Late nandkumar B. Phaltane, L/h. Anuradha N. Phalatane, Ahmednagar V. Income-tax Officer,

ITA 1577/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1608 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 03-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT DUA
• Assessee Lawyers: S N DOSHI
• Keywords: Principle of natural justice
• Section: 143(3); 54F

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE MS. SUSHMA CHOWLA, JM / ITA NO.1577/PN/2015 ! ' ' / ASSESSMENT YEAR : 2010-11 LATE NANDKUMAR B PHALTANE, L/H ANURADHA N. PHALATANE, MAULI, MODERN COLONY, GULMOHAR ROAD, SAVEDI, AHMEDNAGAR 414 003 . / APPELLANT PAN: ABEPP3525C VS. THE INCOME TAX OFFICER, WARD- 2, AHMEDNAGAR . RESPONDENT / APPELLANT BY : SHRI S. N. DOSHI / RESPONDENT BY : SHRI AMIT DUA DATE OF HEARING : 30.06.2016 / DATE OF PRONOUNCEMENT: 30.06.2016 # / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-2, PUNE, DATED 30.09.2015 RELATING TO ASSESSMENT YEAR 2010-1 1 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). ITA NO.1577/PN/2015 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD CIT(A) HAS ERRED IN REJECTING THE CLAIM OF EXEMPTION MADE U/S 54F HOLDING THAT APPELLANT HAD NOT DEPOSITED CAPITAL GAIN IN CAPITAL GAIN ACCO UNT SCHEME WITHIN DUE DATE STIPULATED U/S 139(1) DESPITE THE FACT THAT APPELLA NT HAS PURCHASED NEW FLAT WITHIN 2 YEARS FROM THE DATE OF TRANSFER AS EVIDENC ED BY AGREEMENT FOR SALE EXECUTED ON 16.07.2010. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD CIT(A) HAS FURTHER ERRED IN ALLOWING THE EXEMPTION ONLY TO THE EXTENT OF RS 6,70,000/- ACTUALLY PAID BEFORE THE DUE DATE OF FILING THE RET URN OF INCOME AND REJECTING THE CLAIM OF EXEMPTION FOR BALANCE OF CAPITAL GAIN OF R S 14,76,216/- AS ACCORDING TO HIM THE SAID AMOUNT IS NOT ACTUALLY PAID & DEPOSITE D IN THE CAPITAL GAIN DEPOSIT SCHEME OVERLOOKING THE FACT THAT THE APPELL ANT HAS ACTUALLY UTILIZED THE ENTIRE AMOUNT OF CAPITAL GAIN IN AGREEING TO PURCHA SE THE FLAT FOR RS 28,50,000/- AS PER THE REGISTERED SALE AGREEMENT DA TED 16.07.2010 AND THEREBY LEGALLY OWED THE BALANCE TO THE BUILDER THA T CONSTITUTES CONSTRUCTIVE PAYMENT OF THE PURCHASE CONSIDERATION OF NEW FLAT. THE ABOVE GROUNDS OF APPEAL MAY KINDLY BE ALLOWED T O BE ALTERED, AMENDED OR MODIFIED ETC IN THE INTEREST OR NATURAL JUSTICE. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS I N RESPECT OF THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT FOR NON-DEPO SIT OF THE UNUTILIZED AMOUNT IN THE CAPITAL GAINS ACCOUNT WITHIN THE DUE DATE ST IPULATED UNDER SECTION 139(1) OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.37,740/-. IN T HE YEAR UNDER CONSIDERATION, AN OLD ASSET WAS SOLD ON 18.07.2009 FOR RS.27,50,00 0/- AND THE ASSESSEE ENTERED INTO A SALE DEED TO PURCHASE A NEW ASSET ON 16.07.2010. THE TOTAL INVESTMENT IN PURCHASE OF THE NEW ASSET INCLUDING S TAMP DUTY AND REGISTRATION CHARGES WAS RS.30,03,600/-. THE ASSESSEE CLAIMED T HE ENTIRE LONG TERM CAPITAL GAIN ON SALE OF THE OLD ASSET AS ELIGIBLE F OR EXEMPTION UNDER SECTION 54F OF THE ACT. THE ASSESSING OFFICER, DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, NOTED THAT THE ENTIRE SALE CONSIDERATI ON WAS NOT PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME I.E. 31.07. 2010. THE ASSESSEE ONLY PAID A SUM OF RS.6,70,000/- TOWARDS COST OF NEW ASSET. THE ASSESSING OFFICER ITA NO.1577/PN/2015 3 FURTHER OBSERVED THAT SINCE THE BALANCE AMOUNT WAS NOT DEPOSITED IN THE CAPITAL GAINS SCHEME BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139(1) THE ASSESSEE WAS NOT ENTITLED THE CL AIM OF AFORESAID DEDUCTION UNDER SECTION 54F OF THE ACT. 5. THE CIT(A) UPHELD THE ORDER OF THE ASSESSING OFF ICER ON THE GROUND THAT THE ASSESSEE HAD NOT DEPOSITED BALANCE AMOUNT IN TH E CAPITAL GAINS ACCOUNT AND HENCE HAS NOT FULFILLED THE CONDITIONS PRESCRIB ED IN SUB-SECTION (4) OF SECTION 54F OF THE ACT. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT(A). 7. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE IN THIS REGARD POINTED OUT THAT WHERE THE ASSESSEE HAD EXECUTED TH E PURCHASE DEED ON 16.07.2010 AND WHERE THE TOTAL PURCHASE CONSIDERATI ON WAS RS.30,03,600/-, WHICH WAS EXECUTED BEFORE THE DUE DATE FOR FILING T HE RETURN OF INCOME UNDER SECTION 139(1) AND MERELY BECAUSE THE BALANCE AMOUN T WAS NOT DEPOSITED IN THE CAPITAL GAINS ACCOUNT, THEN THERE WAS NO MERIT IN DENYING THE DEDUCTION TO THE ASSESSEE UNDER SECTION 54F OF THE ACT. 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE, ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF THE AUTHORIT IES BELOW. 9. ON THE PERUSAL OF RECORD AND AFTER CONSIDERING T HE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS APPARENT THAT THE ASSESSEE IN THE PRESENT CASE HAD SOLD AN OLD ASSET ON 18.07.2009 FOR RS.27,50,00 0/-. IN THE STATEMENT OF FACTS FILED BEFORE THE CIT(A), IT HAS BEEN POINTED OUT THAT THE ASSESSEE WAS ITA NO.1577/PN/2015 4 SUFFERING FROM RIGHT SIDE PARALYSIS SINCE JANUARY, 2008. THE ASSESSEE FURTHER ENTERED INTO A REGISTERED PURCHASE DEED FOR ACQUISI TION OF RESIDENTIAL FLATS FOR TOTAL CONSIDERATION OF RS.30,03,600/-. THE SAID RE GISTERED SALE DEED WAS EXECUTED ON 16.07.2010, COPY OF WHICH IS PLACED AT PAGES 5 TO 25 OF THE PAPER BOOK. THE INTENTION OF THE ASSESSEE TO INVEST THE SAID AMOUNT IN THE PURCHASE OF THE PROPERTY TO THE EXTENT OF RS.30,03,600/- WAS EXERCISED BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME UNDER SECTION 1 39(1) OF THE ACT IN THE CASE OF THE ASSESSEE. UNDOUBTEDLY, THE ASSESSEE UP TO THE DUE DATE OF FILING THE RETURN OF INCOME HAD PAID ONLY RS.6,70,000/- I.E. RS.1,00, 000/- ON 11.03.2010 AND RS.5,70,000/- ON 29.03.2010, BUT THE BALANCE AMOUNT WAS THE LIABILITY OF THE ASSESSEE TO PAY, SINCE IT HAD ALREADY EXECUTED IN T HE PURCHASE DEED IN THIS REGARD. MERELY BECAUSE THE BALANCE AMOUNTS WERE NO T DEPOSITED OR NOT PAID TO THE BUILDER DOES NOT DISENTITLE THE ASSESSEE TO CLA IM THE SAME AS A DEDUCTION UNDER SECTION 54F OF THE ACT WHERE THE LIABILITY TO PAY ARISES BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME UNDER SECTION 1 39(1) OF THE ACT. THE REGISTERED DOCUMENTS HAVING BEEN EXECUTED ON 16.07. 2010 AGAINST WHICH THE STAMP DUTY WAS ALSO PAID BY THE ASSESSEE, AN OBLIGA TION WAS CAST UPON THE ASSESSEE TO PAY THE BALANCE AMOUNT AS PER TERMS AND CONDITIONS OF THE AGREEMENT. THE PERUSAL OF THE SAID AGREEMENT REFLE CTS THAT RS.5,70,000/- WAS TO BE PAID ON EXECUTION OF THE PURCHASE DEED AND TH E BALANCE AMOUNT TO BE PAID AS WHEN THE CONSTRUCTION WAS COMPLETED BY THE BUILDER. IN THE TOTALITY OF THE ABOVE FACTS AND CIRCUMSTANCES, I HOLD THAT WHER E THE ASSESSEE HAS EXERCISED THE OPTION OF PURCHASING THE NEW ASSET BY WAY OF A REGISTERED DOCUMENT WHICH PUTS AN OBLIGATION UPON THE ASSESSEE TO PAY THE TOTAL AMOUNT WITHIN THE TIME FRAME AS SETTLED BETWEEN THE PARTIE S AND MERELY BECAUSE THE TOTAL AMOUNT WAS NOT PAID BEFORE THE DUE DATE OF FI LING THE RETURN OF INCOME DOES NOT DISENTITLE THE ASSESSEE TO THE AFORESAID C LAIM ON THE GROUND THAT THE ITA NO.1577/PN/2015 5 BALANCE AMOUNT WAS NOT DEPOSITED IN CAPITAL GAINS A CCOUNT BEFORE THE DUE DATE OF FILING RETURN OF INCOME UNDER SECTION 139(1 ) OF THE ACT. ACCORDINGLY, THERE IS NO MERIT IN THE ORDERS OF THE AUTHORITIES BELOW AND HENCE I DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSE E UNDER SECTION 54F OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE, THUS ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE, 2016. SD/- (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE, 2016 . ! #$%&'()(& / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; ' ' # () THE CIT(A)-2, PUNE; ' ' # THE CIT-2, PUNE &'( ))*+, ' *+ , , - . // / DR SMC, ITAT, PUNE; (01 2 / GUARD FILE. #! / BY ORDER & ) // TRUE COPY // 345 )! *6 / SR. PRIVATE SECRETARY ' *+ , ITAT, PUNE