ITO, New Delhi V. Ms. Dolly nanda, New Delhi

ITA 1917/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4416 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-06-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 03-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: UMESH GUPTA
• Keywords: Income from undisclosed sources; Additional evidence
• Section: 54F; 148; 54; 2

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1917/DEL/2013 (ASSESSMENT YEAR: 2004 - 05 ) ITO, WARD - 22(2), NEW DELHI VS. DOLLY NANDA, H - 10, MAHARNI BAGH, NEW DELHI PAN:AAAPN0833C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANSHU PRAKASH, SR. DR ASSESSEE BY: SHRI UMESH GUPTA, CA DATE OF HEARING 07/09 / 2017 DATE OF PRONOUNCEMENT 18 / 09 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT ( A) - XXIII, NEW DELHI DATED 31.01.2013 FOR THE ASSESSMENT YEAR 2004 - 05. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE WITHOUT CONSIDERING THE STAND OF THE AO THAT THE SUBMISSION MADE DURING THE REMAND REPORT PROCEEDINGS WERE TOTALLY BASELESS AND BAD IN LAW, THUS VIOLATING RULE 46A(3) OF I T RULE, 1962. 2. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN REDUCING THE ADDITION FROM RS. 2,16,00,000/ - AS UNDISCLOSED INCOME TO RS. 1,52,91,683/ - ASSESSABLE UNDER THE LTCG AS PER REVISED COMPUTATION OF INCOME. 3. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CA SE THE LD. CIT ( A) HAS ERRED IN ALLOWING THE EXEMPTION U/S 54 OF THE INCOME TAX ACT WITHOUT CONSIDERING THE FACTS THAT ASSESSEE HAD NOT CLAIMED ANY EXEMPTION IN HIS ORIGINAL RETURN OF INCOME AND EVEN IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE I T. ACT. 3. THE ASSESSEE IS AN INDIVIDUAL FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 28/07/2004 DECLARING TOTAL INCOME OF RS. 5 35350/ . NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT WAS ISSUED ON 30/03/2011. ON THE BASIS OF THE CERTAIN INFORMATION RE CEIVED BY THE ASSESSING OFFICER THAT A SUM OF RS. 2 .16 CRORES HAD BEEN DEPOSITED IN THE APPELLANTS BANK ACCOUNT WITH STANDARD CHARTERED BANK DURING FY 2003 04. AS THE LD. ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE HAS NOT DECLARED SUCH SUM IN HER R ETURN OF INCOME, NOTICE UNDER PAGE 2 OF 4 SECTION 148 WAS ISSUED ON 30/03/2011. IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN FILED ON 28/07/2004 MAY BE CONSIDERED AS RETURN FILED IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT , VIDE LETTER DATED 11/10/2011. THE ASSESSEE DID NOT FILE REQUISITE DETAIL IN THE ASSESSMENT PROCEEDINGS WITH RESPECT TO CAPITAL GAINS, SOURCE OF PURCHASES OF SHARES, COPIES OF THE BANK STATEMENT ETC AND THEREFORE THE LD. ASSESSING OFFICER COMPLETED THE AS SESSMENT MAKING THE ADDITION OF RS. 2.16 CRORES AS INCOME FROM UNDISCLOSED SOURCES, WIDE ASSESSMENT ORDER DATED 19/12/2011 UNDER SECTION 143 (3) READ WITH SECTION 148 OF THE INCOME TAX ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 22135350/ - . ASS ESSEE AGGRIEVED WITH THE ORDER OF THE LD. ASSESSING OFFICER PREFERRED AN APPEAL BEFORE THE LD. CIT (A). BEFORE HIM, THE ASSESSEE SUBMITTED THE COMPLETE DETAILS OF THE PURCHASE AND SALE OF THE SHARES OF M/S PR INDUSTRIES. FURTHER ASSESSEE SUBMITTED THAT THE INVESTMENT UNDER SECTION 54F OF THE INCOME TAX ACT HAS BEEN MADE IN A RESIDENTIAL HOUSE AMOUNTING TO RS. 53 LAKHS AT NEW DELHI AND ASSESSEE IS A 50% JOINT HONOUR IN THE SAID PROPERTY. THE ASSESSEE SUBMITTED THE COPIES OF THE PURCHASE DEED AND THE COPY OF THE BANK STATEMENT. BEFORE HIM, ASSESSEE ALSO FILED ADDITIONAL EVIDENCES ALONG WITH THE APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962. GIVING REASONS FOR NOT ABLE TO FURNISH IT BEFORE THE LD. ASSESSING OFFICER. THE LD. CIT (A ALSO C ALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER ON THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AS WELL AS THE WRITTEN SUBMISSION MADE BEFORE HIM. THE LD. ASSESSING OFFICER SUBMITTED THE REMAND REPORT AND WHICH WAS ALSO APPEAL GIVEN TO THE ASSESSE E TO FILE A REJOINDER ON IT, WHICH WAS FILED ON 31/01/2013. THE LD. CIT APPEAL. BASED ON THE ABOVE SUBMISSION MADE BY THE ASSESSEE AND THE ASSESSING OFFICER BEFORE HIM HELD THAT THE ASSESSEE HAS DERIVED THE CAPITAL GAIN OF RS. 2.16 CRORES ON SALE OF THE S HARES OF MRS PR INDUSTRIES PRIVATE LIMITED WHICH WERE PURCHASED BY THE ASSESSEE ON 8/2/1983 AND 03/05/2000 TO FACE VALUE OF RUPEES HUNDRED PERCENT AND RS. 1 620 PER SHARE LATER ON. SUBSEQUENTLY THE ASSESSEE HAS SOLD 460 SHARES OF THE ABOVE COMPANY AT THE R ATE OF RS. 1 640 IN MAY 2000. THE ASSESSEE COMPUTED THE CAPITAL GAIN OF RS. 2 036 5568/ AND AS THESE ASSET WAS HELD FOR MORE THAN 36 MONTHS, THE ASSESSEE CLAIMED IT AS A LONG - TERM CAPITAL GAIN. FROM THE ABOVE LONG - TERM CAPITAL GAIN THE ASSESSEE CLAIMED EX EMPTION UNDER SECTION 54F OF THE ACT OF RS. 5 074885/ AS ASSESSEE IS INVESTED RS. 53 LAKHS IN PURCHASE OF RESIDENTIAL HOUSE. THE CLAIM OF THE DEDUCTION UNDER SECTION 54F OR INVESTMENT IN NEW HOUSE PROPERTY WAS PAID BY THE ASSESSEE BY FILING REVISED COMPUT ATION OF THE TOTAL INCOME. THE ASSESSEE IS ALSO PLACED ON LOADING THE ORIGINAL RETURN OF INCOME FILED ON 28/07/2004 STATING THAT THE ENTIRE CAPITAL GAIN HAD BEEN INVESTED IN THE PURCHASE OF NEW RESIDENTIAL HOUSE PROPERTY AND THEREFORE THE PROVISIONS OF SEC TION 54F ARE APPLICABLE AND THEREFORE THE LONG - TERM CAPITAL GAIN IS EXEMPT FROM TAX. THE LD. CIT (A) ALSO VERIFIED THE VARIOUS CHEQUES ISSUED BY THE ASSESSEE FOR THE PURPOSE OF PURCHASE OF THE HOUSE PROPERTY AS WELL AS THE PAYMENT OF STAMP DUTY. HE FURTHE R PAGE 3 OF 4 NOTED THAT THE ASSESSEE HAS ALSO INVESTED A SUM OF RUPEES ONE CRORE IN BONDS OF STATE HOLDING CORPORATION LIMITED UNDER SECTION 54 E C OF THE INCOME TAX ACT. THEREFORE, ACCORDING TO THE LD. CIT APPEAL THE CAPITAL GAIN CHARGEABLE TO INCOME TAX AFTER GRANTIN G DEDUCTION OF 54F THE CHARGEABLE CAPITAL GAIN IS NIL. IN VIEW OF THIS, HE ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE LD. A SSESSING OFFICER. 5. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED A PAPER BOOK AS WELL AS THE WRITTEN SUBMISSION PLACING ON RECORD THE VARIOUS EVIDENCES FOR THE CLAIM OF EXEMPTION. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORI TIES. THE FIRST GROUND OF APPEAL OF THE REVENUE IS THAT THE LD. CIT APPEAL AND IN LAW IN ADMITTING THE ADDITIONAL EVIDENCES VIOLATING THE PROVISIONS OF RULE 46A (3) OF INCOME TAX RULES, 1962. THE LD. CIT APPEAL HAS RECORDED THE REASONS OF ADMISSION OF THE ADDITIONAL EVIDENCE AT PARA NO. 3.1 OF HIS ORDER WHEREIN HE IS CONSIDERED THAT THE APPELLANT WAS 83 YEARS OF AGE AND HAD REQUIRED SOME TIME TO TRACK DOWN THE DOCUMENTS PERTAINING TO A Y 2004 05 IN THE YEAR OF REASSESSMENT 2011. THEREFORE, HE WAS OF THE V IEW THAT APPELLANT WAS NOT ALLOWED SUFFICIENT TIME TO GATHER ALL THE DETAILS PERTAINING TO A MUCH EARLIER PERIOD, THE ADDITIONAL EVIDENCES WERE ADMITTED. FURTHER, AFTER ADMISSION OF THE ADDITIONAL EVIDENCE HE FORWARDED IT TO THE ASSESSING OFFICER FOR REMAN D REPORT. WIDE IS OFFICE LETTER DATED 08/11/2012. THE LD. ASSESSING OFFICER ALSO SUBMITTED HIS REMAND REPORT FILED LETTER DATED 04/01/2013. IN VIEW OF THIS, WE DISMISS GROUND NO. 1 OF THE APPEAL OF THE REVENUE HOLDING THAT THERE IS NO VIOLATION OF THE PROV ISIONS OF SECTION 46A OF INCOME TAX RULES, 1962. 7. THE SECOND GROUND OF APPEAL OF THE REVENUE WAS AGAINST THE COMPUTATION OF CAPITAL GAINS BY THE LD. CIT (A FROM RS. 2.16 CRORES TO RS. 1.42 CRORES AS LONG - TERM CAPITAL GAIN AS PER REVISED COMPUTATION OF INCO ME. THE AMOUNT OF RS. 2.16 CRORE IS CONSIDERED AS THE SALE CONSIDERATION AND THE LD. CIT (A) HAS COMPUTED THE CAPITAL GAIN. ACCORDING TO THE PROVISIONS OF THE INCOME TAX ACT AFTER GRANTING INDEXATION COST ON SALE OF THOSE SHARES OF RS. 2 036 6568/ . FROM T HE ABOVE SUM HE FURTHER GRANTED THE DEDUCTION UNDER SECTION 54F OF RS. 5 074885/ - . BEFORE US REVENUE COULD NOT POINT OUT THAT HOW THE COMPUTATION OF THE CAPITAL GAIN MADE BY THE LD. CIT (A IS INCORRECT. IN VIEW OF THIS GROUND NO. 2 OF THE APPEAL OF THE REV ENUE IS DISMISSED. 8. GROUND NO. 3 OF THE APPEAL OF THE REVENUE IS AGAINST THE ALLOWANCE OF EXEMPTION UNDER SECTION 54 OF THE INCOME TAX ACT, WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAS NOT CLAIMED ANY EXEMPTION IN HIS ORIGINAL RETURN OF INCOME AND EVE N IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND WE ARE OF THE OPINION THAT EVEN IF THE ASSESSEE IS NOT CLAIMED DEDUCTION UNDER SECTION 54 OF THE INCOME TAX ACT BEFO RE THE LD. ASSESSING OFFICER OR NOT BY FILING REVISED PAGE 4 OF 4 RETURN OF INCOME OR IN THE ORIGINAL RETURN OF INCOME, EVEN THEN BEFORE THE APPELLATE AUTHORITIES SUCH CLAIM CAN BE MADE. SUCH VIEW HAS ALSO BEEN TAKEN BY THE HONBLE DELHI HIGH COURT IN CASE OF CIT VERS US JAI PARABOLIC SPRINGS LTD IN 306 ITR 42. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT APPEAL IN ENTERTAINING THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE INCOME TAX ACT. IT IS ALSO TO BE NOTED THAT THE LD. CIT APPEAL IS G RANTED ENOUGH AUTHORITY TO THE LD ASSESSING OFFICER FOR VERIFICATION AND COMMENTING ON THE CLAIM OF THE ASSESSEE. IT IS NOT ALSO THE CASE OF THE REVENUE THAT THE CLAIM OF THE ASSESSEE IS NOT ENTERTAINABLE OR DISALLOWABLE. IN VIEW OF THIS GROUND NO. 3 OF TH E APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 / 0 9 / 2017 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 8 / 0 9 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI