ITO, New Delhi V. Sh. Sandeep Hora, New Delhi

ITA 2110/DEL/2012

• Counselvise Citation: 211020114 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 19-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SN GUPTA
• Keywords: Revised return
• Section: 143(3); 54F; 154

Judgement Text

ITA NO. 2110/DEL/2012 & CO NO. 466/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. NO. 2110/DEL/2012 A.Y. 2008-09 INCOME TAX OFFICER, WARD 22(1), NEW DELHI VS. SH. SANDEEP HORA, 59/4, KALKAJI, NEW DELHI (PAN:AABPH4323A) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) AND AND AND AND SH. SANDEEP HORA, 59/4, KALKAJI, NEW DELHI (PAN:AABPH4323A) C.O. NO. 466 /DEL/2012 (IN I.T.A. NO. 2110/DEL/2012 ) INCOME TAX OFFICER, WARD 22(1), NEW DELHI A.Y. 2008-09 VS. (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. RAMESH KUMAR, SR. D.R. ASSESSEE BY : SH. SN GUPTA, CA. ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU : JM H.S. SIDHU : JM H.S. SIDHU : JM H.S. SIDHU : JM THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE EMANATE OUT OF ORDER PASSED BY THE LD. C IT(A)XXIII, NEW DELHI DATED 23.1.2012 AND PERTAINING TO ASSE SSMENT YEAR 2008-09. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- ITA NO. 2110/DEL/2012 & CO NO. 466/DEL/2012 2 1. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN APPRECIATING THE FACTS THAT THE ASSESSEE PURCHASED THE SECOND NEW RESIDENTIAL PROPERTY WITHIN ONE YEAR OF THE TRANSFER OF ORIGINAL ASSETS IN CONTRAVENTION OF CLAUSE (II) TO PROVISO (A) OF SUB- SECTION 1 OF SECTION 54F OF THE I.T. ACT. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 24.01.2009 DISCLOSING A TOTAL I NCOME OF RS. 6,41,200/-. THE CASE WAS SELECTED FOR SCRUTINY BY I SSUE OF NOTICE UNDER SECTION 143(2), DATED 04.08.2009. THE ASSESSE E HAD DISCLOSED LONG TERM CAPITAL GAIN OF RS. 2,01,24,019 /- ON SALE OF LAND. THE SAID CAPITAL GAIN WAS CLAIMED EXEMPT UNDE R SECTION 54F, FOR INVESTMENT IN TWO NEW RESIDENTIAL PROPERTI ES. DURING THE SCRUTINY ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE APPELLANT WAS ALREADY AN OWNER OF A PLOT OF LAND AT FARIDABAD, AND AS PER THE PROVISIONS OF SECTION 54F, THE EXEMP TION WAS NOT PERMISSIBLE WHERE THE ASSESSEE OWNS MORE THAN ONE. ITA NO. 2110/DEL/2012 & CO NO. 466/DEL/2012 3 RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THE ASSEESSEE FILED A REVISED COMPUTATION OF INCOME, RESTRICTING THE CLAIM OF EXE MPTION UNDER SECTION 54F TO RS. 95,50,000/-, AND OFFERED T HE BALANCE LONG TERM CAPITAL GAINS OF RS. 1,05,74,019/- FOR TA XATION. THE ASSESSING OFFICER, WHILE NOT ACCEPTING THE REVISED COMPUTATION, AS TIME FOR FILING OF A REVISED RETURN HAD LAPSED, ADOPTED THE SAID AMOUNT OF RS. 1,05,74,019/- AS LONG TERM CAPIT AL GAINS ASSESSABLE IN THIS YEAR. SUBSEQUENTLY, AN ORDER UND ER SECTION 154 R.W.S. 143(3) WAS PASSED ON 08.11.2010, WITHDRA WING THE EXEMPTION UNDER SECTION 54F OF RS. 95,50,000/-, ALL OWED IN THE ORDER UNDER SECTION 143(3) DATED 16.08.2010. IT WAS STATED THAT THE LONG TERM CAPITAL GAIN OF RS. 2,01,24,019/ - WAS TO BE BROUGHT TO TAX AND 'DUE TO TYPOGRAPHICAL MISTAKE', ONLY DISALLOWANCE OF RS. 1,05,74,019/- WAS MADE IN THE O RDER UNDER SECTION 143(3). 3. AGAINST THE ABOVE, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A). 4. LD. CIT(A) ELABORATELY DISCUSSED THE ISSUE AND D ELETED THE DISALLOWANCE OF THE CLAIM OF EXEMPTION UNDER SECTIO N 54F IN THE ORDER UNDER SECTION 154. ITA NO. 2110/DEL/2012 & CO NO. 466/DEL/2012 4 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. DR RELIED UPON THE ORDER OF THE AO. ON THE OT HER HAND, LD. COUNSEL OF THE ASSESSEE HAS RELIED THE ORDER OF THE LD. CIT(A). WE FIND THAT. LD. CIT(A) HAS PERUSED THE ORDER UNDE R SECTION 143(3), DATED 16.08.2010 AND THE ORDER UNDER SECTIO N 154, R.W.S. 143(3), DATED 08.11.2010. WE FIND THAT IT WAS SEEN BY THE LD. CIT(A) THAT THE SALE VALUE DISCLOSED BY THE ASSESSEE WAS RS. 2,02,18,750/-, ON WHICH LONG TERM CAPITAL GAINS OF RS. 2,01,24,019/- WAS COMPUTED IN THE RETURN FILED. THE ASSESSEE INVESTED THE AMOUNT OF RS. 95,50,000/- IN A RESIDEN TIAL HOUSE AT K-100, KALKAJI, NEW DELHI ON 17.12.2007 AND AN AMOU NT OF RS. 1,00,29,500/- IN LAND AT 365, SECTOR-21C, FARIDABAD ON 07.07.2008. WE FIND THAT THE ASSESSEE ORIGINALLY C LAIMED EXEMPTION UNDER SECTION 54F FOR THE ENTIRE AMOUNT O F CAPITAL GAINS, BUT DURING THE ASSESSMENT PROCEEDINGS, HE RE VISED HIS CLAIM OF EXEMPTION UNDER SECTION 54F TO THE AMOUNT INVESTED IN RESIDENTIAL HOUSE, I.E. TO RS. 95,50,000/-. THIS REVISED CLAIM WAS ACCEPTED BY THE ASSESSING OFFICER IN THE ORIGIN AL ORDER UNDER SECTION 143(3), ALBEIT WITH INITIATION OF PEN ALTY UNDER ITA NO. 2110/DEL/2012 & CO NO. 466/DEL/2012 5 SECTION 271(1)(C). HOWEVER, IN THE ORDER UNDER SECT ION 154, THE CLAIM OF EXEMPTION OF RS. 95,50,000/- WAS WITHDRAWN , SUPPOSEDLY FOR CONTRAVENTION OF 'PROVISO (A) TO SUB SECTION (1) OF SECTION 54F. IT IS NOT AT ALL CLEAR FROM THE ORD ER UNDER SECTION 154 HOW THE PROVISO TO SECTION 54F (1) HAS BEEN CON TRAVENED IN THIS CASE. THE ASSESSEE HAS CATEGORICALLY STATED TH AT THE RESIDENTIAL HOUSE AT KALKAJI AND THE PLOT OF LAND A T FARIDABAD HAD BEEN PURCHASED OUT OF THE SALE CONSIDERATION OF THE LAND SOLD. SECTION 54F LAYS DOWN THAT THE EXEMPTION FOR INVESTMENT IN A NEW RESIDENTIAL HOUSE IS NOT ALLOWABLE IF THE ASSESSEE IS ALREADY THE OWNER OF 'MORE THAN ONE RESIDENTIAL HOU SE, OTHER THAN THE NEW ASSET'. IN OTHER WORDS, IF THE ASSEESS EE OWNED TWO OR MORE RESIDENTIAL HOUSES ON THE DATE OF THE TRANS FER OF THE ORIGINAL ASSET, HE WOULD NOT BE ELIGIBLE FOR CLAIM OF EXEMPTION UNDER SECTION 54F. IN THE FACTS OF THIS CASE, THE A SSESSEE IS THE OWNER OF ONLY ONE RESIDENTIAL HOUSE, PURCHASED ON 1 7.12.2007, WELL WITHIN THE TIME OF TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE. WE FIND THAT LD. CIT(A) HAS RI GHTLY OBSERVED THAT NO CASE CAN BE MADE OUT FOR DENIAL OF EXEMPTIO N UNDER SECTION 54F AS THE ASSESSEE HAS PURCHASED THE RESID ENTIAL HOUSE IN ACCORDANCE WITH THE PROVISIONS. CERTAINLY THE ASSESSEE ITA NO. 2110/DEL/2012 & CO NO. 466/DEL/2012 6 WAS NOT ENTITLED TO THE EXEMPTION UNDER SECTION 54F OF THE BALANCE AMOUNT OF RS. 1,00,29,500/- FOR PURCHASE OF LAND, AND THE SAID CLAIM WAS WITHDRAWN DURING THE ASSESSMENT PROCEEDINGS. IT SHOULD ALSO BE STATED THAT WITHDRAW AL OF EXEMPTION UNDER SECTION 54F IS CERTAINLY OUTSIDE TH E SCOPE OF SECTION 154, AND THERE IS NO MISTAKE APPARENT FROM THE RECORD WHICH COULD HAVE BEEN RECTIFIED BY THE ASSESSING OF FICER. AFTER CAREFULLY EXAMINING THE FACTS OF THIS CASE, THE DIS ALLOWANCE OF THE CLAIM OF EXEMPTION UNDER SECTION 54F IN THE ORD ER UNDER SECTION 154 WAS RIGHTLY DELETED BY THE LD. CIT(A) . IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE AFFIRM THE ORDER OF THE LD. CIT(A) AND DECIDE THE ISSUE AGAINST THE REV ENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 8. THE CROSS OBJECTION IS ONLY SUPPORTIVE OF THE L D. COMMISSIONER OF INCOME TAX (A)S ORDER. SINCE WE HAVE ALREADY UPHELD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) IN THE RE VENUES APPEAL ABOVE, THIS CROSS OBJECTION BY THE ASSESSEE HAS BE COME INFRUCTUOUS. ACCORDINGLY, THE SAME IS DISMISSED AS INFRUCTUOUS. ITA NO. 2110/DEL/2012 & CO NO. 466/DEL/2012 7 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 20/8/2014. SD/- SD/- (J.S. REDDY) (J.S. REDDY) (J.S. REDDY) (J.S. REDDY) (H.S. SIDHU) (H.S. SIDHU) (H.S. SIDHU) (H.S. SIDHU) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATE 20/8/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 2110/DEL/2012 & CO NO. 466/DEL/2012 8