ITO, Ghaziabad V. St. Joseph Capuchin Service Society, Ghaziabad

ITA 1452/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5808 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 12-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K TEWARI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Charitable institution
• Section: 50C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI G BENCH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA ACCOUNTANT MEMBER ITA NO. 1 452 /DEL/2015 [ASSESSMENT YEAR: 20 11 - 12 ] THE I .T . O VS. ST. JOSEPH CAPUCHIN SERVICE SOCIETY WARD EXEMPTION SECTOR 3, RAJINDER NAGAR NEW DELHI SAHIBABAD , GHAZIABAD PAN : AA ETS 1341 J [APPELLANT] [RESPONDENT] DATE OF HEARING : 26 . 0 6 .201 8 DATE OF PRONOUNCEMENT : 27 .0 6 .2018 ASSESSEE BY : NONE REVENUE BY : S HRI S.K. TEWARI SR DR ORDER PER N.K. BILLAIYA , ACCOUNTANT MEMBER, T HIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , GHAZIABAD DATED 25 . 1 2 .201 4 PERTAINING TO ASSESSMENT YEAR 20 1 1 - 12 . 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS. 97.18 LAKHS MADE BY THE AO ON THE GROUND THAT THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 11(1A) OF THE ACT . 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HEARD THE LD. DR AT LENGTH WHO RELIED UPON THE FINDINGS OF THE AO. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEE DINGS, THE AO NOTICED THAT THE ASSESSEE HAS SOLD FOUR PLOTS OF LAND FOR RS. 1.11 CRORES. THE AO FOUND THAT NO CAPITAL GAINS ON SALE OF PLOTS WAS SHOWN. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. IN ITS REPLY, THE ASSESSEE STATED THAT U/S 11(1A) OF THE ACT , CAPITAL GAINS ARISING ON TRANSFER OF CAPITAL ASSET IS EXEMPT IF NET CONSIDERATION IS USED IN ACQUIRING ANY CAPITAL ASSET AND SAME IS CONSIDERED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES. 5. THE AO WAS OF THE OPINION THAT THE ASSESSEE HAS NOT FULFILLED CONDITIONS FOR EXEMPTION WHICH HA VE BEEN LAID DOWN IN SECTION 11( 1A) OF THE ACT. THE AO DISALLOWED THE CLAIM OF EXEMPTION ON THE GROUND 3 THAT NO EVIDENCE WAS FURNISHED FOR THE APPLICATION OF NET SALE PROCEEDS TOWARDS ACQUISITION OF OTHER CAPITAL ASSETS. 6. WHEN THE MATTER WAS AGITATED BEFORE THE CIT(A), IT WAS POINTED OUT THAT THE ASSESSEE HAD FURNISHED THE DETAILS OF INVESTMENT IN NEW ASSET AND THE AO HAS ERRONEOUSLY STATED THAT NO DETAILS HAVE BEEN FURNISHED BY THE ASSESSEE. THE CIT(A) CALLED FOR REMAND REPORT AND AFTER CONSIDERING THE REMAND REPORT, THE CIT(A) HELD AS UNDER: HAVING CONSIDERED THE FACTS OF THE CASE SUBMISSION OF THE APPELLANT AND ASSESSMENT ORDER, THE APPEAL SI DECIDED AS UNDER: I FIND THAT THE SOLE REASON OF MAKING THE ADDITION BY AO IS THAT THE SOCIETY HAS NOT FULFILLED THE CONDITIONS FOR EXEMPTION WHICH HAVE BEEN LAID DOWN IN SECTION 11(1 A) OF I.T. ACT, 1961. THE ASSESSING O FFICER IN THE ASSESSMENT ORDER H AS HELD THAT THE SOCIETY HAS DESPITE SEVERAL OPPORTUNITIES BEIN G PROVIDED, NOT BEEN ABLE TO SHOW AS TO HOW THE NET CONSIDERATION DERIVED FROM SALE OF THE CAPITAL A SSETS HAS BEEN UTILIZED IN ACQUIRING ANY OTHER CAPITAL ASSE TS WHICH HAS TO BE HELD UNDER THE TRUST. THE APPLICATION OF THE SALE PROCEEDS HAD TO NECESSARILY APPLIED FOR ACQUISITION OF ANOTHER CAPITAL ASSETS AS PER THE CONDITION OF SECTION 11(1 A). THE AR NOWHERE IN THE LENGTHY EXPLANATION OFFERED ABOVE HAS DISCUSSED OR FURNISHED ANY EVIDENCE OF THE APPLICATION OF THE NET SALE P ROCEEDS TOWARDS THE ACQUISITION OF THE OTHER CAPITAL ASSETS. THEREFORE, CONSIDERING THE EXISTING PROVISIONS CONTAINED IN SECTION 11(1 A) OF THE ACT THE PROFIT ARISING ON SALE OF PLOTS AS COMPUTED IN THE ANNEXURE FORMING PART OF ASSESSMENT ORDER IS ADDED TO THE INCOME OF THE ASSESSEE SOCIETY UNDER THE HEAD CAPITAL GAIN'. FURTHER THE SALE CONSIDERATION IS TAKEN AT RS. 12680000/ - AS ADOPTED OR 4 ASSESSED BY THE STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY AS PER PROVISIONS OF SECTION 50C OF L.T. AC T, 1961. 7.2. IN THE REMAND REPORT, IT HAS BEEN SUBMITTED BY THE ASSESSING OFFICER THAT DETAILS OF INVESTMENT IN NEW ASSETS WERE FILED AND ARE ON RECORD. I FIND THAT THE INVESTMENTS HAVE BEEN MADE OUT OF SALE PROCEEDS OF CAPITAL ASSET. THE ASSETS SOLD, CONSIDERATIONS RECEIVED AND INVESTMENT MADE AS PER FOLLOWING DETAILS: - ASSETS SOLD S - NO. PARTICULARS PURCHASER DATE MODE AMOUNT (RS.) AMOUNT OF 50C AS TAKEN BY ASSESSING OFFICER (RS.) AMOUNT (RS.) (INCLUDING AMOUNT OF 50C AS TAKEN BY ASSESSING OFFICER) PART OF PLOT NO. 9/312, BLOCK NO.9, SECTOR - 03, 17.04.2010 CHEQUE 765,000.0 0 IAND SOLD 17.04.2010 CHEQUE 700,000.0 0 THA, RAJINDER NAGAR, SAHIBABAD RAKESH JAIN . 08.03.2010 CHEQUE 200,000.0 0 (TRANSFER ON 23/04/2010) 08.03.2010 CASH 3,600.00 23.04.2010 1,400.00 TOTAL 1,668,600 .00 1,400.00 1,670,000.00 P ARTICULARS PURCHASER DATE MODE AMOUNT (RS.) AMOUNT OF 50C AS TAKEN BY ASSESSING OFFICER (RS.) AMOUNT (RS.) (INCLUDING AMOUNT OF 50C AS TAKEN BY ASSESSING OFFICER) PART OF PLOT NO. 9/312, 18.04.2010 CHEQUE 1,644,280. 00 J BLOCK NO.9, SECTOR - 03, ] THA. RAJINDER NAGAR, RAHUL JA IN 07.03.2010 CHEQUE 20 0000 5 AGAINST THE RECEIPTS OF CONSIDERATION AS ABOVE OF RS. 1,11,53,760/ - , THE INVEST M ENTS WERE OF RS. 16033215/ - (AS PER PARA 4 OF THIS ORDER) (TRANSFER ON 23/04/2010) 23.04.2010 4,840.00 TOTAL 1,865,160. 00 4,840.00 1,870,000.00 AMOUNT OF 50C AMOUNT (RS.) SL AS TAKEN BY (INCLUDING AMOUNT OF ASSESSING OFFICER 50C AS TAKEN BY NO. PARTICULARS PURCHASER DATE MODE AMOUNT (RS.) (RS.) ASSESSING OFFICER) 31.05.2010 CASH 20,000.00 31.05.2010 CHEQUE 500,000.0 0 07.06.2010 CHEQUE 500,000.0 0 07.06.2010 CHEQUE 1,000,000. 