Shri Sameer Akhil Kachru, Gurgaon V. ITO, New Delhi

CO 289/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9625 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 09-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Salary income
• Section: 143(3); 54F; 234B; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 3981/DEL/2016 ASSESSMENT YEAR: 2012-13 ITO, WARD 72(3), VS. SH. SAMEER AKHIL KACHRU. ROOM NO. 504, VILLA NO. B 63 & 63A, CIVIC CENTRE, GRABG MANSION, MINTO ROAD, SECTOR-49, RESEWOOD CITY, NEW DELHI GURGAON (PAN: ACDPK1182C) (APPELLANT) (RESPONDENT) AND CROSS OBJECTION NO. 289/DEL/2016 (IN ITA NO. 3981/DEL/2016) ASSESSMENT YEAR: 2012-13 SH. SAMEER AKHIL KACHRU., VS. ITO, WARD 72(3), VILLA NO. B 63 & 63A NEW DELHI GRABG MANSION SECTOR-49, RESEWOOD CITY, GURGAON (PAN: ACDPK1182C) (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : MS. ASHIMA NEB, SR. DR . ASSESSEE BY : NONE ORDER PER H.S. SIDHU, JM THE DEPARTMENT HAS FILED THIS APPEAL AND ASSESSEE HAS FILED THE CROSS OBJECTION WHICH ARE EMANATE FROM THE ORDER DATED 29.4.2016 O F LD. CIT(A)-21, NEW DELHI PERTAINING TO ASSESSMENT YEAR 2012-13. SINCE THE ISSUES INVOLVED IN THE REVENUES 2 APPEAL AS WELL AS ASSESSEES CROSS OBJECTION ARE IDENTICAL, HENCE, THE SAME ARE BEING CONSOLIDATED WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- 1. WHETHER THE LD. CIT(A) ON THE FACTS AND CIRCUMST ANCES OF THE CASE AND ALSO IN LAW, HAS ERRED IN DELETING THE ADDITION OF RS. 82,43,703/- ON ACCOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE U/S . 54F IGNORING THE FACT THAT THE NEW ASSET HAS BEEN PURCHASED BY T HE ASSESSEE IN JOINT NAME WITH HIS FATHER. 2. APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER VARY AND OR / WITHDRAW ANY OR ALL THE ABOVE GROUNDS OF APPEAL. 3. THE GROUNDS RAISED IN THE ASSESSEES CROSS OBJEC TION READ AS UNDER:- 1. THAT THE LD. CIT(A) WAS WHOLLY JUSTIFIED IN DEL ETING THE ADDITION OF RS. 83,43,703/- ON ACCOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 54F OF THE INCOME TAX ACT. IT IS WR ONGLY ALLEGED IN GROUND NO. 1 RAISED BY THE REVENUE THAT ASSET WAS PURCHASED IN JOINT NAME OF THE ASSESSEE AND HIS FATHER. THE FACT REMA INS THAT THE NAME OF THE FATHER SH. KB KACHRU HAD BEEN GIVEN IN THE B UYER AGREEMENT OUT OF RESPECT AND FOR CONVENIENCE PURPOSES AND TH E ENTIRE INVESTMENT IN SUCH ASSET WAS MADE SOLELY BY THE ASS ESSEE OUT OF HIS OWN SOURCE DERIVED FROM SALE OF HIS SHARES. 2. THAT WITHOUT PREJUDICE TO CROSS OBJECTION NO. 1 ABOVE, THE ASSESSMENT ORDER DATED 31.3.2016 PASSED BY THE ITO BEING WHOLLY ILLEGAL, IN THE ABSENCE OF SERVICE OF NOTICE U/S. 1 43(2) OF THE ASSESSEE WITHIN A STIPULATED TIME, DESERVES TO BE QUASHED IN VIEW OF DETAILED 3 SUBMISSIONS MADE BY THE ASSESSEE DULY SUPPORTED BY CASE LAWS AS ALSO TAKEN NOTE OF BY THE LD. CIT(A). 3. THAT NO JUSTIFICATION SUBSISTED FOR LEVY OF INTE REST U/S. 234B & 234C AS MADE BY THE ITO IN HIS IMPUGNED ASSESSMENT ORDER . 4. THAT THE RESPONDENT ASSESSEE RESERVES HIS RIGHT TO ADD, AMEND / MODIFY THE GROUNDS OF CROSS OBJECTION. REVENUES APPEAL 4. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE F ILED HIS RETURN OF INCOME DECLARING RS. 8,12,924/- ON 26.7.2012. THE CASE OF THE ASSES SEE WAS SELECTED FOR SCRUTINY THROUGH CASS AND STATUTORY NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) ALONGWITH THE QUESTIONNAIRE WERE ISSUED AND DULY SE RVED UPON. DURING THE ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE ASSESSEE HAS D ECLARED TOTAL INCOME AT RS. 8,12,924/- WHICH INCLUDES INCOME FROM SALARY, CAPITAL GAIN AND INCOME FROM OTHER SOURCE. THE CASE WAS SELECTED FOR SCRUTINY TO VERIFY THE GENUINENESS OF CLAIM MADE BY THE ASSESSEE FOR EXEMPTION U/S. 54F OF THE ACT. AO FURTHER NOTED TH AT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 54F BY MAKING INVESTMENT OF RS. 1.70 CRORES TO WARDS PURCHASE OF NEW PROPERTY FROM BESTECH BUILDERS BEARING VILLA NO. 9 AND THE PROPE RTY WAS PURCHASED BY THE ASSESSEE IN THE JOINT NAME ALONGWITH HIS FATHER. HENCE, THE AO WAS OF THE VIEW THAT SINCE THE ASSESSEE HAS MADE INVESTMENT IN JOINT NAME ALONGWIT H HIS FATHER WHO BECOMES 50% OWNER OF THE PROPERTY AND, THEREFORE, ACCORDING TO HIM THIS AMOUNTED TO RELINQUISHMENT OF HIS OWNERSHIP RIGHTS IN THE NE3W ASSET TO THE EX TENT OF 50% AND, THEREFORE, ASSESSEE WAS ENTITLED TO ONLY 50% OF THE TOTAL DEDUCTION U/S . 54F AVAILABLE IN THIS CASE. ACCORDINGLY, THE AO COMPLETED THE ASSESSMENT BY ALL OWING ONLY 50% OF THE DEDUCTION AVAILABLE U/S. 54F OF THE ACT TO THE ASSESSEE AND A SSESSED THE INCOME AT RS. 90,56,627/- 4 VIDE ORDER DATED 31.3.2015 PASSED U/S. 143(3) OF TH E ACT. AGAINST THE ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE H IS IMPUGNED ORDER DATED 29.4.2016 HAS ALLOWED THE APPEAL OF THE ASSESSEE BY RELYING U PON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAVINDER KUMAR A RORA (2011) 15 TAXMANN.COM 307. AGGRIEVED WITH THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 6 . IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE W AS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR ITS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FI LED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE FACTS AND CIRCUM STANCES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE PRESENT APPEAL, WE AR E OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND A GAIN TO THE ASSESSEE, THEREFORE, WE ARE DECIDING THE PRESENT APPEAL EXPA RTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 7. WE HAVE HEARD LD. DR AND PERUSED THE RELEVANT RE CORDS ESPECIALLY THE IMPUGNED ORDER. WE FIND THAT STATUTE U/S 54F OF THE I.T. ACT DOES NOT REQUIRE THAT THE INVESTMENT IN NEW ASSET CANNOT BE DONE IN JOINT NAME. IT TALKS AB OUT THE INVESTMENT HAS TO BE DONE BY THE ASSESSEE IN THE NEW PROPERTY SO AS TO CLAIM DED UCTION U/S 54F OF THE ACT. THIS IS A BENEFICIAL PROVISION IN THE I.T. ACT WHICH HAS TO B E INTERPRETED LIBERALLY SO AS TO MAKE IT ACTUALLY BENEFICIAL TO THE ASSESSEE AT LARGE. WE FU RTHER NOTE THAT DURING THE APPELLATE PROCEEDINGS, PHOTOCOPY OF ITR-V OF SH. K.B. KACHRU, FATHER OF THE ASSESSEE, WAS FURNISHED TO SHOW THAT HE HAS NOT CLAIM ANY BENEFIT U/S 54F OF THE ACT IN HIS RETURN OF INCOME. THE ASSESSEE HAS PLEADED THAT JOINT NAME WA S ONLY MEANT FOR FUTURE CONVENIENCE. THE ASSESSEE HAS ALSO PLEADED THAT THE PROVISIONS O F LAW DOES NOT MANDATES THAT THE HOUSE 5 MUST BE PURCHASED IN THE NAME OF ASSESSEE ALONE. F ROM THE MATERIAL AVAILABLE ON RECORD IT IS NOTICED THAT THE CAPITAL GAIN HAS ARISEN FROM THE SALE OF SHARES WHICH WERE OWNED BY THE ASSESSEE HIMSELF. AS SUCH, ENTIRE AMOUNT OF CAP ITAL GAIN HAS BEEN OFFERED FOR TAXATION IN THE NAME OF THE ASSESSEE HIMSELF. IT IS ALSO AN ACCEPTED FACT THAT THE ENTIRE PAYMENT FOR NEW ASSET HAS BEEN DONE BY THE ASSESSEE FROM HIS OW N SOURCE OUT OF CAPITAL GAIN ARISEN ON SALE OF SHARES. IT IS ALSO A FACT THAT NO INCOME WH ATSOEVER FROM THE NEWLY ACQUIRED PROPERTY HAS EVER BEEN SHOWN IN THE INCOME TAX RETU RN OF THE ASSESSEE'S FATHER WHO HAPPENS TO BE THE JOINT OWNER IN THIS CASE. WE HAVE ALSO GONE THROUGH THE JUDGMENT MENTIONED IN THE IMPUGNED ORDER OF THE LD. CIT(A) PASSED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS RAVINDER KUMAR ARORA (2 011) 15 TAXMANN.COM 307, WHICH THE ASSESSEE HAS RELIED UPON BEFORE THE LD. CIT(A) TO CONTEND THAT HE IS FULLY ELIGIBLE FOR ENTIRE EXEMPTION AVAILABLE U/S 54F OF THE ACT, EVEN THOUGH THE PROPERTY WAS HELD IN THE JOINT NAME. WE FURTHER FIND THAT THE JUDGMENT OF TH E HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS RAVINDER KUMAR ARORA (2011) 15 TAXMA NN.COM 307 IS SQUARELY APPLICABLE TO THE FACTS OF THE INSTANT CASE, HENCE, LD. CIT(A) BY RELYING UPON THE SAME HAS RIGHTLY HELD THAT THE ASSESSEE IS ELIGIBLE FOR FULL EXEMPTION U/S 54F OF THE ACT, WHICH IN OUR OPINION, DOES NOT NEED ANY INTERFERENCE ON O UR PART, THEREFORE, WE UPHOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AN D REJECT THE GROUND RAISED BY THE REVENUE AND ACCORDINGLY, THE REVENUES APPEAL STAN DS DISMISSED. ASSESSEES CROSS OBJECTION 8. AS FAR AS ASSESSEES CROSS OBJECTION IS CONCERNE D, SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE AS AFORESAID ON THE MERIT OF THE CASE BY UPHOLDING THE ORDER OF THE LD. CIT(A), HENCE, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND DISMISSED AS SUCH. 6 9. IN THE RESULT, THE REVENUES APPEAL AS WELL AS A SSESSEES CROSS OBJECTION STAND DISMISSED. ORDER PRONOUNCED ON 03/07/2019. SD/- SD/- [B.R.R. KUMAR] [H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03/07/2019 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR