Krishan Paul, Dhakoli V. ITO, W-2, Panchkula

ITA 1156/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5352 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 18-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Capital asset
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 1156/CHD/2017 ASSESSMENT YEAR: 2008-09 SHRI KRISHAN PAUL, VS. THE ITO, H.NO. 1282, SECTOR 11, WARD-2, PANCHKULA 9NOW 186, PANCHKULA. GREEN CITY, DHAKOLI, MC, ZIRAKPUR. PAN NO. ACTPP6699R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPAK AGGARWAL RESPONDENT BY : SHRI MANJIT SINGH, SR.DR DATE OF HEARING : 20.11.2017 DATE OF PRONOUNCEMENT : 04.01.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 17.10.2013 OF LD. CIT (APPE ALS) PANCHKULA PERTAINING TO 2008-09 ASSESSMENT YEAR ON THE FOLLOWING GROUND : 1. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF A.O. IN DISALLOWING THE BENEFITS OF STATUTORY EXEMPTION U/S 54 TO THE A SSESSEE ON THE GROUND THAT THE CAPITAL GAIN AROSE IN THE MATTER IS SHORT TERM WHER EAS AS PER THE ASSESSEE THE FINDINGS OF THE LD. A.O ARE NOT IN COMMENSURATE WITH THE DOC UMENTS ON RECORD, THEREFORE THE ACTION OF DISALLOWING THE BENEFIT OF SECTION 54 MAY KINDLY BE SET-ASIDE. 2. THE LD. AR INVITING ATTENTION TO THE ASSESSMENT ORDER AND THE IMPUGNED ORDER VEHEMENTLY CONTENDED THAT IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE'S CASE SQUARELY FALLS U/S 54(1)(II) OF THE INCOME TAX ACT. THE ASSESSEE HAD PURCHASED PROPERTY WHICH HAD BEEN S OLD ON 29.04.1993 AND THEREFROM PLOT NO. 40, GOVIND VIHAR, BALTANA HAD BEEN P URCHASED. DWELLING UNIT HAD BEEN CONSTRUCTED FOR RS. 3,28,890/- AND T HE HOUSE CONSTRUCTED DURING 1995-96 WAS CONSTRUCTED FROM A LOAN FROM LIC. THE SAID HOUSE WAS SOLD ON 06.04.2005 FOR RS. 4 LACS AND THE E NTIRE AMOUNTS WERE DEPOSITED IN IDBI BANK ACCOUNT NO. 01610400002375 5. THEREAFTER, PLOT NO. 1286 SECTOR 25 WAS PURCHASED FOR RS. 3,77,500/- ON 24.06.2005 AND IT HAD BEEN SOLD FOR RS. 3,80,000/- ON 16.02.2006. ON 22.06.2006, THE ASSESSEE PURCHASED HOUSE NO. 1043 SECTOR 25 FOR R S. 5,10,000/- AND SOLD IT ON 13.07.2007 FOR RS. 10,93,410/- AND WITHIN THE PERM ISSIBLE TIME ITA 1156/CHD/2017 A.Y 2008-09 PAGE 2 OF 2 HAD PURCHASED HOUSE NO. 47 GREEN ENCLAVE FOR RS. 9,95,000/- AND HE H AD NOT TAKEN CREDIT FOR RS. 4 LACS WHICH HAD BEEN DEPOSITED IN IDBI ON 07.04.2005. ACCORDINGLY, IN THE CIRCUMSTANCES, THE CLAIM OF T HE ASSESSEE HAS WRONGLY BEEN DISALLOWED. 3. THE LD. SR.DR VEHEMENTLY RELYING UPON THE ASSESSMENT O RDER AND THE IMPUGNED ORDER SUBMITTED THAT THE ASSESSEE'S CASE WAS SELECTED FOR SCRUTINY UNDER CASS AS THE ASSESSEE HAS BEEN REQUIRED TO EXPLAIN VARIOUS DEPOSITS TOTALING RS. 9,99,000/- IN THE SAID IDBI ACCOUNT. THE EXPLANATION OF THE ASSESSEE THAT THESE WERE DEPOSITED O UT OF SALE CONSIDERATION OF HOUSE NO.1043 SECTOR 25, PANCHKULA DEMON STRATED THAT THE ASSESSEE HAD SOLD A SPECIFIC PROPERTY ON 30.07.2007 FOR AN AMOUNT OF RS. 10,93,410/- AND UTILIZED THE SALE CONSIDERATION FOR PURCH ASE OF H.NO. 47, GREEN ENCLAVE, VILLAGE LOHGARH, ZIRAKPUR FOR RS. 9,95,000/- . COPY OF THE SALE DEED PRODUCED WERE TAKEN INTO CONSIDERATION. CO NSIDERING THE PURCHASE OF PLOT NO. 1286 SECTOR 25, PANCHKULA OUT OF SALE PROCEEDS OF H.NO. 40 GOVIND VIHAR, BALTANA WHEREFROM THE DEPOSIT OF R S. 4 LACS WAS MADE, THE AO NOTED THAT DURING ASSESSMENT PROCEEDINGS, FOR THE PERIOD UNDER CONSIDERATION IT EARNED SHORT TERM CAPITAL GAIN ON SALE OF H.NO. 1043 SECTOR 25, PANCHKULA WHICH HAD NOT BEEN DECLARED. AS A RESULT OF THIS, SHORT TERM CAPITAL GAIN WAS CALCULATED AT RS. 5,42,610 /- WHICH ADDITION WAS CONFIRMED IN APPEAL AFTER CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE AS THE FACT REMAINED NOT DISPUTED THAT THE PR OPERTY HAD BEEN HELD ONLY FOR A PERIOD OF 17 MONTHS. 4. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL O N RECORD. CONSIDERING THE ARGUMENTS ON BEHALF OF THE ASSESSEE AND THE SUBMISSIONS OF LD. SR.DR, I FIND THAT IN THE FACTS AS THEY STAND, THE CO NCLUSION DRAWN BY THE CIT(A), DOES NOT WARRANT ANY INTERFERENCE. THE SPE CIFIC REASONING IN THE FACTS CONSIDERED WHICH HAVE NOT BEEN ASSAILED IN THE PRESENT PROCEEDINGS IS REPRODUCED HEREUNDER : 7. I HAVE GONE THROUGH THE FACTS OF THE CASE AND WR ITTEN SUBMISSIONS FILED BY THE APPELLANT. THE ASSESSING OFFICER NOTICED THAT THE A PPELLANT HAD DEPOSITED RS.9.99,0007- IN CASH ON 14.07.2007 IN ITS BANK ACCOUNT WITH IDBI BANK. ON E XAMINATION, THE ASSESSING OFFICER FOUND THAT THE APPELLANT HAD PURCHASED PROPERTY NUMBER 1043. S ECTOR 25, PANCHKULA ON 22.02.2006 AT THE COST OF RS.5,50,000/- WHICH WAS SOLD ON 13.07.2007 AT THE COST OF RS. 10,93,410/-. SINCE, THE PROPERTY WAS HELD FOR LESS THAN 36 MONTHS, THE ASSE SSING OFFICER COMPUTED SHORT TERM CAPITAL GAIN AT RS.5,42,610/- AND ADDED TO THE INCOME. THE APPELLANT HAS SUBMITTED THAT ITS CASE FALLS U/S 54(1 )(II) OF I.T. ACT. THE APPELLANT HAS MADE AN A TTEMPT TO EXPLAIN THE TRANSACTION OF THE PROPERTY AS LONG TERM CAPITAL GAIN CONSIDERING THE AMOUNT RECEIVED ON THE SALE OF A PLOT OF LAND AT BALTANA ON 06.04.2005. THE APPELLANT CLAIMS THAT THE MONEY INVOLVED IN THE PURCHASE OF PROPERTY NO. 1043, SECTOR 25, PANCHKULA WAS OUT OF THE SALE PROCEEDS OF EARLIER TRANSACTION IN ITA 1156/CHD/2017 A.Y 2008-09 PAGE 3 OF 2 PLOT NO. 1286, SECTOR 25, PANCHKULA WHICH WAS 'IN T URN WAS PURCHASE OUT OF'AMOUNT RECEIVED FROM THE SALE OF PLOT AT BALTANA IN YEAR 2 005. 7.1 IN FACT, THE APPELLANT IS NOT ABLE TO APPRECIAT E THAT THE CAPITAL GAIN IS LEVIED ON TRANSFER OF A CAPITAL ASSET AS PER PROVISIONS OF SECTION 45 OF INCOME TAX ACT WHERE THE GAIN IS COMPUTED WHICH ARISES FROM THE TRANSFER OF A CAPITAL ASSET. IT IS IMMATERIAL THAT FROM WHAT SOURCE THAT CAPITAL ASSET WAS PURCHASED. SO THE AMOUNT WHICH WAS INVEST ED OUT OF THE SALE PROCEED OF EARLIER TRANSACTIONS IN THE PURCHASE OF THE CAPITAL ASSET W HICH HAS BEEN TRANSFERRED NOW IS OF NO RELEVANT IS DETERMINING WHETHER THE GAIN WAS SHORT TERM OR A LO NG TERM. THE APPELLANT HAS RELIED THAT ITS CASE IS COVERED UNDER PROVISIONS OF SECTION 54(1 )( II) IS NOT CORRECT AS THE BENEFIT UNDER PROVISION OF SECTION 54 IS AVAILABLE IN THE CASE OF CAPITAL G AIN ARISING FROM THE TRANSFER OF A LONG TERM CAPITAL ASSET. 7.2 THE PROVISIONS OF SECTION 2(42A) OF I.T. ACT DE FINES THE SHORT TERM CAPITAL ASSET AS A CAPITAL ASSET HELD BY AN ASSESSEE FOR NOT MORE THAN 36 MONTHS IMMEDIATELY PRECEDING THE DATE OF ITS TRANSFER. IN THE INSTANT CASE, THE SALE OF' PROPERTY TOOK PLACE ON 13.07.2007 WHICH WAS PURCHASED ON 22.02.2006. SO THE PROPERTY WAS HELD BY THE APPELLANT FOR MERELY ABOUT 17 MONTHS. THEREFORE, THE ASSET WHICH HAS BEE N SOLD DURING THE YEAR WAS IN THE NATURE OF SHORT TERM CAPITAL V ASSET AND ANY GAIN ACCRUED TO THE APPELLANT OUT OF ITS TRANSACTION IS IN THE NATURE OF SHORT TERM CAPITAL GAIN. HENCE, I DO NOT FIND ANY DEFECT IN THE COMPUTATION OF CAPITAL GAIN CHARGEABLE TO THE APPELLANT BY THE AO. 4.1. BEING SATISFIED BY THE CONCLUSION DRAWN ON THE FACTS AS THEY STAND, WHEREIN NO INFIRMITY HAS BEEN POINTED OUT BY THE LD. AR, TH E IMPUGNED ORDER IS UPHELD. THE GROUND OF THE ASSESSEE IS DISMISSED. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.01. 2018. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT/CHANDIGARH