ITO 1(2), Gwalior V. Smt Reena Agrawal, Gwalior

ITA 161/AGR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2106 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 18-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MANUJ SHARMA
• Keywords: Unexplained cash credit; Capital asset
• Section: 54F; 12A; 250; 201; 68; 54; 139

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO. 161/AGR/2017 ASSESSMENT YEAR: 2012-13 INCOME - TAX OFFICER, 1(2), GWALIOR. (APPELLANT) VS. SMT. REENA AGARWAL, NEAR HARI NIRMAL TALKIES, NAI SADAD, GWALIOR. PAN: AELPA2217G) (RESPONDENT) APPELLANT BY SHRI WASEEM ARSHAD, SR. DR RESPONDENT BY SHRI RAJENDRA SHARMA & SHRI MANUJ SHARMA, ADVOCATES ORDER PER LALIET KUMAR, J.M.: THIS APPEAL IS BEING FILED BY THE ASSESSEE AGAINS T THE ORDER PASSED BY THE LD. CIT(A) DATED 20.11.2015 FOR THE ASSESSMENT YEAR 201 0-11 ON THE FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN ALLOWING A RELIEF OF RS .99,95,501/- ON ACCOUNT OF CLAIM UNDER SECTION 54F OF THE IT ACT, IN SPITE OF THE FAC TS ON RECORDS THAT THE ASSESSEE HAS FAILED TO PRODUCE PROOF OF CONSTRUCTION ON LAND , DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE A.O. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN DELETING THE ADDITIONS OF RS.6,45,000/- WHICH HAS BEEN ADDED BY THE A.O. ON ACCOUNT OF UNEXPLAINED CREDITS IN THE BANK ACCOUNT, IN SPITE OF THE FACTS ON RECORDS THAT THE ASSESSEE HAS FAILE D TO FURNISH THE DETAILS OF DEPOSITS IN THE BANK ACCOUNT, DURING THE COURSE OF ASSESSMENT PROCEEDING BEFORE THE A.O. DATE OF HEARING 04.07.2019 DATE OF PRONOUNCEMENT 18 .07.2019 ITA NO. 161/AGR/2017 2 2. THE BRIEF FACTS ARE THAT THE ASSESSEE DURING THE ASSESSMENT YEAR 2012-13 HAD DECLARED AN INCOME OF RS.4,64,940/- . IN THE RETURN OF INCOME, THE ASSESSEE HAD CLAIMED CAPITAL GAINS OF RS.99,95,501/- U/S. 54F AR ISING ON ACCOUNT OF SALE OF 20238 AND 4762 EQUITY SHARES OF RS.10/- EACH OF M/S. R.P. EDIBLE OILS LTD. TO BHIMTALNIRMAN (PVT) LTD. AND INVOX MANAGEMENT CONSU LTANCY PVT. LTD. RESPECTIVELY @ 420/- EACH FOR RS.84,99,960/- AND RS .20,00,040/- ON 29.03.2012 AND 17.02.2012 RESPECTIVELY. IT IS THE CASE OF THE ASSESSEE BEFORE US THAT THE ASSESSEE HAD CLAIMED EXEMPTION FROM CAPITAL GAINS OF RS.99,9 5,501/- U/S. 54F. AS PER ASSESSEE ENTIRE SALE CONSIDERATION OF RS.105.00 LAC S WERE INVESTED IN PURCHASE OF RESIDENTIAL PLOT NO. 15 ALONG WITH FRONT WALL AND E NTRY GATE AT EMERLAND GARDEN, GUTAIYA SCHEME NO. VII VIDE REGISTERED PURCHASE DEE D DATED 30.03.2012. THE SAID PLOT WAS PURCHASED BY THE ASSESSEE ALONG WITH HUSBA ND FOR A TOTAL CONSIDERATION OF RS.2,89,39,690/-. THE ASSESSEE HAD ALSO POINTED OUT A CONTRACTOR FOR THE PURPOSE OF CONSTRUCTION OF GROUND FLOOR ON TURNKEY BASIS FOR C OST OF RS.23.20 LACS. IT WAS ALSO THE CASE OF THE ASSESSEE THAT THE CONSTRUCTION OF T HE RESIDENTIAL PLOT WAS COMMENCED IN THE MONTH OF JANUARY, 2014. THE ASSESSING OFFICE R NOTED IN PARAGRAPH NO. 2.4 THAT THE ASSESSEE HAS NOT INVESTED THE LONG-TERM CAPITAL GAINS ARISING ON ACCOUNT OF SALE OF SHARES IN PURCHASE OF RESIDENTIAL HOUSE AND THER EFORE, THE BENEFIT AS SOUGHT BY THE ASSESSEE U/S. 54 WAS DENIED TO THE ASSESSEE BY THE ASSESSING OFFICER. FEELING ITA NO. 161/AGR/2017 3 AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER AND THE COMMISSIONER IN PARA 5.1.2 AND 5.1.3 HAD HELD AS UNDER : 5.1.2. IN THIS REGARD, THE SUBMISSION PUT FORTH ON BEHALF OF THE APPELLANT AS UNDER: ASSESSEE AFTER PURCHASE OF PURCHASE OF SAID RESIDEN TIAL PLOT COMMENCED CONSTRUCTION OF RESIDENTIAL HOUSE PROPERTY IN JANUA RY, 2014. A CONTRACTOR WAS APPOINTED WITH WHOM AN AGREEMENT WAS ENTERED INTO F OR CONSTRUCTION OF GROUND FLOOR ON TURNKEY BASIS AT A COST OF RS. 23.40 LACS. THE CONSTRUCTION ACTIVITY ON THE RESIDENTIAL PLOT WAS COMMENCED IN THE MONTH OF JANU ARY, 2014 AND WAS UNDER PROGRESS ON THE DATE OF FINALIZATION OF THE ASSESSM ENT PROCEEDINGS. THE ASSESSEE HAS BEEN PAID A SUM OF RS. 14.40 LACS ON THIS COUNT TO THE CONTRACTOR. COMPLETE DETAILS IN THIS REGARD, SUCH AS, COPY OF AGREEMENT WITH THE CO NTRACTOR, MAP OF THE HOUSE, PROOF OF PAYMENTS MADE TO CONTRACTOR ETC. WERE FURNISHED BEFORE THE LEARNED AO IN THE COURSE OF ASSESSMENT PROCEEDINGS. CIRCULAR NO.667 DATED 18.10.1993 ISSUED BY THE CBDT (COPY ENCLOSED) ALSO INDICATES IN CASES WHERE THE RESIDENTIAL HOUSE IS C ONSTRUCTED WITH IN THE SPECIFIED PERIOD, THE COST OF SUCH RESIDENTIAL HOUSE CAN BE T AKEN TO INCLUDE THE COST OF PLOT ALSO. IN SUPPORT OF EXEMPTION OF LONG TERM CAPITAL GAINS OF RS. 9995501/- U/S 54 F, IT WAS SUBMITTED THAT INVESTMENT IN LAND WHICH IS AN INTEG RAL AND VITAL PART OF CONSTRUCTION OF A RESIDENTIAL HOUSE QUALIFIES FOR EXEMPTION U/S. 54F AND RELIANCE ON THE FOLLOWING JUDGMENTS INCLUDING THE JUDGMENT OF HON'BLE JURISDI CTIONAL M.P. HIGH COURT WAS PLACED : A. SMT. SHASHI VERMA V. CIT (1997) 224 ITR 106 (MP ) B. CIT V. SARDARMAL KOTHARI AND ANOTHER [2008] 302I TR 286 (MAD) C. MRS. SEETHA SUBRARNANIAM V. ACIT 56TTJ (MAD) 41 7 D. SMT. RAJNEET SANDHU V. DY. CIT [2010] 133TTJ (CH D.) (UO) 64 E. SMT. V.A. THARABAI V. DCIT (2012) 50 SOT 537 F. CIT V. SRI, SAMBANDAMUDAYKUMAR INCOME TAX APPEA L NO. 175 OF 2012 (KARNATAKA HIGH HIGH COURT) G. SMT. USHA VAID V. ITO [2012] 53 SOT 385 (AMRITS AR) H. NARASIMHA RAJU RUDRA RAJU V. ASSISTANT COMMISSIO NER OF INCOME TAX, CIRCLE-8 (1) [2013] 35 TAXMANN.COM 90 (HYDERABAD -TRIB.) COPIES OF ABOVE JUDGMENTS WERE ALSO FILED BEFORE TH E AO. THE AO WITHOUT CONSIDERING ASSESSEE'S CONTENTIONS AND COMPLETELY IGNORING THE RATIO-DECIDENDI OF THE ABOVE JUDGMENTS INCLUDING THE BINDING DECISION OF THE JURISDICTIONA L HON'BLE M.P. HIGH COURT, WITHOUT A SPEAKING ORDER DENIED EXEMPTION CLAIMED U/S 54 F OF THE INCOME TAX ACT, 1961. SINCE THE ENTIRE SALE PROCEED OF SALE OF SHARES HAS BEEN INVESTED DURING THE TIME FRAME OF SECTION 54 F AND THE HOUSE IS UNDER CONSTRUCTION YO UR HONOUR ARE REQUESTED TO KINDLY ALLOW THE EXEMPTION U/S 54 F AS CLAIMED IN THE RETURN OF INCOME OF RS. 9995501/-. ITA NO. 161/AGR/2017 4 GROUND NO. 2 : THAT THE AO IS NOT JUSTIFIED IN NOT CONSIDERING THE WRITTEN SUBMISSION DATED 19.03.2015 IN TOTO WHICH IS BAD IN LAW. SUBMISSION ON THE GROUND NO. 2 : THE WRITTEN SUBMISSION DATED 19.03.2015 FILED BEFO RE THE AO ENCLOSING COMPLETE AND COGENT REPLY ON ALL THE QUERY/S IS NOT AT ALL CONSI DERED BY THE AO, WHICH IS BAD IN LAW AND ON THE FACTS. THE COPY OF THE SAME IS ENCLOSED HERE WITH FROM PAGE NO. 13 TO 17 TO THIS WRITTEN SUBMISSION. YOUR HONOUR ARE REQUESTED TO KI NDLY CONSIDER THAT SAME QUASH THE ADDITIONS MADE IN THE ASSESSMENT ORDER.' 