Yashodhar Kumar Jain, New Delhi V. ACIT, New Delhi

ITA 1449/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7497 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 16-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Corroborative evidences
• Section: 143(3); 142(1); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 1449/DEL/2012 ASSESSMENT YEAR: 2008-09 YASHODHAR KUMAR JAIN, VS. ASSTT. COMMISSIONER OF INCOME TAX 221, KAILASH HILLS, CIRCLE 23(1), NEW DELHI NEW DELHI (PAN:AAPPJ6527Q) AND ITA NO. 1697/DEL/2012 ASSESSMENT YEAR: 2008-09 ACIT, CIRCLE 23(1), VS. YOSHODHAR KUMAR JAIN , ROOM NO. 190, CR BLDG., 221, KAILASH HILLS, IP ESTATE, NEW DELHI NEW DELHI (PAN:AAPPJ6527Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY: SHRI AMIT JAIN, SR. DR DATE OF HEARING : 16-05-2016 DATE OF ORDER : 03-06-2016 ORDER PER H.S. SIDHU, J.M. THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE COMMON ORDER OF THE LD. CIT(A)- XXIII, NEW DELHI DATED 01.12.2011 PERTAINING TO ASSESSMENT YEAR 20 08-09. SINCE THE ISSUE ARE INTER-CONNECTED, HENCE, THESE APPEALS WER E HEARD TOGETHER AND ITA NOS.1449 & 1697/DEL/2012 2 ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE, BY DEALING WITH REVENUES APPEAL. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL NO. 1449/DEL/2012:- 1. BECAUSE THE LD C.I.T (A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFIRMING THE FOLLOWING DISALLOWANCES EXEMPTION CLAIMED U/SEC 54 ALLOWED BY LD CIT DISALLOWANCE CONFIRMED BYCIT(APPEALS) RS. 46,92,000 RS. 17,50,6747- RS.29,41,330/- 2. BECAUSE THE FOLLOWING OBSERVATIONS OF THE LD C IT (A) IN THE ORDER ARE AGAINST THE PROVISIONS OF SEC 54 OF THE INCOME TAX ACT. ASSESSEE SOLD HOUSE PROPERTY FOR RS. 2,28,97,6757- & THERE WAS LONG TERM CAPITAL GAIN OF RS. 1,33,01,553/-. ' THAT OUT OF CAPITA] GAIN OF RS. 1,33,01,553/- 'A' H AS INVESTED RS. 50,00,000/- IN NHIA BONDS & ALSO CLAIMED DEDUCTION OF RS. 46,92,00 4/- AS THE 'A' HAS PURCHASED A RESIDENTIAL PLOT ON 21/05/2007 WHICH IS ONE YEAR BEFORE THE SALE. THAT OF EXEMPTION OF RS. 46,92,004/- LD C.I.T (A) H AS ALLOWED EXEMPTION TO THE TIME OF RS. 17,50,674/- WHICH WAS PAID AFTER 18/05/ 2007 AND BALANCE RS. 29,41,330 HAS BEEN REDUCED AS THE SAME AMOUNT W AS PAID BEFORE ONE YEAR. DETAILS OF PURCHASE OF RESIDENTIAL PLOT -RS. 46,92, 004/- AT PLOT NO.70 CASSIA NODOSA ESTATE CHI-03, GREATER NOIDA. U.P S.NO. DD/CH. NO. DATE AMOUNT RE MARKS 1 DO NO. 264708 31.03.2006 1900000/- ANURADHA SINGH (PURCHASE OF OWNERSHIP) ITA NOS.1449 & 1697/DEL/2012 3 2 DD NO. 488245 28.03.2006 136000/- BANK TRANSFER CHARGES TO G NOIDA 3 DD NO. 488247 28.03.2006 285000/- JANUARY 2006 INSTALLMENT 4 DD NO. 973306 21.04.2006 1000007- PURCHASE OF OWNERSHIP 5 DDNO. 489411 21.06.2006 260165/- JULY 2006 INSTALLMENT 6 DD NO. 007881 28.12.2006 260165/- JAN 2007 INSTALLMENT 7 DDNO. 154069 18.05.2007 34085G/- MISCELLANEOUS CHARGES FOR REGISTRATION 8 DDNO. 154755 29.06.2007 260165/- JUNE 2007 INSTALLMENT 9 DD NO. 569097 01.01.2008 2601 65/- JAN 2008 INSALLMENT 10 DD NO. 455955 17.06.2008 260 165/- JUNE 2008 INSTALLMENT 11 STAMP PAPERS 612300/- CHARGES FOR REGISTRATION 12 GNOIDA MISC. & BANK CHARGES 17023/- TOTAL EXPENSES TILL DATE OF RETURN FOR FINANCIAL YEAR 2007- 08 4692004/- 3. BECAUSE, THE LD C.I.T (A) HAS ERRED IN OVERLOOK ING THE FACT THAT 'A' WAS ISSUED POSSESSION LETTER BY GNIDA ON 18/05/2007 WHICH IS W ITHIN ONE YEAR OF SALE OF RESIDENTIAL HOUSE ON 01.03.2008 AND 'A' IS ENTITLE TO TOTAL DEDUCTION OF RS. 46,92,004 UNDER THE NATURE & CIRCUMSTANCES OF THE C ASE. 4. BECAUSE IN CASE OF IMMOVABLE PROPERTY POSSESSIO N THE ALLEGED PROPERTY WAS TRANSFERRED ONLY ON 18/05/2007 BY GREATER NOIDA IND USTRIAL AUTHORITY, WHICH IS WITHIN ONE YEAR BEFORE THE SALE OF RESIDENTIAL HOUS E & ENTIRE INVESTMENT MAY BE CONSIDERED FOR EXEMPTION U/SEC 54 AND DISALLOWANCE OF RS 29,41,330/- WHICH ITA NOS.1449 & 1697/DEL/2012 4 WAS PAID BEFORE 18/05/2007 IS UNCALLED FOR & UNJUST AS PER PROVISIONS OF SEC 54 OF THE INCOME TAX ACT. 5. BECAUSE THE LD CIT (A) FAILED TO APPRECIATE THA T LEGAL POSSESSION HAVE BEEN GRANTED TO THE (A) ON 18/05/2007 AND 'A' IS ENTITLE TO TOTAL EXEMPTION EVEN IF ADVANCE AGAINST THE SAID PLOT OF LAND WAS EARLIER T HAN ONE YEAR AMOUNTING TO RS. 29,41,3307- THEREFORE IT IS PRAYED THAT DISALLOWANCE OF RS. 29, 41,330/- AS CONFIRMED BY THE LD CIT (A) MAY BE DELETED IN THE INTEREST OF JUSTICE. ANY OTHER RELIEF AS THIS COURT MAY DEEM FIT & PROPE R BE GRANTED IN FAVOUR OF THE ASSESSEE. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL NO. 1697/DEL/2012:- (I) ON THE FACTS AND ON THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED IN RESTRICTED THE DISALLOWANCE TO RS. 21,28,866/- AS AGAINST RS. 46,92,004/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF EXEMPTION CLAIMED U/S. 5 4 OF THE I.T. ACT. (II) ON THE FACTS AND ON THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE U/S. 40(A)(IA) OF THE IN COME TAX ACT, 1961. ITA NOS.1449 & 1697/DEL/2012 5 (III) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR A MEND ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN OF INCOME AT RS. 1,01,53,098/- ELECTRONICALLY TRANSMIT TED ON 20.9.2008 FOLLOWED BY ITR-V ON 25.9.2008. THE RETURN WAS PRO CESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED THE ACT) ON THE SAME INCOME. ON SELECTION OF CASE FOR SCRUTINY, NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 14.9.2009. SUBSEQUENTLY, NOTICE U/S. 142(1) OF THE ACT WAS ALSO ISSUED. IN COMPLIANCE THERETO, THE AUTHORI SED REPRESENTATIVES OF THE ASSESSEE APPEARED BEFORE THE AO FROM TIME TO TI ME AND FURNISHED WRITTEN SUBMISSIONS AND REQUIRED DETAILS. BOOKS OF ACCOUNTS AND BILLS/VOUCHERS ETC. WERE ALSO PRODUCED AND PUT TO T EST. THEREAFTER, THE ASSESSED THE INCOME OF THE ASSESSEE AT RS. 1,49,51, 300/- AND MADE VARIOUS ADDITIONS VIDE HIS ORDER DATED 14.12.2010 PASSED U/S. 143(3) OF THE ACT. 5. AGAINST THE AFORESAID ASSESSMENT ORDER, THE ASSE SSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 1.12.2011 HAS PARTLY ALLOWED THE APPEAL OF THE ASSE SSEE. 6. AGAINST THE ORDER OF THE LD. CIT(A), BOTH ASSES SEE AS WELL AS REVENUE ARE IN CROSS APPEALS BEFORE US. 6.1 IN THIS CASE, NOTICE OF HEARING TO THE ASSESS EE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESS EE, NOR HIS AUTHORIZED ITA NOS.1449 & 1697/DEL/2012 6 REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INV OLVED IN THE PRESENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE W OULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSEE, THERE FORE, WE ARE DECIDING THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEAR ING THE LD. DR AND PERUSING THE RECORDS. 7. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDER OF THE LD. CIT(A). 7.1 APROPOS GROUND NO. 1 WHICH IS A COMMON GROUND R AISED IN BOTH THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE RELATING TO RESTRICTION OF DISALLOWANCE TO RS. 21,28,866/- AS AGAINST RS. 4 6,92,004/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF EXEMPTION CLAI MED U/S. 54 OF THE ACT. 7.2 ON THIS ISSUE, THE ASSESSING OFFICER EXAMINED T HE DETAILS OF LONG TERM CAPITAL GAINS DISCLOSED OF RS. 36,09,549/- ON SALE OF A HOUSE ON 01.03.2008, IN SUN CITY HEIGHTS, SECTOR - 54, GURGA ON. THE ASSESSING OFFICER FOUND THAT AS AGAINST SALE CONSIDERATION OF RS. 2,25,27,750/-, THE APPELLANT HAD CLAIMED EXEMPTION UNDER SECTION 54EC OF RS. 50,00,000/- FOR PURCHASE OF CAPITAL GAINS BONDS, AND EXEMPTION UNDER SECTION 54 OF RS. 46,92,004/- FOR PURCHASE OF A RESIDENTIAL PLOT. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SHOW CAUSE WHY THE EXEMPTI ON UNDER SECTION 54 SHOULD NOT BE DISALLOWED, AS THE EXEMPTION WAS ALLO WABLE ONLY IN RESPECT OF INVESTMENT IN A RESIDENTIAL HOUSE, AND MOREOVER THE PLOT HAD BEEN ITA NOS.1449 & 1697/DEL/2012 7 PURCHASED ON 21.05.2007, WELL BEFORE THE DATE OF SA LE OF CAPITAL ASSET. THE ASSESSEE EXPLAINED THAT HE HAD CONSTRUCTED A HO USE ON THE PLOT, WHICH WAS COMPLETED ON 29.04.2009, AND AS PER PROVI SIONS OF SECTION 54/54F, THE CAPITAL GAINS WERE NOT TAXABLE IF INVES TED IN CONSTRUCTION OF A NEW RESIDENTIAL HOUSE WITHIN A PERIOD OF ONE YEAR B EFORE OR THREE YEARS AFTER THE DATE OF TRANSFER. THE ASSESSING OFFICER H ELD THAT THE PERIOD OF 'ONE YEAR BEFORE' IN SECTION 54 APPLIED ONLY TO PU RCHASE OF A NEW PROPERTY, WHEREAS THE PERIOD OF 'THREE YEARS AFTER' APPLIED TO CONSTRUCTION OF A NEW HOUSE. HE HELD THAT THE ASSESSEES CLAIM W OULD AMOUNT PROVIDING HIM WITH A WINDOW OF FOUR YEARS FOR MEETI NG THE CONDITIONS OF SECTION 54, WHICH WAS NOT THE INTENTION OF THE PROV ISION. THE DEDUCTION CLAIMED UNDER SECTION 54 OF RS. 46,92,004/- WAS REJ ECTED AND THE LONG TERM CAPITAL GAINS RECOMPUTED AT RS. 1,30,80,481/-. 7.3. WE FIND THAT LD. FIRST APPELLATE AUTHORITY HA S ELABORATELY DISCUSSED THE ISSUE IN DISPUTE BY CONSIDERING THE SUBMISSION S OF THE LD. COUNSEL OF THE ASSESSEE AND ADJUDICATED THE SAME VIDE PARA N O. 3 TO 4.2 AT PAGES 3 TO 7 OF HIS IMPUGNED ORDER. FOR THE SAKE OF CONVEN IENCE, WE ARE REPRODUCING THE RELEVANT PORTION OF THE IMPUGNED OR DER I.E. PARA NO. 3 TO 4.2 AS UNDER:- (3). DURING THE APPELLATE PROCEEDINGS, THE COUNSEL S FOR THE APPELLANT FILED WRITTEN SUBMISSIONS, WHEREIN IT WAS EXPLAINED THAT THE FIRST LIST SUBMITTED OF TDS ON PROFESSIONA L FEES HAD NOT BEEN CORRECTLY COMPILED. IT WAS SUBMITTED THAT THE ITA NOS.1449 & 1697/DEL/2012 8 DISCREPANCY OF RS. 81,200/- HAD ARISEN ON ACCOUNT O F THE FOLLOWING ENTRIES:- S.NO. OLD LIST CORRECT LIST TDS DIFFERENCE 1 BELA MATHUR INTEGRAL DESIGN 2,50,000 2,55,000 26,675 5,000 2 JAG MOHAN 5,000 15,000 1,040 10,000 3 MOHD. ARIF (SALARY) ----- 43,200 400/- 43,200 4 SATISH SINGH 21,854 38,854 2,250 13,000 5 HVS DESIGN HOUSE 6,000 16,000 ----- 10,000 81,200/- (3.1) ON THE ISSUE OF LONG TERM CAPITAL GAINS, IT W AS SUBMITTED THAT THE RESIDENTIAL PROPERTY AT SUN CITY HEIGHTS, GURGAON, WAS SOLD ON 01.03.2008, AND THE INVESTMENT IN THE R ESIDENTIAL PLOT WAS MADE ON 21.05.2007, I.E. WITHIN THE PRESCR IBED PERIOD OF ONE YEAR BEFORE THE DATE OF SALE. IT WAS REITERATED THAT THE CONSTRUCTION OF THE HOUSE WAS COMPLETED BY 21.04.2009, WITHIN THE PERIOD OF TWO YEARS FROM THE DATE OF SALE. THE APPELLANT RELIED ON THE CBDT CIRCULAR NO. 667 DATED 18.10.1993, WHEREIN IT WAS CLARIFIED THAT FOR THE P URPOSES OF SECTIONS 54 AND 54F, THE COST OF A RESIDENTIAL HOUS E INCLUDED THE COST OF THE PLOT, BEING AN INTEGRAL PART OF THE COST OF THE HOUSE, WHETHER PURCHASED OR BUILT. THE APPELLANT FI LED A COPY OF THE RECEIPT ISSUED BY THE GREATER NOIDA INDUSTRI AL ITA NOS.1449 & 1697/DEL/2012 9 DEVELOPMENT AUTHORITY (GNIDA) DATED 21.04.2009, AND A CERTIFICATE FROM GNIDA DATED 05.05,2011 CLARIFYING THAT THE RECEIPT OF 'BUILDING PLAN AND DOCUMENTS FOR OCCUPAN CY CERTIFICATE' DATED 21.04,2009, COMPRISED THE COMPLE TION CERTIFICATE. (4) THE ABOVE SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED. VIDE ORDER SHEET ENTRY DATED 19.10.2011 , THE COUNSELS FOR THE APPELLANT WERE ASKED TO FURNISH FU RTHER SUPPORTING EVIDENCE OF CONSTRUCTION AND COMPLETION OF THE RESIDENTIAL HOUSE AT 70, CASSIA NODASA ESTATE, SECT OR CHI-3, NOIDA. THE APPELLANT SUBMITTED THE FOLLOWING DOCUMENTS:- (I) APPLICATION FOR SANCTION OF BUILDING PLAN S SUBMITTED ON 23.01.2009; (II) DETAILS OF PAYMENTS TO CONTRACTOR M/S. MA LIK & CONSTRUCTION BETWEEN 05.02.2009 AND 19.06.2009 OF RS. 2,07,134/-; (III) TEMPORARY POWER CONNECTION OBTAINED IN FE BRUARY, 2009; (IV) PAYMENT OF WATER CHARGES OF RS. 3,500/- TO GNIDA ON 16.04.2009; (V) PAYMENT TO CONTRACTOR M/S RAUS INFRAS LTD. OF R S. 4,17,086/- FOR PLUMBING WORK; ITA NOS.1449 & 1697/DEL/2012 10 (VI) PERMANENT ELECTRICITY CONNECTION OBTAINED IN MAY, 2010 WITH FIRST BILL RECEIVED FOR THE MONTH OF JUNE , 2010. (4.1) THE ABOVE DOCUMENTS ARE CONSIDERED TO BE ADEQ UATE EVIDENCE OF COMPLETION OF CONSTRUCTION OF THE HOUSE WITHIN T HE PERIOD OF TWO YEARS FROM THE DATE OF SALE, WHICH WORKS OUT TO MAR CH, 2010. HOWEVER, WHERE THE PURCHASE OF THE PLOT IS CONCERNE D, THE APPELLANT HAS RELIED ON THE POSSESSION CERTIFICATE ISSUED B Y GNIDA ON 21.5.2007, WHICH IS ADMITTEDLY WITHIN THE PERIOD OF ONE YEAR BEFORE THE DATE OF SALE OF THE CAPITAL ASSET (9.3.2008), B UT ON VERIFICATION, THE APPELLANT SUBMITTED THE FOLLOWING DATES OF PAYM ENTS FOR PURCHASE OF THE RESIDENTIAL PLOT AS UNDER:- S.NO. DD/CH. NO. DATE AMOUNT RE MARKS 1 DO NO. 264708 31.03.2006 1900000/- ANURADHA SINGH (PURCHASE OF OWNERSHIP) 2 DD NO. 488245 28.03.2006 136000/- BANK TRANSFER CHARGES TO G NOIDA 3 DD NO. 488247 28.03.2006 285000/- JANUARY 2006 INSTALLMENT 4 DD NO. 973306 21.04.2006 1000007- PURCHASE OF OWNERSHIP 5 DDNO. 489411 21.06.2006 260165/- JULY 2006 INSTALLMENT 6 DD NO. 007881 28.12.2006 260165/- JAN 2007 INSTALLMENT 7 DDNO. 154069 18.05.2007 34085G/- MISCELLANEOUS CHARGES FOR REGISTRATION 8 DDNO. 154755 29.06.2007 260165/- JUNE 2007 INSTALLMENT 9 DD NO. 569097 01.01.2008 2601 65/- JAN 2008 INSALLMENT 10 DD NO. 455955 17.06.2008 260 165/- JUNE 2008 INSTALLMENT 11 STAMP PAPERS 612300/- ITA NOS.1449 & 1697/DEL/2012 11 12 GNOIDA MISC. & BANK CHARGES 17023/- TOTAL EXPENSES TILL DATE OF RETURN FOR FINANCIAL YEAR 2007- 08 4692004/- '* '* THIS CLEARLY SHOWS THAT THE APPELLANT PURCHASED TH E ALLOTMENT ON 31.3.2006, AND MADE THE BULK OF PAYMENTS PRIOR T O THE PERIOD OF ONE YEAR BEFORE THE DATE OF SALE. OUT OF THE TOTAL CONSIDERATION OF RS. 46,92,004/- FOR PURCHASE OF THE PLOT, RS. 29,41 ,330/- WAS PAID BETWEEN 31.3.2006 AND 28.12.2006 AND RS. 17,50,674/ - WAS PAID AFTER 18.5.2007. IT CAN BE SEEN THAT REGISTRATIO N HAS TAKEN PLACE LATER THAN 17.6.2008. HENCE, THE APPELLANTS CLAIM, SO FAR AS THE PLOT IS CONCERNED, SPANS A PERIOD OF TWO YEARS BEFORE TH E DATE OF SALE. IT IS THE CONTENTION OF THE ASSESSING OFFICER THAT TH E PROPERTY SHOULD EITHER HAVE BEEN PURCHASED WITHIN THE PERIOD OF ONE YEAR BEFORE AND TWO YEARS AFTER THE DATE OF TRANSFER, OR BEEN C ONSTRUCTED WITHIN THE PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFE R. THE ASSESSING OFFICER HAS RELIED ON THE JUDGEMENT OF THE GUJARAT HIGH COURT IN THE CASE OF SMT. SHANTABEN P. GANDHI VS. CIT [1981] 129 ITR 218, WHEREIN IT WAS HELD THAT THE EXEMPTION UNDER SECTIO N 54 IS NOT AVAILABLE WHERE THE NEW CONSTRUCTION IS MADE BEFORE THE TRANSFER OF THE EXISTING HOUSE, THE APPELLANT ON THE OTHER HAND , HAS RELIED ON THE JUDGEMENT OF THE ALLAHABAD HIGH COURT IN THE CA SE OF CIT VS. H.K. KAPOOR [1998] 150 CTR 128, WHEREIN IT WAS HELD THAT EXEMPTION ON CAPITA' GAINS COULD NOT BE REFUSED SIM PLY ON THE ITA NOS.1449 & 1697/DEL/2012 12 GROUND THAT THE CONSTRUCTION HAD BEGUN BEFORE THE S ALE OF THE OLD HOUSE. RELIANCE WAS ALSO PLACED ON THE KARNATAKA HI GH COURT ORDER IN THE CASE OF CIT VS. J.R. SUBRAMANYA BHAT [1987] 165 ITR 561, WHEREIN THE COURT HELD THAT TO GET THE BENEFIT OF S ECTION 54,(THE ASSESSEE MUST HAVE CONSTRUCTED THE NEW HOUSE WITTER THE PRESCRIBED PERIOD FROM THE DATE OF SALE OF THE OLD HOUSE, BUT THE DATE O' COMMENCEMENT OF CONSTRUCTION WAS NOT MATERI AL. , (4.2) I HAVE ALSO TAKEN NOTE OF THE JUDGEMENT OF TH E JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SMT. BRINDA KUMAR I [2001] 114 TAXMAN 266, IN WHICH IT WAS HELD THAT IN THE CASE O F ALLOTMENT OF FLATS UNDER THE SELF FINANCING SCHEME OF THE DELHI DEVELOPMENT AUTHORITY, PAYMENT OF THE FIRST INSTALMENT OF THE P RICE OF THE FLAT WITHIN 2 YEARS OF SALE OF ORIGINAL PROPERTY WOULD E NTITLE THE ASSESSEE TO CLAIM EXEMPTION EVEN IF CONSTRUCTION OF THE FLAT WAS NOT COMPLETE IN TWO YEARS. THE DELHI HIGH COURT IN THE CASE OF B ALRAJ VS. CIT [2002] 123 TAXMAN 290, AND IN THE CASE OF CIT VS R. L SOOD [2000] 108 TAXMAN 227, HAS HELD THAT THERE IS NO REQUIREME NT THAT A NEW HOUSE MUST BE REGISTERED IN THE ASSESSEE'S NAME WIT HIN THE PRESCRIBED PERIOD, AND ONLY THE DATE OF AGREEMENT T O PURCHASE IS RELEVANT. THE LANGUAGE OF SECTION 54 COMPREHENDS TH AT THE ASSET TRANSFERRED SHOULD BE A RESIDENTIAL BUILDING, AND T HE ASSET INVESTED IN SHOULD ALSO BE A RESIDENTIAL BUILDING, AND THE I NVESTMENT SHOULD BE MADE WITHIN THE TIME SPECIFIED THEREIN. THE TIME SPECIFIED IN THIS CASE, WITHIN ONE YEAR BEFORE AND TWO YEARS AFTER, IS THE PERIOD ITA NOS.1449 & 1697/DEL/2012 13 BETWEEN 9.3.2007 AND 9.3.2010. THE INVESTMENT WHICH IS ELIGIBLE FOR DEDUCTION WOULD THEREFORE, BE RESTRICTED TO RS. 17,50,674/- ON ACCOUNT OF PLOT, AND RS. 8,12,464/- ON ACCOUNT OF C ONSTRUCTION. AFTER CAREFUL CONSIDERATION OF THE LETTER AND SPIRIT OF S ECTION 54, IT IS HELD THAT THE APPELLANT IS ENTITLED TO THE EXEMPTION UND ER SECTION 54 OF RS. 25,63,138. HENCE, THE APPELLANT PARTIALLY SUCCE EDS IN THIS GROUND OF APPEAL. 7.4 ON GOING THROUGH THE AFORESAID FINDING OF THE L D. CIT(A) ON THE ISSUE IN DISPUTE, WE ARE OF THE VIEW THAT CIT(A) HAS RESTRICTED THE ADDITION IN DISPUTE BY PLACING THE RELIANCE OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SMT. BRINDA KUMAR I (2001) 114 TAXMAN 266, WHEREIN IT WAS HELD THAT IN THE CASE OF ALLOT MENT OF FLATS UNDER THE SELF FINANCING SCHEME OF DELHI DEVELOPMENT AUTHORIT Y, PAYMENT OF FIRST INSTALMENT OF THE PRICE OF THE FLAT WITHIN 2 YEARS OF SALE OF ORIGINAL PROPERTY WOULD ENTITLE THE ASSESSEE TO CLAIM EXEMPT ION EVEN IF CONSTRUCTION OF THE FLAT WAS NOT COMPLETE IN TWO YE ARS. WE FURTHER FIND THAT THE LD. CIT(A) HAS RELIED UPON THE DECISIONS O F THE DELHI HIGH COURT IN THE CASE OF BALRAJ VS. CIT [2002] 123 TAXMAN 290 , AND IN THE CASE OF CIT VS R. L SOOD [2000] 108 TAXMAN 227, IN WHICH T HE HONBLE COURT HAS HELD THAT THERE IS NO REQUIREMENT THAT A NEW HO USE MUST BE REGISTERED IN THE ASSESSEE'S NAME WITHIN THE PRESCR IBED PERIOD, AND ONLY THE DATE OF AGREEMENT TO PURCHASE IS RELEVANT. THE LANGUAGE OF SECTION 54 COMPREHENDS THAT THE ASSET TRANSFERRED SHOULD BE A RESIDENTIAL BUILDING, AND THE ASSET INVESTED IT SHOULD ALSO BE A RESIDENT IAL BUILDING, AND THE ITA NOS.1449 & 1697/DEL/2012 14 INVESTMENT SHOULD BE MADE WITHIN THE TIME SPECIFIED THEREIN. THE TIME SPECIFIED IN THIS CASE, WITHIN ONE YEAR BEFORE AND TWO YEARS AFTER, IS THE PERIOD BETWEEN 9.3.2007 AND 9.3.2010. THE INVESTMEN T WHICH IS ELIGIBLE FOR DEDUCTION WOULD THEREFORE, BE RESTRICTED TO RS. 17,50,674/- ON ACCOUNT OF PLOT, AND RS. 8,12,464/- ON ACCOUNT OF CONSTRUCT ION. AFTER CAREFUL CONSIDERATION OF THE LETTER AND SPIRIT OF SECTION 5 4, IT WAS RIGHTLY HELD THAT THE ASSESSEE IS ENTITLED TO THE EXEMPTION UNDER SEC TION 54 OF RS. 25,63,138. HENCE, THE LD. CIT(A) GAVE THE PARTIAL R ELIEF ON THIS ISSUE ON THE RIGHT FOOTING. THEREFORE, WE DO NOT FIND ANY IN FIRMITY IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A) ON THE REST RICTION OF ADDITION IN DISPUTE, HENCE, WE UPHOLD THE FINDING OF THE LD. CI T(A) ON THIS ISSUE. AS A RESULT, THIS GROUND RAISED BY THE REVENUE AS WELL AS ASSESSEE STAND DISMISSED. 8. APROPOS GROUND NO. 2 RAISED IN REVENUE RELATING TO DELETION OF ADDITION OF RS. 1,06,200/- MADE BY THE AO U/S. 40(A )(IA) OF THE ACT. 8.1 ON THIS ISSUE, THE ASSESSING OFFICER OBSERVED T HAT ASSESSEE HAD CLAIMED DEDUCTION OF PROFESSIONAL FEES PAID OF RS. 7,09,054/-, BUT HAD FAILED TO DEDUCT TAX AT SOURCE FROM PROFESSIONAL FE ES PAID OF AN AMOUNT OF RS. 81,200/- FOR WHICH DETAILS OF RECIPIENTS WERE N OT PROVIDED, AND ON RS. 25,000/- PAID TO ONE MS. DIVYA SALUJA. THE ASSESSE E WAS ASKED TO EXPLAIN WHY DISALLOWANCE OF THESE AMOUNTS SHOULD NO T BE MADE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961. THE ASSESSEE SUBMITTED A FRESH LIST OF PROFESSIONAL FEES PAID OF A TOTAL AMO UNT OF RS. 6,40,854/- AND EXPLAINED THAT THE SALARY PAID TO MS. DIVYA SALUJA OF RS. 25,000/-, AND ITA NOS.1449 & 1697/DEL/2012 15 SALARY PAID TO SHRI MOHD. ARIF OF RS. 43,200/-, WER E WRONGLY INCLUDED IN PROFESSIONAL FEES. THE ASSESSING OFFICER CONSIDERED THE EXPLANATION FILED TO BE AN AFTERTHOUGHT AND NOT SUPPORTED BY EVIDENCE , AND HE ADDED THE AMOUNT OF RS. 1,06,200/- (81,200 + 25,000) TO THE T OTAL INCOME UNDER SECTION 40(A)(IA). 8.2. WE FIND THAT LD. FIRST APPELLATE AUTHORITY HA S ELABORATELY DISCUSSED THE ISSUE IN DISPUTE RAISED BY CONSIDERING THE SU BMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE AND ADJUDICATED THE SAME VIDE PARA NO. 5 AT PAGE 7 OF HIS IMPUGNED ORDER. FOR THE SAKE OF CONVE NIENCE, WE ARE REPRODUCING THE RELEVANT PORTION OF THE IMPUGNED OR DER I.E. PARA NO. 5 AS UNDER:- (5) ON THE ISSUE OF DISALLOWANCE UNDER SECTION 40( A)(IA), IT IS VERIFIED FROM THE DETAILS OF PROFESSIONAL FEES PAID BY THE APPELLANT AND FROM THE DETAILS OF TAX DEDUCTED AT S OURCE, THAT THE APPELLANT HAS DEDUCTED TAX IN ALL LIABLE CASES. THE APPELLANT HAD, HOWEVER, SUBMITTED AN INCORRECT LIST OF DETAILS OF TDS DURING THE ASSESSMENT PROCEEDINGS. THOUGH TH E APPELLANT RE-SUBMITTED THE DETAILS IN A FRESH LIST BEFORE THE ASSESSING OFFICER, HOWEVER, THE SAME WAS NOT ACCEPT ED AND TREATED AS AN AFTERTHOUGHT. IN MY OPINION, THE ASSE SSING OFFICER SHOULD HAVE VERIFIED THE PAYMENTS OF FEES A ND SALARY AS WELL AS THE TDS RETURN, BEFORE SUMMARILY REJECTI NG THE EXPLANATION. THE APPELLANT IS SEEN TO HAVE DEDUCTED TAX IN ALL CASES WHERE THE FEES FOR PROFESSIONAL SERVICES EXCE EDED RS. 20,000/-. IN THE CASE OF MS. DIVYA SALUJA, THE SALA RY PAID OF RS. 25,000/- WAS FAR BELOW THE TAXABLE LIMITS. IT I S HELD ACCORDINGLY THAT THERE WAS NO CASE FOR MAKING THE ITA NOS.1449 & 1697/DEL/2012 16 DISALLOWANCE U/S.40(A)(IA). THE ADDITION MADE ON TH IS ACCOUNT OF RS. 1,06,200/- IS DELETED. 8.3 ON GOING THROUGH THE AFORESAID FINDING OF THE L D. CIT(A) ON THE ISSUE IN DISPUTE, WE ARE OF THE VIEW THAT CIT(A) HAS DELETED THE ADDITION OF RS. 1,06,200/- MADE BY THE AO U/S. 40(A)(IA) OF THE ACT ON THE GROUND THAT ASSESSE HAS DEDUCTED TAX IN ALL CASES WHERE TH E FEES FOR PROFESSIONAL SERVICES EXCEEDED RS. 20,000/-. THEREFORE, WE DO NO T FIND ANY INFIRMITY IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A) ON THE ADDITION IN DISPUTE AND HENCE, WE UPHOLD THE FINDING OF THE LD . CIT(A) ON THIS ISSUE. THEREFORE, THIS GROUND RAISED BY THE REVENUE STAN DS DISMISSED. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE AS WELL AS REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/06/2016. SD/- SD/ [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 03/06/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES