Mrs. Krishena Rampal, New Delhi V. DCIT, New Delhi

ITA 13/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7345 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 02-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMAN KANT GARG
• Section: 143(3); 147; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A .NO.13/DEL/2014 ASSESSMENT YEAR-2006-07 KRISHENA RAMPAL, E-13/1, VASANT VIHAR, NEW DELHI. (PAN: AAEPR3122N) (APPELLANT) VS DCIT, CIRCLE-24(1), NEW DELHI. (RESPONDENT) APPELLANT BY SHRI G.N. GUPTA RESPONDENT BY SHRI RAMAN KANT GARG, SR. DR ORDER PER BEENA A. PILLAI, JM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-XXVIII, NEW DELHI VIDE ORDER DATED 28.10.2013, FOR ASSESSMENT YEAR 2006-07, ON THE FOL LOWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-XXVIII, NEW DELHI (HEREINAFTER CALLED THE CIT(A) FOR SHORT) ERRED IN HOLDING THAT DCIT, CIRCLE-24(1), NEW DELHI (HEREINAFTER CAL LED DATE OF HEARING 4.1.2016 DATE OF PRONOUNCEMENT 18.1.2016 I.T.A. 13/DEL/2014 ASSESSMENT YEAR 2006-07 2 THE AO FOR SHORT) HAD JURISDICTION TO FRAME THE ASSESSMENT FOR A.Y. 2006-07 U/S 147/147/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE AC T FOR THE SAKE OF BREVITY). 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE APPELLANT HAD TRANSFERRED ANY ASSETS TO LAXMI BUILT ECH PVT. LTD. DURING F.Y. 01.04.2005 TO 31.03.2006 RELE VANT TO A.Y. 2006-07. 3. THAT WITHOUT PREJUDICE TO THE GENERALITY OF GROUNDS OF APPEAL NO. 1 & 2 ABOVE, THE LEARNED CIT( A) ERRED I) IN CONFIRMING THE ACTION OF THE AO IN DETERMININ G THE CAPITAL GAINS AT RS. 72, 71,158/- REPRESENTING THE TOTAL SALE CONSIDERATION RECEIVED BY THE APPELLANT WITHOUT MAKING ANY DEDUCTION IN RESPECT OF THE INDE XED COST OF THE ORIGINAL ASSETS TRANSFERRED; AND II) FURTHER IN NOT ALLOWING A DEDUCTION U/S 54 OF T HE ACT IN RESPECT OF THE INVESTMENT IN THE NEW RESIDENTIAL HOUSE ACQUIRED FROM M/S. LAXMI BUILTECH PVT. LTD. 2. AT THE OUTSET, LD. AR SUBMITED THAT ON INSTRUCTI ON OBTAINED FROM THE ASSESSEE, GROUND NO.1 AND GROUND NO. 2 IN THE PRESENT APPEAL, ARE BEING WITHDRAWN. ACCORDINGLY, ON THE B ASIS OF THE SUBMISSIONS MADE BY THE LD. AR, GROUND NO. 1 AND 2 IN THE PRESENT APPEAL STAND DISMISSED. 3. THE ONLY ISSUE THAT REMAINS TO BE ADJUDICATED, I S IN RESPECT OF THE COMPUTATION OF CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. BRIEF FACTS OF THE CASE ARE AS UNDER:- I.T.A. 13/DEL/2014 ASSESSMENT YEAR 2006-07 3 3.1. THE ASSESSEE AND HER HUSBAND LATE SHRI N.N. RA MPAL ENTERED INTO A COLLABORATION AGREEMENT WITH THE BUILDER ON 20.10.2005, WHEREIN IT WAS AGREED BETWEEN THE PARTIES THAT THE BUILDER WOULD BUILD FOR THEM THEIR HOUSE AFRESH, WHICH THEN CONSI STED ONLY OF THE GROUND FLOOR. IT WAS AGREED BETWEEN THE PARTIE S THAT THE BUILDER WOULD CONSTRUCT A THREE STORIED STRUCTURE, BEING GROUND PLUS TWO FLOORS AT HIS OWN COST. THE CONSIDERATION FOR BRINGING INTO EXISTENCE THREE STORIED STRUCTURE WAS THAT THE PARTIES WOULD PART WITH FIRST FLOOR OF THE CONSTRUCTED PREMISES, ALONG WITH A PROPORTIONATE SHARE (BEING 30%) OF UNDIVIDED LAND, AND THE AMOUNT AS SET OUT IN THE COLLABORATION AGREEMENT DA TED 20.10.2005 WOULD BE PAID TO THE ASSESSEE AND HER HU SBAND. 3.2. ACCORDINGLY, THE SALE DEED WAS EXECUTED ON 12. 10.2006 FOR THE FIRST FLOOR BETWEEN THE ASSESSEE. DURING THE A SSESSMENT PROCEEDINGS, LD. ASSESSING OFFICER SENT SUMMONS TO THE BUILDER FOR EXAMINING THE DETAILS AS SET FORTH IN THE AGREE MENT DATED 20.10.2005. THE ASSESSING OFFICER FRAMED ASSESSMEN T U/S 147 R/W 143(3) OF THE ACT. THE LD. ASSESSING OFFICER WA S OF THE OPINION THAT, A BENEFIT HAS ACCRUED TO THE ASSESSEE BEING R S.55,42,316/- WHICH IS A PART OF THE SALE CONSIDERATION RECEIVED AGAINST THE TRANSFER OF 30% OF THE OWNERSHIP RIGHT IN THE UNDIV IDED, I.T.A. 13/DEL/2014 ASSESSMENT YEAR 2006-07 4 INDIVISIBLE AND IMPARTABLE PLOT OF LAND. APART FRO M THE ABOVE CONSIDERATION, THE ASSESSEE HAD ALSO RECEIVED A SUM OF RS.45,00,000/- ON ACCOUNT OF COLLABORATION AGREEMEN T EXECUTED BETWEEN THE BUILDER AND THE ASSESSEE AGAINST WHICH THE ASSESSEE HAD CLAIMED EXEMPTION U/S 54EC IN THE ASSESSMENT YE AR 2007- 08. LD. ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE WAS NOT ELIGIBLE FOR EXEMPTION U/S 54EC AS THE LIMI TATION PERIOD FOR MAKING SUCH INVESTMENT U/S 54EC HAD EXPIRED. L D. ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE H AS CLAIMED CAPITAL GAIN IN THE YEAR 2007-08 WHEREAS IT SHOULD HAVE BEEN IN THE YEAR UNDER CONSIDERATION. LD. ASSESSING OFFICER , THEREFORE, MADE AN ADDITION OF RS. 73,16,350/- TAXABLE AT 20%. 4. AGGRIEVED BY THE ORDER OF THE LD. ASSESSING OFFI CER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 4.1. LD. CIT(A), AFTER GOING THROUGH THE SUBMISSION S OF THE LD. ASSESSING OFFICER, RECORDED THAT THE CLAIM U/S 54EC HAS RIGHTLY BEEN REJECTED AS THE INVESTMENT IN REC BONDS HAVE B EEN MADE ON 31.3.2007, WHEREAS THE AMOUNT WAS RECEIVED BY THE A SSESSEE ON 12.10.2006 ON EXECUTION OF THE SALE DEED WITH THE B UILDER. HE FURTHER HELD THAT THE COLLABORATION AGREEMENT WAS S IGNED DURING THE FY. 2005-06, AND THE DATE OF SALE OF PROPERTY C LEARLY FALLS I.T.A. 13/DEL/2014 ASSESSMENT YEAR 2006-07 5 WITHIN THE FY. 2005-06. HE, THEREFORE, HELD THAT T HE ASSESSING OFFICER HAS RIGHTLY CHARGED CAPITAL GAIN. LD. CIT( A) DISMISSED THE ASSESSEES APPEAL FILED BEFORE HIM. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE IS IN APPEAL BEFORE US. 5.1. BEFORE US, THE LD. AR SUBMITS THAT THE ASSESSE E IS NOT DISPUTING TO THE YEAR OF CHARGE FOR CONSIDERING THE CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. HOWEVER, LD. AR SUBMITS THAT THE ASSESSING OFFICER SHOULD HAVE CONSIDERED THE INDEXA TION AND THE BENEFIT THAT COULD ARISE IN THE HANDS OF THE ASSESS EE U/S. 54 OF THE ACT. LD. AR SUBMITTED THAT A SPECIFIC GROUND C OULD NOT BE RAISED AS THE REPRESENTATIVE OF THE ASSESSEE BEFORE THE LD. CIT(A) WAS NOT FROM A TAX BACKGROUND. LD. AR SUBMITTED TH AT A SPECIFIC GROUND IN RESPECT OF INDEXATION TO BE CONSIDERED AN D FOR ALLOWING THE DEDUCTION U/S 54 OF THE ACT HAS BEEN RAISED BEF ORE US IN THE PRESENT APPEAL. 5.2. A PERUSAL OF THE COMPUTATION BY THE LD. ASSESS ING OFFICER REVEALS THAT THE IMPUGNED INCOME EARNED BY THE ASSE SSEE HAS BEEN SUBJECTED TO NORMAL RATE OF TAX INSTEAD OF CO NSIDERING IT UNDER SECTION 45 OF THE ACT. IT CANNOT BE DISPUTED THAT THE I.T.A. 13/DEL/2014 ASSESSMENT YEAR 2006-07 6 ASSESSEE IS NOT ELIGIBLE FOR THE BENEFIT OF INDEXAT ION PROVIDED UNDER THE ACT. FURTHER, IT CANNOT BE IGNORED THAT THE ASSESSEE HAS MADE AN INVESTMENT IN ANOTHER NEW RESIDENTIAL H OUSE, ACQUIRED FROM THE BUILDER AND THUS, COULD BE ELIGIB LE FOR DEDUCTION U/S 54 OF THE ACT. 5.3. WE ARE, THEREFORE, OF THE CONSIDERED OPINION T HAT IT WOULD BE FIT AND PROPER TO SET ASIDE THIS ISSUE FOR A DE NOVO CONSIDERATION, TO THE FILE OF THE LD. ASSESSING OFFICER, FOR COMPU TATING OF THE CAPITAL GAINS IN THE HANDS OF THE ASSESSEE IN ACCOR DANCE WITH LAW. NEEDLESS TO SAY THAT THE LD. ASSESSING OFFICER MAY ISSUE NOTICE TO THE ASSESSEE TO SUBSTANTIATE ITS LEGAL CLAIM AND TH E SAME MAY BE CONSIDERED FOR COMPUTING CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. IN THE LIGHT OF ABOVE DISCUSSION, WE ARE SETTING ASIDE THE ORDERS OF THE LD. CIT(A). THE APPEAL OF THE AS SESSEE STANDS STATISTICALLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.01.2016 SD/- SD/- (S.V. MEHROTRA) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH JANUARY 2016 GS I.T.A. 13/DEL/2014 ASSESSMENT YEAR 2006-07 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT(A) 5. DR ASSTT. REGISTRAR