DHARAM NATH S/O SH. KARAM CHAND,YAMUNANAGAR vs. ITO, WARD-1, YAMUNANAGAR

This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 24/05/2022 pertaining to Assessment Year 2007-08.

Briefly the facts of the case are that the assessment in this case was completed under section 143(3) r.w.s 147 of the Act vide order dt. 12/03/2015 wherein the AO brought to tax Long Term Capital Gain (LTCG) on sale of land amounting to Rs. 12,95,080/-. As per AO, the land sold by the assessee is covered within the ambit of capital asset as per Section 2(14) as distance of land sold by the assessee in Village Jaroda / Jarodi falls within 8 Kilometers from the Municipal Limit of Jagadhri and thereafter considering the assessee’s share of land, being 1/4th share of land and corresponding sale consideration of Rs. 53,88,282/-, index cost acquisition as on 01/04/1981 amounting to Rs. 1,00,548/- and after allowing exemption under section 54B of the Act amounting to Rs. 39,92,650/-, the LTCG were determined at Rs. 12,95,084/- however as far as the assessee’s claim of commission payment of Rs. 55,000/- on purchase of agricultural land and Rs. 50,000/- on sale of agricultural land, the same were not allowed in absence of necessary proof. Further the assessee’s claim of exemption under section 54F amounting to Rs. 5,50,000/- on account of construction of residential house was not allowed in absence of necessary proof of such construction and the copy of valuation report, affidavit etc.

Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) wherein it was submitted that the AO did not give him reasonable opportunity to provide proof of investment under Section 54F, addition and cost of acquisition and other expenses and therefore the necessary opportunity may be provided to the assessee. It was further submitted that during the course of assessment proceedings, the assessee filed copy of the sale deed, copy of the purchase deed of new agricultural land purchased on 23/02/2015. Thereafter, the AO called for valuation of the residential house construction in respect of which the assessee has claimed exemption under section 54F of the Act, the assessee thereafter applied for the valuation report from a registered valuer, and visited the office of the AO on 12/03/2015 with the Valuation Report and documentary proof and at that time, he came to know that the AO has already passed the assessment order under section 143(3) r.w.s 147 of the Act.

The submissions so filed by the assessee were taken on record and referred in the impugned order but no specific finding has been recorded by the ld CIT(A) and the appeal so filed by the assessee was dismissed by the Ld. CIT(A). Against the said findings and the direction the assessee is in appeal before us.

During the course of hearing, none appeared on behalf of the assessee nor was any adjournment application filed, however considering the facts and circumstances of the case, it was decided that no useful purpose would be served in adjourning the matter any further and it was decided to examine the matter based on material available on the record.

After hearing the ld DR and pursuing the material available on record, I find that the assessee deserve one more opportunity especially where the valuation report in support of claim of deduction u/s 54F as called for by the AO has been obtained by the assessee. The matter is accordingly set-aside to the file of the AO to examine the claim of the assessee u/s 54F afresh as per law after taking into consideration the valuation report and submissions/explanations as may be called/ submitted by the assessee where so advised.

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