5.1.3. DECISION : I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , THE FINDING OF THE ASSESSING OFFICER AND ALSO THE WRITTEN SUBMISSIONS PUT FORTH ON BEHALF OF THE APPELLANT. THE CASE OF THE ASSESSING OFFICER IS THAT SINCE THE ENT IRE SALE PROCEEDS OF SHARE OF M/S R.P. EDIBLE OILS PVT. LTD HAVE BEEN INVESTED ONLY IN PUR CHASE OF PLOT OF LAND, THE APPELLANT IS NOT ENTITLED FOR DEDUCTION UNDER SEC. 54F OF THE ACT. O N THE OTHER HAND, THE CLAIM OF THE APPELLANT IS THAT APART FROM PURCHASE OF LAND, THE APPELLANT HAS ALSO MADE INVESTMENT OF RS.14.40 LAKHS IN CONSTRUCTION OF RESIDENTIAL HOUSE WITHIN THE SPECIFIED PERIOD. THE A/R OF THE APPELLANT PLACED RELIANCE ON A PLETHORA JUDGMEN TS TO SUPPORT THE ARGUMENT THAT INVESTMENT IN LAND WHICH IS AN INTEGRAL AND VITAL P ART OF CONSTRUCTION OF A RESIDENTIAL HOUSE QUALIFIES FOR EXEMPTION U/ S 54 F OF THE ACT. IT IS REITERATED THAT SINCE THE ENTIRE SALE PROCEED OF SALE OF SHARES HAS BEEN INVESTED DURING THE TIME FRAME OF SECTION 54 F AND THE HOUSE IS UNDER CONSTRUCTION, THE EXEMPTION U/S. 54F BE ALLOW ED AS CLAIMED IN THE RETURN OF INCOME OF RS.99,95,501/-. 3. FEELING AGGRIEVED BY THE DECISION GIVEN BY THE L D. CIT(A), THE REVENUE IS IN APPEAL ON GROUND NO. 1 MENTIONED HEREINABOVE. 4. IT WAS THE CASE OF THE LD. DR DR THAT THE BENEFI T OF SECTION 54F CAN BE GIVEN TO ONLY SUCH AN ASSESSEE WHO HAD INVESTED THE LONG-TER M CAPITAL GAIN IN CONSTRUCTION OF A HOUSE. IT WAS SUBMITTED BY THE LD. DR THAT NO EVI DENCE OF CONSTRUCTION OF HOUSE WAS GIVEN BY THE AR/ASSESSEE BEFORE THE LOWER AUTHO RITIES AND THEREFORE, THE LOWER AUTHORITIES HAD MENTIONED IN PARA 2.4 CATEGORICALLY THAT THE ASSESSEE HAD FAILED TO BRING ON RECORD DOCUMENTS/EVIDENCES TO SHOW COMMENC EMENT OF CONSTRUCTION OR ITA NO. 161/AGR/2017 5 RAISING THE CONSTRUCTION AFTER PURCHASING THE PLOT WITHIN THE STATUTORY PERIOD GRANTED U/S. 54F. IN THE LIGHT OF THE ABOVE, IT WAS SUBMITTED THAT THE APPEAL OF THE REVENUE IS REQUIRED TO BE ALLOWED. 5. PER CONTRA, THE LD.AR HAD SUBMITTED THAT BEFORE THE LD. CIT(A), THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAD CONSTRUCTED THE RES IDENTIAL HOUSE WITHIN THE PERIOD OF THREE YEARS AND IN SUPPORT OF THAT THE ASSESSEE HAD FILED CONSTRUCTION AGREEMENT ENTERED BETWEEN THE ASSESSEE AND THE CONTRACTOR. IT WAS ALSO THE CASE OF THE ASSESSEE HAD EARNED RS.14,40,000/-. IT WAS ALSO THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAD BROUGHT ON RECORD THE PLAN FOR CONSTRU CTION BEFORE THE LOWER AUTHORITIES. OUR ATTENTION WAS DRAWN TO PAGE 18 OF THE PAPER BOOK, WHERE THE NAME OF THE ARCHITECT AND THE SIGNATURE OF THE ASSESSEE ARE APPEARING. THE LD. AR HAD SUBMITTED THAT THE LD. CIT(A) WAS SATISFIED WITH TH E COMMENCEMENT OF CONSTRUCTION AND THEREAFTER HAS GRANTED RELIEF TO THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES AND PERUSED THE RECORD. SECTION 54F PROVIDES AS UNDER : CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. 54F. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), W HERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREA FTER IN THIS SECTION REFERRED TO AS THE ORIGINAL AS SET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR B EFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERI OD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, ONE ITA NO. 161/AGR/2017 6 RESIDENTIAL HOUSE IN INDIA (HEREAFTER IN THIS SECTI ON REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROV ISIONS OF THIS SECTION, THAT IS TO SAY, ( A ) IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET , THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; ( B ) IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF T HE CAPITAL GAIN THE SAME PROPORTION AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER SECTION 45 : PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL A PPLY WHERE ( A ) THE ASSESSEE, ( I ) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR ( II ) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE N EW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR ( III ) CONSTRUCTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; AND ( B ) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THA N THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEABLE UN DER THE HEAD 'INCOME FROM HOUSE PROPERTY'. EXPLANATION. FOR THE PURPOSES OF THIS SECTION, 'NET CONSIDERATION', IN RELATION TO THE TRANSFER OF A CAPITAL ASSET, MEANS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER OF THE CAPITAL ASSET AS REDUCED BY ANY EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONN ECTION WITH SUCH TRANSFER. (2) WHERE THE ASSESSEE PURCHASES, WITHIN THE PERIOD OF TWO YEARS AFTER THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET, OR CONSTRUCTS, WITHIN THE PERIOD OF THREE YEARS AFTER SUCH DATE, ANY RESIDENTIAL HOUSE , THE INCOME FROM WHICH IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY', OTHER THAN THE NEW ASSET, THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDE R SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROV IDED IN CLAUSE ( A ), OR, AS THE CASE MAY BE, CLAUSE ( B ), OF SUB-SECTION (1), SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOU S YEAR IN WHICH SUCH RESIDENTIAL HOUSE IS PURCHASED OR CONSTRUCTED. (3) WHERE THE NEW ASSET IS TRANSFERRED WITHIN A PER IOD OF THREE YEARS FROM THE DATE OF ITS PURCHASE OR , AS THE CASE MAY BE, ITS CONSTRUCTION, THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROV IDED IN CLAUSE ( A ) OR, AS THE CASE MAY BE, CLAUSE ( B ), OF SUB-SECTION (1) SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH NEW ASSET IS TRANSFERRED. (4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS NO T APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFO RE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM F OR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139 , SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING M ADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHI NG THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 ] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVER NMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT ; AND, FOR ITA NO. 161/AGR/2017 7 THE PURPOSES OF SUB-SECTION (1), THE AMOUNT, IF ANY , ALREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN TH E PERIOD SPECIFIED IN SUB-SECTION (1), THEN, ( I ) THE AMOUNT BY WHICH ( A ) THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANS FER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF THE NEW ASSET AS PROVI DED IN CLAUSE ( A ) OR, AS THE CASE MAY BE, CLAUSE ( B ) OF SUB-SECTION (1), EXCEEDS ( B ) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGED HA D THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NE W ASSET WITHIN THE PERIOD SPECIFIED IN SUB- SECTION (1) BEEN THE COST OF THE NEW ASSET, SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND ( II ) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW THE UN UTILISED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. ON PERUSAL OF ABOVE SECTION, FOLLOWING CONDITIONS A RE REQUIRED TO BE FULFILLED FOR CLAIMING THE EXEMPTION : (I). THAT THERE HAS TO BE A LONG-TERM CAPITAL GAINS ARISING ON ACCOUNT OF TRANSFER OF ANY LONG TERM CAPITAL ASSET. (II). THE ASSESSEE WITHIN THE PERIOD OF ONE YEAR BE FORE HAD PURCHASED A CAPITAL ASSET OR (III). THE ASSESSEE WITHIN THE PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER OF THE CAPITAL ASSET THE ASSESSEE PURCHASES NEW ASSET OR (IV). WITHIN A PERIOD OF THREE YEARS, AFTER THE TRA NSFER TOOK PLACE CONSTRUCT ONE RESIDENTIAL HOUSE IN INDIA. 7. AS PER ASSESSEE, THE PRESENT CASE FALLS IN THE T HIRD CATEGORY, AS THE ASSESSEE HAD CONSTRUCTED ONE RESIDENTIAL HOUSE WITHIN A PERI OD OF THREE YEARS FROM THE DATE OF TRANSFER OF THE CAPITAL ASSET. ITA NO. 161/AGR/2017 8 8. THE MOOT QUESTION BEFORE US IS WHETHER THE LD. C IT(A) WAS RIGHT IN COMING TO THE CONCLUSION THAT THE ASSESSEE IS ENTITLED TO BEN EFIT OF SECTION 54F ONLY BASED ON THE CONSTRUCTION AGREEMENT AND THE SITE PLAN ONLY O R NOT. UNDISPUTEDLY, THE LAND WAS PURCHASED BY THE ASSESSEE ALONG WITH HER HUSBAND FO R TOTAL CONSIDERATION OF RS.2,89,39,690/- ON 30.03.2012. THE CONSTRUCTION AG REEMENT FILED BEFORE US AND BEFORE THE LOWER AUTHORITIES (CIT[A]) WAS DATED 02. 04.2014 AND THE CAPITAL ASSET WAS DISPOSED OF (TRANSFERRED) BY THE ASSESSEE ON 29 .03.2012 AND 17.02.2012 RESPECTIVELY, I.E., THE ASSESSEE HAD PURCHASED THE LAND IMMEDIATELY AFTER TRANSFERRING THE SHARES TO M/S. BHIMTAL NIRMAN PVT. LTD. AND INV OX MANAGEMENT CONSULTANCY PVT. LTD. THE OUTER LIMIT OF RAISING THE CONSTRUCTION T O CLAIM THE BENEFIT OF SECTION 54F WOULD BE 30.03.2015. ADMITTEDLY, THE ASSESSMENT YEA R UNDER CONSIDERATION BEFORE US IS 2012-13 AND THE TIMELINE FOR RAISING THE CONS TRUCTION AS PER THE STATUTE IS UPTO 30.03.2015. THE CONSTRUCTION AGREEMENT ENTERED BETW EEN THE ASSESSEE WAS DATED 02.04.2014 AND THE PERIOD OF RAISING THE CONSTRUCTI ON PROVIDED IN THE AGREEMENT IS UPTO 15.03.2015. THUS, AS PER CONSTRUCTION AGREEMEN T, THE CONSTRUCTION WAS REQUIRED TO BE COMPLETED ON OR BEFORE THE LAST DATE PROVIDED BY 54F, I.E., 30.03.2015 (AS THE CAPITAL ASSET WAS TRANSFERRED ON 29.03.2012 ). AS PER THE FACTS, THE ASSESSING OFFICER HAD PASSED THE ASSESSMENT ORDER ON 23.03.20 15. BY THAT TIME AS PER THE AGREEMENT, CONSTRUCTION SHOULD HAVE BEEN COMPLETED BY THE CONTRACTOR IN PURSUANCE TO THE CONSTRUCTION AGREEMENT. UNFORTUNAT ELY, THE ASSESSEE HAS NOT ITA NO. 161/AGR/2017 9 BROUGHT ON RECORD ANY EVIDENCE EITHER BY WAY OF PHO TOGRAPHS, PAYMENT OF HOUSE TAX, OCCUPANCY CERTIFICATE, COMPLETION CERTIFICATE OR ANY OTHER DOCUMENT ON RECORD TO SHOW THAT THE