00 PART OF PLOT KHASRA NO. 597/1, KARKAR MADAN, LONI MACFLOW 07.06.2010 CHEQUE 1,000/000 .00 3 LAND SOLD ENGINEERIN G PRIVATE 07.06.2010 CHEQUE 500,000.0 0 (TRANSFER ON 15/06/2010) LIMITED 07.06.2010 CHEQUE 500,000.0 0 07.06.2010 CHEQUE 500,000.0 0 07.06.2010 CHEQUE 500,000.0 0 07.06.2010 CHEQUE 500,000.0 0 07.06.2010 CHEQUE 500,000.0 0 TOTAL 6020,000. 00 0.00 6,020,000.00 S. NO. PARTICULARS PURCHASER DATE MODE AMOUNT (RS.) AMOUNT OF 50C AS TAKEN BY ASSESSING OFFICER (RS.) AMOUNT (RS.) (INCLUDING AMOUNT OF 50C AS TAKEN BY ASSESSING OFFICER) 4 LAND PART OF PLOT KHASRA NO. 597/1, KARKAR MADAN, LONI KIRANPAL SINGH 14.07.2010 CHEQUE 1,600,000 .00 SOLD 29.07.2010 1520000 TOTAL 1,600,000 .00 1,520,000.00 3,120,000.00 PARTICULARS AMOUNT (RS.) AMOUNT OF 50C AS TAKEN BY ASSESSING OFFICER (RS.) AMOUNT (RS.) (INCLUDING AMOUNT OF 50C AS TAKEN BY ASSESSING OFFICER) TOTAL (1+2+3+4) 11,153,760 .00 1,526,240.00 12,680,000.00 6 7 . 3 IN MY CONSIDERED OPINION, DENIAL OF THE DEDUCTION U/S 11(1 A) ON THE GROUND CITED BY THE AO IS FOUND TO BE FACTUALLY INCORRECT. IT I S ALSO NOTEWORTHY THAT NEITHER THE ASSESSEE HAS BEEN HELD TO BE NON CHARITABLE ENTITY NOR THE NEW ASSETS HAVE BEEN HELD TO BE PURCHASED FOR PURPOSES OTHER THAN CHARITABLE NOR IT HAS BEEN HELD THAT THE NEW ASSETS ARE NOT QUALIFIED FOR SUCH DEDUCTION. THEREFORE, AS SUCH THE APPELLANT IS ENTITLED TO DEDUCTION U/S 11(1 A) OF THE ACT. THE OTHER RELATED ISSUE IS ADOPTING THE SALE CONS IDERATION AS PER SECTION 50C. I FIND ON FACTS OF THE CASE THAT INVESTMENT IN NEW ASSETS IS EVEN MORE THAN THE CONSIDERATION AS PER SECTION 50C. THEREFORE, EVEN IF SALE CONSIDERATION IS ADOPTED AS PER SECTION 50C NO ADDITION WOULD ARISE. THEREFORE, WHETHER CONSIDERATION SHOULD BE AS PER VALUE ADOPTED AS PER SECTION 50C IS A MERE ACADE MIC EXERCISE WHICH HAS NO RELEVANCE IN FACTS OF THE PRESENT CASE AND HENCE IS NOT BEING VENTURED INTO. IN VIE DISCUSSION, THE ADDITION IS D ELETED. GROUND OF APPEAL NO. 1 IS THER EFORE ALLOWED. 7. BEFORE US, THE LD. DR COULD NOT POINT OUT ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE CIT(A). ON THE OTHER HAND, WE FIND THAT THE CIT(A) AFTER CONSIDERING THE REMAND REPORT FROM THE AO HAS GIVEN A CATEGORICAL FINDING ON THE FACT THAT THE ASSESSEE HAS INVESTED IN NEW ASSETS AND, THEREFORE, IS ELIGIBLE FOR DEDUCTION U/S 11(1A) OF THE ACT. WE DECLINE TO INTERFERE . 7 8 . IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 1452 /DEL/2015 IS DISMISSED. THE ORDER IS PRON OUNCED IN THE OPEN COURT ON 27 .0 6 .2018. S D / - S D / - [ H.S. SIDHU ] [ N.K. BILLAIYA ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 T H JUNE , 2018 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 8 DATE OF DICTATION 26.06.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27.06.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER