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| The Tax Publishers2020 TaxPub(DT) 3713 (Hyd-Trib) INCOME TAX ACT, 1961
Section 48 read with Section 54F
Where assessee entered into a joint development agreement (JDA) on its land to develop residential complex, and assessee was entitled to receive certain constructed area as determined under JDA, revenue adopted value of the property at lower figure for computing cost of acquisition as on 1-4-1981 and also considered sale consideration at higher figure, considering that there was absence of proper information, matter was remitted back to AO with a direction to re-work cost of construction on basis of proper evidence or by referring to the valuation cell or obtaining the information from the SRO.
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Capital gains - Computation of capital gains - Assessee entered into a joint development agreement (JDA) on its land to develop residential complex - AO adopted higher sale consideration and lower cost of acquisition--Re-verification of AO's findings
Assessee-HUF entered into a joint development agreement (JDA) on its land to develop residential complex. Ratio of division between owner and developer was fixed at 59:41 and assessee was to receive 24100 sq. ft. of constructed area. Assessee filed return of income admitting capital gain subsequent to show cause notice issued by AO. While computing capital gains, AO adopted value of the property at Rs. 125 sq. yards as on 1-4-1981 as against Rs. 900 per sq. ft claimed by assessee. Similarly, AO considered sale consideration received as per JDA at Rs. 1,48,40,450 as against Rs. 1,26,50,000 admitted by assessee. AO also denied claim of deduction under section 54F. CIT(A) upheld sale consideration amount determined by AO and also denied to allow indexed cost of existing building on said land as on 1-4-1981 in absence of any mention in JDA and non-furnishing of any proof. CIT(A) allowed deduction under section 54F in part. Held: There was no material evidence furnished by assessee to support the cost of construction (sale consideration) to be at Rs. 550 per sq. ft. as claimed by assessee. At same time, assessee claimed deduction under section 54F at Rs. 1200 per sq. feet and there was apparent inconsistency in claim of assessee. The correctness of cost of construction stated to be incurred by builder also needed verification and could not be applied blindly. In absence of proper information, it was obligation of AO to refer cost of construction to valuation cell or to obtain the market information from the SRO to arrive at the sale consideration for constructed area received by assessee towards his share. Issue needed to be verified by AO and thus, matter was remitted back to AO with a direction to re-work cost of construction on basis of proper evidence or by referring to the valuation cell or obtaining the information from the SRO.
REFERRED :
FAVOUR : Matter remanded
A.Y. :
INCOME TAX ACT, 1961
Section 147
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