CONSTRUCTION WAS COMPLETED BY 15.03.2 015, I.E., PRIOR TO COMPLETION OF ASSESSMENT PROCEEDINGS. PARA 2.4 OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY ABOUT RA ISING OF CONSTRUCTION AFTER PURCHASE OF PLOT. WHOLE CASE OF THE ASSESSING OFFIC ER WAS REVOLVING AROUND THE PURCHASE OF PLOT ONLY AND HE HAS NOT DONE ANY INQUI RY ABOUT THE CONSTRUCTION AND COMPLETION OF THE HOUSE AFTER PURCHASING THE PLOT. IN OUR VIEW, MORE ENQUIRIES WERE REQUIRED TO BE CONDUCTED BY THE ASSESSING OFFICER A ND THE ASSESSING OFFICER HAS TO COLLECT EVIDENCES FROM THE ASSESSEE OR ON FIELD INS PECTION AS TO WHETHER ANY CONSTRUCTION IN PURSUANCE TO THE CONSTRUCTION AGREE MENT HAD STARTED AND IF IT WAS STARTED WHEN IT WAS COMPLETED, BUT NOTHING WAS BROU GHT ON RECORD BY THE ASSESSING OFFICER AS WELL AS BY THE LD. CIT(A). THOUGH THERE IS CONSTRUCTION AGREEMENT AS WELL AS SITE PLAN, BUT MERELY ON THE BASIS OF THESE DOCU MENTS, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAS CONSTRUCTED THE HOUSE WITHIN THE P ERIOD OF TIME STIPULATED BY THE ACT. THE ORDER PASSED BY THE COMMISSIONER WAS SILEN T ON THESE ASPECTS AND IS STEREOTYPE AND CRYPTIC ORDER. IT IS EXPECTED FROM T HE COMMISSIONER TO GIVE REASON FOR AGREEING TO THE CONTENTION OF THE ASSESSEE THAT THE HOUSE HAS BEEN CONSTRUCTED ON THE BASIS OF THE CONSTRUCTION AGREEMENT. NOTHING HAS BEEN BROUGHT ON RECORD BY ITA NO. 161/AGR/2017 10 THE COMMISSIONER OR BY THE ASSESSEE ON RECORD TO SH OW THE COMPLETION OF CONSTRUCTION BEFORE THE END OF 3 YEARS FROM THE DAT E OF PURCHASE PROPERTY. 8.1. IN VIEW OF THE ABOVE AND IN VIEW OF THE FACT T HAT THERE IS NO CATEGORICAL FINDING RECORDED BY THE AUTHORITIES BELOW AND MORE PARTICUL ARLY WHEN THE ORDER PASSED BY THE COMMISSIONER WAS STEREOTYPED AND CRYPTIC ORDER, WE ARE CONSTRAINED TO REMAND THE MATTER TO THE FILE OF LD. CIT(A) WITH THE DIREC TION TO CONDUCT FRESH ENQUIRY AND DECIDE THE APPEAL DEALING WITH THE CONTENTION OF TH E AO AS WELL AS OF THE ASSESSEE. IT IS EXPECTED FROM THE LD. CIT(A) TO BRING ON RECORD INDEPENDENT EVIDENCE REGARDING THE DATE OF COMMENCEMENT OF CONSTRUCTION AND DATE O F COMPLETION OF CONSTRUCTION, NATURE AND QUALITY OF CONSTRUCTION, PHOTOGRAPHS, IF ANY AND ANY OTHER EVIDENCE SHOWING THE CONSTRUCTION OF A RESIDENTIAL HOUSE FRO M THIS STATUTORY AUTHORITIES. IN VIEW OF THE ABOVE THE GROUND NO. 1 OF THE REVENUE A PPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 9. APROPOS SECOND GROUND THE LD. DR HAD DRAWN OUR A TTENTION TO PARAGRAPH 5.2.3 OF THE CIT ORDER WHEREIN THIS ISSUE WAS DEALT . IT WAS CONTENDED BY THE LD. DR THAT THE ORDER OF THE LD. CIT WAS PREMISED ON THE A SSUMPTION THAT PASSBOOK IS NOT BOOK OF ACCOUNT AND THEREFORE THE PROVISION OF SECT ION 68 ARE NOT APPLICABLE. IN VIEW OF THIS ISSUE, WHETHER THE PASSBOOK IS BOOKS OF ACC OUNT OR NOT IS NO MORE RES INTEGRA AS AFTER THE AMENDMENT IN THE DEFINITION OF BOOKS O F ACCOUNT THERE ARE MANY JUDGMENTS OF THE COORDINATE BENCH, WHEREIN IT WAS H ELD THAT PASSBOOK IS REQUIRED TO ITA NO. 161/AGR/2017 11 BE CONSIDERED AS BOOKS OF ACCOUNT. WE MAY RECORD TH AT THE BOOKS OF ACCOUNT IS DEFINED U/S. 2(12A) TO THE FOLLOWING EFFECT : 'BOOKS OR BOOKS OF ACCOUNT' INCLUDES LEDGERS, DAY-B OOKS, CASH BOOKS, ACCOUNT- BOOKS AND OTHER BOOKS, WHETHER KEPT IN THE WRITTEN FORM OR AS PRINT-OUTS OF DATA STORED IN A FLOPPY, DISC, TAPE OR ANY OTHER FORM OF ELECTRO-MAGNETIC DATA STORAGE DEVICE. 9.1. FROM THE PERUSAL OF THE ABOVE, IT IS CLEAR THA T OTHER BOOKS ALSO COME WITHIN THE DEFINITION OF BOOKS OF ACCOUNT. IN FACT, THE BA NK MAINTAINS THE PASSBOOK FOR AND ON BEHALF OF THE ASSESSEE. THE PASSBOOK IS THE PROP ERTY OF THE ASSESSEE MAINTAINED BY THE BANK AND THEREFORE, RIGORS OF SECTION 68 ARE APPLICABLE IN CASE OF ENTRIES IN THE PASSBOOK ARE UNEXPLAINED AND WILL AMOUNT TO CREDIT IN THE BOOKS OF ACCOUNT. SIMILAR VIEW IS ALSO TAKEN BY THE CO-ORDINATE BENCH CONSIST ING OF BROTHER PRASHANT MAHARISHI, A.M., IN THE MATTER OF SHRI JANAK GOEL V S. DCIT (ITA NO. 937 & 938/DEL/2012-ORDER DATED 13.05.2019), WHEREIN IT HA S BEEN HELD THAT THE PASSBOOK IS THE BOOKS OF ACCOUNT WITHIN THE MEANING OF SECTI ON 12A AND THEREFORE, SECTION 68 OF THE IT ACT IS APPLICABLE. THE RELEVANT FINDINGS RECORDED BY CO-ORDINATE BENCH OF TRIBUNAL READ AS UNDER: 19. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT ION AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IN THE PRESENT CASE, ADMITTE DLY, ASSESSEE HAS DEPOSITED MONEY IN BANK ACCOUNT FOR WHICH THE SOURCE COULD NO T BE EXPLAINED PROPERLY AND THEREFORE LOWER AUTHORITIES HAVE MADE ADDITION U/S 68 OF THE INCOME TAX ACT. THE CONTENTION OF THE ASSESSEE IS THAT HE IS NOT MAINTA INING ANY BOOKS OF ACCOUNTS AND THEREFORE DEPOSIT MADE IN THE BANK ACCOUNT OF T HE ASSESSEE CANNOT BE CONSIDERED AS AN AMOUNT DEPOSITED IN THE BOOKS OF A CCOUNTS OF THE ASSESSEE AND HENCE, THE ADDITION MADE U/S 68 OF THE INCOME TAX A CT STANDS VITIATED AND THEREFORE IT SHOULD BE DELETED. THE FIRST JUDICIAL P RECEDENT IN THIS CONTROVERSY IS ITA NO. 161/AGR/2017 12 THE DECISION OF THE HONOURABLE BOMBAY HIGH COURT IN 141 ITR 67, WHEREIN IT HAS BEEN HELD THAT THAT WHEN MONIES ARE DEPOSITED IN BA NK ACCOUNT, RELATIONSHIP THAT IS CONSTITUTED BETWEEN THE BANK AND THE CUSTOM ER IS OF CREDITOR AND NOT THE TRUSTEE AND BENEFICIARY. THEREFORE, IT IS NOT AS IF THE BANK PASSBOOK IS MAINTAINED BY THE BANK AS AN AGENT OF THE CUSTOMER, NOR CAN IT BE SAID THAT THE PASSBOOK IS MAINTAINED BY THE BANK UNDER THE INSTRUCTIONS OF TH E CUSTOMERS. IN VIEW OF THIS, THE BANK PASSBOOK SUPPLIED BY THE BANK TO THE ASSES SEE CANNOT BE REGARDED AS A BOOKS MAINTAINED BY THE ASSESSEE UNDER INSTRUCTIONS . ACCORDINGLY, IT WAS HELD THAT CASH CREDIT FOR THE PREVIOUS YEAR SHOWN IN THE ASSESSEES BANK PASSBOOK ISSUED TO HIM BY THE BANK, BUT NOT SHOWN IN THE CAS HBOOK MAINTAINED BY HIM FOR THAT YEAR, DOES NOT FALL WITHIN THE AMBIT OF SECTIO N 68 OF THE INCOME TAX ACT. THE FACTS IN THAT CASE ARE THAT ASSESSEE DID MAINTAIN T HE BOOKS OF ACCOUNTS , CERTAIN SUMS WERE FOUND IN THE BANK ACCOUNT OF THE ASSESSEE BUT WERE NOT FOUND IN THE REGULAR CASHBOOK SUBMITTED BY THE ASSESSEE. IN THE CIRCUMSTANCES, THE HONOURABLE HIGH COURT STATED SO. FURTHER, THE ASSES SMENT YEAR INVOLVED IN THAT CASE IS 1962 63. ADMITTEDLY ON THAT DATE DEFINITI ON OF THE BOOKS OF ACCOUNTS AS PRESCRIBED UNDER SECTION 2 (12A) WAS NOT THERE O N STATUTE, WHICH IS INSERTED BY THE FINANCE ACT, 2001, WITH EFFECT FROM 1/6/2001 . FURTHER, THE HONOURABLE BOMBAY HIGH COURT IN 85 TAXMANN.COM 306, 250 TAXMAN 362 AND 399 ITR 256 (BOMBAY) IN ARUNKUMAR J MUCHHALA V CIT HAS CONSIDE RED AN IDENTICAL ISSUE WHERE THE ABOVE DECISION OF THE HONOURABLE BOMBAY H IGH COURT IN 141 ITR 67 WAS CONSIDERED. THE HONOURABLE BOMBAY HIGH COURT NOT ED THAT IN SUDHIR KUMAR SHARMA (HUF) VS CIT, 46 TAXMANN.COM 340, HONOURABLE HIGH COURT NOTED THAT WHEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A SSESSING OFFICER NOTED THAT THE ASSESSEE HAS DEPOSITED HUGE AMOUNT OF CASH IN H IS BANK ACCOUNT, THE ADDITION OF THE SAID AMOUNT IN THE INCOME OF THE AS SESSEE, BY INVOKING THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT IS J USTIFIED. IT WAS FURTHER HELD THAT ONUS IS ON THE ASSESSEE TO EXPLAIN THE NATURE AND S OURCE OF THE SAID CASH DEPOSITS. SPECIAL LEAVE PETITION WAS PREFERRED CHALLENGING TH E ABOVE JUDGMENT BEFORE HONOURABLE SUPREME COURT. HOWEVER, THE HONOURABLE S UPREME COURT HAS DISMISSED THE SAME IN 69 TAXMANN.COM 219 [239 TAXMA NN 264]. IN VIEW OF THIS, EVEN IF THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNTS BUT THE AMOUNT IS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE, WHIC H REMAINS UNEXPLAINED THE ADDITION COULD BE CORRECTLY MADE U/S 68 OF THE ACT. FURTHER LOOKING AT THE DEFINITION OF THE BOOKS OR BOOKS OF ACCOUNTS IT I S APPARENT THAT PASSBOOK IS A DAYBOOK WHICH IS KEPT IN THE RETURN FORM OR AS A PR INTOUT OF DATA STORED IN A FLOPPY. THEREFORE, AFTER THE INTRODUCTION OF THE DEF INITION OF THE BOOKS OR BOOKS OF ACCOUNT UNDER SECTION 2 (12A) OF THE ACT, THE PASSB OOK CAN ALSO BE CONSIDERED AS BOOKS OR BOOKS OF ACCOUNT. THERE IS NO DISTINCTION W HO WRITES IT, BUT IT IS RECORD OF THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE WI TH THE BANK. THE PROVISIONS OF ITA NO. 161/AGR/2017 13 SECTION 68 OF THE INCOME TAX ACT ALSO DOES NOT MAKE ANY DISTINCTION ABOUT WHO MAINTAINS THE BOOKS OF ACCOUNT, THE ONLY REQUIREMEN T IS THAT THE BOOKS SHOULD BE OF AN ASSESSEE. THERE IS NO REQUIREMENT THAT THE BOO KS OF ACCOUNT SHOULD BE MAINTAINED BY THE ASSESSEE HIMSELF. IN VIEW OF THIS , WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT A, IN CONFIRMING A N ADDITION OF INR 512000/ ON ACCOUNT OF UNEXPLAINED BANK DEPOSITS UNDER SECTI ON 68 OF THE INCOME TAX ACT. ACCORDINGLY, THE ADDITIONAL GROUND RAISED BY THE AS SESSEE FOR ASSESSMENT YEAR 2004 05 IS ALSO DISMISSED. SINCE THIS ASPECT HAS NOT BEEN EXAMINED AND CONSIDE RED BY THE LD. CIT(A) WHILE DECIDING THE ISSUE AND THE LD. CIT(A) MERELY RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE MATTER OF CIT VS. BHAICHAN D H. GANDHI (1983) 141 ITR 67 (BOM), HOLDING THAT THE BOOKS OF ACCOUNT DO NOT CON SISTS OF THE PASSBOOK. IN OUR RESPECTFUL UNDERSTANDING, THE SAID DECISION IS REND ERED PRIOR TO INSERTION OF DEFINITION OF BOOKS OF ACCOUNT U/S. 2(12A), WHICH W AS INSERTED W.E.F. 01.06.2001. THEREFORE, THE SAID DECISION IS NOT APPLICABLE. 10. IN VIEW OF THE ABOVE, THE WHOLE MATTER IS REMAN DED BACK TO THE FILE OF LD. CIT(A) FOR DECIDING THE ISSUE AFRESH AFTER AFFORDIN G THE OPPORTUNITY OF HEARING TO THE ASSESSEE AND FURTHER THE LD. CIT(A) SHALL GRANT OPP ORTUNITY TO THE ASSESSEE TO FILE EVIDENCES, AS MAY BE ADVISED, IN THIS REGARD. 11. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: *AKS*