Deputy Commissioner of Income-tax, V. Dr. Gondkar Eknath Bhagchand, Ahmednagar

ITA 2177/PUN/2012

• Counselvise Citation: 217724514 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 02-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Unexplained cash credit; Unexplained investment; Capital asset; Source of fund; Onus to prove
• Section: 143(3); 54B; 54F; 2(14); 68; 69; 54; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.2177/PN/2012 (ASSESSMENT YEAR : 2007-08) THE DY. COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR . APPELLANT VS. DR. GONDKAR EKNATH BHAGCHAND PIMPALWADI ROAD, SHIRDI, TAL. RAHATA, DIST. AHMEDNAGAR. PAN: AFQPG1445N . RESPONDENT APPELLANT BY : SHRI P.S. NAIK RESPONDENT BY : SMT. DEEPA KHARE DATE OF HEARING : 15-09-2014 DATE OF PRONOUNCEMENT : 29-10-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DA TED 13.04.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 23.12.2009 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSL Y ERRED IN DELETING THE ADDITION OF RS. 18,00,000/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF UN-EXPLAINED CASH CREDIT U/S.68 OF TH E INCOME-TAX ACT, 1961 INSTEAD OF CONFIRMING THE SAME. 3. THE LEARNED CIT(APPEALS) GROSSLY ERRED IN DELETING THE ABOVE ADDITION WITHOUT APPRECIATING THE FACTS ON REC ORD WHICH CLEARLY INDICATED THAT THE DEPOSITS OF RS.18,00,000/- AP PEARING IN THE CASH BOOK IN CASH ARE NOT MATCHING AND ARE PRE-DATED TO THE AMOUNTS AND DATES MENTIONED IN THE SALE DEED AND ALSO THE ASSES SEE HAD NO ITA NO.2177/PN/2012 DR. GONDKAR EKNATH BHAGCHAND VALID OR BONAFIDE EXPLANATION IN SUPPORT OF THE CAS H CREDITS OR IN RESPECT OF THE DISCREPANCIES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) FAILED TO APPRECIATE THAT THE BURDEN OF PROVING THE SOURCE OF CASH CREDITS IS ON THE ASSESSEE AS HELD IN THE CASE OF SHREELEKHA BANERJI VS.CIT REPOR TED AT 1963(49) ITR SC 112, AND, IN THE PRESENT CASE, THE ASSESSEE HAD FAILED TO DISCHARGE THE SAME BY ADDUCING ANY EVIDEN CES. IN VIEW OF THE FACT THAT THE BURDEN OF PROOF WAS ON THE ASSESSEE, WHICH HE HAD FAILED TO DISCHARGE, THE LEARNED COMMISSIONER OF INCOME-TA X(APPEALS) ERRED IN HOLDING THAT THERE WAS NO MATERIAL AVAILABLE ON RECORD WHICH COULD BE CONSIDERED AS SUFFICIENT FOR MAKING THE ADDITION . 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSL Y ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UN- EXPLAINED INVESTMENT U/S.69 OF THE INCOME-TAX ACT, 1961 OF RS. 25,50,000/-, BEING THE CASH DEPOSITS IN BANK INSTEA D OF CONFIRMING THE SAID ADDITION. 6. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GROSSLY ERRED IN FAILING TO APPRECIATE THAT THE ASSESSEE HAD NO VALI D OR BONAFIDE EXPLANATION IN SUPPORT OF THE CASH DEPOSITS OF RS.2 5,50,000/-. 7. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GROSSLY ERRED IN DELETING BOTH THE ADDITION OF RS.18,00,000/- U/S.6 8 AS WELL AS THE ADDITION OF RS.25,50,000/- U/S.69 MERELY ON THE BAS IS OF GENERAL SUBMISSIONS, SUCH AS THE TOTAL CASH RECEIVED ON SAL E OF AGRICULTURAL LAND AND THE OVERALL CASH BALANCE, WITHOUT EXAMININ G THE SPECIFICS IN ANY MANNER AND WITHOUT APPRECIATING THAT IT WAS FOR THE ASSESSEE TO PROVE EACH CREDIT AND EACH DEPOSIT SEPARATELY WITH CLINCHING EVIDENCES. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GROSSL Y ERRED IN DELETING THE ADDITION OF RS.6,30,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEDUCTION CLAIMED U/S.54F OF THE INCO ME-FAX ACT, 1961 INSTEAD OF CONFIRMING THE SAME. 9. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE CONSIDERED THAT THE INVESTMENT MADE BY THE ASSESSEE IN THE FLAT TO CLAIM DEDUCTION U/S.54F WAS PURCHASED BY HIM, JOINT LY ALONG WITH HIS SON, ON A PLOT WHICH WAS LEASED BY CIDCO F OR A PERIOD OF 60 YEARS. 10. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) FAILED TO APPRECIATE THAT THE APPELLANT IS NOT THE OWNER OF THE SAID PRO PERTY WITHIN THE MEANING OF PROVISION OF 'TRANSFER OF PROPERTY ACT', AND HENCE THE IMPUGNED INVESTMENT IS INELIGIBLE FOR DEDUCTION U/S .54F WHICH CAN BE AVAILED ONLY BY THE OWNER. 11. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COM MISSIONER OF INCOME- TAX(APPEALS) FAILED TO TAKE COGNIZANCE OF THE FACT THAT THE ASSESSEE IS IN ANY CASE NOT ENTITLED TO FULL DEDUCTION U/S.54F AS HE HAD ONLY 50% SHARE IN THE PROPERTY. ITA NO.2177/PN/2012 DR. GONDKAR EKNATH BHAGCHAND 12. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGE D AT THE TIME OF HEARING, THE ORDER OF THE LEARNED COMMISSIONER OF I NCOME-TAX (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 13. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY OR ALL THE GROUNDS OF APPEAL. 3. ALTHOUGH, REVENUE HAS RAISED 13 GROUNDS OF APPEA L IN THE MEMO OF APPEAL BUT THE GRIEVANCE AGAINST THE ORDER OF CIT(A ) IS ON THREE ISSUES. THE FIRST GRIEVANCE IS WITH RESPECT TO AN ADDITION OF R S.18,00,000/- DELETED BY THE CIT(A). IN THIS CONTEXT, BRIEF FACTS ARE THAT ASSE SSEE HAD SOLD AN AGRICULTURAL LAND SITUATED AT VILLAGE SHIRDI, DURING THE YEAR UN DER CONSIDERATION FOR A SUM OF RS.90,00,000/-. THE ENTIRE CONSIDERATION WAS RECEI VED BY THE ASSESSEE IN CASH ON VARIOUS DATES. THE ASSESSING OFFICER OBSER VED THAT THE DATES OF PAYMENTS NOTED IN THE SALE DEED DID NOT CORRESPOND TO THE DATES OF RECEIPTS APPEARING IN THE CASH BOOK MAINTAINED BY THE ASSESS EE. IN RESPECT TO A PAYMENT SHOWN TO HAVE BEEN MADE IN MAY, 2006, THE A MOUNT IN THE SALE DEED WAS RS.32,00,000/- WHEREAS IN THE CASH BOOK AN AMOUNT OF RS.50,00,000/- WAS SHOWN AS RECEIVED IN THE MONTH O F MAY, 2006. FOR THE SAID REASON, THE ASSESSING OFFICER TREATED THE SUM OF RS.18,00,000/- (RS.50,00,000/- - RS.32,00,000/-) AS AN UNEXPLAINED CREDIT APPEARING IN THE BOOKS OF ACCOUNT BY WAY OF CASH RECEIPT AND ACCORDI NGLY, TAXED THE SAME U/S 68 OF THE ACT. THE CIT(A) HAS DELETED THE ADDITION AFTER ACCEPTING THE EXPLANATION FURNISHED BY THE ASSESSEE. PERTINENTLY , THE CIT(A) NOTED THAT THE DISCREPANCY IN RESPECT OF CERTAIN DATES BETWEEN THE SALE DEED AND THE CASH BOOK MAINTAINED BY THE ASSESSEE DOES NOT LEAD TO AN Y INFERENCE THAT ANY EXCESS AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE OVE R AND ABOVE THE AMOUNTS STATED IN THE SALE DEED. AGAINST THE ACTIO N OF THE CIT(A) IN DELETING THE ADDITION, THE REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING, THE LEARNED DR REITERATE D THE STAND OF THE ASSESSING OFFICER WHICH IS TO THE EFFECT THAT THE D ATES OF DEPOSITS OF ITA NO.2177/PN/2012 DR. GONDKAR EKNATH BHAGCHAND RS.18,00,000/- IN THE MONTH OF MAY, 2006 APPEARING IN THE CASH BOOK ARE NOT MATCHING WITH THE DATES OF PAYMENT MENTIONED IN THE SALE DEED. THEREFORE, THE ORDER OF THE CIT(A) IS SOUGHT TO BE ASSAILED. 5. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE FO R ASSESSEE HAS JUSTIFIED THE ACTION OF THE CIT(A) BY POINTING OUT THAT THE ASSESSEE HAD ALSO OBTAINED A CONFIRMATION FROM THE PURCHASER THAT THE PAYMENTS HAVE INDEED BEEN MADE AS PER THE DATES NOTED IN THE CASH BOOK. ON THIS BASIS, THE ORDER OF THE CIT(A) IS SOUGHT TO BE DEFENDED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. FACTUALLY SPEAKING, THE TOTAL SALE CONSIDERATION ACCRUED TO T HE ASSESSEE AS PER THE SALE DEED IS RS.90,00,000/-. IT IS ALSO CLEAR THAT THE AMOUNT OF CASH RECEIVED ON VARIOUS DATES AS RECORDED IN THE CASH BOOK WITH RES PECT TO THE SALE OF LAND IN QUESTION ALSO AMOUNTS TO RS.90,00,000/-. THE ONLY DIFFERENCE IS THAT THE DATES OF PAYMENTS NOTED IN THE SALE DEED DO NOT FULLY MAT CH THE DATES OF PAYMENTS RECORDED IN THE CASH BOOK. IN PARTICULAR, WITH RES PECT TO THE PAYMENTS IN THE MONTH OF MAY, 2006, THERE IS AN EXCESS AMOUNT OF CA SH RECEIVED IN THE CASH BOOK IN COMPARISON TO THE AMOUNT RECORDED IN THE SA LE DEED. THIS DIFFERENCE OF RS.18,00,000/- HAS BEEN TREATED AS UNEXPLAINED C ASH CREDIT BY THE ASSESSING OFFICER BY INVOKING THE SECTION 68 OF THE ACT. THE CIT(A) HAS NOTED THE EXPLANATION OF THE ASSESSEE THAT THE DATES RECO RDED IN THE SALE DEED WERE PRE-DECIDED AND THE ACTUAL SCHEDULE OF PAYMENT DIFF ERED. WHEREAS, AT THE TIME OF EXECUTION OF SALE DEED, THE PRE-DECIDED DAT ES REMAINED UN-ALTERED IN THE SALE DEED AND THEREFORE, IT RESULTED IN A MIS-M ATCH WITH THE DATES OF ACTUAL PAYMENTS RECORDED IN THE CASH BOOK. IN SUPPORT, AS SESSEE ALSO FURNISHED A LETTER FROM THE PURCHASER THAT THE PAYMENTS HAVE BE EN MADE ON THE DATES NOTED IN THE CASH BOOK, AN ASSERTION NOTED BY THE C IT(A) IN PARA 4.2 OF HIS ORDER. APART THEREFROM, WE FIND NO ERROR ON THE PA RT OF CIT(A) IN HOLDING THAT ITA NO.2177/PN/2012 DR. GONDKAR EKNATH BHAGCHAND THE SUM OF RS.18,00,000/- CANNOT BE CONSIDERED AS U NEXPLAINED DEPOSITS APPEARING IN THE CASH BOOK BECAUSE THE SAME CONSTIT UTES THE SUM OF RS.90,00,000/- RECEIVED BY THE ASSESSEE AS PART OF SALE CONSIDERATION. IN FACT, IN THIS CONTEXT, THE CIT(A) HAS NOTICED THAT THOUGH ASSESSEE RECORDED RS.18,00,000/- IN EXCESS IN THE CASH BOOK IN MAY, 2 006, IN THE SUBSEQUENT MONTH OF JUNE, 2006, THE AMOUNT OF CASH RECEIVED RE CORDED IN CASH BOOK WAS LESSER TO THAT EXTENT IN COMPARISON TO THE AMOUNT S HOWN IN THE SALE DEED. BE THAT AS IT MAY, THAT THERE IS NO CONTRAVENTION TO T HE FINDING OF THE CIT(A) THAT THE TOTAL AMOUNT CREDITED IN THE BOOKS OF ACCOUNT A S SALE CONSIDERATION IS THE SAME AS RECORDED IN THE SALE DEED THOUGH THE DATES OF CASH RECEIPTS HAVE VARIED. IN OUR CONSIDERED OPINION, THE ULTIMATE CO NCLUSION OF THE CIT(A) TO TREAT THE IMPUGNED SUM OF RS.18,00,000/- AS EXPLAIN ED ON ACCOUNT OF THE SALE OF LAND IS HEREBY AFFIRMED. THEREFORE, ON THIS ASP ECT, REVENUE FAILS. 7. THE SECOND GROUND OF APPEAL OF THE REVENUE IS AG AINST THE ACTION OF THE CIT(A) IN DELETING AN ADDITION OF RS.25,50,000/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT BY WAY OF DEPOSITS IN THE BANK ACCOUNTS. THE ASSESSING OFFICER NOTED THAT CERTAIN AMOUNTS OF CASH DEPOSITED IN THE BANK ACCOUNTS ON VARIOUS DATES WAS NOT EXPLAINED BY THE ASSESSEE, THEREFORE, HE TREATED THE AMOUNT OF SAID DEPOSITS OF RS.25,50,000/- AS ASSESSABLE U/S 6 9 OF THE ACT. THE CIT(A) HAS DELETED THE ADDITION BY NOTICING THAT THE DEPOS ITS APPEARING IN THE BANK ACCOUNT ARE OUT OF CASH RECEIVED ON SALE OF LAND AS WELL AS CASH AVAILABLE IN THE CASH BOOK MAINTAINED BY THE ASSESSEE ON A MONTH LY BASIS. AGAINST THE AFORESAID DECISION OF THE CIT(A), REVENUE IS IN APP EAL BEFORE US. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELI ED ON THE ORDER OF ASSESSING OFFICER IN SUPPORT OF THE CASE OF THE REV ENUE. AS PER THE LEARNED DEPARTMENTAL REPRESENTATIVE, THE CIT(A) ERRED IN DE LETING THE ADDITION BY ITA NO.2177/PN/2012 DR. GONDKAR EKNATH BHAGCHAND ACCEPTING THE EXPLANATION FURNISHED BY THE ASSESSEE WITH RESPECT TO THE AVAILABILITY OF CASH FOR THE DEPOSIT IN THE BANK AC COUNT. 9. ON THE OTHER HAND, THE COUNSEL FOR THE RESPONDEN T ASSESSEE HAS RELIED UPON THE ORDER OF CIT(A) IN SUPPORT OF THE CASE OF THE ASSESSEE. THE LEARNED COUNSEL EMPHASIZED THAT THE SOURCE OF THE DEPOSITS WAS MAINLY OUT OF SALE CONSIDERATION OF LAND AND ON THE BASIS OF CASH BOOK , SUCH AMOUNT WAS AVAILABLE WITH THE ASSESSEE TO DEPOSIT IN THE BANK ACCOUNT ON VARIOUS DATES. 10. IN THIS CONTEXT, WE HAVE CAREFULLY CONSIDERED T HE FOLLOWING FINDING OF THE CIT(A) IN PARA 5.3 OF HIS ORDER. 5.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE LAW AS ARE APPARENT FROM RECORD. THE ASSESSING OFFICER, I N THE ASSESSMENT ORDER NOTED ABOVE HAS FOUND THAT THE APPELLANT HAS MADE CASH DEPOSITS OF RS.25,50,000 ON DIFFERENT DATES AS MENT IONED IN PARA 5.1 ABOVE. THE ASSESSING OFFICER HAS NOTED IN THE ASSES SMENT ORDER THAT THE APPELLANT WAS ASKED TO EXPLAIN THE NATURE AND S OURCE OF THIS DEPOSIT VIDE SHOW CAUSE DATED 11.12.2009 AND THE APPELLANT VIDE THEIR LETTER DATED 23.12.2009 INFORMED THAT THE EXPLANATION ABOU T THE SAME HAS ALREADY BEEN GIVEN VIDE THEIR LETTER DATED 8.12.200 9. HOWEVER, THE ASSESSING OFFICER FORMED HIS OPINION THAT THE SAID EXPLANATION WAS NOT SUFFICIENT AND THEREFORE, TREATED THE AFORESAID DEP OSITS OF RS.25,50,000 AS UNEXPLAINED U/S 69 OF THE IT. ACT. THE APPELLANT IN THEIR SUBMISSIONS ETC. MADE IN APPEAL HAS CONTENDED THAT THE FINDING OF THE ASSESSING OFFICER IS NOT CORRECT. ALL THE MATERIAL FACTS WERE AVAILABLE BEFORE HIM. COPY OF LETTER DATED 8.12.2009 HAS BEEN PLACED ON R ECORD TO CLAIM THE SAME. IT HAS FURTHER BEEN STATED THAT THE DEPOSITS APPEARING IN THE BANK ACCOUNT IS OUT OF THE CASH RECEIVED ON SALE OF LAND AS WELL AS THE CASH AVAILABLE IN THE CASH BOOK MAINTAINED ON MONTHLY BA SIS. THE APPELLANT HAS ENCLOSED THE COPY OF THE CASH BOOK MAINTAINED I NCLUDING THE EXTRACT OF BALANCES AS NOTED IN PARA 5.2.1 ABOVE. C OPY OF THE BANK ACCOUNT WHEREIN THE DEPOSITS HAVE BEEN MADE HAS ALS O BEEN PLACED ON RECORD. I HAVE CAREFULLY CONSIDERED THE SAME AND FOUND THAT THE CLAIM OF THE APPELLANT IS CORRECT. IT WAS FIRST OF ALL NOTED THAT THE DEPOSIT OF CASH IN THE BANK ACCOUNT IN THIS ASSESSMENT YEAR IS NOT OF RS.25,50,000 AS NOTED BY THE ASSESSING OFFICER BUT IS OF RS.40,50,000 AS NOTED BELOW : SR. NO. DATE AMOUNT OF CASH DEPOSIT (RS.) WHETHER CONSIDERED IN ASSESSMENT ORDER 1 26.06.2006 1000000 YES 2 05.09.2006 450000 YES 3 06.09.2006 1500000 NO 4 22.09.2006 500000 YES ITA NO.2177/PN/2012 DR. GONDKAR EKNATH BHAGCHAND 5 03.10.2006 200000 YES 6 28.03.2007 400000 YES TOTAL 4050000 FROM THE ABOVE, IT CAN BE NOTED THAT THE ASSESSING OFFICER FAILED TO NOTICE THE CASH DEPOSIT MADE BY THE APPELLANT OF RS .15,00,000 ON 6.9.2006. HOWEVER, EVEN AFTER TAKING INTO ACCOUNT A LL THE DEPOSITS MADE BY THE APPELLANT IT IS NOTED THAT CASH OF RS.10,00, 000 HAS BEEN DEPOSITED IN JUNE 2006 (26.6.2006) AND REMAINING SU MS HAVE BEEN DEPOSITED IN SEPT.2006, OCTOBER 2006, AND MARCH 200 7 AS NOTED ABOVE. IT IS IMPORTANT TO NOTE THAT ALL THE DEPOSIT S ARE APPEARING AFTER THE FINAL EXECUTION OF SALE DEED AND RECEIPT OF ENT IRE CONSIDERATION OF RS.90,00,000 FROM TIME TO TIME. THEREFORE, THE CLAI M OF THE APPELLANT THAT THE SOURCE OF THE DEPOSIT MAINLY LIES IN THE S ALE CONSIDERATION OF THE LAND CANNOT BE NEGATED. THE APPELLANT HAS SHOWN THA T THE SALE CONSIDERATION OF RS.40,00,000 WAS RECEIVED IN CASH BEFORE JUNE 2006 AND THEREFORE, THE DEPOSIT OF CASH MADE IN BANK FRO M JUNE ONWARDS OF RS.40,50,000 CAN BE SAFELY ASSUMED TO BE ARISING FR OM THE SAME. THE APPELLANT HAD OTHER SOURCES OF INCOME ALSO AND WAS ALSO CARRYING CASH BALANCES IN THE CASH BOOK AS SHOWN ABOVE AND THEREF ORE, IT WILL BE DIFFICULT TO HOLD THAT THE DEPOSITS APPEARING IN TH E BANK CANNOT BE TREATED AS EXPLAINED. THE ABOVE FINDING FURTHER GET S STRENGTH FROM THE FACT STATED BY THE APPELLANT THAT THE SALE CONSIDER ATION OF LAND WAS INVESTED IN PURCHASE OF ANOTHER AGRICULTURAL LAND A ND A FLAT AT AURANGABAD, AND THE PAYMENTS WERE MADE FROM TIME TO TIME BY DEPOSITING THE AMOUNTS IN THE BANK. THE CLAIM OF TH E APPELLANT THAT THE CASH RECEIVED WAS NOT IMMEDIATELY DEPOSITED IN THE BANK AS HE WAS LOOKING FOR INVESTMENT OPPORTUNITIES IN THE AGRICUL TURAL LAND AND WAS NOT CERTAIN ABOUT ITS TIMING AND OTHER REQUIREMENTS, AP PEARS CORRECT AND LOGICAL IN THE FACTS OF THE CASE AVAILABLE ON RECOR D. FOR THE DISCUSSIONS MADE ABOVE, GROUND NO.2 IS ALLOWED 11. THE AFORESAID FINDINGS, WHICH ARE BASED ON THE RELEVANT MATERIAL, CLEARLY SUGGEST THAT THE AMOUNTS DEPOSITED IN THE B ANK ACCOUNT ARE OUT OF THE CASH AVAILABLE WITH THE ASSESSEE ON SALE OF LAND WH ICH WAS ALSO FOUND NOTED IN THE CASH BOOK MAINTAINED. THE ASSESSEE HAD FURN ISHED BEFORE THE CIT(A) A SUMMARY OF CASH BOOK SHOWING MONTH-WISE OPENING BAL ANCE, RECEIPTS AND PAYMENTS TO JUSTIFY THAT ENOUGH CASH WAS AVAILABLE IN THE RESPECTIVE MONTHS TO SUPPORT THE DEPOSITS IN THE BANK ACCOUNT. THE AFOR ESAID FINDINGS OF THE CIT(A), IN OUR VIEW REQUIRE NO INTERFERENCE FROM OU R SIDE IN AS MUCH AS NOTHING CREDIBLE HAS BEEN BROUGHT OUT BY THE REVENUE TO NEG ATE THE SAME. THEREFORE, WE HEREBY AFFIRM THE ORDER OF CIT(A). O N THIS ASPECT ALSO, THE REVENUE FAILS. ITA NO.2177/PN/2012 DR. GONDKAR EKNATH BHAGCHAND 12. THE LAST ISSUE IN THIS APPEAL IS WITH RESPECT T O A DISALLOWANCE OF RS.6,30,000/- MADE BY THE ASSESSING OFFICER U/S 54F OF THE ACT, WHICH HAS SINCE BEEN DELETED BY THE CIT(A). 13. IN THIS CONTEXT, THE RELEVANT FACTS ARE THAT WI TH RESPECT TO THE CAPITAL GAIN EARNED ON THE SALE OF AGRICULTURAL LAND, ASSESSEE, INTER-ALIA, CLAIMED A DEDUCTION U/S 54F OF THE ACT FOR INVESTMENT IN A FL AT AT AURANGABAD AMOUNTING TO RS.6,50,730/-. THE ASSESSING OFFICER DID NOT AC CEPT THE AFORESAID DEDUCTION U/S 54F ON THE GROUND THAT THE LAND ON WH ICH THE FLAT HAS BEEN CONSTRUCTED WAS ACQUIRED FROM CIDCO ON LEASE. SECO NDLY, AS PER THE ASSESSING OFFICER, THE SAID FLAT WAS IN THE JOINT N AME OF ASSESSEE AND HIS SON AND THEREFORE, EVEN IF THE DEDUCTION IS TO BE ALLOW ED, THE SAME IS ALLOWABLE ONLY TO THE EXTENT OF 50%. THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY MAKING FOLLOWING DISCUSSION:- ON THE ISSUE OF INVESTMENT IN FLAT, IT IS NOTED TH AT BOTH THE OBJECTIONS OF THE ASSESSING OFFICER ARE NOT CORRECT. IF HE IS SAT ISFIED THAT THE INVESTMENT HAS BEEN MADE BY THE APPELLANT AND HIS N AME APPEARS AS THE FIRST HOLDER, NO FAULT CAN BE FOUND TO DENY THI S DEDUCTION. SIMILARLY, THE COURTS ARE UNANIMOUS THAT THE LEASEHOLD RIGHTS ARE CAPITAL ASSET AND IF THE SAME IS RELATING TO THE FLAT THE CONDITI ON PRESCRIBED U/S 54F CANNOT BE SAID TO BE VIOLATED. HOWEVER, IT IS NOTED THAT SEC. 54F IS ALLOWABLE AGAINST THE CAPITAL GAINS ARISING FROM TH E TRANSFER OF ANY LONG TERM CAPITAL ASSET. CAPITAL ASSET IS DEFINED IN SEC . 2(14) WHICH MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER O R NOT CONNECTED WITH HIS BUSINESS, BUT DOES NOT INCLUDE STOCK-IN-TR ADE, PERSONAL EFFECTS, AGRICULTURAL LAND EXCEPT FOR THOSE SPECIFIED IN THE PROVISION AND CERTAIN OTHER SPECIFIED ITEMS. SINCE THE APPELLANT HAS OFFE RED CAPITAL GAINS AND HAS CLAIMED DEDUCTION U/S 54B AND 54F, IT APPEARS T HAT HE CLAIMS THAT THE AGRICULTURAL LAND SOLD IS A CAPITAL ASSET. IF S O, THEN THE DEDUCTION U/S 54F WILL BE ALLOWABLE. THE ASSESSING OFFICER IS DIR ECTED TO VERIFY THIS ASPECT WHILE GIVING APPEAL EFFECT IN THE MANNER DES CRIBED ABOVE. 14. AFTER HAVING CONSIDERED THE RIVAL STANDS, WE FI ND NO REASONS TO INTERFERE WITH THE AFORESAID DECISION OF THE CIT(A) WHICH IS QUITE A FAIR AND JUSTIFIED. NOTABLY, ASSESSEE HAD STATED BEFORE THE CIT(A) THAT THE ENTIRE INVESTMENT IN THE SAID FLAT WAS MADE BY HIM OUT OF HIS OWN SOURCE S AND THE NAME OF HIS SON AS JOINT HOLDER WAS INCLUDED ONLY FOR PERSONAL REAS ONS. FURTHER, WITH REGARD TO ITA NO.2177/PN/2012 DR. GONDKAR EKNATH BHAGCHAND THE LEASE OF THE LAND FROM CIDCO AUTHORITY, ASSESSE E POINTED OUT THAT HE HAS PURCHASED A RESIDENTIAL FLAT ON A PROPERTY CONSTRUC TED ON LEASEHOLD PLOT OBTAINED FROM CIDCO. THE ASSESSEE ALSO ASSERTED BE FORE THE CIT(A) THAT THE FLAT PURCHASED BY HIM HAS BEEN CONSTRUCTED WITH THE PERMISSION OF CIDCO AUTHORITY WHO GAVE THE LEASEHOLD RIGHTS OF LAND FOR CONSTRUCTION AND ASSESSEE WAS HAVING PROPRIETARY RIGHTS WHICH ARE TRANSFERABL E AND THEREFORE, SUCH AN INVESTMENT QUALIFIES FOR THE BENEFITS OF SECTION 54 F OF THE ACT. IN THE BACKGROUND OF THE AFORESAID ASSERTIONS OF THE ASSES SEE, WE FIND THAT THE CIT(A) MADE NO MISTAKE IN ACCEPTING THE STAND OF TH E ASSESSEE. THERE IS NO MATERIAL BROUGHT BY THE REVENUE TO NEGATE THE FINDI NG OF THE CIT(A), WHICH WE HEREBY AFFIRMED. THUS, ON THIS ASPECT ALSO, REVENU E FAILS. 15. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE, DATED: 29 TH OCTOBER, 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-I, PUNE 4) THE CIT-I, PUNE 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE