DHARAM VEER SINGH,DELHI V. ITO, WARD-69(1), DELHI

ITA 2778/DEL/2024

AI Insights

The case involves Dharam Veer Singh, a retired school teacher and physically handicapped individual, who appealed against the order of the Commissioner of Income Tax (Appeals) disallowing his claim for deduction under section 54 of the Income Tax Act, 1961. The deduction was initially partially allowed by the Assessing Officer for the amount utilized in purchasing a new house after selling his old residential property. However, the CIT(A) disallowed the entire claim on the grounds that the new property was purchased in the name of the assessee's spouse. The Tribunal, referencing decisions from the Delhi High Court, overturned the CIT(A)'s decision, emphasizing a purposive construction of the law that favors the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472474 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. Kamal Wahal, CIT vs. Ravinder Kumar Arora
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVANI BANSAL
• Keywords: Period of limitation; Capital Gains; Time period of passing order
• Section: 148; 154; 54; 54F

Judgement Text

" आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.2778/िदʟी/2024 (िन.व. 2012-13) ITA No.2778/DEL/2024 (A.Y.2012-13) Dharam Veer Singh, RZ-80/5D, Shanker Park West Sagarpur, Delhi 110046 PAN: AICPS-6533-L ...... अपीलाथᱮ/Appellant बनाम Vs. Commissioner of Income Tax, National Faceless Assessment Centre Delhi 110001 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : None ŮितवादीȪारा/Respondent by : Ms. Shivani Bansal, Sr. DR and Shri Om Prakash, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 10/01/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 04/04/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 29.07.2021, for assessment year 2012-13. 2. As per objection memo issued by the Registry, the appeal is time barred by 912 days. The assessee/appellant has filed an application explaining that there was no delay in filing of appeal. The impugned order was passed on 29.07.2021. The order was served on the assessee on 01.10.2021. The assessee filed appeal through 2 ITA No.2778/Del/2024 (AY 2012-13) e-portal of the Tribunal on 15.11.2021. Subsequently, the assessee furnished physical copy of appeal to the Registry on 30.05.2024. The Registry has taken note of only the physical appeal filed by the assessee and has ignored the appeal filed by the assessee through e-filing portal of the Tribunal. To substantiate his contention, the assessee has placed on record a screenshot from the official portal of the Tribunal, indicating date of filing of appeal as 15.11.2021 against acknowledgment number 16336974507. Considering the facts explained by the assessee, the appeal has been filed within limitation period. 3. The assessee in appeal has assailed the order of CIT(A) disallowing assessee’s claim of deduction u/s. 54 of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) in entirety. 3.1. The brief facts of the case as emanating from records are: The assessee is a retired school teacher and is physically handicapped. The assessee had sold his residential House No. F/419 Gali No.7, Ganga Vihar, New Delhi on 03.01.2012 for a consideration of Rs.43,50,000/- in cash. After the sale of original asset, the assessee purchased new asset i.e House no. 80/5D Shanker Park, West Sagarpur, New Delhi on 08.05.2012 for a consideration of Rs.18,00,000/- in the name of his wife and paid Rs.72,000/- in cash towards stamp duty. The assessee deposited balance consideration Rs.20,33,000/- in his bank account maintained with Axis Bank, Yamuna Vihar, Delhi. The Assessing Officer (AO) issued notice u/s. 148 of the Act to the assessee on 29.03.2019. In response to said notice, the assessee filed a return of income for AY 2012-13 declaring total income of Rs.4,15,160/-. The assessee claimed deduction u/s. 54 of the Act in respect of Long Term Capital Gain of Rs.37,74,130/- from sale of his residential house. The AO accepted assessee’s claim 3 ITA No.2778/Del/2024 (AY 2012-13) of deduction u/s. 54 of the Act to the extent of Rs.18,72,000/- i.e. Long Term Capital Gain utilized for the purchase of new house including payment of stamp duty and rejected the balance claim i.e. Rs.19,02,130/-. As the assessee had failed to furnish any documentary evidence with regard to utilization of balance Long Term Caital Gain. Aggrieved by the assessment order dated 14.12.2019, the assessee carried the issue in appeal before the CIT(A). The CIT(A) issued enhancement notice to the assessee and vide impugned order disallowed assessee’s entire claim of deduction u/s.54 of the Act on the ground that the new asset has been purchased in the name of spouse, hence, the assessee is not eligible for deduction u/s. 154 of the Act. The CIT(A) in order to support his findings has placed reliance on the decisions rendered by Hon’ble Punjab and Haryana High Court and Hon’ble Andhra Pradesh High Court. Hence, present appeal by the assessee. 4. Ms. Shivani Bansal, representing the department vehemently defended the impugned order and prayed for upholding the same. 5. Submissions made by ld. DR heard, orders of the authorities below examined. It is an undisputed fact that the assessee after sale of original asset has invested part of Long Term Capital Gain towards purchase of new asset i.e. house situated at Shanker Park, West Sagarpur, New Delhi. The total consideration including stamp duty for purchase of new asset was Rs.18,72,000/-. The assessee claimed deduction of entire Long Term Capital Gains i.e. Rs.37,74,130/-, the AO restricted assessee claim to Rs.18,72,000/- i.e. amount utilized for purchase of new asset in the name of his wife. In so far as utilization of balance amount, the contention of the assessee that the same was used for carrying out renovation of 4 ITA No.2778/Del/2024 (AY 2012-13) the house purchased was rejected by the AO in absence of any documentary evidences to substantiate the claim. The CIT(A) has rejected entire claim u/s. 54 of the Act on the ground that the assessee is not entitled to claim the benefit of deduction u/s. 54 of the Act, as the property was purchased in the name of another person. 6. I am of considered view that the CIT(A) has erred in coming to the conclusion that the benefit of deduction u/s. 54 of the Act is not admissible to the assessee as the house has been purchased by the assessee in the name of his spouse. In so far utilization of part of Long Term Capital Gain for purchase of new asset i.e. a house is concerned, it is not in dispute. The Hon’ble Delhi High Court in the case of CIT vs. Kamal Wahal 30 taxmann.com 34 and CIT vs. Ravinder Kumar Arora 15 taxmann.com 307 has held that wherein new house is purchased in the name of spouse of the asssesse, the assessee is eligible for claiming deduction u/s. 54F of the Act. The provisions of section 54F of the Act are pari materia with the provisions of section 54 of the Act. Thus, the law expounded by Hon’ble Jurisdictional High Court in respect of section 54F of the Act, would equally hold good for deduction claimed u/s. 54 of the Act. It is a well settled legal preposition that purposive construction is to be preferred as against literal construction, more so when literal construction does not restrict that the house be purchased in name of assessee only. The provisions of section 54 of the Act are beneficial provisions which should be interpreted liberally in favour of the assessee, once the basic conditions for claiming the deduction are satisfied. 7. The assessee has further claimed that the assessee has incurred expenditure of Rs.22,50,000/- on renovation/repairs of the new asset to make it leviable. 5 ITA No.2778/Del/2024 (AY 2012-13) However, no documentary evidences to substantiate this claim has been furnished by the assessee. Considering the fact that some expenditure must have been incurred by the assessee towards the renovation/repairs of the house to make it leviable, to meet the ends of justice, expenditure on renovation and repairs is estimated at Rs.8,00,000/-. Thus, the assessee gets the benefit of deduction to the extent of Rs.26,72,000/- (Rs.18,72,000/- +Rs.8,00,000/-) u/s. 54 of the Act. 8. In the result, impugned order is modified and appeal of the assessee is allowed pro tanto. Order pronounced in the open court on Friday the 04th day April, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 04.04.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "