of the Ld. AO preferred an appeal before the Ld. CIT (A), who dismissed the appeal of the assessee. Therefore aggrieved with the order of the Ld. CIT A assessee is in appeal before us.

4. Ld. authorised representative submitted, same facts which were stated before the Ld. assessing officer that the property was with tenant and therefore the sale was made to the tenant where there was no possibility of evicting such tenant and therefore the objection was raised before the Page 3 of 4 assessing officer about the value of said property. He therefore submitted that the Ld. AO as well as Ld. CIT A erred in adopting the provisions of section 50 C of the income tax act to the impugned property.