ITO, Jaipur V. KAILASH GUPTA, Jaipur

ITA 20/JPR/2013

• Counselvise Citation: 2023114 RSA 2013
• Duration Of Justice: 2 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 02-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEPH
• Section: 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 20/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER, WARD 4(2), JAIPUR. CUKE VS. KAILASH GUPTA 5/2, KHANDELWAL TOWER, SECTOR-1, VIDHYADHAR NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AATPG 5359 B VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : MRS. NEENA JEPH (JCIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 23/03/2015 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 27/03/2015 VKNS'K @ ORDER PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 29/10/2012 PASSED BY THE LEARNED CIT (A)-II, JAIPUR FOR A.Y. 2008-09. THE SOLE GROUND OF APPEAL IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION MADE IN THE CASE OF THE ASSESSEE WHEN IN REALITY, THE LEGAL OWNERSHIP OF THE PROPERTY SOLD BELONGED TO THE ASSESSEE AND NOT HIS BROTHER SH. ITA 20/JP/2013_ ITO VS. KAILASH GUPTA 2 B.S. GUPTA WHO HAS CLAIMED EXEMPTION U/S ON THE SALE PROCEEDS OF THE PROPERTY IN QUESTION. 2. THE REVENUE CHALLENGED THE DELETION OF ADDITION I N CASE OF ASSESSEE ON THE GROUND THAT EVEN LEGAL OWNER OF PROP ERTY IS ASSESSEE. THE LD. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE PURCHASED A PLOT FOR RS. 17,081/- BEARING PLOT NO. E-67, SHASTRI NAG AR, JAIPUR OUT OF WHICH RS. 4,265/- WAS DEPOSITED AT THE TIME OF PARTI CIPATION IN AUCTION AND BALANCE RS. 12,823/- WAS DEPOSITED SUBSEQUENTLY. THE ENTIRE AMOUNT WAS PAID BY SHRI B.S. GUPTA OUT OF HIS OWN SOU RCES OF INCOME. THE ASSESSEE AT THAT POINT OF TIME HAS NO SOURCE OF INCOME AND WAS RESIDING AT VILLAGE. HE HAS ALREADY FILED AN AFFIDA VIT BEFORE THE ASSESSING OFFICER AND CLAIMED THAT HE CONSTRUCTED THE HOUSE I N 1975 AND STARTED RESIDING THERE. HOWEVER, THE ALLOTMENT OF PLOT WAS TA KEN BY HIM IN THE NAME OF HIS YOUNGER BROTHER SHRI K.C. GUPTA. SINCE HE WAS IN GOVERNMENT SERVICE AND POSTED OUTSIDE JAIPUR. THE AS SESSEE SOLD THE PROPERTY SITUATED AT E-67, SHASTRI NAGAR, JAIPUR FO R A CONSIDERATION OF RS. 50 LACS ON 04/8/2007. THE ASSESSEE HAS NOT SHOWN ANY INCOME FROM CAPITAL GAIN. IN CASE OF B.S. GUPTA, THE ASSES SING OFFICER MADE ADDITION OF RS. 50 LACS BEING THE SALE PROCEED OF H OUSE ON PROTECTIVE BASIS. THE LEGAL HEIRS OF B.S. GUPTA FILED APPEAL BE FORE THE LD. CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE ENTIRE FACTS, H ELD THAT B.S. GUPTA ITA 20/JP/2013_ ITO VS. KAILASH GUPTA 3 WAS THE REAL OWNER OF THE SAID HOUSE AND ACCORDINGLY HELD THAT CAPITAL GAIN ON SALE OF THE HOUSE IS TO BE CHARGED IN THE H ANDS OF B.S. GUPTA. WITHOUT PREJUDICE TO THE ABOVE THE ASSESSEE ALSO CL AIMED THAT IF THE PROPERTY IS ASSESSED TO TAX IN THE HANDS OF ASSESSE E THEN BENEFIT OF SECTION 54 MAY KINDLY BE ALLOWED AS THE ENTIRE SALE PROCEED HAS BEEN INVESTED IN THE PURCHASE OF THE HOUSE. THE LD. ASSES SING OFFICER AFTER CONSIDERING THE DETAILED SUBMISSIONS MADE BY THE AS SESSEE AS HELD THAT SHRI K.C. GUPTA IS REAL OWNER OF PROPERTY AT E-67, S HASTRI NAGAR, JAIPUR AND CAPITAL GAIN ARISE FROM THE TRANSFER OF THIS PR OPERTY IS ASSESSABLE IN THE HANDS ON SUBSTANTIVE BASIS. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), WH O HAD DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER:- IT IS SEEN THAT MY PREDECESSOR THROUGH HIS ORDER D ATED 11/10/2011 IN THE CASE OF SMT. SHAKUNTALA DEVI GUPT A- LEGAL HEIR OF LATE SHRI B.S. GUPTA IN A.Y. 2008-09 HAD HE LD THAT THE PROPERTY AT E-67, SHASTRI NAGAR, JAIPUR WAS ACTUALLY OWNED BY LATE SHRI B.S. GUPTA. HIS FINAL FINDING ON PAGE 15 OF THE APPELLATE ORDER IS AS UNDER:- IN VIEW OF ABOVE FACTS, I HOLD THAT CAPITAL GAIN O F RS. 28,48,074/- ON THE SALE OF HOUSE HAS TO BE CHARTED TO TAX IN THE HANDS OF APPELLANT. SINCE THE APPELLANT HAD PU RCHASED RESIDENTIAL HOUSE ON 23/08/2007 AND A FLAT ON 06/09 /2007, THE DEDUCTION U/S 54 FOR RS. 28,48,074/- HAS TO BE ALLO WED TO THE APPELLANT. SINCE THE RECEIPTS ON SALE OF HOUSE WERE CREDITED IN ITA 20/JP/2013_ ITO VS. KAILASH GUPTA 4 THE BANK ACCOUNT OF THE APPELLANT AND THE AMOUNT WA S DISCLOSED AS CAPITAL GAIN, THE OPINION OF THE A.O. THAT IT WAS INCOME OF THE APPELLANT FROM UNDISCLOSED SOURCES, H AD NO LEGAL SANCTITY. I THEREFORE DIRECT THE A.O. TO DELETE THE ADDITION OF RS. 50,00,000/- ON ACCOUNT OF UNDISCLOSED INCOME. T HESE GROUNDS OF APPEAL ARE ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED. THE DEPARTMENT DID NOT FILE APPEAL AGAINST THE APPEL LATE ORDER IN THE CASE OF SHRI B.S. GUPTA. IN OTHER WORKDS, TH E A.OS ACTION OF TAXING RS. 50,00,000/-AS INCOME FROM OTHER SOURC ES WAS NOT UPHELD, AND LONG TERM CAPITAL GAINS ON SALE PROCEEDS OF RS. 50,00,000/- WERE FOUND ASSESSABLE IN THE HANDS OF TH E ACTUAL OWNER -LATE SHRI B.S. GUPTA, THOUGH NO LONG TERM CAP ITAL GAINS WERE FOUND FINALLY TAXABLE BECAUSE THE SAME WERE REIN VESTED IN HOUSE PROPERTIES AND WERE THUS EXEMPT FROM TAXATION U/S 54. THEREFORE, THERE IS NO BASIS FOR TAXING THE LONG TER M CAPITAL GAIN FROM SALE OF THE PROPERTY AT SHASTRI NAGAR IN THE H ANDS OF THE APPELLANT, BECAUSE THE SAME HAVE BEEN CONSIDERED IN THE HANDS OF THE REAL OWNER- LATE SHRI B.S. GUPTA AND THE APP ELLANT IS NOT TAXABLE FOR CAPITAL GAINS WHICH NEVER REACHED HIS O N THE PROPERTY WHICH WAS ALSO NOT ACTUALLY OWNED BY HI. I A GREE WITH THE FINDINGS OF MY PREDECESSOR IN THE CASE OF SMT. SHANKUNTALA DEVI GUPTA- THE LEGAL HEIR OF LATE SHRI B.S. GUPTA IN ORDER DATED 11/10/2011, THEREFORE, THE A.O. IS DIRECTED TO DELE TE THE ADDITION OF RS. 39,89,830/-. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LEARNE D D.R. FAIRLY ACCEPTED THAT IN CASE OF LEGAL HEIR OF LATE B.S. GU PTA, NO SECOND APPEAL HAS BEEN FILED BY THE DEPARTMENT AND THE LD CIT(A) H AS HELD THAT THIS ITA 20/JP/2013_ ITO VS. KAILASH GUPTA 5 PROPERTY IS OWNED AND BELONGED TO LEGAL HEIR OF LATE B.S. GUPTA. THE LD. AR OF THE ASSESSEE HAS ALSO ACCEPTED THE FACTUA L POSITION OF THE CASE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WHEN THE LD. CIT(A) HAS DECIDED THAT THIS PROPERTY IS BELONGED TO LEGAL HEI R OF LATE B.S. GUPTA AND THE LD ASSESSING OFFICER HAS ASSESSED TO TAX IN THE HANDS OF LEGAL HEIR, WHICH HAS BEEN HELD CORRECT IN CASE OF LEGAL H EIR OF LATE B.S. GUPTA. THE DEPARTMENT HAS NOT FILED AN APPEAL BEFORE THE ITAT ON THE FINDINGS OF LEGAL HEIR OF LATE B.S. GUPTA FOR A.Y. 2008-09. THEREFORE, WE DO NOT FIND ANY REASON TO INTERVENE IN THE ORDER OF THE LD CIT(A). ACCORDINGLY WE UPHELD THE ORDER OF THE LD. CIT(A). 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 27/03/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 27 TH MARCH, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- ITO, WARD 4(2), JAIPUR ITA 20/JP/2013_ ITO VS. KAILASH GUPTA 6 2. IZR;FKHZ @ THE RESPONDENT- KAILASH GUPTA, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 20/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR