Shri Ishwarbhai Himmatbhai Patel, Ahmedabad V. DCIT, Circle-3(2), Ahmedabad

ITA 2010/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4552 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 25-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Capital Gains
• Section: 54; 54B; 54F; 250; 143(2); 139(1); 119; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER SHRI GOVINDBHAI HIMMATBHAI PATEL, 610, GHUMA GAM AHMEDABAD PAN: CSMPP0196C (APPELLANT) VS THE DCIT , CIRCLE - 3 ( 2 ) , AHMEDABAD - 380015 (RESPONDENT) SHRI ISHWAR BHAI HIMMATBHAI PATEL, 610, GHUMA GAM AHMEDABAD - 380058 PAN: CSLPP7710F (APPELLANT) VS THE DCIT , CIRCLE - 3(2) , AHMEDABAD - 380015 (RESPONDENT) REVENUE BY : S H RI VIDHYUT TRIVEDI , SR. D . R. ASSESSEE BY: SHRI S.N. DIVETIA , A.R. DATE OF HEARING : 18 - 0 2 - 2 020 DATE OF PRONOUNCEMENT : 19 - 02 - 2 020 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - I T A NO . 2009 / A HD/20 18 A S S ESSMENT YEAR 2015 - 16 ITA NO. 2010 /AHD/20 18 ASS ESSMENT YEAR 2015 - 16 I.T.A NO S . 2009 &2010 /AHD/20 18 A.Y. 2015 - 16 PAGE NO SHRI GOVINDBHAI HIMMATBHAI PATEL VS. DCIT & SHRI ISHWARBHAI HIMMATBHAI P ATEL VS. DCIT 2 THESE TWO APPEALS ARE FILED BY THE ASSESSEE BY THE DIFFERENT ASSESSEES AGAINST THE DECISION OF THE LD. CIT(A) - 3 AHMEDABAD. SINCE THE COMMON ISSUE S ON IDENTICAL FACTS ARE INVOLVED IN THESE TWO APPEALS , THEREFORE, FOR THE SAKE OF CONVENIENCE , BOTH THESE APPEALS ARE ADJUDICATED TOGETHER BY TAKING THE FACTS OF ITA NO . 2010 /AHD /2018 AS LEAD CASE AND ITS FINDING WILL BE APPLICABLE TO ITA NO. 2009/AHD/2018 . ONE DAY DELAY IN FILING THESE APPEALS ARE CONDON ED . ITA NO. 2010/AHD/2018 2. THE ASSESSEE HAS RAISED F OLLOWING GROUNDS OF APPEAL: - 1.1 THE ORDER PASSED U/S 250 ON 23.07.2018 FOR A.Y.2015 - 16 BY CIT(A) - 3, A'BAD UPHOLDING ADDITION OF RS.20 LACS TOWARDS CAPITAL GAIN IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE L D. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGNED ADDITIONS. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FAC TS UPHOLDING ADDITION OF RS.20 LACS TOWARDS CAPITAL GAIN, THOUGH IT WAS DISCLOSED AS INCOME IN AY 2018 - 19. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT NOT HAVE UPHELD THE ADDITION OF RS.20 LACS TOWARDS CAPITAL GAIN MADE B Y AO. 2.3 WITHOUT PREJUDICE TO ABOVE AND IN ALTERNATIVE, IN CASE THE ADDITION OF RS.20 LACS IS UPHELD IN THIS YEAR, THE AQ SHOULD BE DIRECTED TO EXCLUDE THE SAME FROM THE TOTAL INCOME FOR AY 2018 - 19. IT IS THEREFORE PRAYED THAT THE ADDITIO N TOWARDS CAPITAL GAIN OF RS. 20,00,000/ - UPHELD BY CIT(A) SHOULD BE DELETED. 3 . THE FACT IN BRIEF IS THAT ASSESSEE HAS FILED RETURN OF INCOME ON 22 ND SEP, 2015 DECLARING TOTAL INCOME AT RS. 71 , 87 , 630/ - . THE CASE WAS SELECTED FOR SCRUTINY AND NO TICE U/S. 143(2) OF THE ACT WAS ISSUED ON 19 TH SEP, 2016. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS NOTICE D THAT ASSESSEE ALONG WITH OTHER ASSESSEE SHRI GOVIND HIMMAT BHAI PATEL WHO IS APPELLANT IN THE SECOND CASE VIDE ITA NO. 2009 AS MENT IONED ABOVE WERE JOINT HOLDER WITH 50% SHARES OF AGRICULTURAL LAND WHICH WAS SOLD ON 26 TH MARCH, 2015 FOR SALE CONSIDERATION AMOUNTING TO RS. 3.5 CRORES AND AN AMOUNT EQUIVALENT 50% OF THE SALE CONSIDERATION OF RS. 1.75 CRORES WAS COME IN THE SHARE OF EACH ASSESSEE. THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF RS. 1,7 2 , 41 , 187/ - . AGAINST THE LONG TERM CAPITAL GAIN, THE ASSESSEE HAS CLAIMED EXEMPTION U/S. 54B OF RS. 32 , 86 , 200/ - ON ACCOUNT OF I.T.A NO S . 2009 &2010 /AHD/20 18 A.Y. 2015 - 16 PAGE NO SHRI GOVINDBHAI HIMMATBHAI PATEL VS. DCIT & SHRI ISHWARBHAI HIMMATBHAI P ATEL VS. DCIT 3 INVESTMENT MADE IN AGRICULTURAL LAND ON 3 RD FEB, 2015 AND ALS O CLAIMED EXEMPTION U/S. 54F OF RS. 4 , 78 , 000/ - ON ACCOUNT OF INVES TMENT IN RESIDENTIAL HOUSE IN B OPAL, AHMEDABAD ON 23 RD JULY, 2015. THE ASSESSEE HAS ALSO DEPOSITED AN AMOUNT OF RS. 20 LACS IN CAPITAL GAIN CLAIM ON 29 TH JULY, 2015 WITH THE BANK DURING THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS RAISED QUER Y TO THE ASSESSEE TO JUSTIFY HIS CLAIM OF RS. 20 LACS U/S. 54 ON ACCOUNT OF AMOUNT DEPOSITED IN CAPITAL GAI N ACCOUNT AS THE SAME WAS IN VIOLATION OF CONDITION S LAID DOWN UN DER CLAUSE (II ) AND (III) OF PROVISO A OF SECTION 54F(1 ) OF THE ACT. THE ASSESSEE EXPLAINED THAT HE WAS INTENDED TO MAKE FURTH ER CONSTRUCTION ON THE PURCHASED HOUSE, THEREFORE, UN - UTILIZED AMOUNT WAS DEPOSITED IN THE CAPITAL GAINS CLAIM. T HE PERIOD OF THREE YEARS FOR UTILIZING THE DEPOSITED AMOUNT IN THE CAPITAL GAIN SCHEME WAS TO BE EXPIRED ON 24 TH MARCH, 2013. T HE ASSESSEE HAS ALSO SUBMITTED THAT AS PER PROVISION OF THE ACT (I)(A) & (B) SUB - SECTION (4) SECTION 54(F ) THE UN - UTILIZED AMOUN T SHALL BE CHARGED U/S. 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET EXPIRED. THE ASSESSING OFFICER HAS NOT AGREED WITH THE SUBMISSION OF THE ASSESSEE STATING THAT ASSESSEE IS NOT ENT ITLED TO CLAIM FURTHER EXEMPTION U/S. 54F OF THE ACT ON ACCOUNT OF EXTENSION OR NEW INVESTMENT IN OTHER RESIDENTIAL HOUSE WIT HIN PERIOD OF THREE YEARS FROM TRANSFE R R ED OF ORIGINAL PROPERTY . THE A SSESSEE HAS DEPOSITED RS. 20 LACS IN THE CAPITAL GAIN ACCOU NT WITHOUT KEEPING IN MIND THE PROVISION OF SECTION 54F, THEREFORE , CLAIM OF EXEMPTION WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. I.T.A NO S . 2009 &2010 /AHD/20 18 A.Y. 2015 - 16 PAGE NO SHRI GOVINDBHAI HIMMATBHAI PATEL VS. DCIT & SHRI ISHWARBHAI HIMMATBHAI P ATEL VS. DCIT 4 4 . AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF T HE ASSESSEE REITERATING THE FACT REPORTED BY THE ASSESSING OFFICER. 5 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS NOTICED THAT ASSESSEE HAS SOLD THE AGRICULTURAL LAND ON 26 TH MARCH, 2015 AND DEPOSITED THE UN - UTILIZED AMO UNT OF CAPITAL GAIN TO THE AMOUNT OF RS. 2 0 LACS IN THE CAPITAL GAIN SCHEME ON 29TH JULY, 2015, B EFORE FILING THE INCOME TAX RETURN U/S. 139(1) OF THE A CT FOR THE YEAR UNDER CONSIDERATI ON AS THE ASSESSEE HAS FILED THE INCOME TAX R ETURN FRO M ASSESSMENT YEAR 2015 - 16 ON 22 ND SEP, 2015. IN THIS REGARD, WE ARE OF THE VIEW THAT AS PER THE PROVISION OF SECTION 54(2) OF THE ACT, THERE IS NO BAR ON THE ASSESSEE FOR MAKING DEPOSIT OF UN - UTILIZED CAPITAL GAIN IN PRESCRIBED BANK BEFORE DUE DATE OF FILING TAX RETURN AS PER SECTION 139(1) OF THE ACT, D ESPITE THE FACT THAT ASSESSEE HAS ALREADY PURCHASED ONE RESI DENTIAL FLAT AS HELD IN CIT VS. KHOOBCHAND M. MAKHIJA (2014) 223 TAXMAN 189 AND IN THE DECISION OF THE MUMBAI ITAT VIDE (2016) 66 TAXMAN.COM 105 (MUMBAI)/(2016) 157 ITD 119 MUMBAI. THE ASSESSEE HAS DISCLOSED THE AMOUNT OF RS. 20 LACS AS CAPITAL GAIN AFTER EXPIRY OF THREE YEARS IN THE ASSESSMENT YEAR 2018 - 19. AS PER PROVISO TO SUB - SECTION (4) OF SECTION 54F IF T HE AMOUNT DEPOSITED IN CAPITAL GAIN ACCOUNT IS NOT UTILIZED WHOLLY OR PARTLY FOR PURCHASE OF OR CONSTRUCTION OF NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB - SECTION (1) THEN THE AMOUNT OF CAPITAL GAIN SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER OF THE ASSET EXPIRED. THUS FROM THE PLAIN READING OF THE PROVISIONS OF SECTIONS 54 & 54F IT IS CLEAR THAT ONCE THE AMOUNT HAS BEEN DEPOSITED IN THE CAPITAL GAIN ACCOUNT AND SUBSEQUENTLY, THE I.T.A NO S . 2009 &2010 /AHD/20 18 A.Y. 2015 - 16 PAGE NO SHRI GOVINDBHAI HIMMATBHAI PATEL VS. DCIT & SHRI ISHWARBHAI HIMMATBHAI P ATEL VS. DCIT 5 ASSESSE COULD NOT UTILIZE THE SAID AMOUNT FOR PURCHASE OF NEW ASSET, THEN THE SAID AMOUNT SHALL BE CHARGE D TO CAPITAL GAIN AS INCOME FOR THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS AS PROVIDE D UNDER SUB - SECTION (1) EXPIRED. THE CONSEQUENCE OF NON - UTILIZATION OF THE CAPITAL GAIN WITHIN TH E PERIOD OF THREE YEARS WOULD LEAD TO ASSESSMENT OF THE CAPITAL GAIN TO TAX IN THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THREE YEARS EXPIRED. THEREFORE, IT IS NEITHER THE DISCRETION OF THE ASSESSEE NOR THE DISCRETION OF THE ASSESSING OFFI CER TO ASSESS THE SAID AMOUNT TO CAPITAL GAIN TAX IN THE ASSESSMENT YEAR OTHER THAN THE YEAR AS PROVIDED IN SECTION 54/54F AND PARTICULARLY AS PER PROVISO TO SUB - SECTION (4) OF THE SAID SECTION SO LONG T HE AMOUNT IS DEPOSITED IN CAPITAL GAIN ACCOUNT. THUS , THE ADDITION MADE BY THE ASSESSING OFFICER FOR THE YEAR UNDER CONSIDERATION WAS NOT SUSTAINABLE AND THE SAME IS DELETED. THEREFORE , THE APPEAL OF THE ASSESSSE IS ALLOWED. ITA NO. 2009/AHD/2018 6 . WITHOUT REPEATING THE FACTS AS MENTIONED ABOVE IN IT A NO. 2010/AHD/2018 ON THE BASIS OF SIMILAR ISSUE AND IDENTI CAL FACTS AFTER APPLYING THE FIND ING OF ITA 2010/AHD/2018 AS SUPRA, THIS APPEAL OF THE ASSESSEE IS ALSO ALLOWED. 7 . IN THE RESULT, BOTH THE APPEALS FILED BY DIFFERENT ASSESSEES ARE ALLOWED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 19 - 02 - 20 20 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 19 /02 /2020 I.T.A NO S . 2009 &2010 /AHD/20 18 A.Y. 2015 - 16 PAGE NO SHRI GOVINDBHAI HIMMATBHAI PATEL VS. DCIT & SHRI ISHWARBHAI HIMMATBHAI P ATEL VS. DCIT 6 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,