Shri Nand Kishore Yadav, Secunderabad V. Income Tax Officer, Hyderabad

ITA 1363/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74557 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 11-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K HARITA
• Section: 54F; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND S HRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1363/HYD/2013 ASSESSMENT YEAR 2003-04. SRI NAND KISHORE YADAV, -V- INCOME -TAX OFFICER, SECUNDERABAD. WARD-7(2), HYDER ABAD. PAN:AAEPY 9638G (APPELLANT) (RESPONDENT) APPELLANT BY SHRI K.C. DEVDAS RESPONDENT BY SMT. K. HARITA DATE OF HEARING 23-01-2014 DATE OF PRONOUNCEMENT 05-02-2014 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 19-08-2013 OF CIT (A)-V, HYDERABAD PASSED IN APPE AL NO.CIT (A)-18- 7(2)/HYD/IT-187/2007-08 PERTAINING TO ASSESSMENT YEAR 2003-04. 2. BRIEFLY THE FACTS ARE, ASSESSEE IS AN INDIVIDU AL HAVING INCOME FROM HOUSE PROPERTY AND CAPITAL GAIN. FOR THE IMPU GNED ASSESSMENT YEAR, THE ASSESSEE FILED HIS RETURN OF INCOME ON 31 -7-2003 DECLARING TOTAL INCOME OF RS.18,000/-. THOUGH THE ASSESSEE D ECLARED LONG TERM CAPITAL GAIN OF RS.7,62,800/-, BUT THE ENTIRE AMOUNT WAS CLAIMED AS DEDUCTION U/S 54F OF THE ACT TOWARDS INV ESTMENT IN CONSTRUCTION OF A HOUSE PROPERTY. ON THE BASIS OF INFORMATION THAT 2 ITA NO.1363 OF 2013 SRI NAND KISHORE YADAV, SECUNDERABAD. THE ASSESSEE ALONG WITH THREE OTHERS HAD GIVEN PLOT OF 1000 SQUARE YARDS SITUATED AT D.NO.12-1-923/5, MALLEPALLY, HYDE RABAD FOR DEVELOPMENT BY ENTERING INTO A DEVELOPMENT AGREEMEN T CUM GPA, REOPENED THE ASSESSMENT BY ISSUING A NOTICE U/S 148 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER CALLED UPON THE ASSESSEE TO PRODUCE EVIDENCE SUCH AS MUNIC IPAL APPROVAL, DATE OF COMMENCEMENT, COMPLETION OF COST OF CONSTRU CTION ETC., TO PROVE HIS CLAIM OF DEDUCTION U/S 54F OF THE ACT. T HOUGH THE ASSESSEE SUBMITTED HIS EXPLANATION GIVING DETAILS O F EXPENDITURE INCURRED ON CONSTRUCTION, BUT THE ASSESSING OFFICER DISBELIEVED IT BY HOLDING THAT THE ASSESSEE HAS NOT SUBMITTED ANY EVI DENCE RELATING TO CREDITS IN THE BANK ACCOUNTS, MONEY RECEIVED ON GIVING PLOT FOR DEVELOPMENT. HE FURTHER OBSERVED THAT ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE IN RESPECT OF SOURCES FOR COST OF CONS TRUCTION NOR ANY EVIDENCE TO SHOW THAT LONG TERM CAPITAL GAIN WAS U TILISED FOR CONSTRUCTION OF HOUSE PROPERTY IN RESPECT OF WHICH DEDUCTION U/S 54F WAS CLAIMED. ACCORDINGLY, ASSESSING OFFICER DISALL OWED RS.7,62,800/- CLAIMED AS DEDUCTION U/S 54F AND ADDE D BACK TO THE INCOME OF THE ASSESSEE. AGAINST THE ASSESSMENT MAD E, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). IT APPEARS FROM THE OBSERVATION MADE BY THE CIT (A), IN SPITE OF SE VERAL OPPORTUNITIES GIVEN SINCE NEITHER THE ASSESSEE NOR HIS AR APPEARED, THE CIT (A) PROCEEDED TO DISPOSE OF THE APPEAL EX P ARTE ON THE BASIS OF THE STATEMENT OF FACTS AND OTHER MATERIALS ON RE CORD. THE CIT (A) ULTIMATELY SUSTAINED THE ADDITION OF RS.7,68,00 0/- BY HOLDING AS UNDER:- BEFORE ME NEITHER THE ASSESSEE NOR HIS COUNSEL WAS APPEARED IN SPITE OF THE FACT THAT MORE THAN 20 OPP ORTUNITIES 3 ITA NO.1363 OF 2013 SRI NAND KISHORE YADAV, SECUNDERABAD. WERE GIVEN. FROM THE PERUSAL OF THE FACTS GIVEN IN THE ASSESSMENT ORDER IT IS OBSERVED THAT SPECIFIC OPPOR TUNITY WAS GIVEN BY THE ASSESSING OFFICER TO SUBMIT COMPLETE E VIDENCES FOR THE CLAIM OF EXEMPTION U/S 54F OF RS.7,62,800/- AND ALSO THE SHORT TERM CAPITAL GAIN ON THE SALE OF 8 FLATS AND ONE SHOP. HOWEVER, NEITHER BEFORE THE ASSESSING OFFICE R NOR BEFORE ME ANY DOCUMENTARY EVIDENCE WAS FILED BY THE ASSESSEE TO SUBSTANTIATE ITS CLAIM. IT IS WELL SET TLED LAW THAT ONUS IS ON THE ASSESSEE TO SUBMIT COMPLETE EVIDENCE S BEFORE THE ASSESSING OFFICER BEFORE CLAIMING ANY DEDUCTION . TO STRENGTHEN THIS VIEW RELIANCE IS PLACED ON E DECISI ON OF HONBLE SUPREME COURT IN CASES OF CIT VS. CALCUTTA AGENCY LD. 19 ITR 1991, WHERE IT IS HELD THAT THE ONUS IS ON T HE ASSESSEE TO PROVE NECESSARY FACTS IN ORDER TO CLAIM ANY DEDU CTION. SIMILARLY, HONBLE A.P. HIGH COURT IN THE CASE OF C IT VS. TRANSPORTING CORPORATION OF INDIA LTD., 256 ITR 701 AND IN THE CASE OF CIT VS. IMERIAL CHEMICALS INDUSTRIES IN DIA PVT. LTD 74 ITR 17 HAS HELD THAT ONUS IS ON THE ASSESSEE COMPANY TO PROVE THE VERACITY OF THE EXPENSES CLAIMED BY IT . IN THE PRESENT CASE THE ASSESSEE HAS FAILED TO SUBMIT ANY EVIDENCE BEFORE THE ASSESSING OFFICER AND BEFORE ME THEREFOR E NO INTERFERENCE IS CALLED FOR TO THE DECISION OF THE A SSESSING OFFICER AND THE ADDITIONS MADE ON ACCOUNT OF DISALL OWANCE OF EXEMPTION U/S 54F AND ADDITION MADE OF SHORT TERM C APITAL GAIN ARE UPHELD AND GROUND OF APPEAL IS DISMISSED. THE LEARNED AR SUBMITTED THAT CONCLUSION OF THE CIT (A) TO THE EFFECT THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDE NCE TO SUBSTANTIATE ITS CLAIM IS NOT CORRECT. HE SUBMITTE D THAT IN RESPONSE TO THE QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICE R DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITTED HIS REPLY 4 ITA NO.1363 OF 2013 SRI NAND KISHORE YADAV, SECUNDERABAD. FURNISHING ALL THE DETAILS. THE LEARNED AR REFERRIN G TO ASSESSEES REPLY DATED 26-12-2007 SUBMITTED THAT ALL QUERIES MADE BY THE ASSESSING OFFICER WERE ANSWERED BY THE ASSESSEE AND NOT ONLY THE AMOUNT OF EXPENDITURE INCURRED FOR CONSTRUCTION OF THE HOUSE WAS SUBMITTED BUT ALSO THE DETAILS OF SUCH EXPENDITURE WAS ALSO SUBMITTED BEFORE THE ASSESSING OFFICER. IN THIS CO NTEXT, THE LEARNED A R REFERRED TO THE LETTERS PLACED AT PAGES 14 AND 15 OF PAPER BOOK. IT WAS THEREFORE SUBMITTED THAT THE ASSESSING OFFIC ER WITHOUT PROPERLY EXAMINING THE MATERIALS ON RECORD AND WITH OUT MAKING ANY EFFORT TO EVEN PHYSICALLY VERIFY WHETHER THE HOUSE HAS BEEN ACTUALLY CONSTRUCTED BY THE ASSESSEE OR NOT HAS ARBITRARILY COME TO A CONCLUSION THAT THERE IS NO INVESTMENT MADE BY THE ASSESSEE FOR CONSTRUCTION OF THE HOUSE TO CLAIM OF DEDUCTION U/S 54F OF THE ACT. 3. THE LEARNED DR, ON THE OTHER HAND, SUPPORTING TH E ORDERS OF THE CIT (A) AS WELL AS ASSESSING OFFICER SUBMITTED THAT WHEN THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE TO SUBSTANT IATE ITS CLAIM THAT IT HAS ACTUALLY INVESTED IN CONSTRUCTION OF HOUSE, THE DISALLOWANCE OF DEDUCTION CLAIMED U/S 54F OF THE ACT WAS JUSTIFIED. 4. WE HAVE HEARD CONTENTIONS OF THE PARTIES AND PER USED THE MATERIALS ON RECORD. THE ONLY ISSUE BEFORE US, IS WHETHER THE ASSESSEE HAS INVESTED THE CAPITAL GAINS IN CONSTRUC TION OF NEW HOUSE PROPERTY SO AS TO CLAIM DEDUCTION U/S 54F OF THE AC T. ON PERUSAL OF THE ASSESSEES LETTERS DATED 26-12-2007 AND 28-12-2 007 PLACED AT PAGES 14 AND 15 OF THE PAPER BOOK SUBMITTED BEFORE US DO INDICATE THAT THE ASSESSEE HAS REPLIED TO ALL THE QUERIES M ADE BY THE ASSESSING OFFICER. THE ASSESSEE HAS CONTENDED TH AT SINCE THE SITE IS BELOW 100 SQ. YARDS, NO MUNICIPAL APPROVAL IS RE QUIRED. HE HAS FURTHER FURNISHED DATE OF COMMENCEMENT AND DATE OF COMPLETION AND 5 ITA NO.1363 OF 2013 SRI NAND KISHORE YADAV, SECUNDERABAD. THE SOURCE OF INVESTMENT OF RS.8,25,680/-. THE ASS ESSEE HAS ALSO GIVEN THE DETAILS OF EXPENDITURE CLAIMED IN CONSTRU CTION BY FURNISHING COST OF MATERIALS PURCHASED AND USED IN CONSTRUCTION. IN THESE CIRCUMSTANCES, WHEN THE ASSESSEE HAS CONTENDE D BEFORE THE ASSESSING OFFICER THAT HE HAS INVESTED THE CAPITAL GAINS DERIVED FROM SALE OF FLATS IN THE CONSTRUCTION OF THE HOUSE PROP ERTY WITHOUT PROPERLY VERIFYING THE ASSESSEES CONTENTION, THE A SSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF DEDUCTI ON U/S 54F OF THE ACT ON PRESUMPTIONS AND SURMISES. IF THE ASSESSING OFFICER HAD ANY DOUBT WITH REGARD TO THE FACT AS TO WHETHER THE ASS ESSEE HAS ACTUALLY CARRIED OUT THE CONSTRUCTION, HE SHOULD HA VE MADE A PHYSICAL VERIFICATION TO ASCERTAIN THE FACTS HIMSEL F. INSTEAD OF DOING THAT, IT WAS NOT PROPER ON HIS PART TO REJECT THE C LAIM OF THE ASSESSEE. THE CIT (A) HAS ALSO DISPOSED OF THE APP EAL EX PARTE FOR WHATEVER MAY BE THE REASON, MERELY SUSTAINING THE O RDER OF THE ASSESSING OFFICER. 5. IN COURSE OF HEARING BEFORE US, ON A SPECIFIC QU ERY MADE BY THE BENCH, THE ASSESSEE HAD PRODUCED THE MUNICIPAL TAX RECEIPT OF THE HOUSE IN QUESTION, INVESTMENT FOR WHICH WAS CLAIMED AS DEDUCTION U/S 54F OF THE ACT. ON A PERUSAL OF THE SAID RECEI PT DATED 24/12/2013 PRIMA FACIE IT APPEARS THAT A HOUSE EXIS TS IN DOOR NO.15-6-190/1/J, AGAINST WHICH THE ASSESSEE HAS CLA IMED DEDUCTION/S 54F OF THE ACT. WHEN THE ASSESSING OFF ICER DOES NOT DISPUTE THE FACT THAT THE ASSESSEE HAS DERIVED CAPI TAL GAINS FROM SALE OF FLAT, THEN THE FACT THAT THIS WAS UTILISED FOR CONSTRUCTION OF THE HOUSE CANNOT BE DISBELIEVED, WHEN NO CONTRARY M ATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW THAT AMOUNT WAS UTI LISED IN ANY OTHER MANNER. SINCE, THE AFORESAID MUNICIPAL TAX R ECEIPT WAS NOT 6 ITA NO.1363 OF 2013 SRI NAND KISHORE YADAV, SECUNDERABAD. PRODUCED EITHER BEFORE THE ASSESSING OFFICER OR BEF ORE THE CIT (A), WE DIRECT THE ASSESSING OFFICER TO VERIFY THE ORIGI NAL MUNICIPAL RECEIPT AND ALLOW THE CLAIM U/S 54F OF THE ACT. SO FAR AS ADDITION OF SHORT TERM CAPITAL GAIN OF RS.1,67,000/- IS CONCERN ED, SINCE THE ASSESSEE HIMSELF HAS ADMITTED SUCH INCOME, THERE IS NO REASON TO INTERFERE WITH THE SAME. IN VIEW OF OUR ABOVE FIND INGS, OTHER GROUNDS RAISED BY THE ASSESSEE HAVE BECOME INFRUCTU OUS AND HENCE DISMISSED AS SUCH. 6. THE LEARNED AR ALSO SUBMITTED THAT HE DOES NOT WANT TO PRESS THE ADDITIONAL GROUND RAISED BEFORE US. IN VIEW OF SUCH SUBMISSION, THE ADDITIONAL GROUND IS DISMISSED AS NOT PRESSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 05-02-2014. S D / - (B. RAMAKOTAIAH) ACCOUNTANT MEMBER S D / - (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 5 TH FEBRUARY, 2014. JMR* COPY TO:- 1) C/O SRI K.C. DEVDAS, SEKHAR & CO., CAS, 133/4, RPRO AD, SECUNDERABAD. 2) ITO, WARD-7(2), IT TOWERS, HYDERABAD. 3) CIT(A)-18, MUMBAI. 4) CIT-5/6, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. 7 ITA NO.1363 OF 2013 SRI NAND KISHORE YADAV, SECUNDERABAD.