Sh. Satinder Kumar Khera, Sangrur V. ACIT, Sangrur

ITA 1067/CHANDI/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9834 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: RAKESH K GUPT A
• Keywords: Opportunity of being heard
• Section: 54B; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 1067/CHD/2014 ASSESSMENT YEAR: 2009-10 SHRI SATINDER KUMAR KHERA, VS THE ACIT, DISTT. REVENUE OFFICER, CIRCLE, # 64, ADARSH MOHALLA, SANGRUR. NABHA GATE, SANGRUR. PAN: AEMPK2323L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH K. GUPT A RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 17.06.2015 DATE OF PRONOUNCEMENT : 19.06.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) PATIALA DATED 26.09.2014 FOR ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUND : THE ID. CIT(A) IS WRONG IN NOT ALLOWING THE BENEFIT OF DEDUCTION U/S 54B AMOUNTING TO RS. L8,00,000/- BY HOLDING THAT THE AMOUNT WAS NOT UTILIZED BEFORE THE DUE DATE OF FILIN G OF INCOME TAX RETURN DUE TO CANCELLATION OF PURCHASE AGREEMEN T IGNORING THE FACT THAT THE AMOUNT WAS DULY UTILIZED FOR PURC HASE OF AGRICULTURE LAND BEFORE FILING OF INCOME TAX RETURN AND IT WAS RECEIVED BACK ONLY DUE TO CANCELLATION OF AGREEMENT WHICH WAS FURTHER UTILIZED FOR PURCHASE OF AGRICULTURE LA ND WITHIN PRESCRIBED PERIOD OF 2 YEARS FROM THE DATE OF SALE O F AGRICULTURE LAND. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E CLAIMED DEDUCTION U/S 54B OF THE IT ACT' 1961. HOWE VER, 2 IT WAS NOTED THAT THE ASSESSEE ACTUALLY ADVANCED RS.18,00,000/- ON DIFFERENT DATES TO SMT. SHANTOSH HANS FOR PURCHASE OF AGRICULTURAL LAND. HOWEVER, IT WAS SUBMITTED THAT THE SAID AGREEMENT COULD NOT MATURE DUE TO SOME DISPUTE AND SMT. SANTOSH RETURNED RS.18,00,000/- AND RS.3,00,000/- AS DAMAGES AND FIN ALLY ON 24.02.2011 LAND WAS PURCHASED FROM ONE SH. MOHINDER SINGH FOR RS.19,08,000/- THE ASSESSEE SUBMITTED THAT HE HAS ALREADY UTILIZED THE AMOUNT O F CAPITAL GAIN BY GIVING RS.18,00,000/- TO SMT. SANTO SH HANS AND THAT THIS AMOUNT WAS NOT UNDER HIS POSSESS ION AND CONTROL. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT PRODUCE THE AGREEMENT WITH SMT. SANTOSH HANS. THE A.O. HELD THAT THE AMOUNT WAS NOT DEPOSITED OR UTILIZED BEFORE THE DATE OF FURNISHING THE RETURN U/S 139(1) AND, THEREFORE, THE DEDUCTION CLA IMED U/S 54B WAS NOT ALLOWED. FURTHER, THE ASSESSEE CLAI MED EXEMPTION U/S 54F. IT WAS NOTED THAT THE ASSESSEE H AS PURCHASED A FLAT FOR RS. 54,24,061/-. OUT OF THIS, RS.46,87,5OO/- WAS PAID TO THE OWNER OF THE FLAT FR OM 08.06.2009 TO 03.07.2009. RS.7,16,561/- WAS PAID TO JMD LTD. FROM 03.09.2009 TO 10.10.2010. THE ASSESSE E FURTHER CLAIMED THAT RS.2O,000/- WAS PAID IN CASH T O THE BROKER. THE A.O., THEREAFTER, HELD THAT INVESTMENT OF RS.46,87,5OO/- WAS MADE IN TIME I.E. BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME. HOWEVER, THE CA SH PAYMENT TO THE BROKER IS NOT REFLECTED IN THE STATE MENT OF AFFAIRS AND NO DOCUMENTARY EVIDENCE IN THIS CONNECT ION 3 WAS SUBMITTED. SIMILARLY, RS.7,16,561/- WAS ACTUALL Y UTILIZED AFTER THE DUE DATE OF FILING THE RETURN. F URTHER, RS. 7,16,561 AND RS.2O,000/- HAS NOT BEEN CLAIMED A S DEDUCTION U/S 54AF IN THE ORIGINAL COMPUTATION OF INCOME. THE A.O., THEREFORE HELD THAT THESE TWO AMO UNTS ARE NOT ALLOWABLE FOR DEDUCTION U/S 54F. THEREFORE, THE ASSESSING OFFICER ALLOWED ONLY PROPORTIONATE DEDUCT ION ON THE BASIS OF ACTUAL INVESTMENT MADE BEFORE FILIN G OF RETURN AND THE BALANCE WAS DISALLOWED. 2(I) DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE T HE A.O. THE ASSESSEE ALSO SUBMITTED THAT THERE WAS A N AGREEMENT WITH SMT. SANTOSH HANS AND COPY OF THE AGREEMENT AND CANCELLATION OF AGREEMENT WERE SUBMIT TED. 3. THE LD. CIT(APPEALS) DISMISSED APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 4.2 OF THE APPELLAT E ORDER ARE REPRODUCED AS UNDER : 4.2 I HAVE CONSIDERED THE SUBMISSIONS MADE. FOR CLAIM U/S 54B, THE AMOUNT TO BE UTILIZED BEFORE THE DUE DATE OF FILING OF RETURN. IN THIS CASE, THE AMO UNT IS ADMITTEDLY NOT UTILIZED FOR PURCHASE OF LAND BEF ORE THE DUE DATE OF RETURN. THEREFORE, AS PER SCHEME OF SECTION 54B, IN MY OPINION, THE CLAIM OF THE APPELLANT U/S 54B IS NOT ALLOWABLE. SIMILARLY, THE FACT OF THE CASE SHOWS THAT CLAIM U/S 54F IS ALSO N OT ALLOWABLE AS THE AMOUNT WAS NOT UTILIZED BEFORE FILING OF RETURN. THEREFORE, THE APPEAL IS HEREBY DISMISSED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. TH E ASSESSING OFFICER NOTED FROM THE REPLY OF THE ASSES SEE THAT AN AGREEMENT WAS ENTERED INTO BY ASSESSEE WITH SMT. SANTOSH HANS FOR PURCHASE OF AGRICULTURAL LAND AT 4 VILLAGE SAKRAS DISTT. MEWAT (HARYANA) AND PAYMENT O F RS. 18 LACS HAS BEEN MADE ON DIFFERENT DATES FROM 19 TH JUNE, 2008 TO 27 TH JULY, 2008. IT WAS FURTHER STATED THAT LATER ON, THE AGREEMENT COULD NOT BE MATURED AND SMT. SANTOSH HANS HAD RETURNED RS. 18 LACS ALONGWITH DAMAGES OF RS. 3 LACS FOR NON PERFORMING TO AGREEME NT IN QUESTION. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THE AGREEMENT OR TO PRODUC E SMT. SANTOSH HANS FOR VERIFICATION. THE DATE OF COMPLIANCE WAS FIXED ON 23.12.2011, THOUGH THE ORDE R HAS BEEN PASSED ON 27.12.2011. THE ASSESSEE ALSO F ILED THE AGREEMENT AND CANCELLATION OF AGREEMENT BEFORE LD. CIT(APPEALS) AS WELL. THE LD. CIT(APPEALS), INSTEA D OF GIVING ANY FINDING OF FACT HAS MERELY GONE BY THE F ACT THAT SINCE AMOUNT IS NOT UTILIZED FOR PURCHASE OF L AND BEFORE DUE DATE OF RETURN, THEREFORE, APPEAL OF THE ASSESSEE WAS DISMISSED. 5. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, RIGHTLY CONTENDED THAT ASSESSEE WAS NOT GIVEN SUFFICIENT TI ME AT ASSESSMENT STAGE TO PRODUCE SMT. SANTOSH FOR EXAMINATION BY THE ASSESSING OFFICER. THE LD. COUN SEL FOR THE ASSESSEE, DURING THE COURSE OF ARGUMENTS SUBMIT TED THAT ASSESSEE IS READY AND WILLING TO PRODUCE SMT. SANTOSH HANS BEFORE ASSESSING OFFICER FOR HER EXAMINATION ON OATH BY THE ASSESSING OFFICER. 6. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F AGREEMENT TO SELL AND CANCELLATION OF AGREEMENT A ND THAT 5 ASSESSEE'S COUNSEL HAS AGREED TO PRODUCE SMT. SANTO SH HANS FOR EXAMINATION BY THE ASSESSING OFFICER, WE A RE OF THE VIEW THE MATTER REQUIRES RE-CONSIDERATION AT TH E LEVEL OF THE ASSESSING OFFICER. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE BY GIVING FACTUAL FINDING OF FACTS FOR ENTERING THE AG REEMENT OR FOR CANCELLATION OF AGREEMENT IN QUESTION BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE SMT. SANTOSH HANS BEFORE ASSESSING OFFICER FOR EXAMINATI ON ON OATH BY THE ASSESSING OFFICER WITHOUT SEEKING ANY UNNECESSARY ADJOURNMENT IN THE MATTER. IN CASE ASS ESSEE FAILED TO PRODUCE SMT. SANTOSH HANS BEFORE ASSESSIN G OFFICER, ASSESSING OFFICER SHALL BE AT LIBERTY TO T AKE ANY ADVERSE INFERENCE AGAINST THE ASSESSEE. 7. WITH THESE OBSERVATIONS, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JUNE,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH JUNE,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR AR/ITAT/ C HANDIGARH