Smt. Tara Gupta, Mandi V. ITO, Sunder Nagar

ITA 207/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6561 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 31-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Cost of acquisition; Capital receipt
• Section: 32; 147; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO.207/CHD/2017 ASSESSMENT Y EAR: 2008-09 SMT. TARA GUPTA, VS. THE ITO, W/O SHRI MOHAN, SUNDER NAGAR V&PO TATTAPANI (HP). DISTT. MANDI (H.P.) PAN NO. ANXPG9443K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SMT. CHANDER KANTA, SR.DR DATE OF HEARING : 14.11.2017 DATE OF PRONOUNCEMENT : 15.12.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 10.08.2016 OF LD. CIT (APPE ALS) PALAMPUR PERTAINING TO 2008-09 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD COMMISSIONER OF INCOME TAX ( APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE REOPENING OF THE CAS E UNDER SECTION 147 READ WITH SECTION 148 OF THE INCOME TAX ACT, 1961. 2. THAT IN THE FACT AND CIRCUMSTANCES OF THE CASE THE LD COMMISSIONER OF INCOME TAX ( APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE TAXING THE SUM OF RS 675000/- RECEIVED ON ACCOUNT OF LOSS OF EARNING / GOODWILL. FACT OF THE MATTER IS THAT THE SAME IS NO T TAXABLE INCOME AND AS SUCH THE SAID ADDITION IS N OT AT ALL SUSTAINABLE IN THE EYES OF LAW . 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD COMMISSIONER OF INCOME TAX ( APPEALS) IS NOT JUSTIFED IN UPHOLDING THE TAXING OF A SUM OF RS 16,57,89 L/-AS A SHORT TERM CAPITAL AND TREATING T HE COMPENSATION OF RS 18,03,931 AS PERTAINING TO DEPRE CIABLE ASSETS AND TREATING THE REMAINING CONSIDERATION AS PERTAINING TO LONG TERM ASSETS . F ACT OF THE MATTER IS THAT THE ENTIRE COMPENSATION H AS BEEN RECEIVED ON ACCOUNT OF LONG TERM CAPITAL ASSE TS AND THE SAME IS TAABLE AS SUCH. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD COMMISSIONER OF INCOME TAX ( APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE ACT OF THE LD A.O. I N NOT ALLOWING THE DEDUCTION UNDER SECTION 54 OF TH E INCOME TAX ACT, 1961. 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD COMMISSIONER OF INCOME TAX ( APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE ACT OF NOT ALLOWING THE BENEFIT OF BASIC EXEMPTION IN COMPUTATION OF THE TAX LIABILITY OF THE ASSESSEE. ITA 207/CHD/2017 A.Y. 2008-09 PAGE 2 OF 6 2. HOWEVER, BEFORE ADDRESSING THE GROUNDS, IT IS APPROPRIA TE TO NOTE THAT THE REGISTRY HAS POINTED OUT DEFECT IN THE PRESENT APPE AL BY WAY OF DELAY OF 48 DAYS. THE LD. AR SHRI TEJ MOHAN SINGH APPEARING ON BE HALF OF THE ASSESSEE DREW ATTENTION TO PARA 2 TO 5 OF THE CONDONA TION OF DELAY APPLICATION PLACED ON RECORD. THE SAME IS REPRODUCED HEREUNDER: 2. THAT THE APPELLANT/APPLICANT HAD DULY GIVEN PAPERS OF THE APPEAL FOR FILING TO THE OFFICE OF HER CHARTERED ACCOUNTANTS SH. JIT ENDER AND MANOJ AND ASSOCIATES. THE CLERK IN THE OFFICE PLACED THE SAME IN THE FILE WIT HOUT INFORMING THEM. 3. THAT THE CHARTERED ACCOUNTANT CAME TO KNOW ABOUT THE RECEIPT OF THE ORDER ONLY ON 20.01.2017 WHEN THE APPLICANT/APPELLANT ASKED ABOUT THE DATE IN HER CASE. THEREAFTER, THE CHARTERED ACCOUNTANT TOOK IMMEDIATE STEPS TO GE T THE SAID APPEAL FILED. THE AFFIDAVIT OF THE CHARTERED ACCOUNTANT IS BEING PLACED ON RECORD AS ANNEXURE-1 THE PRESENT APPLICATION FOR YOUR KIND PERUSAL AND READY REFERENCE OF THIS HON'BLE BENCH . 4. THAT THE DELAY IN FILING THE APPEAL WAS NEITHER IN TENTIONAL NOR WILLFUL BUT HAD OCCASIONED DUE TO THE REASON AFOREMENTIONED. 5. THAT NO PREJUDICE SHALL BE CAUSED TO THE REVENUE IF THE DELAY IN FILING OF APPEAL IS CONDONED AND THE APPEAL IS HEARD ON MERITS. WHEREAS , THE APPLICANT WOULD BE PUT TO AN IRREPARABLE LOSS. 3. INVITING ATTENTION TO THE AFFIDAVIT FILED BY THE CHARTERED ACCOUNTANT SHRI JITENDER SHARMA, THE LD. AR SUBMITTED THAT THE DELAY HAS OCCURRED FOR REASONS BEYOND THE CONTROL OF THE ASSESSEE. SHRI JITEND ER SHARMA, AS PER THE AFFIDAVIT IN SUPPORT OF THE APPLICATION HAS CONFIRMED THE FOLLOWING FACTS : 1. THAT THE ORDERS PASSED BY THE COMMISSIONER OF INCOM E TAX(APPEALS) WERE RECEIVED BY THE CLERK IN MY OFFICE IN THE MONTH OF NOVEMBER,201 6. THE OFFICE CLERK PLACED THE SAME IN THE RECORD FILE WITHOUT INFORMING ME OR MY PARTNER CHAR TERED ACCOUNTANT SHRI MANOJ KUMAR GUPTA. 2. THAT WE ONLY CAME TO KNOW ABOUT PASSING OF THE O RDER, WHEN THE APPLICANT SMT. TARA GUPTA ASKED ABOUT THE DATE IN HER CASE. THEREAFTER, WE IMMEDIATELY TOOK STEPS TO GET THE SAID APPEAL FILED. 3.1. ACCORDINGLY, IT WAS HIS PRAYER THAT THE DELAY MAY B E CONDONED. THE LD. SR.DR CONSIDERING THE MATERIAL AVAILABLE ON RECORD HAD NO OBJECTION IF THE DELAY IS CONDONED. 4. I HAVE HEARD SUBMISSIONS AND PERUSED THE MATERIAL AV AILABLE ON RECORD. I FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTANCE S OF THE PRESENT CASE, THE DELAY HAS OCCURRED ON ACCOUNT OF REASONS BEY OND THE CONTROL OF THE ASSESSEE. ACCORDINGLY, CONSIDERING THE APPLICATION AND CON TENTS OF THE AFFIDAVIT AS CORRECT AND TRUE, THE DELAY OF 48 DAYS IS CON DONED. ORDER ACCORDINGLY. 5. THE LD. AR INVITING ATTENTION TO THE GROUND RAISED VEHE MENTLY REITERATED AT LENGTH THE SUBMISSIONS MADE BEFORE THE AO AND THE CIT(A) ON ITA 207/CHD/2017 A.Y. 2008-09 PAGE 3 OF 6 THE BASIS OF WHICH IT WAS HIS ARGUMENT THAT THE GROUNDS ON FACTS HAVE BEEN WRONGLY REJECTED. 6. THE LD. SR.DR RELIES UPON THE IMPUGNED ORDER. ATTENTIO N WAS INVITED TO THE ORDERS OF THE ITAT IN THE CASE OF SMT. RADHA DE VI VS ITO WHEREIN THE ITAT VIDE ITS ORDER DATED 13.10.2017 IN ITA 1095/CHD/201 4 HAD CONSIDERED IDENTICAL ISSUES AND UPHELD ASSUMPTION OF JURISDI CTION. A PERUSAL OF THE SAID ORDER SHOWS THAT THE ISSUE CONSIDERED BY TH E CO-ORDINATE BENCH ALSO PERTAINED TO ACQUISITION OF PROPERTY FOR CONSTRUCTION OF KOL DAM IN TATTAPANI FOR WHICH PURPOSES, LAND WAS ACQUIRED AND COMP ENSATION WAS AWARDED BY LAO, SUNDER NAGAR IN THAT CASE AND LAO BILAS PUR IN THE PRESENT CASE OF SPECIFIC AMOUNTS. THE TDS CERTIFICATE WAS ISSUED BY THE LAO AND THE ASSESSEE HAD ALSO FILED RETURN CLAIMING ENTIRE REC EIPT AS TAX FREE AND ALSO CLAIMED REFUND OF THE TAX DEDUCTED AT SOURCE. THE S AID CASE WAS ALSO SUBJECTED TO RE-OPENING AND A SCRUTINY ORDER WAS PASS ED BRINGING TO TAX THE AMOUNT OF COMPENSATION AS SHORT TERM CAPITAL GAIN ON ACC OUNT OF THE SPECIFIC PROPERTY ACQUIRED. THE SCRUTINY ORDER IN THE FACTS OF TH E PRESENT CASE IS U/S 144/147 OF THE ACT. THE ASSESSEE CHALLENGED THE J URISDICTION ASSUMED BY THE AO BEFORE THE CIT(A). CONSIDERING THE FACTS WHICH AR E IDENTICAL TO THE FACTS OF THE PRESENT CASE, THE JURISDICTIONAL ISSUE WAS DIS MISSED BY THE CIT(A). THESE FACTS ARE FOUND TO BE IDENTICAL TO THE FACTS AS CONSIDERED BY THE ITAT IN PARAS 11 TO 12 OF THE AFORESAID ORDER. 7.1 ON CONSIDERING THE FACTS AS SET OUT IN THE ASSESSMEN T ORDER AND THE REASONING IN PARA 5 ON GROUND NO. 1 IN THE IMPUGNED ORDE R, I FIND NO INFIRMITY IN THE CONCLUSION DRAWN AND HOLD THAT GROUND NO. 1 RAISED BY THE ASSESSEE IN THE PRESENT PROCEEDINGS ALSO IS NOT MAINTAINA BLE AS IN THE ASSUMPTION OF JURISDICTION, NO INFIRMITY ON RECORD IS FOUND. AC CORDINGLY, THE RE-ASSESSMENT PROCEEDINGS ON FACTS ARE FOUND TO HAVE BEEN VALIDLY INITIATED. 8. THE SECOND ISSUE AGITATED IN THE PRESENT APPEAL, IT IS S EEN, IS ADDRESSED BY THE CO-ORDINATE BENCH IN PARAS 18 TO 22 ON FACTS, AS CONSIDERED IN PARAS 14 TO 17. THE ISSUE IN THE PRESENT PROCEEDIN GS HAS BEEN CONSIDERED BY THE AO IN THE FOLLOWING MANNER : 'IT HAS BEEN ESTABLISHED FROM THE INFORMATION GATHE RED FROM THE LAO, BILASPUR THAT THE APPELLANT WAS PAID RS. 6,75,000/- VIDE ORDER DATED 15.0.2008 TOWARDS COMPENSATION ON ACCOUNT OF LOSS OF EARNING WHICH SHE WOULD HAVE EAR NED IN THE COMING YEARS BY CALCULATING THE INCOME @ RS. 45.000/- P.A. FOR THE 15 YEARS. THIS PAYMENT WAS MADE BY HIM ON THE APPLICATION MOVED BY HER AS ALREADY DISC USSED EARLIER. THEREFORE, IT IS CLEAR FROM THE FACTS THAT HER DECREASE IN INCOME HAS BEEN COMPENSATED AND HENCE I HOLD THAT THIS AMOUNT OF RS. 6,75,000/- IS HER NORMAL BUSINESS INC OME RECEIVED IN THE YEAR 2007-08 ITA 207/CHD/2017 A.Y. 2008-09 PAGE 4 OF 6 RELEVANT TO THE ASSESSMENT YEAR 2008-09. HENCE, ADD ITION OF RS. 6,75,000/- IS MADE ON THIS ACCOUNT'. 8.1 THE CIT(A) HAS HELD IT TO BE A ONE TIME RECEIPT AND CONCLUDED THAT IT HAS TO BE TAXED IN THE YEAR UNDER CONSIDERATION EVEN T HOUGH IT IS COMPENSATION FOR EARNING OF THE NEXT 15 YEARS. I FIND THA T THE SAID CONCLUSION IS IN DIRECT CONFLICT WITH THE CONCLUSION DRAWN BY THE CO-ORDINATE BENCH. LD. AR HAS PLACED HEAVY RELIANCE ON THE SAME STA TING THAT IT HAS BEEN HELD AS A CAPITAL RECEIPT DISTINCT FROM THE COMPENSATION RECEIVED FOR ACQUISITION OF LAND AND THUS NOT TAXABLE IN THE HAN DS OF THE ASSESSEE. RELIANCE HAS BEEN PLACED ON THE DECISION OF THE APEX COURT IN THE CASE OF SENAIRAM DOONGARMALL VS CIT (1961) 42 ITR 392 (S.C). RELEVANT FINDING FR OM THE ORDER OF THE ITAT IS EXTRACTED HEREUNDER : 18. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PART IES. THE ISSUE BEFORE US PERTAINS TO DETERMINING THE NATURE OF THE COMPENSATION RECEI VED OF RS.11,25,000/- WHETHER IT WAS IN THE NATURE OF COMPENSATION RECEIVED FOR ACQUISITION OF THE ASSESSEES PROPERTY AS HELD BY THE CIT(A) CAPITAL OR WAS OTHERWISE CAPITAL IN NATURE NOT LIABLE TO BE TAXED AS PLEADED BY THE LD.COUNSEL FOR THE ASSESSEE. 19. THE FACTS WHICH ARE NOT DISPUTED ARE THAT THE A SSESSEE WAS THE OWNER OF A PROPERTY BUILT ON LAND TAKEN ON LEASE BY HER FROM H ER HUSBAND FOR A PERIOD OF 20 YEARS AND WAS RUNNING A GUEST HOUSE ON THE SAME. THE PERIOD OF LEASE REMAINING WHEN THE SAID PROPERTY WAS ACQUIRED BY THE GOVERNMENT WAS 15 YEAR S. THE ASSESSEE HAD BEEN COMPENSATED FOR THE ACQUISITION OF PROPERTY TO THE TUNE OF RS.66,04,202/- AND THEREAFTER THE ASSESSEE HAD REQUESTED THE LAO TO COMPENSATE HER FU RTHER FOR GOODWILL ON ACCOUNT OF DISCONTINUATION OF HER BUSINESS, IN RESPONSE TO WHI CH THE ASSESSEE HAD FILED COPIES OF HER BALANCE SHEET TO THE LAO TO PROVE THAT SHE HAD BEEN RUNNING A GUEST HOUSE ON THE SAID PROPERTY AND EARNING INCOME OF APPROXIMATELY RS.75, 000/- PER YEAR. THE LAO HAD ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND DIRECTED THAT T HE ASSESSEE BE COMPENSATED FOR HER LOSS OF YEARLY INCOME WHICH AMOUNTED IN ALL TO RS.11,25,000 /-. THE RELEVANT APPLICATION OF THE ASSESSEE AND THE ORDER OF THE LAO FORMED PART OF TH E PAPER BOOK PLACED AT PAGES 36 TO 38. 20. WHAT EMERGES FROM THESE FACTS IS THAT THE LAO H AD AWARDED THE SUM OF RS.11,25,000/- TO THE ASSESSEE AS COMPENSATION FOR THE LOSS OF THE INCOME EARNING APPARATUS OF THE ASSESSEE. THE GOVERNMENT HAVING TA KEN OVER/ACQUIRED THE PREMISES AND THE LAND ON WHICH THE ASSESSEE WAS RUNNING HER GUES T HOUSE, THE ASSESSEE HAD BEEN DEPRIVED OF HER INCOME EARNING SOURCE AND SINCE THE REMAINING LEASE FOR THE GUEST HOUSE WAS 15 YEARS, SHE HAD BEEN DEPRIVED OF HER INCOME E ARNING APPARATUS FOR THE NEXT 15 YEARS. CONSIDERING THESE FACTS THE LAO HAD COMPENSATED HER FOR THE LOSS OF HER INCOME EARNING APPARATUS. SUCH COMPENSATIONS RECEIVED FOR LOSS OF BUSINESS ON ACCOUNT OF COMPULSORY REQUISITION OF BUSINESS ASSETS HAS BEEN HELD TO BE CAPITAL RECEIPTS BY THE HONBLE APEX COURT IN THE CASE OF SENAIRAM VS CIT (1961) 42 ITR 392. THE SAID RECEIPT, THEREFORE, IS CAPITAL IN NATURE AND CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. 21. THE CONTENTION OF THE REVENUE THAT THE SAME FOR MED PART OF THE CONSIDERATION FOR THE ASSET IS TOTALLY OFF THE MARK. THE COMPENSATIO N RECEIVED BY THE ASSESSEE ON ACCOUNT OF THE ACQUISITION OF THE BUILDING FORMED PART AND WA S INCLUDED IN THE AWARD GRANTED TO THE ASSESSEE, THE AMOUNT OF WHICH WAS RS.66,04,202/- O NLY, AS PER THE SAID SHEET PLACED AT PAPER BOOK PAGE NO.26. THE FIGURE OF RS.11,25,000/- DOES NOT FORM PART OF THE SAID SHEET. IN FACT, AS POINTED OUT ABOVE, THE LAO HAD AWARDED THE SUM AS COMPENSATION FOR LOSS OF INCOME AND, THEREFORE, BY NO STRETCH OF IMAGINATION THE SAID AMOUNT CAN BE SAID TO BE PART OF THE COMPENSATION OF ACQUISITION OF ASSET. 22. IN VIEW OF THE ABOVE WE HOLD THAT THE AMOUNT RE CEIVED AMOUNTING TO RS.11,25,000/-AS COMPENSATION FOR LOSS OF BUSINESS WAS A CAPITAL RECEIPT DISTINCT FROM THE COMPENSATION RECEIVED FOR ACQUISITION OF LAND AND T HUS NOT TAXABLE IN THE HANDS OF THE ASSESSEE. GROUND NO.2 RAISED BY THE ASSESSEE THEREFORE STANDS ALLOWED. ITA 207/CHD/2017 A.Y. 2008-09 PAGE 5 OF 6 8.2 IN THE ABSENCE OF ANY CHANGE IN FACT OR POSITION OF LAW , GROUND NO. 2 RAISED BY THE ASSESSEE IN THE PRESENT PROCEEDINGS IS ALLOWED. 9. THE NEXT ISSUE AGITATED BY THE ASSESSEE IN THE PRESE NT PROCEEDINGS VIDE GROUND NOS. 3 TO 5 IS FOUND ADDRESSED IN PAGES 6 AN D 7 OF THE IMPUGNED ORDER. A PERUSAL OF THE SAME SHOWS THAT THE S PECIFIC PROPERTY ACQUIRED CONSISTED OF FIRST FLOOR AND SECOND FLOOR WHICH WAS RESIDENTIAL AND HOTEL ACCOMMODATION. FIFTY PERCENT OF THE BUILDING WAS TREA TED AS DEPRECIABLE ASSET BEING USED FOR HOTEL BUSINESS AND 50% A S RESIDENTIAL PURPOSES. THE AO TREATED THE SAME AS SHORT TERM CAP ITAL GAIN. THE CIT(A) HAS UPHELD THE SAID DECISION. THE SAID ISSUE, IT IS SEEN, H AS ALSO BEEN CONSIDERED BY THE ITAT IN THE AFORESAID DECISION. 10. CONSCIOUS OF THE SAID DECISION, LD. AR NEVERTHELESS REITERATED THE SUBMISSIONS BEFORE THE AUTHORITIES BELOW. 10.1. THE LD. SR.DR RELIES ON THE ORDER OF THE ITAT AS WE LL AS THE CONSISTENT ORDERS OF THE TAX AUTHORITIES. 12. I HAVE HEARD SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. I FIND THAT THE CO-ORDINATE BENCH AFTER CONSIDERING THE IDENTIC AL SUBMISSIONS OF THE PARTIES BEFORE THE BENCH PROCEEDED TO CONSIDER THE ISSUE VIDE PARAS 30 TO 34 IN FOLLOWING MANNER AND ALSO PROCEEDED TO CONSIDER G ROUND NO. 4 RAISED IN THE FACTS OF THAT CASE VIDE PARAS 35 TO 36 HOLDING AS UNDER : 30. WE HAVE HEARD BOTH THE PARTIES AND PERUSED T HE DOCUMENTS FILED BEFORE US. WE FIND NO MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR ASSE SSEE. IT IS AN ADMITTED FACT THAT BEFORE THE LAO THE ASSESSEE HAD STAKED CLAIM TO BE COMPENSATED FOR LOSS OF ITS BUSINESS INCOME AND AS EVIDENCE OF THE SAME HAD FILED BALANCE SHEET BEFORE THE LAO SHOWING THAT THE IMPUGNED ASSET WAS ITS BUSINESS ASSET AND WAS BEING DEPRECIATED AC CORDINGLY. THE ASSESSEE IN HER APPLICATION BEFORE THE LAO HAD SUBMITTED THAT SHE WAS RUNNING A GUEST HOUSE IN THE SAID PROPERTY AND WAS EARNING INCOME THEREON. EVEN THE LAO AWARDED COMPEN SATION TO THE ASSESSEE OF RS.11,25,000/- FOR LOSS OF BUSINESS INCOME. ALL THESE FACTS,WHICH HAVE NOT BEEN CONTROVERTED BY THE ASSESSEE LEAD ONLY TO ONE LOGICAL CONCLUSION, THAT THE ASSET WAS THE BUSINESS ASSET OF THE ASSESSEE. THE REVENUE, THEREFORE, HAS RIGHTLY HELD THE CAPITAL GA IN EARNED THEREON AS SHORT TERM CAPITAL GAIN EARNED ON SALE OF BUSINESS ASSET AS PER THE PROVISI ONS OF SECTION 50 OF THE ACT AND DENIED THE ASSESSEE INDEXATION ON THE COST OF ACQUISITION OF T HE ASSET THEREON. 31. THE CLAIM OF THE LD. COUNSEL FOR ASSESSEE TH AT THE SAID ASSET WAS NOT ITS BUSINESS ASSET IS BASED SOLELY ON THE FACT THAT IT HAD NEVER FILED RE TURNS BEFORE THE INCOME-TAX AUTHORITIES CLAIMING SO. WE FIND NO SUBSTANCE IN THIS ARGUMENT OF THE LD. COUNSEL FOR ASSESSEE. NON FILING OF INCOME TAX RETURN DOES NOT PROVE THAT THE ASSET WAS NOT THE BUSINESS ASSET OF THE ASSESSEE. THE NON-FILING OF INCOME TAX RETURN IS IN FACT A DEFAUL T ON THE PART OF THE ASSESSEE WHICH HAS ITS OWN CONSEQUENCES BUT MERELY BECAUSE THE ASSESSEE DOES N OT FILE HER INCOME TAX RETURN DOES NOT MEAN THAT SHE HAS EARNED NO TAXABLE INCOME AT ALL. THE N ON FILING OF INCOME TAX RETURN DOES NOT PROVE ANYTHING AT ALL. 32. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO C ONTENDED THAT AS PER SECTION 50 OF THE ACT ,WHICH TREATS CAPITAL GAINS EARNED IN CASE OF DEPRE CIABLE ASSETS AS SHORT TERM CAPITAL GAINS, THE CAPITAL ASSET SHOULD FORM BLOCK OF CAPITAL ASSETS O N WHICH DEPRECIATION HAS BEEN ALLOWED ITA 207/CHD/2017 A.Y. 2008-09 PAGE 6 OF 6 UNDER THE ACT. THE CONTENTION OF THE LD.COUNSEL IS THAT SINCE NO RETURN HAS BEEN FILED BY THE ASSESSEE, THE ASSESSEE HAS NOT CLAIMED DEPRECIATION ALSO AND HAVING NOT CLAIMED DEPRECIATION, THE SAME CANNOT BE SAID TO HAVE BEEN ALLOWED TO IT ALSO. 33. WE DO NOT FIND ANY MERIT IN THIS CONTENTION OF THE ASSESSEE ALSO. FIRSTLY AS PER THE ASSESSEES OWN CLAIM BEFORE THE LAO, THE IMPUGNED AS SET I.E. THE BUILDING ,IS ITS BUSINESS ASSET WHICH IS BEING DEPRECIATED YEAR TO YEAR AS REFLECTE D IN THE BALANCE SHEET FILED BEFORE THE LAO. MERELY BECAUSE NO RETURN HAS BEEN FILED BY THE ASSE SSEE WILL NOT TAKE AWAY THE ADMITTED FACT THAT THE ASSET IS A BUSINESS ASSET OF THE ASSESSEE FORMI NG PART OF BLOCK OF ASSET I.E. BUILDING. MOREOVER DEPRECIATION ALLOWED TO THE ASSESSEE CAN NOT BE READ SO AS TO MEAN THAT ALLOWED AFTER HAVING BEEN CLAIMED BY THE ASSESSEE. EXPLANAT ION 5 TO SECTION 32(1) ,WHICH DEALS WITH ALLOWABILITY OF DEPRECIATION ,STATES DEPRECIATION W ILL BE ALLOWED AS PER THE PROVISION OF SECTION 32 WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDU CTION WHILE COMPUTING ITS INCOME. THEREFORE ACTUAL CLAIM BY THE ASSESSEE IS NOT REQUI RED EVEN BY STATUTE FOR ALLOWING IT. 34. WE, THEREFORE, HOLD THAT THE CAPITAL GAIN E ARNED ON COMPULSORY ACQUISITION OF THE PROPERTY HAS BEEN RIGHTLY HELD TO BE SHORT TERM CAPITAL GAIN AND HAS BEEN CORRECTLY COMPUTED AT RS.56,50,290/- AFTER DENYING THE INDEXATION ON THE COST OF THE ACQUISITION. GROUND NO.3 RAISED BY THE ASSESSEE IS, THE REFORE, DISMISSED. 35. GROUND NO.4 RAISED BY THE ASSESSEE READS A S UNDER: 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD COMMISSIONER OF INCOME TAX (APPEALS) IN NOT ALLOWING DEDUCTION UNDER SECTI ON 54F/54D OF THE INCOME TAX ACT, 1961. THE SAME IS VERY MUCH ALLOWABLE IN THE EYES O F LAW. 36. THE ABOVE GROUND WAS NOT PRESSED BEFORE US AND IS, THEREFORE, DISMISSED AS NOT PRESSED. IN EFFECT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. 12.1 IN THE ABSENCE OF ANY CHANGE IN FACTS OR CIRCUMST ANCES OR THE POSITION OF LAW, RESPECTFULLY FOLLOWING THE ORDER OF THE CO-ORDINATE BE NCH, THE SAID GROUNDS OF THE ASSESSEE ARE DISMISSED. SAID ORDER WAS PR ONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.12. 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.