ITO, Jaipur V. SMT SAROJ DEVI HALDIYA, Jaipur

ITA 122/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5573 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 54F

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 122/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2009-10 . THE INCOME TAX OFFICER, WARD 6(1), JAIPUR. CUKE VS. SMT. SAROJ DEVI HALDIYA, E-65, SIDDHARTH NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AACPH 6564 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.12.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 01/01/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THE APPEAL FILED BY THE REVENUE IS ARISING FROM TH E ORDER DATED 29.11.2012 PASSED BY THE LEARNED CIT (A)-II, JAIPUR FOR THE A. Y. 2009-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN (1) DIRECTING THE AO TO ALLOW DEDUCTION U/S 54F OF RS. 22,23,450/-. (2) HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR CLAIMING DEDUCTION U/S 54F DESPITE THE FACT THAT THE PROPERTY ON WHICH DEDUCTI ON U/S 54F CLAIMED WAS 2 ITA NO. 122/JP/2013 A.Y. 2009-10. ITO VS. SMT. SAROJ DEVI HALDIYA. SOLD PARTLY WITHIN ONE YEAR OF ITS CONSTRUCTION WHI CH IS IN VIOLATION TO PROVISIONS OF SECTION 54F(3) OF THE I.T. ACT, 1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM SPECULATION BESIDES INCOME FROM RENT, INTEREST AND AGRICULTURE. THE ASSESSEE HAS SOLD OUT HER PROPERTIES AND WAS SUBJECTED TO CAPITA L GAIN. THE ASSESSEE FILED HER RETURN OF INCOME ON 24.03.2010 DECLARING TOTAL INCOME OF R S. 6,64,210/- (INCLUDING AGRICULTURAL INCOME OF RS. 1,30,200/-). THE CASE WAS SELECTED FO R SCRUTINY AND THEREAFTER A NOTICE DATED 19.08.2010 WAS ISSUED TO THE ASSESSEE. THE A SSESSEE THROUGH HER A/R APPEARED BEFORE THE AO AND EXPLAINED HER CASE. THE AO WAS N OT CONVINCED WITH THE SUBMISSION MADE BY THE LD. A/R AND, THEREFORE, HE PASSED THE O RDER AGAINST THE ASSESSEE. THE REASONING GIVEN BY THE AO VIDE PARA 2.6 OF HIS ORDE R ARE REPRODUCED HEREIN BELOW :- 2.6. THE ASSESSEE CONTENTION THAT THE PREMISES WE RE LET OUT TO DIFFERENT BUSINESS ESTABLISHMENT HAS NO EFFECT AND THE PROVIS IONS OF SECTION 54F ARE NOT FULFILLED SINCE SHE OWNS MORE THAN ONE HOUSE PR OPERTY/RESIDENTIAL HOUSE WHICH WERE AVAILABLE WITH HER AND CAN BE USED FOR THE PURPOSE OF RESIDENCE. IN VIEW OF THE ABOVE FACTS AND DISCUSSIO N, I HOLD THAT THE ASSESSEE WAS ELIGIBLE FOR EXEMPTION U/S 54F ON FOLL OWING GROUNDS :- (I) SHE OWNED MORE THAN ONE RESIDENTIAL HOUSE AT THE TI ME OF SALE OF LONG TERM ASSET I.E. RESIDENTIAL LAND. (II) SHE TRANSFERRED THE SECOND AND THIRD FLOOR OF THE P ROPERTY, FOR WHICH SHE CLAIMED EXEMPTION U/S 54F, WITHIN ONE YEA R OF CONSTRUCTION. THUS INCOME FROM LONG TERM CAPITAL GAINS ON SALE OF LAND IS ASSESSED AT RS. 39,06,398/- AND ADDED TO THE TOTAL INCOME OF ASSESSEE. 3 ITA NO. 122/JP/2013 A.Y. 2009-10. ITO VS. SMT. SAROJ DEVI HALDIYA. SINCE THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME, THEREFORE, PENALTY PROCEEDING U/S 271(1)(C) IS INIT IATED. 3. FEELING AGGRIEVED BY THE ORDER PASSED BY THE AO, THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A), WHO AFTER TAKING INTO CO NSIDERATION THE WRITTEN SUBMISSIONS FILED BY THE LD. A/R, HAS PARTLY ALLOWED THE CLAIM OF THE ASSESSEE. THE RELEVANT PARA NO.8 OF THE ORDER OF LD. CIT (A) IS REPRODUCED AS UNDER :- 8. FROM THE DEVELOPMENT AGREEMENT DATED 20.10.200 8 SIGNED BETWEEN THE APPELLANT AND SMT. PADMAJA JAIN (THE DE VELOPER) FOR CONSTRUCTION OF BASEMENT, GROUND, FIRST, SECOND AND THIRD FLOORS AT NEETI NAGAR PLOT OF LAND, IT IS LEARNT THAT THE APPELLANT THROUGH SALE DEED DATED 3.9.2008 PURCHASED PLOT OF LAND (PLOT NO. 14/86 ADM EASURING 122.40 SQ. METERS AT NEETI NAGAR, MALVIYA NAGAR, JAIPUR) FROM SHRI BHAGWATI SINGH RATNU. IN PARA 2 OF THE ASSESSMENT ORDER THE AO HAS MENTIONED THAT LAND COST WAS RS. 21,00,000/- AND REGISTRATION CHARGES O F RS. 1,23,450/-. SALE DEED DATED 3.9.2008 WAS INFORMED SUBMITTED TO THE A O, COPY OF THE SAME SHOWING LAND VALUE AT RS. 21,00,000/- WAS ALSO SUBM ITTED TO THIS OFFICE DURING APPELLATE PROCEEDINGS. HOWEVER IT IS SEEN TH AT NO PROOF OF PAYING THE DEVELOPER RS. 43,04,376/- HAS BEEN FURNISHED. N EITHER IS IT MENTIONED IN THE DEVELOPMENT AGREEMENT THAT SO MUCH AMOUNT HA S BEEN PAID TOWARDS RETAINING BASEMENT, GROUND AND FIRST FLOORS . RATHER THE COMMON PRACTICE IN SUCH CASES IS THAT THE OWNER OF THE LAN D RETAINS FLATS CONSTRUCTED WHILE THE BUILDER/DEVELOPER RETAINS THE OTHER FEW FLATS OUT OF TOTAL CONSTRUCTED, IN THE PROCESS THE OWNER GAINS R ATHER THAN LOSING. IN THIS CONTEXT OF FACTS IN MY OPINION THE APPELLANT I S ENTITLED TO LTCG EXEMPTION TO THE EXTENT OF RS. 22,23,450 (RS. 21,00 ,000 COST OF PLOT + RS. 4 ITA NO. 122/JP/2013 A.Y. 2009-10. ITO VS. SMT. SAROJ DEVI HALDIYA. 1,23,450 REGISTRATION CHARGES) OUT OF RS. 39,06,398 /- CLAIMED U/S 54F. THE APPELLANT GAVE HER LAND AT NEETI NAGAR FOR CONS TRUCTION AND IN LIEU RECEIVED RS. 20,00,000/- PLUS BASEMENT, GROUND AND FIRST FLOORS THIS IS PROVED BY THE DEVELOPMENT AGREEMENT, BUT THERE IS N O PROOF OF COST OF CONSTRUCTION CLAIMED AT RS. 43,04,376/- BY THE APPE LLANT, THEREFORE, THE 54F EXEMPTION IS LIMITED TO RS. 22,23,450/- WHEREAS THE BALANCE RS. 16,82,948/- (RS. 39,06,398 RS. 22,23,450) IS DIRE CTED TO BE TAXED AS LTCG. 4. FEELING AGGRIEVED BY THE ORDER OF LD. CIT (A), T HE REVENUE HAS FILED APPEAL IN RESPECT OF BENEFIT ACCORDED TO THE ASSESSEE TO THE TUNE OF RS. 16,82,948/- WHICH HAS BEEN DIRECTED TO BE CHARGED AS LONG TERM CAPITAL GA IN. 4.1. IT IS OBSERVED THAT AS PER CBDT CIRCULAR BEARI NG NO. 21/2015 DATED 10.12.2015 THE TAX EFFECT IN THIS CASE IS LESS THAN RS. 10 LAC S AND THE REVENUE SHOULD NOT FILE APPEAL OR PURSUE THE APPEAL WHICH HAS TAX EFFECT B ELOW THE MONETARY LIMIT PRESCRIBED IN THIS CIRCULAR. AS PER SECTION 268A, NOTIFICATIO N REFERRED HEREIN ABOVE, IF THE TAX EFFECT IS LESS THAN RS. 10 LACS, THEN THE APPEAL OF THE DE PARTMENT IS LIABLE TO BE DISMISSED BEING NOT MAINTAINABLE/PRESSED. ACCORDINGLY THE AP PEAL OF THE REVENUE /APPELLANT IS DISMISSED ON ACCOUNT OF TAX EFFECT BEING LESS THAN RS. 10 LACS. HOWEVER, THE DISMISSAL OF THE APPEAL WILL NOT BE TREATED AS PRECEDENT IN A NY PROCEEDINGS NOR IT WILL BE CONSIDERED AS AN EXPRESSION ON THE MERITS OF THE CA SE. THE REVENUE IS FREE TO FILE ANY OTHER APPEAL ON THE SAME ISSUE BEFORE THIS TRIBUNAL . IN VIEW THEREOF, THE APPEAL IS DISMISSED. 5 ITA NO. 122/JP/2013 A.Y. 2009-10. ITO VS. SMT. SAROJ DEVI HALDIYA. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/01/2016. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/01/2016 DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO WARD 6(1), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- SMT. SAROJ DEVI HALDIYA, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 122/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 6 ITA NO. 122/JP/2013 A.Y. 2009-10. ITO VS. SMT. SAROJ DEVI HALDIYA.