T.Peddiraju, Rajahmundry V. Income Tax Officer, Ward-1(1), Rajahmundry

ITA 164/VIZ/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2858 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 08-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Section: 143(3); 54F; 142(1); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 1 64 / VIZ /201 8 (ASST. YEAR : 20 13 - 14 ) T. PEDDIRAJU, D.NO. 43 - 16 - 14, KOTHAPETA, RAJAHMUNDRY . V S . IT O , WARD - 1(1), RAJAHMUNDRY . PAN NO. AHSPM 2719 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C. SUBRAHMANYAM, FC A. DEPARTMENT BY : SMT. SUMAN MALIK , SR. DR DATE OF HEARING : 04 / 0 6 /201 9 . DATE OF PRONOUNCEMENT : 12 / 0 6 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 12 , HYDERABAD , DATED 02 /0 1 /201 8 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING ON TRADING IN VEGETABLES AND ALSO RECEIVED A COMMISSION ON SALE OF POTATO, FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 93,408/ - . THE RETURN FILED BY THE ASSESSEE WAS INITIALLY PROCESSED UNDER SECTION 143(1) AND THER E AFTER CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY . A FTER FOLLOWING DUE PROCEDURE, 2 ITA NO. 164 /VIZ/2018 ( T. PEDDIRAJU ) ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS 'ACT'), DATED 24/03/2016 . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS N OTED THAT ON GOING THROUGH THE S CHEDULE S 7, 8 & 9 OF THE STATEMENT OF INCOME , IT IS REVEALED THAT ASSESSEE HAS RECEIVED TOTAL SALE CONSIDERATION OF RS. 23,78,440/ - TOWARDS SALE OF THREE SITES AND SHOWN LONG TERM CAPITAL GAIN AT NIL AF T ER CLAIMING EXEMPTION UNDER SECTION 54F OF THE ACT. THE ASSESSEE WAS ASKED TO F URNISH DOCUMENTARY EVIDENCE FOR EXEMPTION CLAIMED UNDER SECTION 54F AND FIXE D THE CASE FOR HEARING ON 19/10/2015 . ON 19/10/2015 , THE AR OF THE ASSESSEE WAS APPEARED AND SOUGHT TIME TO FURNISH THE INFORMATION. ACCORDINGLY, HEARING IS ADJOURNED TO 02/11/2015. ON THE SAID DATE OF HEARING, NEITHER ASSESSEE APPEARED NOR FURNISHED ANY INFORMATION. THE ASSESSING OFFICER ON VERIFICATION OF THE STATEMENT OF INCOME FURNISHED ALONG WI T H THE RETURN OF INCOME, IT IS NOTICED THAT THE ASSESSEE HAS ADMITTED HOUSE PROPERTY AT RS. 2,49,696/ - FROM PROPERTIES SITUATED AT D.NO S . 4 - 6 - 31 & 4 - 17 - 9 (TWO HOUSES) APART FROM , D.NO. 85 - 10 - 11, SRINAGAR COLONY, RAJAHMUNDRY MENTIONED IN THE RETURN OF INCOME AND CLAIMED MUNICIPAL TAXES OF RS. 20,006/ - . THE ASSESSEE ALSO FURNISHED EVIDENCES FOR PA YMENT OF MUNICIPAL TAXES IN HIS NAME ISSUED BY THE COMMISSIONER , RAJAHMUNDRY MUNICIPAL CORPORATION . THEREFORE, THE ASSESSING 3 ITA NO. 164 /VIZ/2018 ( T. PEDDIRAJU ) OFFICER CAME TO A CONCLUSION THAT THE ASSESSEE IS HAVING MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF TRANSFER AND ISSUED NOTICE U/S. 142(1) , DATED 19/01/2016 . IN REPLY, ASSESSEE HAS SUBMITTED THAT D.NO. 43 - 16 - 14 WAS PURCHASED BY HIS FATHER AND THE SAME IS IN THE POSSESSION AND OCCUPATION OF HIS MOTHER. INSOFAR AS D.NO S . 4 - 17 - 9 & 4 - 6 - 31 IS CONCERNED , IT IS A SINGLE BUILDING HAVING TWO DOOR NUMBERS WAS ALSO IN THE POSSESSION OF HIS MOTHER SMT. TALASETTY SETHAYAMMA AND SUBMITTED THAT HE IS ENTITLED FOR CLAIM UNDER SECTION 54F OF THE ACT. THE ASSESSING OFFICER AFTER EXAMINING THE ABOVE EXPLANATION CAME TO A CONCLUSION THAT D.NO S . 4 - 17 - 9 & 4 - 6 - 31 (TWO HOUSES) ARE IN THE NAME OF THE ASSESSEE IN THE ROLLS OF THE MUNICIPAL CORPORATION, RAJAHMUNDRY AND HE IS ALSO ADMITTED RENTAL INCOME FROM THESE HOUSES AND CLAIMED MUNICIPAL TAXES. AS THE ASSESSEE IS THE OWNER O F TWO RESIDENTIAL HOUSES OTHER THAN THE NEW ASSET ON THE DATE OF TRANSFER , IT IS CONCLUDED TH A T THE CONDITIONS LAID DOWN FOR CLAIMING OF EXEMPTION UNDER SECTION 54F IS NOT FULFILLED BY THE ASSESSEE , THEREFORE, HE REJ E CTED THE CLAIM OF THE ASSESSEE UNDER SECTION 54F OF THE ACT. 3 . ON APPEAL, THE ASSESSEE HAS NOT FILED ANY DETAILS BEFORE THE LD. CIT(A), THEREFORE, HE CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4 ITA NO. 164 /VIZ/2018 ( T. PEDDIRAJU ) 4 . ON APPEAL BEFORE US, THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO SUBSTA NTIATE HIS CLAIM UNDER SECTION 54F OF THE ACT. IT IS THE CASE OF THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THERE ARE TWO SEPARATE HOUSE NUMBERS , BUT HOUSE IS ONLY ONE, WHICH IS IN THE NAME OF HIS MOTHER . THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO SUPPORT HIS CLAIM THAT HE IS HAVING ONLY ONE HOUSE AND TWO SEPARATE DOOR NUMBERS THAT APART FROM , HE IS NOT ABLE TO ESTABLISH ANOTHER ASPECT THAT THE HOUSES ARE IN THE NAME OF HIS MOTHER. THEREFORE, THE ASSESSING OFFICER HAS DENIED THE CLAIM MADE UNDER SE CTION 54F OF THE ACT THAT ON THE DATE OF TRANSFER, THE ASSESSEE IS HAVING MORE THAN ONE HOUSE, THEREFORE HE IS NOT ELIGIBLE FOR CLAIM OF SECTION 54F. ON APPEAL, LD. CIT(A) BY CONSIDERING ALL THE DETAILS, CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THE RELEVANT PORTION OF THE ORDER OF THE LD. CIT(A) IS EXTRACTED AS UNDER: - 6.3 1 HAVE CAREFULLY CONSIDERED THE ORDER OF THE AO AS WELL AS THE WRITTEN SUBMISSIONS OF THE AR. DURING THE YEAR UNDER CONSIDERATION, AS PER THE AR'S OWN SUBMISSIONS, THE ASSESSEE HA S HOLD THREE PLOTS FOR A CONSIDERATION OF RS.24,04,000/ - , ON WHICH, CAPITAL GAINS OF RS.23,78A40/ WERE CLAIMED AS EXEMPT U/S.54F, THE ASSESSING OFFICER OBSERVED FROM THE STATEMENT OF INCOME FURNISHED BY THE ASSESSEE THAT THE ASSESSEE HAD ADMITTED HOUSE PRO PERTY INCOME OF RS.2,49,693/ - FROM TWO PROPERTIES, AND HAD ALSO CLAIMED MUNICIPAL TAXES PAID OF RS.20,006/ - ON THE SAID PROPERTIES. THE MUNICIPAL TAXES RECEIPTS WERE CALLED FOR BY THE ASSESSING OFFICER DURING THE COURSE OF SCRUTINY PROCEEDINGS, AND FURNISH ED BY THE ASSESSEE, WHICH SHOWED THE NAME OF THE OWNER AS T.PEDDIRAJU, I.E., THE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, OBSERVED THAT THE 5 ITA NO. 164 /VIZ/2018 ( T. PEDDIRAJU ) CONDITIONS LAID DOWN FOR CLAIMING OF EXEMPTION U/S.54 OF THE INCOME TAX ACT WERE NOT FULFILLED IN THIS CASE, AND WENT ON TO DENY THE DEDUCTION CLAIMED BY THE ASSESSEE, AND THE ENTIRE AMOUNT OF CAPITAL GAINS WAS THEREFORE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE CONTENTION OF THE APPELLANT'S AR IS THAT THE SAID RENTAL PROPERTIES WERE IN THE NAME OF THE FATHER OF THE APPELLANT, AND THAT HE EXECUTED A WILL, ACCORDING TO WHICH, THE MOTHER OF THE APPELLANT IS HAVING A LIFE INTEREST IN THE SAID PROPERTIES, AND IT IS THE CLAIM OF THE APPELLANT'S AR THAT THE INCOME FROM THESE PROPERTIES IS BEING TAKEN BY THE MOTHER OF THE APPELLANT. HOWEVER, THE FACTS ON RECORD PROVE OTHERWISE. IT IS SEEN THAT THE SAME ARGUMENTS WERE MADE BY THE ASSESSEE/APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER, AND THE ASSESSING OFFICER HAS DEALT WITH ALL THESE ARGUMENTS IN DETAIL IN THE ASSESSMENT ORDER REPRODUCED IN PARE 6.1 ABOVE. THE CONTENTION OF THE APPELLANT'S AR THAT THE ORDER OF THE ASSESSING OFFICER IS ARBITRARY, AND THAT THE SUBMISSIONS MADE BY THE ASSESSEE H AVE BEEN IGNORED, IS NOT CORRECT. AS OBSERVED BY THE ASSESSING OFFICER, HIMSELF IN THE RETURN OF INCOME FILED BY HIM. THEREFORE, THERE IS NO MERIT IN THE CONTENTION THAT THE INCOME FROM THESE PROPERTIES IS BEING TAKEN BY THE MOTHER OF THE ASSESSEE, AND THAT SHE IS NOT WILLING TO FORE GO THIS ADVANTAGE, WHICH IS AVAILABLE TO HER AS PER THE WILL. FURTHER, IT IS SEEN THAT THE MUNICIPAL TAX RECEIPT IS IN THE NAME OF THE ASSESSEE, SHRI T.PEDDIRAJU, WHICH SHOWS THAT THE TWO HOUSES ARE IN THE NAME OF THE: ASSES SEE IN THE RECORDS OF MUNICIPAL CORPORATION. ALL THESE FACTS ARE SUFFICIENT TO SHO W THAT FOR ALL PRACTICAL PURPOSES, THE ASSESSEE IS THE OWNER OF THE SAID HOUSES, AND THEREFORE, IS NOT ENTITLED TO CLAIM EXEMPTION U/S.54F. IT IS THEREFORE HELD THAT THE EXEM PTION U/S.54F HAS BEEN RIGHTLY DENIED BY THE ASSESSING OFFICER. THE ADDITION MADE IS THEREFORE CONFIRMED AND ALL GROUNDS RELATED TO THIS ISSUE ARE DISMISSED. 5. IN VIEW OF THE ABOVE, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 6 ITA NO. 164 /VIZ/2018 ( T. PEDDIRAJU ) 6 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 2 T H DAY OF JUNE , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 2 T H JUNE , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE T. PEDDIRAJU, D.NO. 43 - 16 - 14, KOTHAPETA, RAJAHMUNDRY. 2. THE REVENUE ITO, WARD - 1(1), RAJAHMUNDRY. 3. THE PR. CIT , RAJAMAHENDRAVARAM. 4. THE CIT(A) - 12, HYDERABAD. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.