IRM Trust, Ahmedabad V. The Addl.CIT.,Range-11, Ahmedabad

ITA 1719/AHD/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9282 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 143(3); 54

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ ITA NO. 1719/AHD/2011 / ASSESSMENT YEAR : 2008-09 IRM TRUST, 13, SANJIV BAUG SOCIETY, NEW SHARDA MANDIR ROAD, PALDI, AHMEDABAD PAN : AAATI 0877 R VS ACIT, RANGE-11, AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. SOPARKAR, AR REVENUE BY : SHRI PRASOON KABRA, SR DR / DATE OF HEARING : 15/12/2016 / DATE OF PRONOUNCEMENT: 14/02/2017 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER:- THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, AHMEDABAD DATED 27.05.2011 FOR ASSESSMENT YEAR 2008-09. 2. THE GROUNDS TAKEN BY THE ASSESSEE READ AS UNDER: 1. THE ASSESSMENT ORDER PASSED BY LEARNED ASSESSING OFFICER (ADDL. COMMISSIONER OF INCOME TAX, CIRCLE-11) U/S 143(3) OF THE IT ACT IS BAD IN LAW, ILLEGAL AND DESERVES TO BE AMENDED. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE DISALLOWANCE OF THE EXEMPTION OF RS.36,85,222/- CLAIMED U/S 54 OF THE IT ACT. THE DISALLOWANCE SHOULD BE CANCELLED. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE DISALLOWANCE OF RS.55,91,510/- FOR SET OFF OF BROUGHT FORWARD CAPITAL LOSS. THE DISALLOWANCE SHOULD BE CANCELLED. 3. THE FACTS OF THE CASE ARE THAT, FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DECLARED A TOTAL INCOME OF RS.1,53,78,632/- UNDER THE PROVISIONS OF INCOME-TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSING ITA NO. 1719/AHD/2011 IRM TRUST VS. ACIT AY : 2008-09 2 OFFICER PASSED THE ASSESSMENT ORDER U/S 143(3) OF THE ACT ON 30.12.2010 DETERMINING TOTAL INCOME AT RS.2,46,55,364/- BY MAKING FOLLOWING DISALLOWANCE/ADDITIONS, WHICH ARE CONFIRMED BY THE LD. CIT(A) IN FURTHER APPEAL. I) DEDUCTION U/S 54 OF THE ACT - RS.36,85,222/- II) SET OFF OF BROUGHT FORWARD CAPITAL LOSS - RS.55,91,510/- 4. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE ASSESSEE HAD SOLD THE ITS OWN HOUSE PROPERTY FARM HOUSE BEING USED AS RESIDENTIAL HOUSE FOR THE INDIVIDUAL BENEFICIARIES OF THE TRUST, AS ON 08.08.2007. AS PER INCOME-TAX ACT, TOTAL LONG TERM CAPITAL GAIN DERIVED FROM THE SALE IS RS.92,76,732/- WHICH WAS SET-OFF AGAINST THE CLAIM OF EXEMPTION U/S 54 OF THE IT ACT FOR RS.36,85,222/- BEING AMOUNT INVESTED IN CONSTRUCTION OF THE NEW PROPERTY BEING FARM HOUSE FOR THE RESIDENTIAL PURPOSE OF THE INDIVIDUAL BENEFICIARIES AND THE REST WAS CLAIMED AS SET OFF AGAINST THE BROUGHT FORWARD CAPITAL LOSS OF RS.55,91,510/- WHICH WAS PERTAINING TO AY 2006-07. THE RELEVANT PAPERS CLARIFYING THE ASSESSEES CLAIM AND ELIGIBILITY OF THE LOSS OF THAT PARTICULAR YEAR TO BE SET OFF AGAINST THE YEAR UNDER CONSIDERATIONS LONG TERM CAPITAL GAIN HAVE ALREADY BEEN PLACED BEFORE THE LOWER AUTHORITIES. 6. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. GROUND NO.1 IS GENERAL IN NATURE. WITH REGARD TO GROUND NO.2 REGARDING THE ITA NO. 1719/AHD/2011 IRM TRUST VS. ACIT AY : 2008-09 3 DISALLOWANCE OF THE EXEMPTION OF RS.36,85,222/- CLAIMED U/S 54 OF THE ACT, THE LD. CIT(A) OBSERVED THAT THE DEDUCTION U/S 54 IS AVAILABLE ONLY TO AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY AND THE ASSESSEE-TRUST IS NEITHER AN INDIVIDUAL NOR A HINDU UNDIVIDED FAMILY; WHEREAS THE ASSESSEE-TRUST IS BEING ASSESSEE IN THE STATUS OF AOP. THUS, HE RIGHTLY HELD THAT THE ASSESSEE IS NOT ENTITLED TO THE DEDUCTION U/S 54 OF THE ACT. BESIDES, THE LD. CIT(A) HELD THAT THE LONG TERM CAPITAL GAIN ARISED FROM THE TRANSFER OF A CAPITAL ASSET SHOULD BE A BUILDING OR LAND APPURTENANT THERETO AND MUST BE USED AS A RESIDENTIAL HOUSE. IN THE CASE ON HAND, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAD SOLD ITS FARM HOUSE WHICH WAS NEVER BEEN USED AS A RESIDENTIAL HOUSE. NO EVIDENCE WAS FURNISHED IN THIS REGARD EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE US FOR THE CONTENTION THAT THE FARM HOUSE WAS USED AS A RESIDENTIAL HOUSE. MOREOVER, THE LD. COUNSEL FOR THE ASSESSEE COULD NOT ESTABLISH AS TO WHETHER ANY INCOME WAS EARNED FROM THE AFORESAID FARM HOUSE WHICH WAS BEING ASSESSED AS INCOME FROM HOUSE PROPERTY. THUS, IN OUR CONSIDERED VIEW, THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A) IN THIS REGARD AND THE GROUND NO.2 OF THE ASSESSEES APPEAL IS DISMISSED. 7.1 WITH RESPECT TO GROUND NO.3, WHICH IS REGARDING THE DISALLOWANCE OF RS.55,91,510/- FOR SET OFF OF BROUGHT FORWARD CAPITAL LOSS, THE LD. CIT(A) HELD THAT NO CAPITAL LOSS WAS DECLARED IN THE RETURN FILED BY THE ASSESSEE FOR THE AY 2006-07, WHICH COULD HAVE DISCLOSED THE LONG TERM CAPITAL LOSS IN THE COLUMN MEANT FOR INCOME FROM CAPITAL GAINS. THE LD. CIT(A) ALSO OBSERVED THAT THE ASSESSMENT FOR THE AY 2006-07 WAS COMPLETED U/S 143(3) OF THE ACT AND THE SAID ASSESSMENT ORDER, THERE WAS NO MENTION ABOUT THE LOSS INCURRED ON ACCOUNT OF SALE OF SHARES AND HE ACCORDINGLY CONCLUDED THAT THE ASSESSEE HAD NOT DISCLOSED THE LONG TERM CAPITAL LOSS IN THE RETURN FILED FOR AY 2006-07 AND ALSO NOT RAISED THE ISSUE OF NOT DETERMINING THE LOSS TO BE CARRIED FORWARD IN THE ORDER PASSED U/S 143(3) OF THE ACT BEFORE THE ITA NO. 1719/AHD/2011 IRM TRUST VS. ACIT AY : 2008-09 4 ASSESSING OFFICER AND THEREFORE, THE SET OFF OF CARRIED FORWARD LONG TERM CAPITAL LOSS WAS NOT ALLOWABLE TO THE ASSESSEE. THUS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) WHICH IS UPHELD AND THIS GROUND OF THE ASSESSEES APPEAL IS ALSO DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON _14_ FEBRUARY, 2017 AT AHMEDABAD. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (MAHAVIR PRASAD) JUDICIAL MEMBER AHMEDABAD; DATED 14/02/2017 *BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION- .. 14.02.2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15.02.2017 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S. - .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER