SHRI NAVEEN GARG, Ajmer V. ITO, Jaipur

ITA 115/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82773 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 02-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: SANTOSH SHARMA
• Keywords: Opportunity of being heard; Cost of acquisition
• Section: 154; 54

Judgement Text

ITA NO. 115/JP/2012 NAVEEN GARG VS. ITO , WARD- 2(1), AJMER 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 115/JP/2012 ASSESSMENT YEARS : 2008-09 PAN : ACHPG 5330 Q SHRI NAVEEN GARG VS. THE ITO P/O M/S. AJMER AUTO CENTRE WARD- 2(1) M.G. ROAD, AJMER AJMER (APPELLANT) (RESPONDENT) ASSESSEE BY : MISS. SANTOSH SHARMA DEPARTMENT BY: SHRI D.C. SHARMA DATE OF HEARING: 15-09-2014 DATE OF PRONOUNCEMENT: 15-09-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A), AJMER DATED 11-11-2011 FOR THE ASSESSM ENT YEAR 2008-09 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUND S:- 1. THAT THE LD. CIT(A), AJMER HAS GROSSLY ERRED I N LAW AS WELL AS ON FACT IN UPHOLDING THE CALCULATION OF CAPITAL GAIN U/S 54 OF RS. 32,31,527/- AND THUS ADD ING RS. 11,43,817/- IN THE TOTAL INCOME OF THE APPELLANT. THE COST OF ACQUISITION U/S 48 SHOULD BE RS. 33,51, 115/- INSTEAD OF RS. 11,68,473/- AS CALCULATED BY AUTHORI TY BELOW. THE APPELLANT HAS INVESTED RS. 11,87,700/- U /S 54 AS AGAINST CAPITAL GAIN ARISES OF RS. 1,48,885/- ITA NO. 115/JP/2012 NAVEEN GARG VS. ITO , WARD- 2(1), AJMER 2 IT IS THEREFORE, PRAYED THAT THE ADDITION U/S 54 UP HELD BY LD CIT (A) OF RS. 11,43,817/- MAY PLEASE BE DELETED . 2. THAT THE LD. CIT(A), AJMER HAS ERRED IN LAW AS W ELL AS ON FACTS IN NOT ALLOWING THE EXPENSES OF RS. 48, 000/- AS DRIVER SALARY OF RS. 24,000/- AND PETROL AND MAINTENANCE OF CAR OF RS. 24,000/- AS CLAIMED BY APPELLANT. IT IS THEREFORE, SUBMITTED THAT THESE EXPENSES OF R S. 48,000/- MAY PLEASE BE TREATED AS EXPENSES INCURRED FOR EARNING THE PROFIT, INTEREST AND REMUNERATION FROM THE PARTNERSHIP BUSINESS. 2.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE SOLD HOUSE PROPERTY ACQUIRED BY WILL OF MOTHER. ACCORDING TO THE ASSESS EE, AS THE CAPITAL GAINS WERE EXEMPT U/S 54 OF THE ACT, THEREFORE, THE SAME WERE RETURNED AS NIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE INVESTMENT IN NEW ASSET HAS BEEN MADE AFTER OBTAINI NG THE LOAN OF RS. 15.00 LACS FROM ICICI BANK. IT WAS HELD THAT THE AMOUNT O F LOAN BEING NOT THE SALE PROCEEDS OF THE RESIDENTIAL HOUSE WAS NOT ELIGIBLE FOR EXEMPTION U/S 54 OF THE ACT. CONSEQUENTLY, THE CLAIM TO THE EXTENT OF RS. 1 1,43,827/- WAS NOT ALLOWED U/S 54 OF THE ACT. AFTER THE ASSESSMENT PRO CEEDINGS, THE ASSESSEE FILED AN APPLICATION U/S 154 OF THE ACT CLAIMING TH AT THERE WAS A MISTAKE IN THE ORDER OF THE AO INASMUCH AS THE DECEASED MOTHER HAD CONSTRUCTED FIRST FLOOR ALSO ON THE SOLD PROPERTY. THE COST OF CONSTR UCTION AND INDEXATION ITA NO. 115/JP/2012 NAVEEN GARG VS. ITO , WARD- 2(1), AJMER 3 THEREOF WAS NOT ALLOWED BY THE AO. THIS CLAIM WAS R AISED BEFORE THE LD. CIT(A) WHO HELD THAT NO EVIDENCE IN RESPECT OF CON STRUCTION OF THE FIRST FLOOR WAS ADDUCED BY THE ASSESSEE TO CLAIM HIGHER C OST OF ACQUISITION. 2.2 AGGRIEVED, THE ASSESSEE IS BEFORE US. 2.3 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THE MATERIAL ON RECORD. THE OR IGINAL PURCHASE DEED BY WHICH THE ASSESSEES MOTHER PURCHASED THE PROPERTY CONSISTED OF ONLY ONE FLOOR WHICH IS EVIDENT FROM THE MAP ATTACHED TO THE PURCHASE DEED. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SALE DE ED EXECUTED BY THE ASSESSEE CLEARLY REFERS TO THE FACT THAT THE MOTHER HAD PURCHASED PROPERTY OF GROUND FLOOR AND THEREAFTER HE CONSTRUCTED THE FIRS T FLOOR. THUS THERE IS NO DISPUTE TO THE FACT THAT THE PROPERTY INHERITED BY THE ASSESSEE WAS A DOUBLE STOREY HOUSE AND NOT A GROUND FLOOR HOUSE AS HAS BE EN HELD BY THE AO WHILE DENYING THE COST OF ACQUISITION OF FIRST FLOOR. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO AND THE LD. CIT(A) DID NOT AS K FOR ANY EVIDENCE IN THIS BEHALF. ACCORDING TO THE ASSESSEE, THE RECITALS IN THE PURCHASE AND SALE DEED WERE ENOUGH TO DEMONSTRATE THE CONSTRUCTION OF FIRS T FLOOR AND AREA THEREOF. IN ANY CASE, WITH THIS EVIDENCE ON RECORD, THE AO O UGHT TO HAVE APPLIED THE PWD RATES OF THE RELEVANT TIME ON ESTIMATE BASIS AN D WORKED OUT THE COST OF ACQUISITION. THE LD. COUNSEL FOR THE ASSESSEE FURT HER MADE A STATEMENT AT BAR ITA NO. 115/JP/2012 NAVEEN GARG VS. ITO , WARD- 2(1), AJMER 4 THAT THE ASSESSEE HAS SUFFICIENT EVIDENCE TO DEMONS TRATE THE CONSTRUCTION OF FIRST FLOOR BY MOTHER. THEREFORE, AN OPPORTUNITY IN THIS BEHALF MAY BE GIVEN. 2.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES AND CONTENDED THAT IN THE ABSENCE OF ANY EVIDENCE FORTHCOMING FRO M THE ASSESSEE'S SIDE, THE CONSTRUCTION OF THE FIRST FLOOR CLAIM HAS RIGHTLY B EEN DENIED BY THE LOWER AUTHORITIES. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PURCHASE DEED OF THE DECEASED MOTHER OF THE ASSESSEE AND THE SALE DEED EXECUTED BY THE ASSESSEE , IT EMERGES THAT THE ASSESSEE SOLD THE SECOND STOREY HOUSE WHICH CONTAIN S THE RECITAL THAT FIRST FLOOR WAS CONSTRUCTED AFTER PURCHASE OF GROUND FLOO R HOUSE BY THE ASSESSEES MOTHER. BESIDES THE LD. COUNSEL FOR THE ASSESSEE MA DE A STATEMENT AT BAR THAT EVIDENCE WAS NOT PRODUCED AS THE SAME WAS NEVE R ASKED OR ENQUIRED BY THE LOWER AUTHORITIES. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO SET ASIDE THE MATTER BACK TO THE FILE OF THE AO REMINDING THE LD. ARS STATEMENT AT BAR THAT THE A SSESSEE WILL PRODUCE THE EVIDENCE TO PROVE THE CONSTRUCTION AREA AND COST TH EREOF IN ACCORDANCE WITH LAW. 3.1 APROPOS SECOND GROUND ALSO, THE LD. COUNSEL FOR THE ASSESSEE COULD NOT DEMONSTRATE FROM RECORD THE FACT THAT THE ASSES SEE OWNED MOTOR CAR, THE ITA NO. 115/JP/2012 NAVEEN GARG VS. ITO , WARD- 2(1), AJMER 5 NAME OF THE DRIVER AND PETROL & MAINTENANCE EXPENSE S. SINCE WE HAVE SET ASIDE THE FIRST GROUND, THEREFORE, WE ARE INCLINED TO SET ASIDE THIS GROUND ALSO TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH BY PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15- 09-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 15 TH SEPT 2014 *MISHRA COPY FORWARDED TO:- 1. SHRI NAVEEN GARG, AJMER 2. THE ITO , WARD- 2(1), AJMER 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (IT NO. 115/JP/2012) BY ORDER AR ITAT, JAIPUR ITA NO. 115/JP/2012 NAVEEN GARG VS. ITO , WARD- 2(1), AJMER 6 ITA NO. 115/JP/2012 NAVEEN GARG VS. ITO , WARD- 2(1), AJMER 7 ITA NO. 115/JP/2012 NAVEEN GARG VS. ITO , WARD- 2(1), AJMER 8