Govind Gangadhar Sabane, Hingoli V. Income-tax Officer,

ITA 1654/PUN/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9565 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Assessee Lawyers: S N DOSHI; P B SANDBHOR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Condonation of delay
• Section: 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO.1654/PUN/2016 / ASSESSMENT YEAR : 2009-10 SHRI GOVIND GANGADHAR SABANE, L/H. LT. SHRI GANGADHAR GOVINDRAO SABANE, GOVIND NAGAR, KAVATH ROAD, A/P. BASMATH. DIST.- HINGOLI-431512 PAN : ERFPS9038E ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD-1(4), PARBHANI . / RESPONDENT ASSESSEE BY : SHRI P.B. SANDBHOR & SHRI S.N DOSHI REVENUE BY : SHRI ANIL CHAWARE / DATE OF HEARING : 17.12.2018 / DATE OF PRONOUNCEMENT : 18.12.2018 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE LD. CIT(APPEALS)-1, AURANGABAD DATED 08.03.2016 AS PER T HE GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 1654/PUN/2016 A.Y.2009-10 2. THIS APPEAL WAS FILED WITH THE DELAY OF 60 DAYS. THE LD. A R HAS FILED SWORN IN AFFIDAVIT WHEREIN THE REASONS FOR DELAY IS EXPLAINED AND SUBMITTED THAT THE DELAY IS NOT INTENTIONAL AND THEREFORE, PRAYED TH AT THE DELAY OF 60 DAYS BE CONDONED. LD. DR DID NOT SERIOUSLY OBJECT TO TH E PRAYER OF CONDONATION. ON THE ISSUE OF CONDONATION OF DELAY OF APPEAL, WE HAVE GONE THROUGH THE SWORN IN AFFIDAVIT FILED BY ASSESSEE AND HEARD THE LD. DR. AFTER CONSIDERING THE REASONS STATED IN THE AFFIDAVIT WE ARE OF THE VIEW THAT THE DELAY IN FILING THE APPEAL HAS BEEN SATISFACTORILY EXPLAINED. IN VIEW OF THESE FACTS, DELAY IN FILING THE APPEAL IS CONDONED AND APPEAL IS ADMITTED FOR HEARING. 3. ON PERUSAL OF THE GROUNDS OF APPEAL, IT IS OBSERVED THA T THE ASSESSEE HAS RAISED BOTH, THE LEGAL GROUNDS AS WELL AS GROUND ON MERITS . HOWEVER, AT THE TIME OF HEARING, THE LEGAL GROUNDS RAISED BY ASSESSEE WERE NOT PRESSED. HENCE, THEY ARE DISMISSED AS NOT PRESSED . 4. THE GROUND ON MERITS PERTAINS TO THE ALLOWABILITY OF DED UCTION U/S.54F OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE FACTS ON THE GROUNDS ON MERITS ARE THAT ON THE BASIS OF AIR INFO RMATION, THE ASSESSING OFFICER NOTED THAT LATE SHRI GANGADHAR GOVINDRAO SABNE HA D SOLD THE AGRICULTURAL LAND FOR RS.18,70,000/-. THE STAMP DUTY VALUATION OF THIS PROPERTY WAS MADE BY THE SUB-REGISTRAR AT RS.61,17,000/ -. THEREAFTER, SHRI GANGADHAR GOVINDRAO SABNE DIED ON 24.08.2010. THE ASSESS MENT HEARING WAS ATTENDED BY LEGAL HEIR NAMELY, GOVIND GANGADHAR SAB NE AND EXPLAINED TRANSACTIONS RELATING TO THE SALE OF LAND. THE LEGAL HEIR FU RNISHED VARIOUS DOCUMENTARY EVIDENCES VIZ. COPY OF SALE DEED, COMPUTATION OF INCOME, AND COMPLETION CERTIFICATE OF THE CONSULTING ENGINEER I.E. SHRI GA NESH SUBASH TIWADI CERTIFYING THE ESTIMATED SALE VALUE OF THE PROPER TY AT RS.18,13,500/-. 3 ITA NO. 1654/PUN/2016 A.Y.2009-10 THE EXEMPTION WAS ALSO CLAIMED U/S.54F FOR THE NEW HOUSE CONSTRUC TED BY THE ASSESSEE. THE COMPLETION CERTIFICATE FROM CONSULTING ENGINEE R HAS ALSO BEEN FILED. THE ASSESSING OFFICER DEPUTED HIS INSPECTOR TO VERIFY T HE CONSTRUCTION OF THE RESIDENTIAL HOUSE. THE INSPECTOR REPORTED THAT RESIDE NTIAL HOUSE HAS BEEN CONSTRUCTED CONSISTING OF 6 RCC ROOMS ON THE GROUND FLOO R. HOWEVER, THE ASSESSING OFFICER ADOPTED THE FULL VALUE OF SALE CONSIDERATION AT RS.61,70,000/- AS AGAINST ACTUAL SALE CONSIDERATION OF RS.18,7 0,000/- BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. THE ASSE SSING OFFICER DID NOT ALLOW CLAIM OF EXEMPTION ON THE GROUND THAT THOUGH COMPLET ION CERTIFICATE WAS BY THE GOVERNMENT REGISTERED CONTRACTOR AND CONSULTING ENGINEER, THE COMPLETION CERTIFICATE FROM MUNICIPAL COUNCIL HAD NOT BEEN PR ODUCED. THE ASSESSING OFFICER, ACCORDINGLY, COMPUTED LONG TERM CAPITAL GA IN AT RS.57,04,400/-. 5. THE ARGUMENTS BEFORE THE FIRST APPELLATE AUTHORITY BY ASSESSEE WAS THAT THE ENTIRE SALE CONSIDERATION THAT HAS BEEN RECEIVED HA S BEEN UTILIZED FOR THE CONSTRUCTION OF THE HOUSE AND THAT INSPECTOR OF THE DE PARTMENT HAS EXAMINED AND VERIFIED THE PLACE AND HAVE SUBMITTED THE CONCERNED REPORT. THEREFORE, DEDUCTION IN ACCORDANCE WITH SECTION 54F OF THE ACT WHICH IS NET CON SIDERATION RECEIVED AND USED FOR CONSTRUCTION OF THE RESIDENTIAL HO USE THAT SHOULD BE ALLOWED, WHEREAS, THE ASSESSING OFFICER HAS RESORTED TO SEC TION 50C OF THE ACT WHICH IS FOR THE PURPOSE OF SECTION 48 AND NOT FOR SECTION 54F OF THE ACT. THE LD. CIT(APPEALS) DID NOT ALLOW THE DEDUCTION CLAIMED U/S.54F OF THE ACT ON THE GROUND THAT BILLS AND VOUCHERS WERE NOT PRODUCED THOUG H ADMITTING IN HIS ORDER THAT INSPECTOR HAD VERIFIED THE PLACE AND HAS REP ORTED THAT THE CONSTRUCTION OF HOUSE HAS TAKEN PLACE AND ALSO FOR ALL OTHER VARIOUS R EASONS AS APPEARING IN THE CIT(APPEALS) ORDER WHICH IS ALREADY ON REC ORD. THAT BEING FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4 ITA NO. 1654/PUN/2016 A.Y.2009-10 6. THE LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE SUB-ORDINATE AUTHORITIES AND VEHEMENTLY STATED THAT ENTIRE NET CON SIDERATION RECEIVED HAS BEEN UTILIZED FOR CONSTRUCTION OF THE HOUSE WHICH HAVE BEE N VERIFIED BY REVENUE AUTHORITIES THROUGH INSPECTION BY THE INSPECTO R. ONCE THE NET CONSIDERATION HAS BEEN SPENT FOR ACQUIRING NEW CAPITAL ASSET THEN TH E ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.54F OF THE ACT. THE LD. AR HAS P LACED RELIANCE ON THE FOLLOWING DECISIONS: I) PR. COMMISSIONER OF INCOME TAX VS. C. GOPALASWAMY REPORT ED AS 384 ITR 307 (KARNATAKA). II) COMMISSIONER OF INCOME TAX VS. K. RAMACHANDRA RAO, REPORTED AS 277 CTR 522 (KARNATAKA) 7. PER CONTRA, LD. DR HAS PLACED RELIANCE ON THE ORDERS O F AUTHORITIES BELOW AND SUPPORTED THE ACTION OF ASSESSING OFFICER IN RESORTING TO SE CTION 50C OF THE ACT. 8. WE HAVE PERUSED THE CASE RECORD AND HEARD THE RIVA L CONTENTIONS. WE FIND THAT THERE IS NO DISPUTE TO THE FACT THAT ONE CAPITA L ASSET WAS SOLD AND THEREAFTER, NEW HOUSE WAS CONSTRUCTED. THAT BOTH THE R EVENUE AUTHORITIES IN THEIR RESPECTIVE ORDERS HAVE AGREED THAT THE INSPECTO R HAD VISITED THE SITE AND HAS REPORTED THAT RESIDENTIAL HOUSE HAS BEEN CONSTRUCT ED CONSISTING OF 6 RCC ROOMS ON THE GROUND FLOOR. THAT WITHOUT NEGATING THIS RE PORT, REVENUE AUTHORITIES HAVE SIMPLY REJECTED THE CLAIM OF DEDUCTION U/S.54F OF THE ACT SO FAR AS THE ASSESSEE IS CONCERNED. MOREOVER, NEITHER ASSE SSING OFFICER NOR CIT(APPEALS) HAS CONDUCTED ANY SPECIFIC ENQUIRY TO DEMONS TRATE THAT THE CONSTRUCTION OF THE NEW HOUSE WAS FROM ANY OTHER SOURC E OTHER THAN THE NET CONSIDERATION RECEIVED FROM SALE OF LAND. THE CIT(APPEALS) DE NIED THE DEDUCTION U/S.54F OF THE ACT SIMPLY BECAUSE BILLS AND VOU CHERS WERE NOT 5 ITA NO. 1654/PUN/2016 A.Y.2009-10 PRODUCED. BUT THE FACTUAL PARAMETERS OF EXISTENCE OF NEW RESIDENTIAL HOUSE WAS NOT DENIED BY THE CIT(APPEALS). NOR HE HAS SHOWN THE FUND UTILIZED FOR SUCH CONSTRUCTION WAS FROM OTHER SOURCES. IN ABSENCE OF THESE S PECIFIC ENQUIRY AND NOT GRANTING DEDUCTION U/S.54F OF THE ACT TO THE AS SESSEE, IS NOT PERMITTED WITHIN THE AMBIT OF WELFARE LEGISLATION WHICH IS EMBE DDED IN THE TAXING STATUTES. WE TAKE GUIDANCE FROM THE JUDICIAL PRONOU NCEMENTS IN PR. COMMISSIONER OF INCOME TAX VS. C. GOPALASWAMY (SUPRA.) WHERE THE HON'BLE KARNATAKA HIGH COURT OPINED THAT WHERE ASSESSEE INVESTED MONEY IN CONSTRUCTION OF A RESIDENTIAL HOUSE, DEDUCTION U/S.54F OF THE ACT CANNOT BE DENIED MERELY BECAUSE CONSTRUCTION WAS NOT COMPLETE IN ALL RESPECT WITHIN STIPULATED TIME . SIMILARLY IN THE CASE OF COMMISSIONER OF INCOME TAX VS. K. RAMACHANDRA RAO (SUPRA.), THE HON'BLE KARNATAKA HIGH COUR T HELD WHERE ASSESSEE INVESTED ENTIRE SALE CONSIDERATION IN CONST RUCTION OF A RESIDENTIAL HOUSE WITHIN THREE YEARS FROM DATE OF TRANSFER OF LAN D, DEDUCTION U/S.54F OF THE ACT CANNOT BE DENIED JUST BECAUSE HE DID NOT DEPOSIT THE SAID AMOUNT IN CAPITAL GAINS ACCOUNT SCHEME. IN VIEW OF THE ABOVE FACTS, WE ALLOW THE APPEAL OF THE ASSE SSEE SETTING ASIDE THE ORDER OF CIT(APPEALS). 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 18TH DAY OF DECEMBER, 2018. SD/- SD/- R.S. SYAL PARTHA SARATHI CHAUDHURY VICE-PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 18 TH DECEMBER, 2018. SB 6 ITA NO. 1654/PUN/2016 A.Y.2009-10 !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-1, AURANGABAD. 4. THE PR. CIT-1, AURANGABAD. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 7 ITA NO. 1654/PUN/2016 A.Y.2009-10 DATE 1 DRAFT DICTATED ON 17 .12.2018 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 18 .12.2018 SR. PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR. PS/PS 7 DATE OF UPLOADING OF ORDER SR. PS/PS 8 FILE SENT TO BENCH CLERK SR. PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER